Economic pressures

[Danny B]

WAR to preserve interest charges.

Muhammad cursed riba as being a sin even worse that eating pork. Charging interest is also condemned in the Bible. The jews claim that they were forced into usury by the Christian prohibition of charging interest.
Riba (Interest) Prohibited in Islam, Christianity and Judaism.
America was attacked by England when Benjamin Franklin told Europeans that America issued whatever currency was needed. Hitler tried to break away from London/European banker control by issuing currency based on, and reflecting actual work. Various writers have proposed the idea of interest-free loans for productive use rather than speculation.
Islamic banking is a system where the bank shares in both loss exposure and profit.
This idea is making a comeback in Russia. This is part of the reason that they are being attacked so fiercely. All the islamic banking centers in the Middle East have been destroyed to keep interest-free banking from growing. Russia and Iran are the 2 strongest economies that would be amenable to islamic banking.
The entire system that Russia is contemplating is aimed at eliminating the drain from bankers and speculators.
Interest-Free Finance is Being Seriously Discussed in Russia
Exxon corp reports that it earns 5.5 cents per gallon of gasoline. 5 years ago, it was reported that speculators added $ 27 a bbl to the cost of oil. That is $ 2.35 a bbl for Exxon (42 gal) and $27 a bbl for speculators.
The IMF has just cancelled the payback on the loan that Ukraine owes to Russia. The West and it's bankers (and armies) are trying to do everything that they can to start a war with Russia,,,, as they did with Germany.
I would much rather see America slide under the waves as opposed to see the planet destroyed.

[Danny B]

Stockman and the end of ZIRP.

Sigh,, people just don't seem to figure it out.
" Anglo American is firing 63 percent of its workforce"
12/10 China wants to replace millions of workers with robots �– Technology Review
The story is the same everywhere. Consumptive power drops because the financial industry is sucking out the blood and produces nothing. As consumptive power drops, industry tries to lower prices by cutting overhead. They cut more jobs and therefore, consumptive power.
• Chinese Devaluation Is A Bigger Danger Than Fed Rate Rises (AEP) Well, it looks like we will get to see this hypothesis proven or dis-proven.

David Stockman writes SO clearly and informatively.
" the denizens of the Eccles Building (the FED) have painted themselves into the most dangerous monetary corner in history. They have left themselves no alternative except to provoke a riot in the casino——-the very outcome that has filled them with fear and dread all these years."
Bernanke is/was straight from academia lacking real-world experience in ANYTHING. He started ZIRP figuring that he could get out when he wanted. The world just doesn't work that way.
" The world’s nominal GDP has dropped 5% in dollar terms during the past year, and that’s what counts because the world’s $225 trillion tower of debt is heavily denominated in dollars,"
Credit growth can not tolerate a cessation let alone a shrinkage.
" The hissy fit will happen because the Fed’s words and actions starting next week will not say “we have your back, keep buying”.
The message will be “we are lost and you are on your own”.
The Fed’s Painted Itself Into The Most Dangerous Corner In History—–Why There Will Soon Be A Riot In The Casino | David Stockman's Contra Corner
The funds are dumping stocks. The insiders are dumping stocks; The Least Surprising Stat Of The Week: Corporate Insiders Are Dumping Their Stock - The Daily Coin Corporate America NEEDS that cash that is fleeing,
"Total corporate and non-corporate business debt outstanding has been on a tear since the pre-crisis peak in late 2007. At that time, business credit outstanding totaled $11 trillion—–a figure which has now ballooned to $14 trillion" $ 14 trillion in business debt has to be serviced at the same time that investors are pulling out all the cash. Thanks For The Corporate Bond Bubble, Fed | David Stockman's Contra Corner

[Danny B]

We did it to ourselves

"Total mortgage debt – $13.6 trillion ($9.9 trillion residential)

