Economic pressures

[Danny B]

Deflationary Ice age and papadrops of cash

Japan can print their own currency and they just keep creating more and more of it. Greece can not print and they just keep going farther and farther in the hole. All of you know who The Council on Foreign Relations is (CFR). The CFR just reported that austerity and debt restructuring just aren't working in Greece. They won't come out and say that massive default is in the winds. Macro and Markets » Greece’s Bailout Dead End

"Nomi Prins – Keynote Speaker Who Recently Addressed The Fed, IMF And World Bank, Warns “It’s All Coming To An End”
November 13, 2015

Today Nomi Prins, the keynote speaker who recently addressed the Federal Reserve, IMF and the World Bank, warned King World News “It’s all coming to an end.” Nomi Prins – Keynote Speaker Who Recently Addressed The Fed, IMF And World Bank, Warns “It’s All Coming To An End” | King World News Nuff said
"deflationary Ice Age" is upon the world" "There is, of course, one way to short circuit said Ice Age, and it involves paradropping money in an act of terminal fiat desperation (the outcome is always hyperinflation) " The CFR also endorses helicopter money.
YES, the dreaded hyperinflation BUT, the alternative is revolution.

A large State is un-natural and artificial. It must be held together by external forces when internal forces are inadequate. The internal forces are centered on mutual prosperity. That has left the room. The external force is ;fear of a common enemy. Why do you think that the CIA goes around murdering people at wedding parties along with general murder? They are trying to create as many enemies as possible. America needs the threat of external enemies to keep the masses from going their own way. The terror attacks will continue until morale improves.
Albert Edwards Explains Why The "Global Economy Will Be Thrown Into Chaos" | Zero Hedge

The cheerleaders for the Eurozone are getting more desperate to hold it together. EU Commissioner's Dire Warning: "The Only Alternative To Europe Is War" Short-sighted idiots.

[Danny B]

Europe and war

It's often claimed that "all wars are banker wars". London was certainly the epicenter of banking decades ago. Many of the London bankers were jewish. Is there any connection? What does history say in retrospective? I'm posting quotes from the people in the "know", people who were there.

"Judea declares War on Germany." - Daily Express (March 24, 1934)

"Germany is the enemy of Judaism and must be pursued with deadly hatred. The goal of Judaism of today is: a merciless campaign against all German peoples and the complete destruction of the nation. We demand a complete blockade of trade, the importation of raw materials stopped, and retaliation towards every German, woman and child." - Jewish professor A. Kulischer (October, 1937).

"The fight against Germany has now been waged for months by every Jewish community, on every conference, in all labor unions and by every single Jew in the world. There are reasons for the assumption that our share in this fight is of general importance. We shall start a spiritual and material war of the whole world against Germany. Germany is striving to become once again a great nation, and to recover her lost territories as well as her colonies. But our Jewish interests call for the complete destruction of Germany..." - Valadimir Jabotinsky, in Mascha Rjetsch (January, 1934)

Winston Churchill: "We will force this war upon Hitler, if he wants it or not." - Winston Churchill (1936 broadcast)

"Germany becomes to powerful. We have to crush it." - Winston Churchill (November 1936 to US-General Robert E. Wood)
Now, we get close, it was economic competition.

"The war wasnt only about abolishing fascism, but to conquer sales markets. We could have, if we had intended so, prevented this war from breaking out without doing one shot, but we didn't want to." - Winston Churchill to Truman (Fultun, USA March 1946)

"Should Germany merchandise again in the next 50 years we have led this war (WW1) in vain." - Winston Churchill in Times (1919)

"Hitler and the German people didn't want this war. We didn't answer Hitlers various petitions for peace. Now we have to admit that he was right. Instead of a cooperation with Germany, which he had offered us, now stands the gigantic, imperialistic might of the Sovjets. I feel ashamed to see how the same intentions which we accused Hitler of now are pursued under a different name." - Sir Hartley Shawcross, British chief-accuser in Nuerenberg
Hitler made NUMEROUS attempts to try to avoid war. ALL of them were rebuffed by Anglo-Americans and French.

