Economic pressures

[Ruphus]

re-inflating the lower loop

Isn't this what was done in the 40-50's? Labor laws and unions were the rage. Corporations were "forced" to open up some of their coffers. An actual redistribution of the wealth.

I suppose politicians were in the bed with corporate America even back then, but it would sure seem unlikely that they would do the same again now as they are now all owned by corporations. Laws against corporate America would never pass or maybe not even be written.

[Danny B]

concentrate the wealth,,, crash the economy

Ruphus, bankers and other idiots only think of their own personal welfare. They want to squeeze the last nickel out of every victim. They very much like the current arrangement where they give you no consideration but, you must pay them almost everything you earn.
The little case that threatened the entire Banking system. | THE TRUTH ABOUT THE LAW
The PTB load us down with taxes; http://cdn.theatlantic.com/static/mt...graph%2025.png
And let the corporations skate; http://y.ourfuture.org/wp-content/up...f1-infocus.jpg
The current situation is a perfect illustration of what happens when you impoverish all your would-be customers.
The feces-for-brains fight against organized labor so they can pay more to stockholders. When too much capital is locked up in the super rich, consumption crashes. The short-sighted morons got rid of their employees and then, mysteriously, couldn't find any consumers. The stock market has NO earnings and is coasting along on vapors looking for a solvent consumer.
This situation is complicated even more in that (wanna be) high-wage producers are buying loads of goods from their low-wage competitors.

Without a production-consumption cycle, imaginary capital becomes phantom capital. These debt notes eventually evaporate in the hot sun. China has dumped $ 1/2 trillion in U.S. GOV debt paper recently because they don't want to be holding a bag of vapor.
Shock Report: China Dumps Half a Trillion Dollars: "Something Is Very, Very Wrong"
"We’ve recently reported that China is preparing for something very big in currency markets this October. We then learned that economic models from two very well known financial forecasters are predicting that governments around the world will run into serious problems starting around October 2nd of this year."
Once again, we see mention of October.
Just imagine capital as a snake. Imagine deflation as a steam roller. The snake has it's tail caught in a slow-moving steam roller. Since the bond market is all debt-notes, it has no where to escape to. It tried to escape to commodities but, they are dependent on consumption. Commodities crashed. Apparently, the steam roller reaches the heart in october.

[Danny B]

All bonds will evaporate

At one time, Martin Armstrong was managing over $ 3 trillion. As he moved money, GOV claimed that he was manipulating markets. He made it hard for banks to screw clients so, the banks got him thrown in prison. He has been very public for years about the crash of U.S. Treasury bonds this coming october. I suspect that his warnings may very well become self-fulfilling.
The stock market is coasting along on fumes rather than earnings. They can't take any big shocks. The private bond market is a bug in search of a windshield.
In 2008 when the crisis hit it was $80 trillion. It has since grown to over $100 trillion.

2) The derivatives market that uses this bond bubble as collateral is over $555 trillion in size.

"4) Corporations today are more leveraged than they were in 2007. As Stanley Druckenmiller noted recently, in 2007 corporate bonds were $3.5 trillion… today they are $7 trillion"
Cyprus; "Then, in the span of a single week, a bank holiday was declared, bank accounts were frozen, and deposits were stolen."
This Time Around, Entire Countries Will be Going Bust | Zero Hedge

[Danny B]

Psychology and debt

Martin Armstrong's model is a model of confidence. Psychology is a major factor in the economy. The Chinese are learning this much to their dismay.
"Instead of repeatting what we have said countless times about what happens when a government finally loses control of not one but numerous credit-driven bubbles of which China now has at least three (the downside is clear: social unrest, rioting, perhaps even civil war should stocks resume their crash to a fair value which BofA said last night is 50% lower from here)"
What Loss Of Control Looks Like: Chinese Regulator Urges Traders To Rat Out "Malicious Sellers" | Zero Hedge

"- As will be the case with Greece, U.S. will eventually be forced to liquidate debt
- Attempts to forecast day of reckoning are futile as it is a function of psychology"
?They Can?t Print Money Forever? - Ron Paul
51% of Americans receive a check from GOV. As a body, they all want this to continue. The bureaucrats came up with FACTA to try to squeeze every penny out of investors. Reportedly, this bureaucratic behemoth is now going after banks to rob them also.
Banks Become the Target of the Hunt for Taxation | Armstrong Economics
The bond market represents "stored wealth". It is actually "stored debt". Presumably, the perception and psychology about this fact will set in this coming October. At some point, all debt will be shunned because all trust will be gone. When trust is gone, credit is very hard to find. When credit ends, GOV will try to reflate the economy with cash,,, presumable digital cash.

