Economic pressures

[Danny B]

Coming soon; the debt ceiling and the new budget

Socialism comes in many disguises; "Never before had so many people been hired by the state, with such salaries, pensions and benefits—to the point where the average government job paid almost three times the salary of the average private-sector job. An egregious but not isolated example was the national railroad company, which had annual revenues of €100 million against an annual wage bill of €400 million, on top of €300 million in other expenses. This is how the average state railroad employee came to earn €65,000 a year."
https://www.amazon.com/Modern-Greece.../dp/0199948798

"Italy has the world’s third-largest sovereign bond market with public debt of more than $2.5 trillion. Much of this debt is held by Europe’s shaky banking system, which heightens the risk that an Italian sovereign debt default could shake the global financial system to its core. …the country’s economic performance since 2008 has been abysmal. Indeed, Italian living standards today are around 10 percent below where they were 10 years ago. "
"the Italian economy has experienced a triple-dip recession that has left its economy today some 7 percent below its pre-2008 crisis peak level "

" …Italian banks now have around EUR 360 billion in non-performing loans, which amounts to a staggering 18 percent of their loan portfolio. If that were not bad enough, the Italian banks also hold unhealthily large amounts of Italian government debt,"
Move Over Greece, Italy's Crisis Will Be Worse | Zero Hedge
Italy is trying to increase it's birth rate. The People are demanding more welfare to make kids more affordable. Without assistance the population falls. With assistance, GOV debt grows. Eventually, it will be recognised that; either GOV produces debt-free money OR, the population continues to decline.

The CFR does a very good job of analysing Trump's financial plans. They clearly show that he just can't make everybody happy.
"In 2013, and then again in 2015, Congress voted to temporarily suspend the limit. (debt ceiling)

The current suspension expires in March, and Trump administration appointees have signalled differing philosophies. Treasury Secretary Steven Mnuchin has warned of the dangers of defaulting, while the director of the Office of Management and Budget, Mick Mulvaney, has previously favored using the debt limit to push for spending cuts."
Trump Budget Deficit and the U.S. Debt - Council on Foreign Relations

"That the cream of the economics profession is clueless was admitted this week by a rate-setting member of the Bank of England’s Monetary Policy Committee, in evidence before the Treasury Select Committee of the UK’s Parliament. The BoE’s forecasters have not only got the performance of the economy over Brexit horribly wrong, but it is now admitted that “….there are large forecast errors, and we are probably not going to forecast the next financial crisis, nor are we going to forecast the next financial recession.”ii
Global (economic) warming

It remains to be seen just how long Pox Americana can conduct business as usual.
The United States of Permanent War

[Danny B]

The West slowly sinks beneath the waves.

The controlling cabal is essentially a WESTERN cabal. LePen wants France to succeed,,, Grillo wants Italy to succeed,,, Putin wants Russia to succeed. The Western-centric cabal is losing out to the rest of the world. Armstrong shows the final collapse of America by 2036;
" The first opportunity where the United States will break apart will be 23 years from 2013 and that will perhaps by the Pi target from the 2032 high – 3.14 years later bringing us to 2036."
Martin Armstrong Warns "Rising Civil Unrest In America Is Highly Dangerous For The Future" | Zero Hedge
Pox Americana has run up ENORMOUS debts, primarily in service to the mother country, israel. It is an artificial country and does NOT have any long-term prospects.
The West is trying to institute socialism and going broke in the process. U.S. GOV debt is reckoned at $ 20 trillion but, is actually double that. Unfunded liabilities are reckoned at $ 213 trillion. (Kotlikoff)

The debt system has destroyed the West and the cabal with it.
Analyzing the Emerging World Order: The Future of Globalism | Global Research - Centre for Research on Globalization
Russia does not have any GOV debt and it is definitely a rising star, What does Russia produce? 1 | The Vineyard of the Saker
George Soros is doing his part to bring a color revolution to America and crash it down. The feces-for-brains Marxists believe that the Cloward-Piven strategy is the key to future happiness;
https://en.wikipedia.org/wiki/Clowar...Piven_strategy
When the great reset happens, that will hasten the fall of the West. Our balance-of-trade deficit is $ 1.5 billion a day. With the crash of credit, our imports will crash,,, including oil.
The upcoming debt-ceiling and budget negotiations will bring a huge dose of reality to our financial state.

We let corporatism run away from control. A corporation has no brain, heart, soul or morality. It is just a pile of money looking to get bigger. "ALL societies that fall into moral collapse soon fall into economic and political collapse", Douglas MacArthur.
It is possible for capitalism to be moral but, it is not possible for crony-capitalism to be moral. It's very basis is un-earned advantage.
http://jayantbhandari.com/capitalism-morality/

[Danny B]

Nowhere to kick the can

The old paradigms of capitalism, socialism, republics, democracy, stimulus and trickle-down economics are broken. They were destroyed by the computer and birth-control. Not to mention super-cheap shipping.
The so-called liberals and progressives have crashed into stupid policies and intransigence. They go running from the room if they hear anything that doesn't agree with pre-formed opinions and old beliefs.
Our brave new world features a crashing consumer base, a demographic crash, runaway automation, bankrupt socialism, etc.