"We made a monster, a devil out of Hitler. Therefore we couldnt disavow it after the war. After all, we mobilized the masses against the devil himself. So we were forced to play our part in this diabolic scenario after the war. In no way we could have pointed out to our people that the war only was an economic preventive measure." - US foreign minister Baker (1992)

What about later on when understanding set in?
"Germanys unforgivable crime before WW2 was its attempt to loosen its economy out of the world trade system and to build up an own exchange system from which the world-finance couldnt profit anymore. ...We butchered the wrong pig." - Winston Churchill, The second World War (Bern, 1960)
Important Quotations For A Better Understanding Of WWII

"Lies come along first, and drag along the gullible. Truth limps in long afterwards, hanging on the arms of time.” - Balthazar Gracian

There is NO reason at all to have a war with Russia. The neocons are arming Germany to the teeth hoping that some provocation will appear. Other States in Europe are being loaded up with offensive arms. The basis of this is pipelines; Competing Gas Pipelines Are Fueling The Syrian War & Migrant Crisis | Zero Hedge
The new Russian cruise missiles show Europe that they do not have a missile shield. Hopefully, the epiphany that came to Churchill AFTER the war will come to European leaders BEFORE a planned war.

[Danny B]

A change of guard

The FED jawbones the market and the market goes up. "Absent the performance on FOMC days, the stock market has gone nowhere in 17 years. "
What Hath The Fed Wrought? | Zero Hedge
Investors flee precious metals. They are fleeing ELECTRONIC precious metals. Investors Flee Precious Metals as ETF Outflows Top $1 Billion - Bloomberg Business
Meanwhile in China, "Roughly 21 tonnes, or 685,652 troy ounces of gold in .999 fine kilo bars, was withdrawn, net of a small deposit of 27,328 ounces, from the Brinks warehouse in Hong Kong yesterday."
Jesse's Café Américain: About 38% of All the Comex Gold in Hong Kong Left the Warehouses Yesterday
That would most likely be gold pulled from Hong Kong and taken to China.
This is an excellent article on the future of America; "The point of no return will pass once and for all sometime in 2016, and America’s elite will no longer be able to choose between the provisions of compromise and collapse. " Time Is Running Out For Pax Americana?s Apologists | Oriental Review
" However, the globalization of not only the world’s industry and trade (that was achieved by the end of the 19th century), but also global finance, caused the collapse of the American empire through a policy that was extremely dangerous and costly for the whole world. To put it bluntly, the United States could bury civilization under its own wreckage."
"America’s elite have been offered a “soft landing” that would preserve much of their influence and assets, while gradually adapting the system to better correspond to the present facts of life (bringing it into line with the available reserve of resources), "
"Up until 2015, America’s elite (or at least the ones who determine US policy) had been assured that they possessed sufficient financial, economic, military, and political strength to cripple the rest of the world, while still preserving Washington’s hegemony by depriving everyone, including (at the final stage) even the American people of any real political sovereignty or economic rights. "
You can see that the new Russian military systems counter the military strength of America,,, especially if we have to rely on turkeys like the F-35.

[MonsieurM]

A large State is un-natural and artificial. It must be held together by external forces when internal forces are inadequate. The internal forces are centered on mutual prosperity. That has left the room. The external force is ;fear of a common enemy. Why do you think that the CIA goes around murdering people at wedding parties along with general murder? They are trying to create as many enemies as possible. America needs the threat of external enemies to keep the masses from going their own way. The terror attacks will continue until morale improves. [/B]


The cheerleaders for the Eurozone are getting more desperate to hold it together. EU Commissioner's Dire Warning: "The Only Alternative To Europe Is War" Short-sighted idiots.