Total credit card debt – $924 billion

Total auto loan debt – $1.0 trillion

Total student loan debt – $1.3 trillion

Other consumer debt – $300 billion

With 118 million occupied households in the U.S., that comes to $145,000 per household. But, when you consider only 74 million of the households are owner occupied and approximately 26 million of those are free and clear of mortgage debt, that leaves millions of people with in excess of $200,000 in mortgage debt. "
"US population in 1971 – 208 million
Total credit card debt 1971 – $8.5 billion ($41 per capita)
Total auto loan debt 1971 – $40.5 billion ($195 per capita)

US population in 2015 – 320 million
Total credit card debt 2015 – $890 billion ($2,781 per capita)
Total auto loan debt 2015 – $1.03 trillion ($3,219 per capita)

The population of the US has grown by 54% since 1971, but the amount of credit card debt per person has grown by 6,782%, and the amount of auto loan debt has grown by 1,650%. Meanwhile, real median household income has grown by 8% since 1971."
"The amount of credit card debt carried by the average household carrying this type of debt is $15,355.
The amount of auto loan debt carried by the average household carrying this type of debt is $26,530.
The amount of student loan debt carried by the average household carrying this type of debt is $47,712.
The average household is paying more than $6,600 in interest per year, which means that roughly 9% of the average household’s income is being spent on interest alone."
LIVING A LIE « The Burning Platform

[Danny B]

On the road to one-world happiness

"The global reset is not a “response” to the process of collapse we are trapped in today. No, the global reset as implemented by central banks and the BIS/IMF are the CAUSE of the collapse. The collapse is a tool, a flamethrower burning a great hole in the forest to make way for the foundations of the globalist Ziggurat to be built. As outlined in my last article, economic disaster serves the interests of elitists."
The Global Economic Reset Has Begun | Zero Hedge
"The schematic for the new world order, according to the admissions of the internationalists, cannot possibly include the continued existence of U.S. geopolitical and economic dominance. The plan, in fact, requires the destabilization and reformation of America into a shell of its former glory. The most important element of this plan demands the removal of the U.S. dollar as the de facto world reserve currency, a change that would devastate our current financial structure."
The Global Economic Reset Has Begun | Zero Hedge
Benjamin Shalom Bernanke forced ZIRP, ostensibly to save the banks and economy. History has made it painfully clear that ZIRP will destroy an economy. The FED is the most powerful CB in the world. Global socialism could not advance unless America, the capitalist powerhouse, was destroyed.
Capitalism is a production system. Socialism is a distribution system. As the United Soviet Socialist Republic clearly showed, you can not focus on distribution and let productivity sail along unmotivated and unguided.
The globalists will get the crash that they want but, they won't get the results that they want.
The heavy taxes that are required to support socialism leave everyone too poor to afford luxuries,,, like having children.
"Germany this year dropped below Japan to have the lowest birth rate in the world.

For every 1,000 people in the European country, just 8.2 babies are born a year.

This is a huge problem because the 1950s and 1960s baby boomers are starting to enter retirement.

Germany has one of the highest basic state pensions in the world and it needs a lot of people in employment and paying tax to keep it going."
Germany heading for financial MELTDOWN set to sink the EU, says expert Harry Dent | City & Business | Finance | Daily Express
The crash is moving along, on schedule. The population is dumbed down, on schedule. Immigration is set to destroy all nationalism, on schedule. As the world is flooded with high-birth-rate migrants, the bad effects of low-birth-rate domestic populations will be mitigated. As agriculture is further automated worldwide, it will be taken over by the State. YOU WILL go to the State for your daily bread.
When we are all the same, we will get along just fine. https://www.youtube.com/watch?v=BhAzslxnqOo#t=49
https://www.stormfront.org/forum/t1081283/

[Danny B]

"Complexity cloaks catastrophe.”