[Danny B]

gold survives,,, ZPE or bust

The paper-money people are working overtime to tarnish the image of gold;
Banksters Unleash a Golden, Drive-by Shooting | SilverDoctors.com
Supply and Demand in the Gold and Silver Futures Markets - Paul Craig Roberts and Dave Kranzler - PaulCraigRoberts.org
The mints are rationing gold and silver because they run out so fast. You can't buy all you want. The paper-money people continually refer to gold and silver as a commodities. Funny, copper is crashing, iron ore costs less than cabbage but gold and silver sales keep rising. http://www.zerohedge.com/news/2015-0...-2015-now-fact
"The once great U.S. Empire is now in big trouble. The U.S. Empire is on its last legs.
At some point, we will not be able to trade worthless Fiat Dollars for our oil imports. Falling domestic oil production, on top of falling oil imports will wreak havoc on the U.S. Economy and most paper and physical assets. "
SilverDoctors | Restoring Your Financial Health

Output from fracking is rising but, the well depletion rate is horrendous. Fracking was financed by junk bonds. If the bond market collapses, there will be no bucks to put in more wells when depletion makes it necessary. There won't be a junk-bond market in America for many years to come. The economy can't survive on $ 100 oil. Either the PTB unleash ZPE to drive massive price deflation or,,, they watch the entire economy collapse.

[Danny B]

Tug-a-war,, parasites and producers

Reportedly, U.S. treasury bonds crash in October., Reportedly, the sale of U.S. treasury bonds is 60% lower that it was 2 years ago.
https://www.youtube.com/watch?v=ZiENFvvZQVc
When the bond market crashes, all credit will lock up. Commerce will try to squeeze into cash and barter. You can bet that this won't last for very long. GOV will have to "inject" a new currency. "Jim Willie: ‘We’re three months away from radical changes…and a new dollar’ "
Jim Willie: 'We're three months away from radical changes...and a new dollar'
OK, so GOV is going to inject / create a new currency. REMEMBER, the people doing this are the same people who brought you the obamacare website. "The Obama administration has spent roughly $840 million on HealthCare.gov, including more than $150 million just in cost overruns for the version that failed so badly when it launched last year."
They will be trying to run the entire economy.
In a general sense, all representative GOV is socialist. America started as a democratic republic because pure democracies only last about 150 years. " If you can keep it"
There is always one element trying to buy GOV and promote fascism.
There is always one element trying to vote themselves a free ride. This tug-a-war is about to go into high gear.

The Anatomy of the State
"The great German sociologist Franz Oppenheimer pointed out that there are two mutually exclusive ways of acquiring wealth; one, the above way of production and exchange, he called the "economic means." The other way is simpler in that it does not require productivity; it is the way of seizure of another's goods or services by the use of force and violence. This is the method of one-sided confiscation, of theft of the property of others. This is the method which Oppenheimer termed "the political means" to wealth. It should be clear that the peaceful use of reason and energy in production is the "natural" path for man: the means for his survival and prosperity on this earth. It should be equally clear that the coercive, exploitative means is contrary to natural law; it is parasitic, for instead of adding to production, it subtracts from it. The "political means" siphons production off to a parasitic and destructive individual or group; and this siphoning not only subtracts from the number producing, but also lowers the producer's incentive to produce beyond his own subsistence. In the long run, the robber destroys his own subsistence by dwindling or eliminating the source of his own supply."