..... Dead on

It is only necessary to make war with Five things; with the maladies of the body, the ignorances of the mind, with the passions of the body, with the seditions of the city and the discords of families.
--- Pythagoras

[Danny B]

Refi NOW,,, sucha deal

The biggest economic crime of all? The biggest economic crime is when international bankers lend the entire money supply of a nation at compound interest, placing the burden of providing national purchasing power upon home buyers and and home equity refinancers where the standard contracts stipulate front-loading of interest payments, so that when deflation from interest drain makes it impossible for households to pay their bills without refinancing to consolidate credit card debt etc. they refinance and in so doing forfeit 100 percent of the interest they have worked so hard for so long to to pay so they must start over paying full interest on principal that, that in many cases has not been paid down even one cent. Over 90 percent of people who refinance do not realize that in doing so they make a gift to the owners of the bank of all the interest they have been paying for, often several years as they are forced to start all over paying full interest on the original full principle -- except that over this time deflation continued and earning each dollar of principal and interest will be even harder than before. The biggest economic crime of all is having this kind of monetary system, this kind of theft of people kept in ignorance of the crime, when money can and should be provided free of charge by government as a public utility, as necessary infrastructure required for a market economy that serves the common good.
~ Dick Eastman Yakima, Washington

[wayne.ct]

Refi

Yup, I have noticed how the banks want me to refi when the net benefit to me is zero. They really are greedy.

[Danny B]

Money from thin air

It has always been considered the right of bankers to create money. Very little of our money supply is created by the FED. Money creation is at a standstill because we are debt saturated. There are increasing calls for the central bank to BYPASS the private banks and create public money that would be injected into the economy by direct deposit.
Monetary authorities around the world are scratching their collective heads wondering why growth has stopped. They still refuse to connect financial growth to population growth. Their actions impoverished us and we cut back on family size. Pre-birth control, this wasn't a widespread option. "They" are operating on assumptions that are no longer valid.
We slide towards a shrinking population that has lower and lower wages. "They" have come up with the grand idea of paying is directly so that we don't have to rely on our shrinking paycheck. This idea is loudly denounced by private banking.
BUT, as we slid further into deflation, the State sees revolution on the horizon. Here are a couple of articles on public money creation.
Why Not Just Print More Money? - The New Yorker
http://www.24hgold.com/english/news-...ael+Pento&mk=1

Our claimed debt is $ 18 trillion. The GAO says that it is closer to $ 65 trillion. https://www.rt.com/usa/322377-debt-c...reform-walker/
FED GOV can't realistically print new money to pay off the debt. The further we slide into deflation, the more calls there will be to create free public money.
The bankers are very happy to create money out of thin air to LEND to us. They MOST certainly don't want to be paid back with money created out of thin air by GOV.

[Danny B]

Avoiding reality as long as possible

State sponsored terror.
It Is Time to Knock off the Bull**** About Surveillance for Terrorism | Armstrong Economics
When The State Is Not Your Friend—–Police Asset Seizures In 2014 Exceeded All Burglaries | David Stockman's Contra Corner
FED rate hike;
11/18 Fed minutes show majority willing to raise interest rates in December – MarketWatch
11/18 Five reasons the Fed can’t raise rates - Peter Diekmeyer – Sprott
India and Brazil;
11/17 Indian exports contract 17.5% to $21.3 billion in October – Live Mint
11/19 Brazil GDP in "free fall mode", get ready for "terrible" Q3 print – Zero Hedge
The Indian GOV came up with the idea that Indians should turn in their gold to the banks and earn interest. It didn't fly; 11/19 Indians refuse to give their gold to the government – Zero Hedge
Evidently the Indians have learned a thing or 2 over the last 32,000 years. https://www.youtube.com/watch?v=evOelfBZbnA
Money velocity is still falling but, there is a more colorful way to state this; 11/19 Money: the blood of capitalism is clotting – Talk Markets
MSM is waking up to the prospects of automation; 11/15 Robots could steal 80 million US jobs – CNBC
David Stockman speaks his mind; Stockman CNBC Interview: Last Spasm Of The Bull, Meltdown Ahead | David Stockman's Contra Corner
Here is an excellent article with several links that lays out the strategy of China.
http://www.24hgold.com/english/news-...n+Popescu&mk=1
Sooner or later, the financial sector will learn that very few people are needed in the productive economy BUT, every person wants to be part of the consumptive sector.

