Economic pressures

[Danny B]

Economic noise

The markets are thrashing about trying to figure out what Trump is going to do.
"The president-elect’s pledges include tax cuts and spending $500 billion or more over a decade on infrastructure," $50 billion a year is going to to do what?
According to Armstrong, the tax cuts will induce American companies to bring home $ 3 trillion in overseas cash. The $ 3 trillion isn't going to go to wages so, what positive difference will it make?

CNBC, "Also, given that the U.S. economy is considered as in full employment," Trump is 'the end' of central banking as we know it: Fund manager


"Bonds around the world had their steepest two-week loss in at least 26 years"
Global Bonds Post Biggest Two-Week Loss in Quarter Century - Bloomberg
11/18 Euro suffers longest losing streak on record – Telegraph
11/18 Global trade is slowing – Bloomberg Amazing, when did Bloomberg figure that out?
Here's a chart of interest rates for the last 200 years. They have dropped like a stone. http://fm.cnbc.com/applications/cnbc...REST_RATES.png
AMAZING, You create the most gigantic bubble of faux money the world has ever seen AND,,,, you can't seem to collect any interest on the money.
200 years of US interest rates in one chart

[Danny B]

Deflationary trap yet, growing debt,,,, FEDcoin,,, helicopter blockchain

"UK Financial Services Authority chief Lord Turner is advocating a policy of debt monetization, with central banks financing major fiscal deficits. " Control "P" in hyperdrive.
"“So you're caught in a trap where the only solution to the trap is to make the trap a bit deeper. It really is. When you're in a hole you're still digging,” Turner said. “So that is I think the fundamental problem facing the global economy and why, having just come back from the IMF meetings in DC, why the IMF has, for about the fifth year in a row, reduced its forecasts of global economic growth. We are in a deeply profound deflationary trap and we don't have perfect answers to get out of it.” Perfect, my culo,,, they don't have ANY answers.
Lord Adair Turner on central banks, interest rates and printing money - Business Insider

"Two weeks ago we warned of the "unintended consequences" of Dodd-Frank which are likely to crush bond market liquidity. On the day of Brexit we got a glimpse of what can happen when the world's most liquid bond market suddenly isn't and as one veteran bond trader exclaimed today, US Treasury market liquidity is "worse than Brexit."
Following the worst two-week loss for bonds... ever..."
US Bond Market Liquidity Collapses: "It's Worse Than Brexit" | Zero Hedge

“One trouble with every inflationary creation of credit is that it acts like a delayed time bomb. There is an interval of indefinite and sometimes considerable length between the injection of the stimulant and the resulting speculation. Likewise, there is an interval of a similarly indefinite length of time between the injection of the remedial serum and the lowering of the speculative fever. Once the fever gets under way it generates its own toxics.” “The Memoirs of Herbert Hoover - The Great Depression 1929-1941”

“Terminal Phase” Bubble excess." Credit Bubble Bulletin: Weekly Commentary: As Exciting as the 1930s

"The debt, she noted, is already beginning to snowball. In the first two weeks of October alone it grew by $170 billion; between January and September, $1.4 trillion was added to the debt. "

Read more: https://sputniknews.com/us/201611101...gift-to-trump/
The debt is expected to surpass $20 trillion in less than eight weeks, and probably before Trump even steps into the Oval Office.
US Congress made a deal with the White House to extend the debt limit to $20.1 trillion until President Obama leaves office. "
"In his eight years in office, President Obama nearly doubled the national debt, from $10.63 trillion in 2009 to the above-mentioned $19.8 trillion today."

Jim Willie wrote a lot about America restructuring it's debt. This is just now coming into view in the mainstream. The PTB of America will fight hard to maintain out imports. How can we pay for them?
https://sputniknews.com/business/201...ects-analysis/

"President Obama's team and the liberal echo chamber lied about Obamacare from the start and covered up the financial time bomb that would soon detonate in Americans' laps."
"The only thing that has caught the left by surprise is that ObamaCare has burst into flames so much faster than even severe critics -- such as myself -- ever thought possible. "
"The ObamaCare insurance companies now want billions of dollars in a taxpayer bailout because the exchange's costs are in a death spiral."
"The average deductible for a family with a Silver plan now exceeds $6,400. "
http://www.investors.com/politics/co...es-and-deceit/

Doug Casey; "The stock market…It's a speculation at this point… People forget that in between 1929 and 1932, the stock market collapsed 93%."
"When the banking crisis hit Cyprus three years ago, this is rather unbelievable but it's true, the stock market in Cyprus collapsed almost 99%."
"I'm not talking about five years or ten years from now. I'm talking about going back into the trailing edge of the storm in a matter of months"
"There are about $10 trillion USD outside of the US. This is a big problem because the major export of the United States for the last 30 years has been dollars. The nice Japanese send us Sonys and Toyotas and the nice Germans send us Mercedes and we basically just print up dollars and send it to them. That's how $10 trillion got outside the US."

