Economic pressures

[Danny B]

Thrashing an empire in the marketplace

Post WW II, America had a lock on manufacturing. We raised our standard of living way up. We lost that lock and our standard of living is going to move way down. oftwominds-Charles Hugh Smith: Welcome to the Future: Downward Mobility and Social Depression
Empire; “Empires at the end concentrate on military force as the be all and end all of power… at the end they use more mercenary based forces than citizen based forces” Could that be ISIS?
“Empires at the end…go ethically and morally bankrupt… they end up with bankers and financiers running the empire, sound familiar?”
Morally bankrupt; could that be hillary, jeb, et al?
http://www.zerohedge.com/news/2015-1...p-deep-trouble
Apparently, our empire is in deep do-do.
The American worker lost his job in the global job market. Commodities are a world market also. The lowest-cost oil producer sells his oil. Those with expensive oil go ka-boom. http://www.zerohedge.com/news/2015-1...-simply-vanish

The U.S. military is the single largest user of oil in the world. The TPP only involves a few minor countries. The rest of the world is united against us because we are murderers and bullies. I suspect that they aren't going to send us oil. This will pit the Pentagon against the public in competition for oil.
10/06 Utility-scale solar reaches cost parity with natural gas throughout America – GTM
This will crash the energy companies even further. That will collapse the hedges and derivatives.
Buy a sailboat.

[wayne.ct]

Dropping Demand

<start quote>

By Rodney Johnson, Senior Editor, Economy & Markets

The current economic mess in the developed world is easy to explain and hard to fix.

This is a demand-driven downturn, where aging populations choose to save more of what they earn, take on less debt, and generally rotate to a risk-averse world view.

The change isn’t new. It happens to almost all of us as we get older.

The difference this time is that the aging generation is so big compared to other generations, that their actions take on outsized importance.

There aren’t enough young people to drive our economies higher. Empty-nesters don’t spend as much because they want to pad their income in retirement. State-sponsored pension programs aren’t typically generous, so this makes sense. As these people spend less, domestic consumption slows down, dragging GDP with it.

<end quote>

This are the opening paragraphs from their email newsletter. I was not able to find the full article on the web. I was going to post a link. These few paragraphs capture the most important take away that I got.

[aljhoa]

While private sector workers pay in 8% and receive around 40% of their salary,
government workers have a different deal. They pay in nothing, and retire with pensions up to 95% of their final salary.

Maybe the solution is to have everyone work for the government.



Al

[wayne.ct]

They already do

Maybe the solution is to have everyone work for the government.

They already do, they just don't know it. What do you think the IRS is all about? They are the boss and your only revenge is to not give them any satisfaction. Have no income and pay no taxes. Spend your FRNs for tangibles.

[Danny B]

currency insurance, Chinese style

The FED claims that it has a toolbox full of tools. They have recently discovered that their toolbox is full of stale dog turds. Federal Reserve paper on the replicability of economic studies - Business Insider
Headlines;
10/07 Once the biggest buyer, China starts dumping US government debt – Wall Street Journal
OK, so what do you buy if you dump dollars?
10/07 China FX reserves post record quarterly fall as cenbank steps up yuan support – Reuters
They dump foreign currencies and buy Chinese Yuan.
The more they own of their own currency,,, the less that it can be manipulated.
10/07 Yuan passes yen; now fourth most-used payment currency – Schiff Gold

In the mid-60s, America created the welfare-warfare State. We financed all this with king dollar, the reserve currency. The rest of the world is quite tired of our empire and is trying to break away. They want to do it without a total crash. The Euro was created as an alternative. With the help of Goldman Sachs, the Euro project was poisoned. http://wolfstreet.com/2015/10/06/rise-of-yuan-fails-to-dent-dollar-hegemony-but-slams-euro/
The largest retirement fund is moving into junk bonds while they are crashing. They can not get their money out of the system so, they risk it all.
All previous crashes of the reserve currency happened while there was an alternative strong currency,,, NOT this time. There is gold and silver though.
The problem is that the money supply includes credit. What happens if credit crashes along with the dollar?
http://www.zerohedge.com/news/2015-1...ther-consensus
It's going to get ugly.

[Danny B]

Keynesian economics and the demographic crash.

There is a growing appreciation for just how important population growth is to the economy. Keynesian economics is based on uninterrupted growth. What happens when population growth stops?
Repost; the FED-finds rate is tied to the growth, or lack of, for the core population. Demographics - The Real Opponent The Fed Has Been Fighting For Decades | Seeking Alpha
Global annual population growth peaked in 1988 and is decelerating.
Forget Peak Oil - It's All About Peak Population Growth | Seeking Alpha
Japan is in the crapper and has the highest population loss. Why one map shows Japan as the biggest country in the world - MarketWatch
Italy too, is in serious trouble. Italy is below replacement in the birth rate.
The PTB may quash us down to poverty but, they can't make us have children.