There is a solution offered by Jim Bell;
Assassination Politics - by Jim Bell

The 6 apostles have a plan too; Western Rifle Shooters Association: Vanderboegh: The Six Apostles

[Danny B]

Breaking the Eurozone,,, electronic reflation

Almost all the banks loaned out way too much money. "To prevent a default on fragile French and German banks, that had irresponsibly lent billions to irresponsible Greek governments, Europe decided to grant Greece the largest loan in world history on condition of the largest ever magnitude of fiscal consolidation (also known as austerity) which, naturally, resulted in a world record loss of national income"
The banks transferred all their bad loans to the taxpayer. Nothing new here. Instead of collapsing the banks, it will collapse GOV ( the taxpayer). It's called "socializing the losses". Germany is the guarantor for many billions in European debt. They want out of the Eurozone and are willing to kill a lot of Greeks to get there. The Defeat of Europe – my piece in Le Monde Diplomatique | Yanis Varoufakis
Italy is looking to leave also. Italy is the most likely country to leave the euro - The Washington Post

The U.S. stock markets have rolled over and it's all downhill. http://www.zerohedge.com/news/2015-0...nternals-looks
As I mentioned, GOV is ready to reflate the lower loop of the economy out of desperation. "Western Central Banks Have Set Us Up; You'll Hear The Printing Presses From Mars"
http://www.zerohedge.com/news/2015-0...g-presses-mars
OK, reflation it is. We are in crashing deflation because credit is evaporating faster than GOV is printing. I suppose that they will do electronic reflation. Anyone holding excess paper dollars will have a limited time to exchange them for scheiss dollars. All bank accounts will be automatically "converted".

The great flow of newly minted electronic dollars will finally bring the reflation of the lower loop and probably bring hyperinflation also. Too early to tell how well the conversion will be handled.

Greece is constantly referred to as a debt deadbeat. Compare Greece to America. Greece | United States - Current Account - Compare - Actual Data - Historical Charts
Compare Greece to Great Britain. http://ieconomics.com/current-account-greece-uk

[Danny B]

Sweden and taxes

(Sweden), " a nation with a Förmögenhetsregistret, or wealth register, which tracks the assets of all its citizens.)"
"For example, Sweden has no inheritance tax. None whatsoever: it also doesn’t have a national minimum wage or a wealth tax. It follows the classical liberal, or if you prefer, standard economics of taxation. Taxes on corporate and capital incomes are lower than those on labour income. It is consumption taxes which carry the heavy load of funding the welfare state, not those taxes on income, companies or capital."
"Which leads me to my basic point. Yes, it’s absolutely true that Sweden and Denmark have both high taxes and large welfare states: they also work very well as countries. The reason they do is that underneath the high tax and large welfare states they’re economically free, even classically liberal economies. Further, that their tax and spending is local meaning that it is done efficiently and with the consent of the local populace.

That is, the Nordic social democracies might indeed be what many American liberals see as the desirable society: they just happen to be places which do everything in entirely the opposite manner to which most American liberals argue things should be done."
Paul Krugman and the Socialist Hellhole That is Sweden

[Danny B]

Wealth storage, gold and the SDR

4 years ago, Wiki; "2011 estimates by property analysts state that there are some 89 million empty properties and apartments in China" "64.5 million electricity meters register zero use. There is major concern for the Chinese middle-class. The middle class have invested massively in property and now estimates suggest that property invest accounts for as much as 20-30% of the economy. As many as 24 new cities are being built every year!"

Wiki; "The bond market (also debt market or credit market) is a financial market where participants can issue new debt, known as the primary market,"
Quora; "At $37 trillion[1], the US Bond market is about 2.6x the size of the $14 tril US Stock Market[2].

[1] This includes all bonds - asset-backed, mortgages, government debt, everything. Corporate debt is only $8 tril of this."

The industrial Revolution created such enormous wealth that it is/was impossible to "store". The Chinese don't have a sovereign bond market because they have so much stored wealth in currency reserves. Rich Chinese have resorted to storing wealth in real estate and whole cities. The West stores wealth in paper debt rather than building extra cities. These 64 million dwellings are empty because nobody can afford to buy them. A collapse in the bond market will mean that nobody will WANT to buy them.

Without some viable means of wealth storage, the whole economy drags to a standstill. Traditional socialism prevents capital formation. The Swedish system of quasi-socialism does not tax wealth. Capital formation still works.

The PTB / mega bankers are adamant that we don't revert to a gold standard because they can't inflate it to their desires. China is buying up all the gold. It looks like China will back a new SDR rather than domestic gold-bonds. http://www.zengardner.com/china-roth...orld-currency/
The indications are clear that this crash was planned. It is safe to say that the PTB have an exit plan. A world currency seems to be central to the plans. The upcoming disaster that is a result (partially) of the currency wars will be used as a justification for a one-world currency that can never be subject to a currency war. The lessons from Greece don't bode well for a unified currency.
ALL paper is going to burn. If the world-improvers can't convince the rich that the SDR (paper) is a reliable store of wealth, then gold will make a comeback.
The value of an object or an asset is related to how many other people value that same asset. Gold stands ahead of everything inorganic as far as popularity. The available gold supply will be going down as the cost of energy goes up. PEAK GOLD vs. PEAK SILVER: Must See Chart : SRSrocco Report
Much depends on the attitude in Asia towards gold.