"Social Security is bankrupt… Forty-seven percent of the people in this country are net recipients of money from the government… Officially, one third of all the US government's assets are student loans; little-known fact. About $1 trillion worth of them."
"My guess is they're going to come up with a – with a completely digital currency called the Fedcoin which will actually act as a parallel, alternative to the dollar."
(Cash ban) "I'm not sure banned is the right word because there are going to be people that don't have smart phones, that won't want to be chipped, so forth."
"we ought to deposit $1,000 in everybody's bank account to stimulate the economy. Well, it was a laughingstock thing back then. But now, a lot of well-known, legitimate economists, are saying we ought to have a guaranteed income for everybody in the country.

And something like a new currency, a Fedcoin, issued directly by the Fed where you don't have to trust the bank which may be bankrupt"
https://www.caseyresearch.com/cm/project-fedcoin
Helicopter money introduced with the blockchain.

"the US national debt has soared by a whopping $294 billion since the start of the 2017 fiscal year, just 45 days ago." "Today’s debt of $19,867,119,032,053.28 is actually bigger than the entire US economy at over 106% of GDP."
http://www.zerohedge.com/news/2016-1...-trillion-year
The lefties don't seem to make any distinction between productive debt and non-productive debt. They just expect the CB to print up whatever they want. The various CBs have printed up a couple hundred trillion$. They
really don't have any prospect of getting paid off. NOBODY has the money. The credit cycle has turned. Will the Central banks baulk at the idea of keeping the party going? Trump will need to CB to finance his programs. There is little chance that the CB will be able to convert it's treasury holdings into cash.


11/19 Obama, EU agree to keep sanctions on Russia – Mish He waddles like a lame duck.
11/19 Italy’s government on verge of collapse – Mish https://drive.google.com/file/d/0Bxw...iew?pref=2&pli
11/19 Lobbyists leave Trump transition team after new ethics rule – Politico We don't need no stinking ethics.
11/19 Paid protesters “planning to cause chaos in DC” – Zero Hedge What an original idea?

11/19 Bond carnage hits mortgage rates. but this time, it’s real – Wolf Street Not real yet!
11/19 San Fran home sales crash to lowest level since 2008 – Zero Hedge
11/19 Global bonds post biggest two-week loss in quarter century – Bloomberg
11/19 The emerging markets’ dollar problem – Bloomberg
11/19 The Big Short: is the next financial crisis on its way? – Guardian

[Danny B]

More butter,,,, fewer guns

Some years ago, the Pentagon and the alphabet spook agencies contacted Jim Rickards to kick off a "war games" exercise on the American economy. The conclusion was simple and straightforward. The crash was unavoidable. Jim said that the Central Banks would go bust AND, only the IMF had the horsepower to recapitalize the private banks and Central banks. They would do it with NEW IMF paper called the Special Drawing Rights.
A lot of nations are ditching the dollar right now. Why would they latch on to another fiat creation from the IMF?

General Eisenhower warned us against letting the military-industrial complex get too much power. The War dept was renamed the Defence dept. The military-industrial complex became the banking-military-industrial complex. The new and improved war dept proceeded to protect us from an invasion from North Korea and later, Viet-Nam.
The B.M.I. complex said that they would create lots of jobs defending America. Following the "broken window" school of economics, the produced lots of stuff to be destroyed.
All of this fit in well with the Wolfowitz doctrine that America should and would control the world. The old saying goes, "you can have guns or butter but, not both". Using our "reserve currency" credit card, we were able to have both. About 40 countries have pulled out of the U.S. dollar straitjacket.

I'm sure that this was foreseen by the spook group that Jim Rickards was heading. The B.M.I. complex still intended to have guns even if we couldn't have butter. They built camps for club FEMA to keep trouble makers out of the way. 6 military bases have been converted to hold criminals. The police state was instituted using the patriot act to justify it all in the name of antiterrorism.

The collapse is/was unavoidable. Killary was going to whip up a limited war with Russia to justify crippling austerity for us while the B.M.I complex got lots of war contracts. The second outcome of a war with Russia would be to poison trade between Russia and Western Europe. It seemed a perfect plan and Pox Americana was getting everything whipped up to a frenzy on the border of Russia. There were 300,000 troops on the border of NATO because the Russians were acting provocatively.

The war couldn't be kicked off until she had her a$$ firmly seated in the Oval Office. Promptly, we would get crashing austerity to keep the war alive. We would have all guns and no butter. Russia only has a GDP about the size of Italy. NATO could probably drag out the war until it bankrupted Russia. Syria would fall shortly there after. All that oil recently found in the Golan Heights of Syria would then all be stolen by their neighbor.