[Danny B]

Nothing new

The IMF says that we are definitely going to crash. Ho Hum. Next financial crash is coming – and before we've fixed flaws from last one | Business | The Guardian
This cheerful writer has a prediction also, "The initial, unanimous answer was you can expect anywhere from 25 million to 50 million dead in the first 90 days. "
We Are Entering the Time of Financial Collapse Point-V the Guerrilla Economist | Economy
This is a good article about the growing disconnect between the rich and the poor. oftwominds-Charles Hugh Smith: When the Aristocracy Leaves the Commoners in the Dust, The Empire Is Doomed

[Danny B]

The uber-parasite is getting hungry

Jim Rickards and 16 U.S. intelligence agencies did a war-games scenario of the U.S. economy and concluded that we definitely are going to crash. THEY are pushing for an adoption of the SDR as the store-of-value. The IMF says that we are definitely going to crash and that the dollar is on it's way out as the reserve currency. The IMF proposes that the new store-of-value should be the ,,,SDR. It will be created by the IMF in whatever quantity the IMF deems necessary.
The rest of the world has had quite enough dollar hegemony and wants NOTHING to do with IMF / SDR hegemony. Here is an excellent article from David Stockman. He shows EXACTLY why U.S. GOV does NOT want gold to be the international money and store of value.
"As Nobel Laureate Mundell wrote a few years back:

“We can look upon the period of the gold standard as being a period that was unique in history, when there was a balance among the powers and no single superpower dominated.”[5]"
Dollar Dissonance And The Remonetization Of Gold | David Stockman's Contra Corner
The rest of the world REALLY wants to get rid of the dollar because we use it as a weapon so often. The US government just crossed the Rubicon "But the government has shown time and time again that they are willing to abuse that trust and use their advantage as a weapon– one that is more powerful than the US military."
U.S. GOV has managed to piss off the whole banking world, JP Morgan private banker: “We can’t make money anymore…â€�
The CBs shoved money (debt) into the financial system at the corporate level without any thought whether or not it could be repaid. Liar loans to corporations. Corporations over borrowed by $ 3 trillion and can't pay back. The coming defaults will make quite a stir. https://www.youtube.com/watch?v=RY5s1OcPa_U

[Danny B]

The uber parasite is never wrong

Armstrong, "All government ever does is move further in the same direction because government employees will NEVER admit a mistake. This is why we must crash and burn. They will never look at their actions and are incapable of admitting an error. Anyone who challenges the status quo becomes the “fringe” element that should be ignored."
Is Quantitative Easing the Same as Printing Money? | Armstrong Economics
So, GOV just runs up more debt when debt is the problem.
Households cut back debt growth from 8.5 to 2.8. No, No, NO we can't have that. The financial sector cut back from 9.4 to 2.9. No,no,no.
GOV went from 5.8 to 9.3 http://static.safehaven.com/authors/saxena/39180_a.png
Calm Before the Storm? | Puru Saxena | Safehaven.com

[Danny B]

Money and needs

Good observations;
"It is incomprehensible to the modern American to conceive of a world without money. It is the primary driver of human activity and it has become the leading cause of stress in adults.

The further we drift away from the primary reasons for our existence as named in Maslow’s Hierarchy of Needs, the more likely we are to become “crippled, stunted, immature and unhealthy” which yields a “crippled psychology and a crippled philosophy”. If ever there was a definition of our era, this is it.

Money was designed to simplify commerce- it is a tool, not an end. Once it transcended it’s original purpose and became and object of human accomplishment and meaning, supplanting the the reason for our existence with it’s own directives, we began down a path that could only lead to ruin and collapse. There is no alternative at this stage, no way to “go back” to a time when things were different unless there is a wholesale rejection of this societal falsehood that has stripped us of human dignity and any chance at a life actually worth living."

"Whether you work in the underground economy or go legit, there will only be three classes of people remaining- Owners, Government Employees and Peasants. I’d like to talk about Owners.

Owners have an asset (or two) that earn them money. It could be rental properties or the knowledge and tools to fix cars. It doesn’t matter so long as you’ve got real assets or hard skills – you’ll eat and possibly thrive as social mobility will only exist within the Owner Class. If the only thing you have for trade is unskilled labor then you will become a peasant as the law of supply and demand dictate that what is common has little monetary value.