Some headlines;
12/12 Carl Icahn says the meltdown in junk bonds is just beginning – Bloomberg
50% of U.S. corporate debt is rated "junk". That is a LOT of melting.
12/12 The US stock market is rotting from the inside – Casey Research
12/12 Stocks more overvalued now than 2000 and 2007 – Mish
GOV propped up the stock market with free money waiting for a recovery. They did not prop up wages.
12/11 Stone Lion Capital suspends redemptions as junk bond fears grow – MarketWatch
12/11 Third avenue redemption freeze sends chill through credit market – Bloomberg
12/12 Which "junk" fund liquidates next? – ETF Daily News
12/11 Warning: Half of oil junk bonds could default – CNN You can bet on it.
One of the main indicators that stock investors watch is the 200 day moving average. It is not looking good. http://www.bestmindsinc.com/document...0_Dec11.15.pdf
Bankers are focused on just the financial side of the economy. They buy politicians to get more favorable laws. They never consider the possibility that; something that is good for them is bad for the rest of the economy. It may come back and hurt them.
“These breakdowns come about not in spite of our efforts at improving market design, but because of them....The steps that we have taken to make the markets more attuned to our investment desires – the ability to trade quickly, the integration of the financial markets into a global whole, ubiquitous and timely market information, the array of options and other derivative instruments – have exaggerated the pace of activity and the complexity of financial instruments that makes crises inevitable. Complexity cloaks catastrophe.”
[Comments by Richard Bookstaber, who served as managing director of risk at Salomon Brothers during the 1987 crash, and as Morgan Stanley’s first market risk manager during the meltdown of Long Term Capital Management in 1998. Comments are from his book, A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation
(2007) pg 5]

[Danny B]

Trading the fear of deflation for the fear of revolution

LaGarde from the iMF has repeatedly mentioned the "global reset". Jim Willie has mentioned a few times that the global reset has been postponed for one year. Jim Willie says 1 Year Delay in Economic Reset | Politics
"However, there seems to be a delay in the launch of yuan-denominated gold on SGE. The reasons aren’t clear, but a possible reason could be that major participants may be worried that China wants to dominate gold markets."
China Wants Yuan-Denominated Gold on the Shanghai Gold Exchange - Yahoo Finance
China was going to launch a big gold-based trading platform. If they postponed the launch, you can assume that they did this for the best interests of China.
We exchange billions of messages every day. I suspect that this NEW level of communication is causing things to fall apart far faster than anticipated by the PTB. There have been a lot of disappearances of top Chinese investors lately and, it is putting a chill on markets. This is the latest; Market Panics As ?China?s Warren Buffett? Detained In ?Richter Scale 9 Event? | Gold and Precious Metals
Investors try to move their capital AWAY from failing institutions.
"According to PRC official sources, “public order disturbances” have grown by nearly 50% in the past two years, from 58,000 incidents in 2003 to 87,000 in 2005. Although political observers have described social unrest among farmers and workers since the early 1990s, recent protest activities have been broader in scope, larger in average size, greater in frequency, and more brash than those of a decade ago. "
http://digitalcommons.ilr.cornell.ed...18&context=crs
I can't find more recent numbers. There are claims that the social unrest is tied directly to the levels of pollution. China is trying to prove, once again, that a centrally planned economy doesn't work in the long run. The current crash is bound to initiate a LOT more protests.

The stock market is looking BAD. China, et al may be holding off any actions that may spook the markets.
"This important event falls at a peculiar time—less than 48 hours before the largest option expiry in many years. There are $1.1 trillion of S&P 500 options expiring on Friday morning. $670Bn of these are puts, of which $215Bn are struck relatively close below the market level, between 1900 and 2050. Clients are net long these puts and will likely hold onto them through the event and until expiry. At the time of the Fed announcement, these put options will essentially look like a massive stop loss order under the market."
Is This What Happens On Monday? | Zero Hedge
It's 2007 all over again; http://www.zerohedge.com/news/2015-1...all-over-again

" the accelerating downward spiral is now rapidly reaching the status of “unmitigated disaster.” In a destabilizing crisis of confidence, panic outflows saw the South African rand sink 10% to an all-time low. Local South African bond Yields jumped 140 bps in two sessions to about 9% (from WSJ). The Turkish lira dropped another 3%, as Turkey’s equities were slammed for 5%. The Russian ruble dropped 3.4%. The Brazilian real declined 3.2%. Despite repeated central bank interventions, the Mexican peso sank 4.4% this week to a record low. Also hurt by collapsing crude, the Colombian peso dropped 4% to a new low.