The obvious thing for Trump to do is to close the foreign bases, cut the Pentagon back to just continental limits and renounce world domination. This would free up a LOT of money that the B.M.I. complex was counting on.

JFK was a pretty straight shooter and had NO idea of how deadly his enemies were. At this point in time, Trump has even more enemies that JFK had. BUT, he is a lot more aware than JFK was.

" China has signed bilateral currency-swap agreements with 28 countries, while 14 global financial centres are now functioning as offshore clearing centres for the yuan. "
These currency swaps shove both the dollar AND the banks aside. The dollar will crash and we will get a replacement (Jim Willie) I doubt that the SDR will fly. We may get a digital currency based on the blockchain. Dunno. We may get helicopter money. We may even get a universal basic income.

If we renounce war, our debt holders may cut us some slack. I'd rather have butter than guns any day.

Saudi has made it clear what they think about peace with Russia; Donald Trump striking a Syria deal with Russia would be ?most disastrous step possible?, Saudi Arabian prince warns | The Independent
The feces-for-brains Wahhabis want to annihilate Iran and Russia is blocking them. Stupid Saudis;
"MOSCOW - Russia and Iran are in talks over an arms deal worth around $10 billion "
"Iran and China signed a deal to enhance cooperation between the two nations.
The military agreement between Tehran and Beijing entails increased bilateral training coordination and closer alignment on what the Iranian regime sees as regional security issues."

[Danny B]

Financing Trump's infrastructure plan

Well, Trump has declared war on the deep State. It remains to be seen how the deep State will fire back.
Crosspost: Fear And Loathing Inside The Deep State | Zero Hedge
Something tells me that it ain't going to be pretty.
One of the centerpieces of Trumps plans is a big investment in infrastructure. This is a general outline of the plan: What Will Trump Do About The Fed, The Debt Ceiling, And Trade: His Key Economic Advisor Explains | Zero Hedge

Ellen Brown has some thoughts on how he can do that.
Trump?s $1 Trillion Infrastructure Plan: Lincoln Had a Bolder Solution - Truthdig
She also has ideas on how it should be paid for: Prop. 51 Versus a State-Owned Bank: How California Can Save $10 Billion on a $9 Billion Loan | The Huffington Post

11/21 Negative rates are failing to halt savings obsession in Europe – Bloomberg No kidding! Who would have figured that; when you steal people's interest income, they are going to need more principle to survive?
11/20 Fears over surge in populism lead EU leaders to hard Brexit stance – Euro Weekly They better get used to it. Populism is here to stay.

[Danny B]

Too many people working against america

Well, you didn't expect any good news,,, did you?
"The Obama administration has increased the national debt by $324 billion in the first 48 days of the fiscal year. That’s a rate of $6.75 billion per day. The rate of accumulation last year was $3.3 billion per day. This is out of control"
https://www.theburningplatform.com/2...mand-part-two/
The America-centric rating agencies were frequently used to cause foreign monetary panics,,, that caused investors to flee to the safety of the U.S. dollar. Russia and China: Watch Out Moody’s, Here We Come! | New Eastern Outlook Now, there is foreign competition.

"The source of data for the chart above is the Bureau Economic Analysis. So this is the government’s own data. This clearly shows that the Democrats just want to tax people who have more than they do EVEN IF it hurts jobs and lowers the economic growth. " https://www.armstrongeconomics.com/w...our-destroyer/
The debt is rising faster than exponentially just as Trump is taking the helm. Don't expect him to work any miracles with the deep state opposing him.

[wayne.ct]

You're Fired

Not really. I don't have any employees and nobody to fire. But it seems Trump will soon have about 5 million employees that he can bully around. I don't know how many he can actually fire, but he has other ways to tilt the scales. He can call for resignations or sic the DOJ dogs on anyone with something to hide. He is already making waves in the swamp, so to speak. He already has 48 percent of the population prejudiced against him. What does he have to lose? (Plus, he has the Secret Service to protect him.) He has asked that question of others. I think the blame game is going to go into hyper drive.

Now here is what I am wondering. Inflation has been described as too much money chasing too few goods. Deflation is basically the reverse. I.e. too much inventory and too few buyers. My eyes tell me the stores are full of merchandise, i.e. deflation. The money supply, i.e. FED action, is ballooning meaning inflation. It looks like a train wreck, but what is the TRUTH? It seems like there are two parallel universes. The "haves" live in one and the "have nots" live in the other. Is that a valid assessment? Can "one percent" of the population control the 99 percent? They may try it but they have always failed in the past.

Is it not a looming crisis in confidence? What are the signs that confidence in the fiat system is failing? I have some ideas about that and I think it is happening. My guess is deflation will predominate until almost everyone has positioned themselves into one of the two polar opposite camps.