[Danny B]

commodity crash and churning

The commodities super-cycle is winding down and taking a lot of financial firms with it.
• Coal Mine Worth $624 Million Three Years Ago Sold for $1 (Bloomberg)

Three years after private-equity giant Carlyle Group LP touted its purchase of a hedge-fund firm, a rout in raw materials has helped drive down holdings in its flagship fund from about $2 billion to less than $50 million, according to people familiar with the matter
"the world’s largest oil companies that are emerging as the unexpected casualties.

The reason: the multibillion-dollar projects at the heart of the oil majors’ strategy need prices closer to $100 to make them economically feasible.

“Big Oil is today squeezed by two low-cost producers: OPEC and U.S. shale,” said Michele Della Vigna, the top oil industry analyst at Goldman Sachs Group Inc. “Big Oil needs to re-invent itself.”
"In the first quarter, Total, BP and Chevron all spent more than they earned. The combined negative cash flow of the five major oil groups was $3.4 billion, compared with a positive cash flow of $17.8 billion a year earlier, according to data compiled by Bloomberg."

The world is driven down towards a global-mean wage and the consumer can't consume. Discretionary spending is for rich economies.
The banks made tons of liar loans knowing that they would default. They didn't care because they could dump them on the taxpayer. It never occurred to them that the taxpayer might be unable to pay. They bought all the politicians thinking that this would cure all their problems.
https://firstlook.org/theintercept/2...tical-bribery/

The upcoming treasury bond collapse will bring a complete collapse of credit. Liars and thieves eventually ruin their credit rating. What is the future of the financial industry and GOV if wealth is gone and money (currency) is all that is left?
The finance industry creates a 100% markup on everything by "financialization" of everything. They live just to generate fees and commissions. The majority of the fees are just churning and BS.

"An astonishing $32 trillion in securities changes hands every year with no net positive impact for investors, charges Vanguard Group Founder John Bogle.

Meanwhile, corporate finance — the reason Wall Street exists — is just a tiny slice of the total business. The nation's big investment banks probably could work for less than a week and take the rest of the year off with no real effect on the economy."
"What else do we do? We encourage investors to trade about $32 trillion a year. So the way I calculate it, 99% of what we do in this industry is people trading with one another, with a gain only to the middleman. It's a waste of resources."

It's a lot of money, $32 trillion. Nearly double the entire U.S. economy moving from one pocket to another, with a toll-taker in the middle. Most people refer to them as "stock brokers," but let's call them what they are — toll-takers and rent-seekers."
Why 99% of trading is pointless - MarketWatch
SO, just how much of this churning and swapping is going to be viable after the credit collapse.

[Danny B]

Topping out and headed down.

We owe a lot to the people who have been sounding the alarm bells. In 2005, I read what they had to say and decided that it had merit. After 10 years of reading, I know who to read and who to ignore. The currency supply MUST be kept somewhat relative to actual physical wealth that is produced. Since the parasites DON'T produce any of this wealth, they always print up too many paper claims on this wealth to ensure that they get a big share.
Nicole Foss and Raoul Iliargi have consistently written correctly about what we could expect in the future and WHY.
China And The New World Disorder - The Automatic Earth
The beneficiaries of this bubble; "Their client base is predominantly composed of the global finance capital elite – i.e. the roughly 200,000 worldwide ultra and very high net worth individuals with net annual additional income from investment flows of $20 million or more"
When their banks threatened to crash, they socialized the debt to the taxpayers. They probably didn't consider the possibility that the taxpayer might crash. By rescuing the banks that were "too big to fail", they have passed on the contagion to States. NOBODY is too big to fail.

States are starting to fail; Puerto Rico Default – Welcome to Big Bang | Armstrong Economics Since the financial system is so interlocked, the contagion will only spread.
Germany has destroyed the common dream of the European Union by it's intransigence. "Jurgen Habermas, intellectual figurehead of European integration, accuses Chancellor Angela Merkel of gambling away “in one night all the political capital that Germany had accumulated in half a century.”