Crude (WTI) sank 12% this week to the lowest level since the 2008 crisis. The Bloomberg Commodities Index sank to fresh 16-year lows. "
http://creditbubblebulletin.blogspot...precipice.html
GOV printed to save the banks. This currency inflation bled over and caused price inflation. Price inflation, seen from the street level, is a reduction in wages / purchasing power. Price inflation combined with job losses to automation plus outsourcing made a huge reduction in aggregate global purchasing power. This crashed commodities and brings down the leveraged bets on commodities. The unwinding of leveraged bets is working it's way through the financial system. This is all happening at (relatively) blinding speed. Big GOV was previously afraid of the "D" word,,, deflation. Now, they are worried about the "R" word. revolution.

[Danny B]

stocks are nervous

It's a quiet Sunday with not much going on. Just a couple of notes.
The FED looks to be absolutely sure to raise rates. The cheerleaders say that it is OK. 12/13 China's stabilizing economy removes rate rise hurdle for Fed – Bloomberg There is absolutely nothing "stable" in China. The opposing side says; "The Fed Doesn't Get It" A Rate-Hike Means People "Will Be Carried Out On Stretchers"
"The Fed Doesn't Get It" A Rate-Hike Means People "Will Be Carried Out On Stretchers" | Zero Hedge
#7 For the poorest 20 percent of all Americans, median household wealth declined from negative 905 dollars in 2000 to negative 6,029 dollars in 2011.
#22 The median net worth of families in the United States was $137, 955 in 2007. Today, it is just $82,756.

The American Dream "Exposed" In 22 Depressing Datapoints | Zero Hedge

"Federal Reserve Chair Janet Yellen leaves after delivering remarks at the Federal Reserve Conference on Monetary Policy Implementation and Transmission in the Post-Crisis Period " GOLDMAN: Here are the 3 big changes the Fed will make this week when it raises rates - Yahoo Finance It's nice to know that we are in the "post crisis" period.
Forbes seems to disagree' "Week Ahead: End Of The World As We Know It?"
Week Ahead: End Of The World As We Know It?
The naysayers are out in force, "
Why the Dow Jones Industrial Average Could Begin a 70% Decline in the Next Few Weeks" Why the Dow Jones Industrial Average Could Begin a 70% Decline in the Next Few Weeks - TheStreet
Bogus indices, "The chart below illustrates how the S&P 500 has misled us about the true state of the market. Since July 1, 2014 the S&P500 is up about 2%. Most people would assume that means that most stocks are trading around flat during that period of time. That is not the case. The great majority of stocks have declined."
http://realmoney.thestreet.com/artic...o&cm_ven=YAHOO
If sentiment has truly turned, the option expiry on friday will be very interesting.

[Danny B]

Junk bonds down,, LIBOR up

OK, I guess that stocks will be the major focus for the week.
"For a while there, companies deemed to be highly risky were nonetheless able to borrow money for less than 6%. And borrow they did. Frackers, ultra-high-leverage retail chains and various other close-to-the-edge entities slurped up trillions from yield-starved investors who had forgotten about the other side of the risk/return equation.