In camp one are honest people that trade out of fiat into durable assets as much as possible. In the other camp are less honest people that borrow as much they possibly can with the intent of somehow declaring bankruptcy or simply not paying their bills if it means eating or starving. Corporations also fit in two parallel camps, the details being expressed in other language. For example, a corporation's balance sheet can be loaded with paper assets and liabilities that may be largely imaginary and unenforceable. If management is at all less than honest they will naturally take what they can and protect themselves personally and let the corporation fail, etc., etc.

So I wonder, how many honest individuals and honest corporate managers are out there right now? I have to default to a 20/80 engineer's rule of thumb. I'd say at least 80 percent are dishonest. The hidden undercurrent of pervasive fraud will be exposed when the next big market disruption occurs and disrupts supply chains. It seems that way and I am wondering if I am right.

I don't think Trump is above pulling a few shenanigans of his own. It seems he has some amount of dishonesty in his past. The little guy on the street will just have to wait and see what happens. I put myself in that wait and see category while I move away from fiat.

[Danny B]

Moral decay

" History fails to record a single precedent in which nations subject to moral decay have not passed into political and economic decline. There has been either a spiritual awakening to overcome the moral lapse, or a progressive deterioration leading to ultimate national disaster."
Douglas MacArthur
A big part of what lead up to our moral decay is the corporate structure. It is well known that; if you remove accountability, you can expect crime. Not only is the corporation immune from prosecution in most cases, it is effectively immortal. Immortal and immoral. It prostituted every politician it came in contact with.

[Danny B]

Doubling the debt,,, euro breakup

Trump has no choice but to increase the debt. THAT course was set in stone when;
The FED charter was changed from the original
The Bretton Woods agreement made the U.S. dollar the reserve currency
Nixon mistakenly closed the gold window rather than re-valuing gold.

Trump has inherited a house of cards with a stick of dynamite under it. Somebody else is holding the detonator.
"it is the masses which ultimately are responsible for repaying debt which is increasing exponentially in most countries. They will of course not repay the debt because they can’t. Instead, they will suffer immeasurably when global debt of around $250 trillion implodes leading to a severe depression."

"Since 1971 when Nixon abolished the gold backing of the dollar US debt has grown by an average of 9% per year. This means that US federal debt has doubled every eight years. And Obama is no exception. He duly complied with the trend of exponential debt increases and doubled US debt from $10 trillion to $20 trillion. " Ah yes, geometric progression.
"Trump’s proposed tax reductions and major infrastructure investments will add over $5 trillion to the debt. But with this expansive policy, there is absolutely no reason why debt in the next four years will grow by less than the 9% annual average. This would take the US debt to at least $28 trillion by 2021."

"The 35 year rate cycle has now turned and rates are likely to go back to at least the 16% we saw in 1980 but probably a lot higher as the biggest bond bubble in history bursts. Due to the massive size of this bubble on a global scale, the increase in rates could happen very quickly. " OUCH

"Clearly, Trump is determined to succeed but running an insolvent economy in a virtually bankrupt world will be a lot harder than building a property empire. But he has made it clear that he is hell-bent on expanding the US economy at all costs. The problem is that he will probably spend more money than anyone can imagine. But sadly, he will be pushing on a string since borrowing and printing money can never repair an economy which is fatally broken."
Looking at the example of Japan, we see that you can not grow an economy that has a falling population. It is a downward spiral of falling wages,,,, smaller families,,, shrinking economies.
http://www.24hgold.com/english/news-...n+Greyerz&mk=1

"On December 4, Italy holds a referendum that would give sweeping powers to the winner of an election. If the referendum fails, prime minister Matteo Renzi has repeatedly threatened to resign.

On December 5, it is increasingly likely that Europe could wake up to an immediate threat of disintegration."
"The most important was Italy’s economic performance since it adopted the euro in 1999. Total factor productivity, the portion of economic output not explained by labour and capital, has fallen in Italy by about 5 per cent "
"Münchau: The referendum matters as it could accelerate the path towards euro exit. If Mr Renzi loses, he has said he would resign, leading to political chaos. Investors might conclude the game is up. On December 5, Europe could wake up to an immediate threat of disintegration."

"If Ms Le Pen became president, she has promised to hold a referendum on France’s future in the EU. If that referendum were to lead to Frexit, the EU would be finished the next morning. So would the euro."
"Münchau: A French or Italian exit from the euro would bring about the biggest default in history."
"Münchau: Can this be prevented? In theory it can, but it would require a series of decisions taken in time and in the right sequence."
https://mishtalk.com/2016/11/21/end-...dly-anti-euro/

The technocrats forced a union on Europe that had NEVER worked previously. As it crashed, the TTP was their solution. They have CONTINUOUSLY demonstrated a lack of understanding of what makes an economy work.