[Danny B]

Fiat currencies and gold backed bonds

"This process was facilitated by a system of lend-lease, in which supplies of arms, equipment and strategic materials to recipient countries were paid for in gold. As a result, the US built up its gold reserves from 13,000 tons in 1938 to 21,800 tons in 1949, concentrating 70% of the world's reserves of the yellow metal in one place.
Read more: http://sputniknews.com/business/2015...#ixzz3s0FU44Az
Pretty good for a barbaric relic.
De Gaulle, "In 1965, he demanded that the United States exchange $1.5 billion dollars for gold. America had no choice but to agree. In two years, de Gaulle made US gold stores 3,000 tons lighter.

Following this, Germany and other countries made the same exchange. And by 1970, the gold reserves of the United States had decreased by more than half, to 9,838.2 tons."
"The largest gold reserve stored by the Fed belongs to Germany, at 674 tons. On the whole, the country holds nearly 3,500 tons of gold.

However, both sides were content with the situation: the US received money for storage, and Germany knew its reserves were finely protected.

The first major attempts by foreign countries to return their gold reserves first began in 2012. At the time, Germany made attempts to withdraw its gold, but it was denied by Washington.

The US said it could not provide the required security for audit. Then, Washington said it was impossible to differentiate the US gold bars from German ones."
Read more: http://sputniknews.com/business/2015...#ixzz3s0GRAyQw
That is very strange. All bars have a number and are not supposed to be re-melted.

China is onboard to join in on the SDR BUT, they say that it is just temporary. http://www.24hgold.com/english/news-...n+Popescu&mk=1
"First in private conversation and more recently on the record. Ben Bernanke, past chairman of the U.S. Fed, said to Jim Rickards, author of Currency Wars, in Seoul, South Korea in 2015: “The international monetary system (dollar based) is not coherent.” And he added, “We need new ‘rules of the game’.”
Triffin's dilemma makes it clear that using a sovereign currency for the reserve currency will always lead to a crash. It has been proven time and time again that a "working Currency" can NOT serve as a store of value. Gresham's Law makes this clear also.
Gresham's Law also makes it clear that no sovereign currency can be gold backed. Any gold-convertible currency would soon go into hiding and be unavailable for use as a currency. Gold-convertible bonds make perfect sense because they are regarded as a store of value and not a working currency.
There is nothing wrong with using a fiat currency for daily use. If the State over-issues it, price inflation and currency conversion will soon tell the tale. Investors will flee to something more stable. The reserve-currency store-of-value attribute is what allows America to go around thrashing the world.
The Chinese initiated currency swaps will gradually sideline the dollar. When China has enough gold, they will offer gold convertible bonds as a store of value. All bonds will be denominated in gold-ounces or kilos or some other weight. The Yuan will float like every other currency.
The Gold supply increases by about 1 1/2% per year. The economy grows by about the same amount. NO currency will be the reserve currency. They will all float depending on the economic strength of the issuer. Gold-denominated bonds will become the strongest collateral. That will satisfy both Gresham and Triffin.

[Danny B]

Another day,,, another financial mess

Here is some BS straight from the self-proclaimed most important BS book.
"Chapters 2 and 3 employ a neoclassical growth framework to study monetary phenomena. The neoclassical model is one in which growth is exogenous and money has no e¤ect on the real economy’s long-run"
Page xix http://www2.um.edu.uy/dtrupkin/Walsh.pdf

The oil glut is going to take down a LOT of hedges and derivatives; Goldman eyes $20 oil as glut overwhelms storage sites - Telegraph
" the cartel, which has lost half a trillion dollars of revenue since the oil crash kicked off in mid-2014. Several OPEC states are in dire straits. Even the Saudis have been downgraded by Standard & Poor’s and are facing a budget crunch."
It doesn't help that ISIS is dumping cheap oil on the market; The Most Important Question About ISIS That Nobody Is Asking | Zero Hedge
A few headlines;
11/20 Hedge funds, large retailers, and energy companies imploding – Market Daily News
11/20 China has a $1.2 trillion Ponzi finance problem – Bloomberg
11/19 What the heck? US public debt up $518 bn in November alone – My Budget 360
11/20 Baltic Dry Shipping Index just collapsed to all-time low – ETF Daily News Maybe because we are too broke to buy anything.
11/20 As investors shun debt, banks are left holding the bag – New York Times YES, banks are left holding the bag. What about the Chinese?
11/19 Chinese savers turn to gold as rest of world exits holdings – Bloomberg
11/19 China's steel industry peers into abyss as output to plunge – Bloomberg No surprise. It's the same for British and American steel producers.