The jokes have already begun. Merkel arrives in Athens. “Your nationality?” asks the immigration officer. “German.” “Occupation?” “No, just visiting.”
The night the dream died | The Japan Times

Look at this graph and project the magnitude of the next dip; http://www.firstrebuttal.com/wp-cont...2.03.09-PM.png
The Tide Has Turned And These Charts Predict The Next Stop | Zero Hedge
The markets have rolled over and there is no saving of this bubble. The magnitude of the credit bubble is far larger than anything else in previous history. The unwinding / deflation of this bubble will be equally spectacular.
"In short, the last 20 years has been nothing but bad policies attempting to cover up the results of previous bad policies creating a need for more extreme policies to cover up more extreme resulting fundamental problems. This is clearly depicted in the data. The end result is that global growth has deteriorated steadily now for the past 6 years to its lowest long term trend line in modern history, "
The working class must remain impoverished to keep them working. Californians were overtaxed by $ 8 trillion; http://www.washingtonsblog.com/2012/...entatives.html
Corporate taxes are very low and payroll taxes are very high. Robots don't pay payroll taxes. The banks and the State have created enormous claims on the future wages of workers. Warn blooded workers are on their way out.
http://www.techrepublic.com/article/...duction-soars/
There is diminishing demand for human labor but, there is enormous need for consumption. China is planning to scrap their one-child policy very soon because there just isn't enough purchasing power for them to maintain.

[Danny B]

150 year mortgage

You drive down the street and things look more-or-less OK. Is there really going to be a crash? There are signs; "Something Just Snapped: Container Freight Rates From Asia To Europe Crash 23% In One Week"
Something Just Snapped: Container Freight Rates From Asia To Europe Crash 23% In One Week | Zero Hedge
We all know what happened when heavy industry left and left behind the present rust-belt. What happens when even more industry leaves? Property values plunged way down in the rust belt because the price of a home is relative to the wages in the same area.
Real estate is leveraged like crazy. What happens when this leverage unwinds?
This isn't the first go-round. "The 30-year mortgage was part of Roosevelt’s New Deal. Real estate prices collapsed along with massive bank failures. There was no credit available, so real estate collapsed to about 10 cents on the dollar."
The banks try to preserve the value of the mortgages."This has been a major factor in creating the long-depression in Japan, for at the top mortgages became 150-years with several generations responsible."
The Risk of Real Estate – Forget Derivative & Fiat | Armstrong Economics
When the final credit crash arrives, there will be very little international trade. Stock up on imported beer NOW.

[Ruphus]

I just watched the movie "The Last Days of Lehman Brothers". It was interesting. It suggested that former FED Chairman Hank Paulson got the heads of all the large American banks together in 2008 to find a way to "take on" Lehman's toxic assets. It also suggested that These bank chairmen seemed to form a coalition of sorts to keep toxic assets from damaging their own banks.

[Danny B]

I just watched the movie "The Last Days of Lehman Brothers". It was interesting. It suggested that former FED Chairman Hank Paulson got the heads of all the large American banks together in 2008 to find a way to "take on" Lehman's toxic assets. It also suggested that These bank chairmen seemed to form a coalition of sorts to keep toxic assets from damaging their own banks.

The Murder of Lehman Brothers: An Insider's Look at the Global Meltdown: Joseph Tibman: Amazon.com: Books

[Danny B]

Crash of Canada

The rich ( The 1% is Really More Like the 0.000000012 %) just don't consume enough to keep the economy rolling. The 1% is Really More Like the 0.000000012 % - Waking Times : Waking Times
We crash down towards a global-mean-wage and consumption falls commensurately. The paper markets can be levitated temporarily by paper injections. Physical markets aren't near as easy to levitate. States that depend on sales of commodities are falling fast.
The Devastation in Global Commodity Currencies Is Far From Over - Bloomberg Business

Naturally, the PTB didn't see this coming. 'Perfect Storm' Engulfing Canada's Economy Perfectly Predictable | The Tyee
The crash of oil is only going to get worse; The Oil Crash Has Caused a $1.3 Trillion Wipeout - Bloomberg Business
State revenue is crashing and GOV is trying to steal everything that it can.
France Paying Informants to Confiscate Wealth | Armstrong Economics