Confidence has fled the scene but, the CBs have printed so much money, it is thwarted while looking for a safe haven. The whole neo-liberalism doctrine has been destroyed by forces beyond the keen of politicians.
https://www.theguardian.com/australi...oo-is-the-left
Regulatory-capture gave us the One Party and the One Bank.
There are NO policies that can rescue the system. Mankind can not expand without limit. Finance systems can't survive without endless expansion.

Neoliberalism self-destructs with NOTHING to replace it. https://www.theguardian.com/commenti...imf-economists
Socialism is incompatible with human nature. BUT, socialism is the firewall between non-producers and Darwinian pressures. Corporatism completely takes man out of the equation. A corporation has no brain so, it doesn't perceive that consumption withers away when potential customers are destitute. A corporation is immortal and immune to prosecution. It has no perception of limitations.
Democracy always , eventually morphs into socialism and communism. A democracy can only be a temporary arrangement.
Trump has the smartest bankers advising him. They ALL read Armstrong. They can see the approaching train wreck. Survival of Goldman Sachs is now impossible without the survival of America.
Helicopter money won't save us in the long run. Social credit has possibilities but, it can't co-exist with human nature. The end of life is death. The opposite of life is boredom. There are ongoing experiments to give everybody a monthly check. I don't hold out much hope. The Libs don't have any answers. The neocons don't have the answer; Neocon panic and agony | The Vineyard of the Saker

Le Pen may win; https://www.theatlantic.com/news/arc...france/517155/
If she is allowed to press ahead with he plans, the Eurozone will collapse; How France scrapping the euro could go beyond a �Lehman moment’

As if things aren't already bad enough, "
GEERT Wilders appears on track to win the Dutch election as anti-EU populism continues to sweep across Europe. But what happens if he wins? "
Armstrong calls for the crash to kick off THIS year. The EU will be lucky to last until the end of 2017.
If the PTB can't somehow make the industrial economy serve the majority of the people, those people will have to revert to an agrarian economy. The developed world will lose most of it's cities.
We're heading into the worst of times with the worst of "leaders".
http://www.smh.com.au/comment/career...22-guj8gw.html
Politicians kick the can down the road but, they have flat run out of road.

[Danny B]

The fast approaching paralysis

If you search on "congressional gridlock", it returns 68,000 results. Things have never been this bad. Soros is doing his part to make them worse. Israel has always used sexual entrapment to get control over politicians. Trump is hell bent on exposing all the dirt. The politicians are hell bent on stopping him. They have already signalled that they are going to oppose him at every turn.
There is a dawning appreciation for just what this will mean in the fast-approaching debt ceiling negotiations.
David Stockman: Giant Fiscal Bloodbath Coming Soon, Everything Will Grind to a Halt in 2017 – InvestmentWatch

"So in a matter of weeks or months at most, Trump will be struggling to survive, while the giant fiscal stimulus that has Wall Street all bulled-up will amount to a heap of ruins scattered about a debilitating political war zone on Capitol Hill.

I never thought the vaunted Trump tax cut and infrastructure boom would see the light of day in their own right, of course, because the Donald is caught in an inherited debt trap that he does not yet even dimly appreciate. "
"During the past year Uncle Sam’s “cash burn rate” was nearly $75 billion per month. That means Washington actually consumed $885 billion of cash during the last 365 days — or far more than implied by the official budget deficit of $587 billion for the fiscal year just ended (FY 2016)."

"Recall that there is not a snowball’s chance in the hot place of the GOP’s fragile 52-48 Senate majority prevailing on Obamacare outside of the filibuster-proof reconciliation instructions under the FY 2017 budget resolution.

But that’s also a Catch-22. Under the rules, Congress cannot pass a FY 2018 budget resolution to shield the tax cut from a 60-vote filibuster without avoiding the prior year reconciliation instructions on Obamacare.

Accordingly, I do not expect either a FY 2018 budget resolution or tax cut/reform instruction before the debt ceiling crisis hits next summer. "
"The one thing we learned during two decades in Washington is that re-litigating an election — which is the essence of the Deep State counter-attack now underway — is toxic to any semblance of ordinary governance, as it proved to be during Watergate.

But if you overlay on that the white hot political confrontations now erupting over issues that truly do divide the American public — such as government arranged health care and immigration — you have guaranteed paralysis and a fractious breakdown in the Imperial City."
https://dailyreckoning.com/fiscal-ho...on-washington/

Global sovereign debt to hit new all-time high - S&P | Reuters
"Britain's post-Brexit double downgrade will mean the percentage of world debt now with a top grade 'triple-A' rating will fall to an all-time low of just 7 percent down from around 13 percent a year ago.