If you wish to survive what is coming then I’d suggest that you start thinking like an owner and if you are not currently earning 20% or more of your income from the underground economy then you are only a disaster away from a disaster.
The time to start is now."
We are currently in Great Depression II. It can only get worse as jobs and credit crash. WHY THIS FEELS LIKE A DEPRESSION FOR MOST PEOPLE « The Burning Platform

Taylor Camp, "John Wehrheim remembers the utopian community, rejecting materialism for the therapeutic power of nature, in a golden hue."
"Taylor Camp thrived as a community independent of any outside influence for eight years until in 1977, government authorities condemned the entire camp, evicted its residents, and set fire to the homes, gardens, churches and community schools, leaving little but charred ashes and beautiful memories."
Take a peek inside this magical 1969 hippie tree house village in Hawaii
Yep, escape the matrix and they burn you down.
Here are a few people that are more successful in Tofino. This family lives on a floating fortress of greenhouses in the middle of the ocean
You MUST spend big bucks or GOV will throw you off your land. "Camping" on Your Own Land is Now Illegal — Gov't Waging War on Off-Grid Living

[Danny B]

Hedge funds and carbon energy crashing

There are several things in the news that are interesting. Puerto Rico has already closed 100 schools. The hedge funds want then to close all of them,,, so that they can pay back the hedge funds. Hedge Funds Urge Puerto Rico to Close Schools, Pay Back $5.2 bn
Hedge funds lost $ 78 billion in August. Hedge Funds Suffering Record Losses Worldwide
There has been a radical crash in the carbon energy industry and the "climate change" people are saying that we need to slow that down or there will be major financial repercussions. How very wise of them. After coal investments, derivatives and hedges crashed through the basement, they are worried about major sectors of "stranded Assets". Norway is opening up a HUGE oil field. Iran is going to start 50 new projects. They have even found oil in the Golan Heights. Shift from fossil fuels risks popping &#39;carbon bubble&#39;: World Bank - Yahoo News

Here is a CEO who read that optimal happiness can be achieved with a salary of $ 70,000 SO, he pays everyone of his employees $ 70,000. The $70,000 Minimum Wage Experiment Reveals A Dark Truth

Economic science is much closer to art or wizardry that science. There is a very interesting report from B of A.
"At some point during Fed QE, the markets started reacting positively to bad news. In our view, this is when things started going wrong. Bad news became good news for asset prices, as markets expected more QE by the Fed. Asset prices were increasingly deviating from fundamentals, as the markets were trading the Fed instead of the economic reality. This was clearly not sustainable."
"Vamvakidis argues that the market's violent reaction to the Fed's announcement in the spring of 2013 that it planned to "taper" its bond purchases was one sign that QE had already gone wrong."
"We should have known something is wrong. The Fed “taper tantrum” could have been the first signal that QE had gone too far. The second warning may have been the across-the-board emerging markets sell-off that started in mid-2014, as QE tapering was coming to an end and the market started pricing Fed tightening, a sell-off that intensified substantially this year."
Bank of America: Here's the Precise Moment When We Should Have Known QE Went Wrong - Yahoo Finance
The truth is, the FED should have known better. Greenspan said that the FED is NOT independent. We can safely assume that GOV forced all the QE. Socialism just doesn't work if you run out of money.
Apparently, this has produced a negative feedback loop. http://finance.yahoo.com/news/story-...123615050.html
I don't want to leave out something from the stupid people. Households have $ 14 trillion in liabilities. Economists just can't figure out why they don't want to take on more debt. 94.6 million workers,,, NOT working might have something to do with it. http://www.businessinsider.com/savin...s-fall-2015-10
"result people saved less as they believed in their ability to spend money now and have enough for retirement."
"This, then, reversed, as expected, in the financial crisis and people started saving as asset prices declined. But the continued saving of consumers is the puzzle here for central bankers."
No kidding. Maybe it is because the financial crisis never ended.

[Danny B]

The movers behind the movements

“The power elite were not signalling you — they were signalling each other.”
Over the weekend, the signals became more accessible to a wider audience."
"The Economist has long served as a transmission belt of ideas as they move from global elites down to the worker bees in big finance and big government throughout the Western world. It sets the agenda for the people who carry out that agenda.