"What exactly do we mean by deflation? Back in 2008 the central banks of the developed world, as well as China, had a choice:

1. admit that prior policies geared towards encouraging borrowing at a faster rate than income growth were a horrible idea, or
2. double down and push those failed policies even harder

As we all know, they chose option #2. And so here we are, just 8 years later, with nearly $60 trillion in new debt piled on top of the prior mountain -- while GDP grew by only $12 trillion over the same time period:
Deflation Warning: The Next Wave | Peak Prosperity
"In other words, instead of saying to ourselves: Hmmm.... it was probably a terrible idea to pile up debt at 2x the rate of income growth, what the world did instead was to double down on that terrible idea and pile on more debt at 5x the rate(!) of nominal GDP growth."

11/20 ECB's top economist signals need to act to maintain confidence – Reuters Well, if it wasn't for 50% youth unemployment, there might be more confidence.
11/20 Draghi says ECB will do what it must to spur price gains – Bloomberg No kidding,,, raise prices. What about raising employment?
11/20 Auto originations hit 10-year high, subprime loans fuel growth – Mish Liar-loans to sell more cars. What a novel idea.
Charles Hugh Smith on currency revaluation;
" But raising interest rates has a brutally negative effect on the domestic economy, as higher rates choke off domestic lending, which then pushes the economy into recession.

It's a no-win double bind, though, for doing nothing and letting one's currency implode drains the nation of capital and makes imports unaffordable. "
" The bone-dry half-dead forest awaiting an igniting lightning strike is the global mountain of debt--debt which is no longer supported by current valuations of commodities and risk.

In effect, a currency crisis is simply the abrupt revaluation of the currency to reflect new realities. That revaluation then raises the risk premium on debt denominated in that currency or owed in other currencies.

As emerging market currencies decline, the income streams needed to service all the debt denominated in U.S. dollars declines, a self-reinforcing dynamic: as income and valuations fall, capital flees, pushing the relative value of the currency down even more, which further raises the risk premium that then triggers even more capital flight.

The sums in play are so staggering (an estimated $11 trillion in emerging market debts denominated in other currencies) that even the Fed won't be able to stop the meltdown. "
Of Two Minds - Is This How the Next Global Financial Meltdown Will Unfold?
So, things are going to get even worse for States with weak currencies, especially for commodity exporters.
Yep, there is a big chain of defaults in the future.

[Danny B]

No way out

The dead-cat bounce, When Wall Street Gets DeFANGed———Look Out Below! | David Stockman's Contra Corner
Hedge fund implosion,,, close cousin to the dead-cat bounce, What Hedge Fund Panic Looks Like | Zero Hedge
NOBODY is spending money on capacity expansion. Why bother if nobody has any money? It Is Different This Time——–Now Comes The Global CapEx Depression | David Stockman's Contra Corner

"Saudi Arabia cannot balance its budget unless the price of oil is at least $106 a barrel"
First appeared: Saudi Arabia’s Economy is Coming Apart at the Seams | New Eastern Outlook
Goldman eyes $20 oil as glut overwhelms storage sites - Telegraph
BMW REALLY wants you to buy a car, http://www.silverdoctors.com/us-econ...-out-of-money/
If the FED raises rates, they will wipe out the emerging markets. (they can't be saved anyway). If they don't raise rates, they will wipe out the hedge funds. Plus, " We must normalize rates ASAP to prevent a major crisis in Pension Funds of which the average hold 40% in government debt and cannot meet future obligations."
http://www.armstrongeconomics.com/archives/39604
It really doesn't matter if they raise or not. It's just a choice of who gets crashed first. When the emerging markets default on $ 13 trillion of debt, it will take down everything else. The pension, hedge and insurance funds may want a rate hike so that they can earn interest income. What will it matter if the whole rest of the economy crashes 2 weeks later?
Brazil will go down no matter what, • Petrobras’s Dangerous Debt Math: $24 Billion Owed in 24 Months (Bloomberg)
Both oil and steel are crashing, • US Oil Producer Bankruptcies Are Piling Up (WSJ)
• Total US Household Debt Hits $12.1 Trillion As Subprime Auto Lending Jumps (WSJ) Liar-loans to the rescue.