Man moved from an agrarian economy to an industrial economy. He is in the process for moving into an automated economy where the worker has to compete with machines and far fewer workers are needed. GOV tried to hire up all the slack labor but, this has run it's course and is no longer viable.
Automation is growing by leaps and bounds. If man can't come to some sort of accommodation, he must either die or revert to the agrarian economy.

[Allcanadian]

@DannyB

Man moved from an agrarian economy to an industrial economy. He is in the process for moving into an automated economy where the worker has to compete with machines and far fewer workers are needed. GOV tried to hire up all the slack labor but, this has run it's course and is no longer viable.
Automation is growing by leaps and bounds. If man can't come to some sort of accommodation, he must either die or revert to the agrarian economy.

Looking at the example of Japan, we see that you can not grow an economy that has a falling population. It is a downward spiral of falling wages,,,, smaller families,,, shrinking economies.

If as you say automation is growing by leaps and bounds then why would Japan's falling population be a problem?. It would seem to me a majority of people will have no real purpose in our future because there former purpose will become automated.

Consider that self-driving vehicles will replace almost everyone who drives a vehicle including automated farms, advanced MRI/ultrasound, Artificial Intelligence and robotics will replace pill pushing doctors and AI will also replace accountants, purchasers and pretty much all paper pushers. The obvious fact one cannot get around is that up to 50% of the people in the future will have no job and they will have no real purpose to exist other that to simply exist and consume more resources.

I believe this is why most growth based economies must collapse because people who's only purpose is to help other people to consume more resources is a losing proposition. If they are not part of any solution then obviously they are the problem and we cannot continue to consume more and more just for the sake of consumption... that is absurd.

What we will see very soon is a correction as whole economies implode upon themselves because they are unsustainable. It also explains these right wing populist movements by people who have been left behind. People who cling to the past when they had some purpose or relevance which is no longer the case. Sorry progress waits for no man and there is no going back.

AC

[wayne.ct]

Nobody is listening

Therefore, whatever I may say is rather meaningless. Communication has to have a receiver otherwise no communication has taken place. I agree with you, Danny and AC. You both have good points.

Trump is marching to his own drummer and won't hear me.

I'm just venting.

The only solution that I see is basically impossible because of human nature and the various people and parties involved would never do it because of their nature and instinct for self preservation. If they tried it they would be assassinated or marginalized, probably assassinated.

Trump should gradually but systematically reduce the payroll of the government to the point where it is less than the tax revenue. This may be impossible because interest payments to the banks would explode. Therefore there would need to be a second element. The actual interest payments to the banks would need to be frozen to a fixed number of dollars. The problem then is to know exactly what those numbers look like from moment to moment. Without additional borrowing and continuous borrowing it appears that taxes will not cover both payroll and interest payments. If the government has not reached that point already, it will reach that point at some point in the future as interest rates paid BY THE GOVERNMENT begin to rise. Therefore, to preserve government power at even a minuscule level, the government must take control over the banks. It must basically kill the banks and the FED. I think this is what got JFK killed.

It seems to me this resembles your basic bankruptcy scenario. The government declares bankruptcy and spurns the banks, essentially refusing to play according to what the bankers want. The government is saying we are bankrupt and instead of letting YOUR lawyers tell US what WE need to pay and who WE need to pay it to, WE will tell YOU who, what, where, when and how. The problem with this is who will be making these decisions and what will the banks do when they realize they have been snookered?

What they will do is basically what they are doing to Trump, etc. right now. Therefore there is not much to lose from Trump's perspective. With big government and big banks out of the big picture, the honest people that are out there can rebuild the economy.

We'll get a smaller government and less powerful banks one way or another. How much pain do honest people have to go through between now and then?

The battle seems to be between two sides both of which are corrupt and corrupted. I.e. government and the banks. Up until now, they have been working together and the people have been the victims. Has this changed?

I'm still willing to wait and hope but in the meantime I'm moving away from fiat as much as makes sense to me.

[Danny B]

Dollar shortage,,,, interest rates moving up

"Epoch Times: What about automation, doesn’t that render the whole process of on-shoring meaningless?

Mr. Keen: Part of the motivation to move production offshore was cheap labor. But as we are getting better and better robots, you can have machines you can retrain for different assembly processes.

And you have 3-D printing turning up, which has become mainstream. So it means you can produce onshore without cheap labor. But it also means you can produce without labor at all.

In a well-functioning human society, that wouldn’t be a problem. The problem in a neoclassical capitalist system is that the workers lose out because their only source of income is wages. If there is no need for wages anymore, you don’t have an income anymore.

So we have to think about a post-capitalist income system."
"Mr. Keen: Yes, humans get their sense of self-worth by contributing to a community. If you are human and you are being paid for staying alive, you are not particularly happy about it, your sense of self-worth is pretty low. But if you have a job and can contribute to a community, that’s where your sense of self-worth is going to come from.