That this hasn’t worked out so well is not much of a surprise. But the speed with which it has gone bad is still breathtaking. The following chart from Bloomberg illustrates just how fast an illogical market can be brought back to reality:"
This Is How Fast It Happens
Ah yes, reality.
With communication so fast these days, there is just a short lag between the time when you can sniff the trouble and the time that it hits. It seems to have started in 2 funds that are run by 2 former bear Stearns risk-fund guys. What a surprise. "It's An Epic Bloodbath" - Presenting The 2015 Junk Bond Heatmap | Zero Hedge
The London Interbank Overnight Rate (LIBOR) is a good indicator of trust between banks. As soon as trouble appears, LIBOR goes up because trust goes down. LIBOR just spiked, https://confoundedinterest.wordpress...t-just-dollar/
As long as free money was flowing, gamblers didn't have to worry about risk. Junk bonds that should have traded at 22% were trading at 6%. Like the dot-com crash, capital was thrown at anything that moved. When earnings didn't appear, investors (gamblers) ran for the exits.
http://thegreatrecession.info/blog/economic-collapse/
The dot-com crash involved a fairly narrow sector. The current bubble involves;
Energy
Student loans
housing
Retail and industrial RE
auto loans
International trade
The investment "community" is FAR to top-heavy for the amount of actual wealth creation. Then, there is GOV. For every additional $1 in taxes, there is a corresponding $3 reduction in the productive economy. GOV pumps money into the upper loop of the economy and extracts taxes from the lower loop. The corporatocracy told GOV that it must have low taxes to be globally competitive. The fascist marriage of the corporation and the State is inwardly focused. The corporatocracy is not particularly concerned with consumption, only productivity. Consumption is dying.
Deflation = Debt + Demographics + Disruption | Zero Hedge
The lower loop of the economy was bled dry. As consumption shrank, wealth creation shrank. Rising money creation was expected to compensate for falling wealth creation.
The debts could never be paid so, the CBs conspired to create a huge credit inflation,,,, that would result in a huge deflation of the notional value of debt. The credit inflation never made it into the lower loop because it was already debt saturated. All those liar-loans in housing and cars were supposed to ignite price inflation in the general economy. The CBs stupidly believed that they could start some kind of inflationary spiral even though wages were/are falling.
Zimbabwe is famous for a runaway wage-price spiral. Wages are set by GOV and "Minimum Wage is calculated on monthly basis."
http://www.mywage.org/zimbabwe/main/...-minimum-wages

[Danny B]

More asset deflation

"In the seven years since the world’s central banks responded to the financial crisis by slashing interest rates, more than a dozen banks in the advanced world have tried to raise them again. All have been forced to retreat."
"The quarter point increase will be reversed in short order as soon as we experience market collapse part two. It will be followed with negative interest rates and QE4, as these academics have only one play in their playbook – print money. They created the last financial crisis and have set the stage for the next – even bigger collapse."
DEJA VU ALL OVER AGAIN « The Burning Platform
"The coming collapse will be three pronged as stocks, bonds, and real estate are all simultaneously overvalued. Junk bonds are the canary in a coalmine. High end real estate in NYC has topped out. New and existing homes sales growth has stalled out. Retailers desperately slash prices to maintain sales, while destroying their profits. Corporate profits are falling. The stock market is teetering on the edge."
"In hindsight, the financial crisis actually ended – precisely – in March 2009. How? The Financial Accounting Standards Board changed rule FAS 157 and overturned the mark-to-market requirement, instead allowing financial institutions “significant judgment” in the way they valued their assets: often called mark-to-model (or as some of us call it, mark-to-unicorn)."

"The Fed is about to attempt the greatest monetary experiment in history" Fed interest rate hike - Quartz
“Fifth of US adults live in or near to poverty..”

• The New American Dream Is To Have A Job (FT)
"Consequently, the world economy is actually going to shrink for the first time since the 1930s."
"Over the last two decades, global credit market debt outstanding has soared from $40 trillion to $225 trillion. This represents an incredible $185 trillion debt expansion. That eruption would be simply unimaginable without the help of money printing central banks.