[Danny B]

more and more contraction

Th FED, reportedly has a toolbox full of tools. I posted from their "Bible" and it shows that their tools are defunct.
"Seven years after the Fed unleashed ZIRP and QE to "fix the economy", it has finally admitted that ZIRP and QE failed to do that" " in other words, the Fed's experiment has weakened the economy so much, its potential growth rate has been cut in half in the past decade. " Whadda you mean"experiment"?
"For example, if nominal growth is 3 percent and the debt GDP ratio is 300 percent, the implied equilibrium nominal rates is around 1 percent. This is because at 1% rates, 100% of GDP growth is necessary to service interest costs.' Bunch of effing "tools" they are.

" This scenario is also bullish for rates because the Fed would, at the very least, stop rolling down its SOMA portfolio. More likely it would restart asset purchases in an attempt to stimulate the economy once more, pushing yields further down. We have argued in the past that unconventional forms of monetary accommodation are here to stay. The minutes of the October meeting confirm this view, noting that some policy makers felt it would be “prudent to have additional policy tools” because a lower long-run equilibrium real rate makes it more likely that reductions in the Funds rate alone would not be sufficient to stimulate the economy in the event of a downturn in the future.

Whether this error will crush what little credibility the Fed has and be its final error, either policy or communication, will be revealed in the very near future.
Good luck Janet. "
Here Is The Complete Scenario In Which The Fed Hikes Rates, Starts A Recession, And Launches QE4 | Zero Hedge
All this unconventional BS will do nothing for employment.

"During a liquidity crunch, there will be very little money in circulation, leading to very little economic activity, and under such circumstances, cash will be exceptionally important. Managing risks to liquidity (cash) makes the difference between being at the mercy of changing circumstances and having the freedom of action to respond to both opportunities and threats as they develop"
"As we have pointed out at the Automatic Earth many times before, trade is very vulnerable when the credit it relies on dries up, meaning that economically contractionary times typically lead to trade collapses. "

Nicole Foss presents: Challenge and Choices - The Automatic Earth
In 2007, I started a thread "The Long Cold Winter". https://eplaya.burningman.com/viewtopic.php?t=19613
I see a recent article with the same name. The Long, Cold Winter Ahead |
"Winter Is Coming" - Wall Street Economists At Work | Zero Hedge
Morality goes away = trust goes away = credit goes away = trade goes away. Stock up on imported beer, NOW.
Saudi produces oil for about $ 15 a bbl. EVERYBODY and their brother is trying to sell oil to meet deteriorating economics. How long can the higher-cost producers keep pumping? Many copper mines are selling copper for less than it costs to mine. What about U.S. oil producers? Rig count is down 60%. EVERYBODY lies about profitability. A large part of the energy sector is crashing; Short These Oil & Gas Companies - They Are Going To Zero | Seeking Alpha
NOBODY will finance U.S. oil producers because nobody will trust them. Nobody will take U.S. Treasury bonds in payment for imported oil,,, only cash or gold.
Better finish building your wood-gas truck.

[Danny B]

Countdown to the FED meeting

Same old news as the crash progresses.
"The $500 Trillion Ticking Time Bomb
But Yellen knows that things are far from well. She knows that unemployment is not 5 percent, since 94 million people capable of work are not working. She also knows that the risks in the U.S. and in the world economy are greater than ever.

The U.S. federal debt is $18.5 trillion and total debt is close to $70 trillion. On top of that there are unfunded liabilities in excess of $200 trillion, plus there is around $500 trillion of interest-rate-sensitive derivatives in U.S. banks.