All this welfare is replacing work which is the case in the rustbelt areas makes people angry and resentful. Their self-worth is challenged and they are not going to be happy with the establishment."
Why Free Trade Doesn't Work for the Workers

News from the less-realistic side of the finance industry;
There is a huge dollar shortage and it will get worse. Only the FED can create dollars and there just aren't enough.
https://www.bloomberg.com/news/artic...of-last-resort

Moving on; The stronger the dollar gets, the harder it is for off-shore dollar-debt holders to service loans. The higher the returns on Treasury notes, the more money moves into the dollar. Interest rates are already moving up. Any raise from the FED would attract tons of money from the ZIRP bond markets. This would make the dollar even stronger.
11/22 Fed hike is certainty for bond traders as market odds reach 100% – Bloomberg
You can't sell your .25% bond when everybody can go out and get a 3.00% bond.

Well, what about the derivatives written on interest rates?
" E.B. wrote in last month’s issue of The Casey Report:
Most of the nearly $500 trillion in outstanding derivatives are contracts based on movements in interest rates. With interest rates artificially fixed near 0%, they say there’s little danger of those contracts becoming a problem.

According to E.B. and his team, “the slightest unexpected change in interest rates or an unexpected bond default could trigger a complete collapse on a scale that dwarfs what we experienced in 2008.”
Why Rising Interest Rates Could Be “Potentially Lethal� | Casey Research

[Danny B]

Maintaining ZIRP to keep the State functioning

11/23 Top ECB officials pledge continued support to euro zone economy – Reuters
11/22 Euro zone nations turn to hedge funds to meet borrowing needs – Reuters
In a ZIRP world, the State can do unlimited borrowing even though there is little prospect of payback. GOV printed up bazillions of currency notes and passed them out to investors. The investors, in turn, return them to State coffers. This allows for an enormous debt bubble that is quiescent until interest rates go up. The State is the beneficiary of ZIRP while it kills all interest income in the private sector.
The State-sponsored ZIRP bubble has solidified for years. The currency inflation has bled over to the lower loop and caused price inflation. Investors must put their money to work to keep it's purchasing power from diminishing. The ZIRP bubble has caused them to go to the high-interest (junk) bond market in a search for yield.
11/23 Junk-bond market heads toward deep freeze – Bloomberg

The markets agree 100% that there is going to be a rate hike. BUT, will it actually materialize? Traditionally, investors move into gold when the currency is manipulated too much. The State started manipulating gold many decades ago when the first gold-futures market was created. Trump threatens to stop the manipulation just by putting somebody honest in the SEC.

Trump has another problem looming. Will the markets let him do his expansionary plans? There is a fair chance that they will because of international capital flows.
"US will likely implement serious fiscal stimulus but without Fed QE supporting it whereas Europe will have no meaningful fiscal stimulus but lots of QE."
"However there is some evidence to suggest that we’ll effectively have cross border helicopter money."
"So there it is: helicopter money is here... and nobody is talking about it because it is not national helicopter money but cross-border, i.e., between central banks, something which makes perfect sense in a globally interconnected world of fungible money, and yet because it does not comply with conventional models, has flown right under the economists' radar."

"Given his protectionist leanings it’s perhaps ironic that the President-Elect’s biggest global allies might end up being the BoJ and the ECB."
"Or, another way of putting it, Japanese and European bond investors will now be unwittingly funding Trump's vision to "make America great again", while China and Saudi Arabia can hold the US hostage with threats of Treasury liquidation."
Helicopter Money Has Arrived... And Nobody Noticed: Here's Why | Zero Hedge

[Danny B]

Busted European banks,, busted CITI and J.P. Morgan

"What is very negative is that in every country in Europe, the largest owner of that country's sovereign bonds are that country's banks,"
The next big short’? Eisman warns that Europe and its banks ‘are still screwed’
OK, so the bonds that the bank hold are only worth about 20% of face value. Italy being the worst.
Looking forward, the European banks are looking to grab the money from a whole new class of investors. Banks await European Commission plan on capital buffers, loss provisions
After the shares and bonds of the bank are wiped out, this new class would get hosed. That would leave the depositors as the last one to get milked. It sounds like the "fix" is already in.