By contrast, global GDP only expanded by $50 billion during the same period"
The End Of The Bubble Finance Era | Zero Hedge
It took 3 years for all the air to leak out of the tech bubble. This one will take about 20 years. The Fuse on the Global Debt Bomb Has Been Lit | Zero Hedge
12/14 27 major global stocks markets that already crashed in 2015 – Most Important News

[Danny B]

GOV vs banks

"After 66 years of credit expansion, and 33 years of a falling trend in interest rates, we expect a reversal.

As Deutsche Bank dryly puts it, “U.S. looks late in the cycle on a macro and micro basis…”
Has the NEXT Credit Collapse Already Begun? - The Daily Reckoning
"In a few weeks the federal government’s debt is going to exceed $19 trillion. I estimate that about $14 trillion of that debt is based on short-term rates. "
Credit Market Carnage And The Big Surprise For This Week | King World News
So, who gets left holding the bag? GOV has $ trillions in debt.
Mish's Global Economic Trend Analysis: Fed Openly Discusses "Permanently High Balance Sheet"; Lie Finally Admitted
"Permanently high balance sheet". Why does that sound like the FED won't ever be able to liquidate it's treasury bond portfolio? All the money left the social security fund to be used for wars. The SS fund was repaid with non-negotiable Treasury notes.
Previously, the FED paid 6% a year to Wall Street banks for their capital on deposit at the FED. Congress has ended that. Banks Squirm As Congress Moves To Cut The 6% Dividend Paid To Them By The Fed | Zero Hedge
So, are the banks going to get gored by GOV when it runs out of money?

[Danny B]

Academia and politicians vying for who can appear the most stupid

Kunstler is a ray of sunshine,,, as usual; Fedpocalypse Now? | KUNSTLER
Apparently we are going to make it through the rest of 2015 so, the trainwreck is rescheduled for 2016; The Great Stock Market and Economic Train Wreck of 2016... :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website
"Big Banks Caught Using Credit Default Swaps To Destroy Nations "- Jeff Nielson https://www.sprottmoney.com/blog/big...ns.html?acc=17
And the result; Germans Take Over 14 Greek Airports In Privatization Deal
Bernanke says that negative rates are coming to fight deflation (recession). Bernanke says Fed likely to add negative interest rates to recession-fighting tool kit - MarketWatch
Armstrong; "The assumption that lowering interest rates will “stimulate” the economy has NEVER worked, not even once. " Are Negative Rates Fueling Deflation? | Armstrong Economics
Bernenake believes that stealing more of our savings on top of stealing our interest income will stimulate our economy. Feces-for-brains from academia.

Yahoo Told: Cut 9,000 Of Your 10,700 Staff (AP)
Big Banks In Europe And US Announced 100,000 New Job Cuts This Year (FT)
• The Mystery of Missing Inflation Weighs on Fed Rate Move (WSJ)
Maybe inflation is "missing" because employment and consumption are MISSING.

[Danny B]

Goldman Sachs and banking consolidation

"None of this has been tried before and, to me, that just demonstrates the dangers. Once you get into a situation like the central banks did in ’08 with this panicking -- everyone calls it the Hotel California -- you can’t get out. And, so incrementally, they have to keep doing something. Instead of stepping back and letting free markets and business cycles and forces of nature have their way and flush out all of the impurities in the system, this is what happens."
GOV had been hard at work trying to counteract the forces of nature.
Grant Williams: The End Of The Road | Zero Hedge

"The Goldman Sachs Trading Corporation sold hundreds of millions of dollars worth of shares to public. They peaked at $104. All the while Goldman insiders were selling. By the fall of 1934 the shares were worth $1.75/each."
"Rep. Louis McFadden (D-NY). Speaking of the Great Depression, McFadden concluded, “It was no accident. It was a carefully contrived occurrence…"

"But Goldman Sachs knows full well that there is but one government and that they own it. Carter Treasury Secretary Michael Blumenthal, Clinton Treasury Secretary Robert Rubin (now CEO at Citigroup), and Boy Bush Treasury Secretary Henry Paulson are all Goldman Sachs alumni. It was Paulson who held the gun to the collective heads of the American people and demanded $1 trillion to be handed over to the bankers to “avoid another Great Depression”."
" 680 S&Ls ended up in the hands of 10 giant US investment banks for pennies on the dollar."
"It wasn’t enough that the megabanks got $1 trillion in TARP money. They also vastly increased their assets, further concentrating their economic power and solidifying their “too big to fail” status."