With a debt and risk position of around 3/4 of a quadrillion dollars, it’s not the most comfortable position for the Fed to increase interest rates.
http://kingworldnews.com/the-500-tri...ancial-system/
The masters of finance are VERY worried. It just occurred to them that China planned to default all along, Masters of the Finance Universe Are Worried About China - Bloomberg Business

"How long can this charade continue?”

David Stockman: “No one really knows. That’s the problem. We are in such uncharted waters. None of this has ever been tried before. None of this is sustainable. It defies every law of common sense and sound economics and finance. Therefore, you are building up a larger and larger combustible element in the system that sooner or later will blow."
David Stockman – This Will Scare The World To Death | King World News
Hmmm, I guess that it WAS and experiment
The FED meeting is in a few weeks. Just imagine the FED as a stationary train in the middle of the RR tracks. There are 2 trains loaded with high explosives converging from either direction.
Pray to all the gods that you believe in that the massive credit lockup doesn't take out the agriculture sector.

[Danny B]

15 people smarter than Wall Street

“If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.”
― Warren Buffett
“When you combine ignorance and leverage, you get some pretty interesting results.”
― Warren Buffett
"What caught my attention in late 2007 were the weird, amorphous, and ever growing trading losses in the subprime-mortgage bond market suffered by the big Wall Street banks. Citigroup’s losses went from $6 billion to $40 billion to more than $65 billion. Merrill Lynch announced a $4.5 billion hit, then revised it to $19 billion and then finally to more than $50 billion. Morgan Stanley announced that it had lost more than $9 billion on what appeared to be a bet by a single trader. ( It turned out to be closer to $ 100 billion ) The big Wall Street banks had become the dumb money. Their employees, the putative best and brightest, and surely the most self-interested people on the planet, were committing mass suicide. How had that happened?

Someone had to be on the other side of the big Wall Street firms’ stupid bets. I set out to find as many of these people as I could. There turned out to be about 15 of them, who had gone all in on the bet against subprime-mortgage bonds. The group included some seriously interesting and peculiar people—the sort of oddballs and misfits who would have a hard time getting a job at a big Wall Street bank. "
Even Michael Lewis Was Surprised Hollywood Bet on The Big Short | Vanity Fair
"Yet they’d found a way to see what the expert insiders had missed: that the big Wall Street banks had become so bizarrely organized that it was hard to say where their stupidity ended and their corruption began."
The big Wall Street banks had become the dumb money.
YES, Wall street had become the dumb money BUT, it was your money that they were losing.

15 people.
On Wall Street, the losers in the collapse of the housing market are legion. The biggest winner looks to be John Paulson, a little-known hedge fund manager who smelled trouble two years ago.

Funds he runs were up $15 billion in 2007 on a spectacularly successful bet against the housing market. Mr. Paulson has reaped an estimated $3 billion to $4 billion for himself -- believed to be the largest one-year payday in Wall Street history.
"Michael Burry was one of the first investors in the world to recognize and invest in the impending subprime mortgage crisis. "

[Danny B]

Worgl and related solutions

I’ve mentioned Worgl before but, not in detail. Worgl had extremely high unemployment. The Mayor only had 40,000 schillings.
"Instead of spending the 40,000 schillings on starting the first of his long list of projects, he decided to put the money on deposit with a local savings bank as a guarantee for issuing Wörgl’s own 40,000 schilling’s worth of stamp scrip. He then used the stamp scrip to pay for his first project. Because a stamp needed to be applied each month (at 1% of face value), everybody who was paid with the stamp scrip made sure he or she was spending it quickly, automatically providing work for others. When people had run out of ideas of what to spend their stamp scrip on, they even decided to pay their taxes, early.

Wörgl was the first town in Austria which effectively managed to redress the extreme levels of unemployment. They not only re-paved the streets and rebuilt the water system and all of the other projects on Mayor Unterguggenberger’s long list, they even built new houses, a ski jump and a bridge"
"In fact, every one of the schillings in stamp scrip created between 12 and 14 times more employment than the normal schillings circulating in parallel. The anti-hoarding device proved extremely effective as a spontaneous work-generating device.