“For 70 years, the dollar has been the superpower of the financial and monetary system,” says the editorial accompanying this week’s 14-page special report. No vanilla language here: It concludes, “the costs of dollar dominance are starting to outweigh the benefits.”
"Outweigh,, that sounds ominous. Dollar Death Sentence - The Daily Reckoning
The IMF says that currency wars "work". The World Bank says that they don't. The real fight to win the international currency wars - Telegraph
Tantalizing Stupidity and the Case for Gold
Read more at Mish's Global Economic Trend Analysis: Tantalizing Stupidity and the Case for Gold
Bernanke says that he is the smartest and the greatest, Credit Bubble Bulletin: Weekly Commentary: Courage to Print
Armstrong; REPLY: Yes, it appears our politicians on a global scale have degenerated to the worse state of incompetence. This appears to be the final nail in the coffin of Europe. The whole idea of Brussels is failing and this is why lawyers as politicians are dangerous. They do not have a clue as to how the economy or society functions. They try to write laws to command an outcome and never listen. Then on top of that, they will never admit a mistake. Once a policy is adopted, they will not change and this is the problem in motion for Europe.

There is just no way out because they will never admit this idea of one government is a total failure. Merkel & the Fate of Germany | Armstrong Economics
The only thing as bad as lawyers and psychopaths running the show is; ivory tower academics running the show.
A lot of well known investors have advised that you get out of the markets and go to cash. The new bail-in laws would allow the banks to confiscate the money of depositors. There is something like a $ quadrillion in derivatives, mostly held by banks. "Go to cash" sounds like a trip to the slaughter house.

Jim Willie said that energy derivatives and hedges were being bailed out to the tune of $ 1 trillion a month. NOBODY else will touch that topic. BUT, the latest chart shows a huge spike in the reverse-repos from the FED. This validates what he claimed. As more and more derivatives fail, how can the FED print a $ 100 trillion?
The Bundesbank is reporting a $ 9 billion loss. They were holding about $ 75 trillion in derivatives. How much of that went bad? Even Credit Suisse is reporting financial trouble.

[Danny B]

dumping EM debt

Emerging market debt is reckoned at about $ 14 trillion. There is a shortage of dollars worldwide to service this debt. HUGE defaults are expected. Mark Carney: Emerging market debt is the biggest risk right now. Mark Carney: Emerging market debt is the biggest risk right now - Telegraph
"China's Central Bank has started a global payment system which provides cross-border transactions in yuan. " ML-Implode News - China launches global yuan payment system
What happens if the EMs just default completely on dollar debt and start off fresh with the Chinese system?
Bankers typically and periodically pump up a huge credit bubble and then,,, cut off new credit. This causes defaults and the bankers grab everything. The EMs are outside the jurisdiction of U.S. courts. They could tell the hedge funds to go piss up a rope.
The FED pumped up QE and then cut it off. The hedge funds are lined up to take everything tangible from any country that can't service it's debt. Read, "Diary of an Economic Hitman" to get the full game plan. If they didn't cough up everything valuable, we sent in the military to screw the place up good.
The new Russian super-sonic cruise missiles and jamming system have proved themselves to be unstoppable. Iran is going to do a huge ground invasion. China is going in to Syria also. This is a huge object lesson. China and Russia are proving that they can give "cover" to any country that wants to escape the double whammy of the FED and armed forces. The Pentagram is paralysed. They say that they are Putin's "prison *****". A U.S. carrier left the gulf when Russian ships entered. Israeli fighter jets turned and ran when they encountered Russian jets.
Some of the more vocal fools in the district of corruption have called for war with Russia. McCain is catatonic. Obummer is paralysed.
If Russia can successfully thwart neo-con ambitions, dozens of countries will entertain the idea of doing a mass default on dollar debt.

German banks loaned money to Greeks. This is a civil matter for collection. The German GOV took over the PRIVATE debt and made it GOV debt. This allowed Germany to use GOV power to force the collection of debt. The banks shift loss exposure to GOV so that GOV can use military force to collect debts. America has long used military force to collect on bad private debt. If the Sino-Soviet powers can provide an umbrella of protection from America, everybody in the SCO will dump their debt. https://en.wikipedia.org/wiki/Shangh...n_Organisation

Armstrong was VERY correct in predicting that 2015.75 would bring great changes. The total thrashing of ISIS, CIA, MOSSAD in Syria will show the world that POX Americana is coming to an end. His model is, after all, a confidence model.
China does long-range planning where American politicians don't think past the next election. Russia, for the time being, has missile superiority. China has control of important shipping choke points. In Push for Power, China Seeks Control Over Global Trade Chokepoints
“Negotiating with Obama is like playing chess with a pigeon. The pigeon knocks over all the pieces, poops on the board and then struts around like it won the game.” Putin (disputed).
The PTB in America place IDIOTS in power in D.C. Now, they have been completely outmanouvred.
Edit China Joining Russia In Syria Brings Risks Of World War - Investors.com
http://www.businessinsider.com/china...s-debt-2015-10
The thing to remember here is; if they are dumping U.S. dollars, they will NOT accept dollars for continuing trade.
This is what Jim Willie has been talking about all along. The SCO includes a few billion people. They don't need to trade with Amerika. They have plenty of commerce without us. They will only trade for gold. That means that we will NOT have access to cheap oil.