"Goldman Sachs led the Wall Street delegation which dealt the Russian oil industry to the Four Horsemen – ExxonMobil, ChevronTexaco, BPAmoco and Royal Dutch/Shell – for a song, leading to the 1998 Russian economic collapse.

The firm lobbied for Enron just before it went belly up, robbing state pension funds before being “sold” to UBS Warburg for the lofty sum of $0."
"Around that same time the infamous Richard Perle was hired as an advisor by Goldman Sachs International. His job was to help Goldman find ways to profit from the coming Gulf War, though the 911 terror attacks had yet to occur."
https://hendersonlefthook.wordpress....te-capitalism/
"Goldman Sachs graduates populate the uppermost reaches of government and business." Forbes Welcome
Goldman Sachs has quite a few fingers in the obummer GOV; https://prof77.files.wordpress.com/2...65e4.png?w=500
There seems to be no escaping GS; https://prof77.wordpress.com/politic...g-elena-kagan/

Draghi is from GS. So is Monti and quite a few others. GS is famous for selling junk to investors and then, betting against them. Now, the are doing the same thing with nations. This won't be so funny when there are revolutions.
9400 banks went under in great depression I. GS is working on destroying as many OTHER banks as possible before/during great depression II.

There is just so MUCH motivation for evil in the banking system that it is constantly our enemy. Hopefully, this will change; http://www.counterpunch.org/2015/12/...nd-to-ecuador/

[Danny B]

The patient is getting weaker

Yahoo is trying to quantify the problem; "Why the current credit crisis might be 35 times worse than you thought" Why the current credit crisis might be 35 times worse than you thought - Yahoo Finance 35 and not 34 or 36?
12/16 Brazil's currency sinks after Fitch cuts rating to junk status – MarketWatch So, each step down pushes them that much closer to default.
12/16 Foreigners sell a record $55.2 bllion in US Treasuries in October – Zero Hedge Nobody wants to be left holding the bag.
12/16 Baltic Dry crashes to new record low as China "demand is collapsing" – Zero Hedge Looks like we're going to have a LOT of extra ships.
12/16 Spain's biggest bankruptcy ever hits banks, Mexico, Brazil – Wolf Street Globalism brings global contagion.

[Danny B]

Falling consumption,, falling demand for money

I'm trying to get my head around an (maybe) emerging paradigm.
Armstrong says that interest rates are at a 5,000 year low. Also;
"Then we have taxation and enforcement rising, which even Keynes said was wrong during a recession. This is all about the greed of politicians and nothing else. There is no giant conspiracy controlling the world. No one in their right mind would run it this way. We are flying in a plane where the pilot died at the wheel and nobody knows because the cockpit door is locked. None of the theories they use to control society have ever worked, which is why the “crowd” has NEVER been able to forecast a single economic change in trend."

" ( the rental of) Money has a value and it is not ZERO." The Fed & the Future | Armstrong Economics
OK, so what is the value of money? The world has been flooded with money. What about the law of supply-and-demand?