Wörgl’s demonstration was so successful that it was replicated, first in the neighboring city of Kirchbichl in January of 1933. In June of that year, Unterguggenberger addressed a meeting with representatives of 170 other towns and villages. Soon afterwards 200 townships in Austria wanted to copy it. It was at that point that the central bank panicked and decided to assert its monopoly rights. The people sued the central bank, but lost the case in November 1933. The case went to the Austrian Supreme Court, but was lost again. After that it became a criminal offence in Austria to issue “emergency currency.”
----------------------------------------------------------------------------------
This story is well known. The center piece is Demmurage currency. The current darling idea of the GOV / Central bankers is negative interest rates to get investors to invest. One more stupid idea that we will have to suffer through until it too is proven a failure.

"The stated justification for this move is to stimulate "demand" by forcing consumers to withdraw their money and go shopping with it. When an economy is struggling, it is standard practice for a central bank to cut interest rates, making saving less attractive. This is supposed to boost spending and kick-start an economic recovery.

That is the theory, but central banks have already pushed the prime rate to zero, and still their economies are languishing. To the uninitiated observer, that means the theory is wrong and needs to be scrapped. But not to our intrepid central bankers, who are now experimenting with pushing rates below zero."
The Austrian CB was aghast at how effective the Worgl experiment was. The CBs are owned by the bankers and they distribute free money to the bankers ( upper loop ).
The Worgl experiment distributed free money in exchange for LABOR to the lower loop.
Ghandi, the seven deadly sins.
"Wealth Without Work
Pleasure Without Conscience
Knowledge Without Character
Commerce (Business) Without Morality (Ethics)
Science Without Humanity
Religion Without Sacrifice
Politics Without Principle"
The upper loop would love for us to continue to run up our debt load. They are VERY unhappy that we can no longer qualify for more debt. The CFR, et al have proposed dropping money out of helicopters to alleviate the shortage. The FED has "printed up" about $ 26 trillion all told. Almost all of it is sequestered in the upper loop. A small % of it has bled over into the lower loop and raised prices of certain areas. At the same time, demand has crashed and lowered prices in other areas.

Ellen Brown explains the critical difference between Worgl and current efforts to get the economy going.
"Whether negative interests will actually stimulate an economic recovery, however, remains in doubt. Proponents of the theory cite Silvio Gesell and the Wörgl experiment of the 1930s. As explained by Charles Eisenstein in Sacred Economics:"
"There is a critical difference, however, between the Wörgl currency and the modern-day central bankers' negative interest scheme. The Wörgl government first issued its new "free money," getting it into the local economy and increasing purchasing power, before taxing a portion of it back. And the proceeds of the stamp tax went to the city, to be used for the benefit of the taxpayers. As Eisenstein observes:
It is impossible to prove . . . that the rejuvenating effects of these currencies came from demurrage and not from the increase in the money supply . . . .

Today's central bankers are proposing to tax existing money, diminishing spending power without first building it up. And the interest will go to private bankers, not to the local government."
Hang Onto Your Wallets: Negative Interest, the War on Cash and the $10 Trillion Bail-In
"If central bankers are seriously trying to stimulate the economy with negative interest rates, they need to repeat the Wörgl experiment in full. They need to first get some new money into the economy, money that goes directly to the consumers and local businessmen who will spend it. This could be achieved in a number of ways: with a national dividend; or by using quantitative easing for infrastructure ( didn't work for Japan with their shrinking population) or low-interest loans to states Will it somehow go to the working man or just be handed out for the dole?; or by funding free tuition for higher education Yeah right. Just what we need, more unemployed students). Consumers will hit the malls when they have some new discretionary income to spend. Just what we need, buy tons more junk from China.
There are no simple answers. The simpletons in GOV haven't a prayer of coming up with a solution. The financial industry ignores social issues like; demographic crash, unemployment, falling core population, falling wages, pollution, birth-control, etc. The final arbiter will be the Grim Reaper.