On this side of the pond, CITI and J.P. Morgan are reported to be in worse shape than Deutsche bank. Forget Deutsche Bank, These 2 American Banks Are Now "The Most Systemically Dangerous In The World" | Zero Hedge
"Six dozen dead banking executives is only one of the many signs that show the financial system is rotten, riddled with fraud, and set to implode."
It seems that the bank, Monte dei Paschi di Siena was doing dirty dealings and had to appeal to Deutsche bank to save them.
What These “Mysterious Deaths” Tell Us About Our Global Banking System | Casey Research

[Danny B]

Collapses and time-bombs looking for a pin

Rumor-control told us that there would be a huge collapse on September 30, 2017. Like the December 31, 2012 apocalypse, it was a no-show. The next apocalypse is scheduled for January 1, 2018.
"And in 2009, I got called in for a closed-door meeting at the Pentagon... to create and oversee their first ever "financial war game" simulation... to expose security weaknesses in U.S. banks.
The good news is that my team and I "won" that game.
The bad news is, we were playing as the Chinese team."
"For the rest of the world, the IMF has the last clean balance sheet.
And the way they see it, it's the IMF -- not the United States -- that should hold the strings to the world's purse. With centralized money, a centralized market, even a centralized government."

"The BRICS now run 22.4% of the world GDP. They now get just 14.9% of the vote in world financial decisions. They only need .1% more to get veto power.
Chances are they'll get more, as much as 16% or 17%."
Rickards is still banging the drum for the SDR. We'll see.
U.S. Dollar Goes Live

"If BofA is correct, it would mean that a day which sees a -4% SPX drop and +1% bond rally (good diversification) would generate no selling pressure, "underscoring the critical role played by bond-equity correlation in governing the severity of risk parity unwinds."
However, a troubling scenario is one where even a relatively benign 2% selloff of the S&P coupled with just a 1% selloff of the 10Y could result in up to 50% deleveraging, which in turn would accelerate further liquidations by other comparable funds, and lead to a self-fulfilling crash across asset classes."
"Which incidentally sounds like precisely the scenario that could happen when the Fed tries to raise rates, and is also why asset classes continue to move without fear of any rate hike, as they now realize - very well - just how trapped the Fed truly is."
Risky Parity Panic Strikes As Correlations Crash To Record Low | Zero Hedge
The article doesn't mention that the FED is also trapped by the derivatives. The FED could very well raise rates as a house-warming present for Trump.

Trump will have other problems. He plans to do $ trillions of infrastructure spending. BUT, it is expected that the bond market will block him; https://dailyreckoning.com/warning-b...gilantes-back/
The stock market may very well love his inflationary plans but, the bond market does not. Zero Hedge reports that the ECB and BOJ may very well be the ones that finance his rebuilding.

11/24 Illinois stiffs vendors to fund budget deficits – “financial time bomb” – Zero Hedge That term is being used a lot these days.
https://www.ft.com/content/0c7dc522-...8-79a99e2a4de6
Access Denied
Financial Markets 'Sitting On A Time Bomb' - Forbes
German Financial Time Bomb Book - by Jeffrey Weston
Don't forget the WMD of derivatives; https://socioecohistory.files.wordpr...ocks_bonds.png

https://dailyreckoning.com/financial...n-plain-sight/
ETFs, "The massive amount of trading that occurred continuously up and down along this trip to nowhere was economically pointless. It was a playpen for speculators and robo-machines. It didn’t allocate capital efficiently or add market liquidity to the real enterprise of American capitalism.

The implication is straightforward. The ETF boom functioned as a market accelerator on the way up." "we believe the dynamic will begin playing out in reverse. That is, ETFs will now become the Big Fat Offer that takes the market down at an accelerating pace.

The reason is straightforward. The $3 trillion world of ETFs is not an investor marketplace. It is a casino where the fast money moves in and out of short term rips, bubbles and flavors of the moment"
https://dailyreckoning.com/financial...n-plain-sight/
Other States have various "time bombs" of their own. ""R3 (Raghuram Rajan) planted a time bomb in our financial system in 2013. It is timed for December 2016. The redeemable $24 billion in f.e. (foreign exchange) to be paid out by banks," http://www.dnaindia.com/money/report...-swamy-2221872

The whole of Italy is a time bomb. We can't forget the demographic crash that is characterized as a time bomb, http://www.telegraph.co.uk/finance/e...l-economy.html

[Danny B]

What does GDP really show?

The State pumps in tons of fiat currency into the market to raise the GDP. The currency is just a chimera masquerading as wealth. Most everything out of Hollywood is just a chimera for reality. We've been brought up in a world of falsehood. The State must maintain control to keep the illusion going. That is why it rails against (fake news). The State pumps in currency to raise the GDP hoping that we won't notice that wealth is going down even though the GDP is reported to be moving up. The further that these 2 items diverge, the harder it is for the State to keep up the illusion.