Roberts, "Prior to today’s Fed announcement, the interbank borrowing rate was averaging 0.13% " " In other words, there has not been enough demand from banks for the available liquidity to push the rate up to the 0.25% limit."
"However, the fact of the matter is that the available liquidity exceeded demand in the old rate range. The purpose of raising interest rates is to choke off credit demand, but there was no need to choke off credit demand when the demand for credit was only sufficient to keep the average rate in the midpoint of the old range. This “rate hike” is a fraud. It is only for the idiots in the financial media who have been going on about a rate hike forever and the need for the Fed to protect its credibility by raising interest rates."
What Does Today’s “Rate Hike� Mean? -- Paul Craig Roberts - PaulCraigRoberts.org
There is no demand for money for consumption but, there IS a demand for money for debt service. Is the next financial crisis nigh? Could closure of Third Avenue Fund finally explode the post-crisis asset bubble? - Telegraph
The cost of borrowing money for speculation is very LOW and the cost of borrowing money for consumption is very HIGH. This arrangement has historically been used to keep population growth down low. This idea / plan emerged long ago before birth control. The combination of the two has resulted in a developed world the core population is actually falling.
Some countries are paying a "baby bonus" to have kids. If you have 6 kids in Russia, they give you a medal.
With automation, wealth creation can proceed fairly well even without a lot of human labor. Consumption is a different story. War is a real high-consumption arrangement but, it is becoming too dangerous.
A B of A analyst claimed that WW II got us out of the Great Depression I and that we need another war. He is assuming that we would win,,, not necessarily true.
Interest rates are at a 5,000 year low and money creation is probably at a 5,000 year high. Wealth creation capacity is at an all-time high but consumption is falling in accord with a falling global-mean-wage. if consumption is limited to basic necessities, than the rest of the consumer economy dies on the vine.
The solution; supply birth control pills and devices only to those who fail an IQ test.
The carrying capacity of the world is getting strained,,, mostly by pollution. Water supplies everywhere, except Russia, are drying up. People recognise this and are cutting back on family size. Our economic system is unworkable with a falling core population and the demographic crash.
Money production has been turned way up because consumption is falling. Not surprisingly, this hasn't worked. China wants to switch over to a consumer economy from an export economy. Their one-child policy has avoided 400 million births. They have adopted the Western financial system and it only works with constant growth.
The developed world needs a constant growth of the economy at the same time that it has a falling population. The undeveloped world has a rising population but, little economic growth.
Our standard of living is our GDP divided by our population. The poor countries are getting poorer because population growth outstrips GDP growth.
The 99% in the rich countries are getting poorer because the productive sector of the economy has been bled dry by the parasitic sector. The money is extracted,,, consumption falls,,, the birth rate falls,,, economic activity falls,,, BUT, the demographic crash is still there.

[Danny B]

Government + responsibility = Superman + kryptonite

"Politics and economics do not go together. They will blame the bankers, but they will never blame government. Hence, this is why we can no longer afford career politicians for they will NEVER accept responsibility for screwing up the economy for political gain."
"The Clintons are responsible for removing ALL restriction from the Great Depression upon the banks. They then eliminated the right to declare bankruptcy on student loans. Yet, the press will NEVER ask Hillary anything about that or the fact that her biggest contributors are the banks in NYC."

Austria — It Started the Collapse in Great Depression. Will It Do so Again?
In 1931, the sovereign debt crisis and banking system collapse began in Austria with the failure of Credit Anstalt, which was partly owned by the Rothschilds. Now the International Monetary Fund (IMF) has come out and stated that Austria’s banks need to increase their capital buffers urgently. The capital buffers in Austria are thin and cannot withstand a crisis. Furthermore, the banks are still active in politically and economically risky countries, which is typically carried out to increase profits.
Screw risk, we want profits. " increase their capital buffers urgently. " So, how are they supposed to raise tons of cash when liquidity has disappeared? http://www.zerohedge.com/sites/defau...1217_BAML3.jpg
Global bank stocks are crashing; http://www.zerohedge.com/sites/defau...1217_BAML6.jpg
In 2016, everything will be up for sale; How The Fed Just Launched The Next Bear Market: BofA's Unexpected Conclusion In 8 Charts | Zero Hedge

The emerging markets look to default before too long. Puerto Rico say that they will default in Jan. or May. The contagion will spread fast.


Austria — It Started the Collapse in Great Depression. Will It Do so Again? | Armstrong Economics