[Danny B]

Run by idiots, the economy continues to slip

The banks have done pump-and-dump for ages and it has always worked. It's completely illogical but, it works,,, for them.
"The heart of the economic disorder is a world financial system that has gone rogue."
"The result, says the Guardian, is a crisis in three acts. Act one was the 2008 bursting of the housing/derivatives bubble that nearly wiped out the global banking system. Act two was the 2011 euro crisis in which the idea that Greek, Italian and Spanish bonds were equivalent to German paper was abruptly discredited, again nearly wiping out the big banks. "
"Act three, now in progress, is the bursting of the emerging markets bubble, led by China "
"The world needs inventive responses. It needs a bigger, reinvigorated IMF whose constitution should reflect the global balance of economic power and that can rescue the EMEs… It needs western governments to launch massive economic stimuli, centred on infrastructure spending. It needs new smart monetary policies that allow negative interest rates."

"This isn’t surprising but it is instructive because it represents the thought process at work in the upper echelons of virtually all the major economies: What we’ve tried has failed, but the fault is with the execution rather than the concept. We didn’t go big enough. We didn’t borrow enough money, we didn’t build enough roads and bridges, we didn’t push interest rates down far enough. So let’s hit the emerging market crisis with everything: bigger multinational institutions making vastly larger development loans, rich-world governments ramping up spending and paying for it with borrowed money, and central banks pushing interest rates down to negative mid-single digits.

For those who view this as the financial equivalent of a junkie doubling the dose of heroin to ensure a permanent high, the question isn’t whether some mutant strain of easy money will save us, but what dosage will turn out to be fatal."
Here?s What We?ll Try ? And What Will Fail ? Next

Here is the same article but, with socialist leanings. They blame the crash on libertarian and anti-state policies. "The grip of libertarian, anti-state philosophies on the dominant Anglo-Saxon political right in the US and UK makes such intervention as probable as a Middle East settlement."
The world economic order is collapsing and this time there seems no way out | Will Hutton | Comment is free | The Guardian

A few people are starting to notice that all is not well in the economy. Citi's Willem Buiter: we're about to go into global recession - Business Insider

[Danny B]

The unavoidable fate of the Euro... febezzle,

The Euro project was a rush-job. No currency union without a fiscal and political union had ever survived. They are trying to cobble together a fiscal / debt union on the fly.
" The euro will be consigned to a permanent state of malaise as deeper integration will bring no prosperity to the crisis-hit bloc, according to the former chief economist of the International Monetary Fund.

In a stark warning, Olivier Blanchard - who spent eight years firefighting the worst global financial crisis in history - said transferring sovereignty from member states to Brussels would be no “panacea” for the ills of the euro. "
Fiscal union will never fix a dysfunctional eurozone, warns ex-IMF chief Blanchard - Telegraph
Armstrong has shown good cause to believe that one-world GOV can't possibly work. Since GOV is never wrong, you can bet that they will muck things up good on the way to collapse.

Embezzlement "More than a half-century ago, John Kenneth Galbraith presented a definitive depiction of the Wall Street Crash of 1929 in a slim, elegantly written volume. Embezzlement, Galbraith observed, has the property that “weeks, months, or years elapse between the commission of the crime and its discovery. This is the period, incidentally, when the embezzler has his gain and the man who has been embezzled feels no loss. There is a net increase in psychic wealth.” Galbraith described that increase in wealth as “the bezzle.”
"This psychic wealth can be created without illegality: mistake or self-delusion is enough. Munger coined the term “febezzle,” or “functionally equivalent bezzle,” to describe the wealth that exists in the interval between the creation and the destruction of the illusion."
"The joy of the bezzle is that two people – each ignorant of the other’s existence and role – can enjoy the same wealth. The champagne that Enron’s Jeff Skilling drank when the US Securities and Exchange Commission allowed him to mark long-term energy contracts to market was paid for by the company’s shareholders and creditors, but they would not know that until ten years later."
https://agenda.weforum.org/2015/10/w...om-the-future/
In widespread deflation, it is this psychic wealth that disappears.