Alasdair Macleod
"Behind the confusion in government economists’ minds is a false conviction that GDP records the performance of an economy. This is wrong. GDP is just a money-total at a previous point in time, and no more than that. It is not a measure of economic progress or regress. A change in GDP reflects only a change in the quantity of money in the economy, so it is perfectly possible for an economy to contract, or even collapse, while nominal GDP rises. "
https://wealth.goldmoney.com/researc...gmrefcode=gata

Steve Keen (repost)
"What mainstream economists and central banks can’t get to grips with, is that demand is declining even with both debt and GDP rising, because the turnover of existing money isn’t being recorded, just GDP. It’s time to throw away the equilibrium mathematics, Keen says, and focus on capitalism as a great disequilibrium and the adaptive, dynamic evolutionary system it is.

“Most of the demand in GDP comes out of turnover of existing money, some comes out of credit, but most of the additional credit goes to buy assets. So you can roughly add the two together to say that’s your total demand in the economy,” he said. “So they are now finding ourselves in a dilemma caused by this slowdown in credit, but their analysis tells them credit doesn’t matter. So they’re doing everything they can to try to get people to continue borrowing money."

“The reason we have the slowdown in Europe and America and England to some degree, is that we have too much private debt and people don’t want to take any more debt on, so credit growth is very low and therefore, demand is low because credit has been a component of demand from the 1940s all the way through to now.

“So you can get out of that problem by using the government’s capacity to create money to cancel that private debt and effectively go from having a strongly credit-based money system to more fiat based.”
"Keen’s ultimate vision includes a banking system revolution that no longer creates money to finance asset bubbles, which is really how banks have created money for the last 30 or 40 years. Eminently more sensible reasons to create money, than giving it to people to buy assets, include providing working capital for companies or money for entrepreneurs to invest. It’s the difference between funding consumers for houses to live in rather than houses to speculate on."
A renegade economist has a plan for reducing global debt | Business Insider

Finance, as a percentage of the economy just kept growing and growing. It produces nothing but takes more and more of economic output. Labor's share of wealth just kept falling. The sole purpose of Finance is to facilitate production and consumption. Finance used regulatory capture to go from slave to master. The upper loop of the economy is crushing the lower loop. The upper loop has belatedly discovered that it is too burdensome for the lower loop to survive. Steve Keen, et al have proposed that the lower loop be infused with lots of cash to pay down their debt and get back to consuming.

The upper loop doesn't want to see the lower loop pay them off painlessly. They see the additional "money" as diluting the value of the money that they hold. This is short-sighted thinking but, this is what they will follow until it is far too late.
The problem comes in that; the State infused money into the upper loop hoping that it would trickle down to the lower loop. With outsourcing and the crash in wages, this didn't happen. Our spending power didn't rise. As our purchasing power crashed, production-consumption crashed. The crash and default of production translates directly to a crash in finance for production.
11/25 NordLB Bank: “40% of our shipping loan book is non-performing” – Zero Hedge

Non performing loans (NPL) are piling up everywhere.
Student loans, energy loans, CRE loans, auto loans, shipping loans.
The banks were given free money but, they don't want US to receive free money. The plan is to just buy up all the distress physical assets for pennies. We will NEVER re-visit our former high wages. We will NEVER revert to a high birth rate, nor growth.
https://ourworldindata.org/wp-conten...-Fertility.png
https://ourworldindata.org/wp-conten...-fertility.png

Our entire system is dependent on growth. The upper loop is creating enormous amounts of currency units to create a FAUX growth in GDP,,, the purported yardstick of growth and wealth. Our U.S. debt is growing by $ ~6.4 billion a day. This is the yardstick that measures how much "money" it takes to make the GDP appear to grow.
After Aug 15, 1971, the State never had to worry about tightening it's belt. ALL limitations were are off. This was also true to a certain extent for the banks. Back before the housing crash, the banks were FINED if they didn't make enough liar-loans. After the crash, they were given TARP and lots of excess-reserves to make sure that they ALL survived. This bought some time for the preppers to get their feces together.

All this cash went into the upper loop and did NOT stop the defaults in the lower loop. Steve Keen's money would help out a lot and probably do a reset but, it wouldn't counteract human nature. People would still spend more than they earn. It also wouldn't turn around the falling birth rate. It would NOT send us away from Wal Mart. China would still have a lock on production.
There will likely be nothing done to severely shrink the upper loop. There will likely be nothing done to shrink the enormous overload of bureaucrats. 51% of Americans receive a check from GOV. That isn't likely to shrink substantially by choice.

The upper loop is going to shrink eventually but, not by choice. The default rate in debt instruments is rising. GOV pumped in tons of money BUT, had no control as to where the money went. Too much of it went into (bad) investments. They were bad investments because nobody recognised that the lower loop had crashed. The banks had papered-over our shrinking wages with MORE credit until the default rate went sky-high. They have passed the losses up the chain to GOV/CBs
But, we are GOV, we are the CB. The buck stops with us.
Edit Here is what you owe; Infographic: How Much Government Debt Rests Upon Your Shoulders?