S&P's calculations also showed Japan faces by far the highest debt rollover ratio this year, reaching a sum equivalent to 66 percent or two thirds of the size its economy."

The State printed tons of money,,,, the State created ZIRP so that the money would be interest-free. The State could finance itself on this free money.
Greenspan, "I never said that the FED is independent".
The tunnel-vision of the State to finance itself with free money never gave any thought to collateral damage. Like most parasites, it gives little thought to the health of the host. (the producing economy).
The cash-drain from the banks and the mega-consumption from the State (wars, etc) has drained the economic life out of most of the economy.
Incurring debt to support investment with a return is one thing.
Incurring debt solely for consumption is another.
The State incurred debt for consumption until that was no longer possible. Now, it incurs debt at ZIRP (free money) to try to maintain spending (consumption) levels.
The State exudes giga-tons of monetary pixels to keep the consumption party going. The surfeit of "money" has no place to go, other than, mal-investment. The State must $hit out even more money to compensate for the defaults in the mal-investment.

Trump said that the dollar is too strong. The coming federal gridlock should change all that. The S&P downgraded U.S. debt a few years ago. It may suffer another downgrade by summer.

[Danny B]

Evidently people are more important than money

I have TONS of posts writing about all the various symptoms and facets of our economic system. I found an article that condenses the problem(s) down to just a few ideas. I only wish that I were so inspired with information and clarity.
https://econimica.blogspot.com/2017/...is-sunday.html

I'm writing about the milestones on our path to insolvency. I’ll continue to do so because it is educational for me. Academia has turned TWO blind eyes to the problems, Intellectual Intolerance - Stunning Speech From Stanford University Provost Exposes "The Threat From Within" | Zero Hedge

Terra is suffering from our pollution and warfare. We have been very poor stewards, especially in the case of radioactive materials. The is especially true for dumping in the Kara Sea and the Barents Sea; "Two years ago, the Russian government provided a tally: two submarines, 14 reactors — five of which contain spent nuclear fuel — 19 other vessels sunk with radioactive waste on board, and about 17,000 containers holding radioactive waste. The last known dumping occurred in 1993. "
Include the DU we have spread around and the "accidents" , from Trinity to Rocketdyne to Fukushima.

The population is in decline. Meaningful work / jobs are in decline. Confidence is the glue that holds society together. That is in decline. The oceans are in decline. Bringing in immigrants with destructive lifestyles and no interest in working won't bring a revival of confidence.
The mantra of; finance first and, man second has helped to create a world where we just don't want to bring more children to life.

The finance system is going to hang on til the bitter end trying to keep their "advantage" over the producers. Japan has about 250,000 FEWER men every year. The producers are slowly leaving the scene. (mortal coil)
There will be no revival of the previous birth rate. The finance system is thrashing about in it's death throes. No amount of money will produce a baby. No babies= no future.

[Danny B]

Stockman,,,, unrolling the original plan for Greece

A few more details from Stockman; "In a typical month we have 250 to 300 billion in revenue coming in… that will easily cover the debt service for a month… that will readily cover social security and other critical payments… but when it comes to paying grants to state and local governments, contractors, or the Army Corp of Engineers, or the Pentagon, or a whole range of other activities, if you don’t have the cash you put the bills in the drawer…"
“Trump Does Not Yet Understand The Magnitude Of The Problem… It’s Going To Shock The System” | Silver Doctors

Stocks are at 2.7 times historical valuations. Sooner or later, gravity will take over.
When selling starts in markets, it'll trigger an 'avalanche', Marc Faber says
Everybody except the muppets know this but, the exodus hasn't started yet. This "action" is called; "picking up dimes in front of a steamroller". Timing the market is called; "catching a falling knife".
Just Five Charts: From ?Hope? To ?Nope? - Investing Video & Audio Jay Taylor Media

Greece is to be privatized and completely dismembered as a State, Greece to Surrender Gold, Utilities and Real Estate in Exchange For Pieces of Paper Printed in Brussels
From comments;
"According to wikipedia there are "deposits" in banks. This is faulty. Even David Icke is wrong on that point, but a less bit wrong. David Icke understands "fractional banking" as the money "multiplies".
No, banking is total fraud. Bottomline is ECB / IMF has created the money that is current debt. Now they want 7% interest on money they did not have (i.e. using EU states, including Greece as collaterals)
7% means debt will double in 10-12 years
EU is created so that no country can expand money supply. Those who do that (all will have to, and the only option is loans) will be punished by interest rates like 7% (26% one year in case of Greece) -> and they will default. The default is by design.
Austerity will accelerate the default.
PM Tsipras is viewed as an agent for EU banks. Yanis Varoufakis is defending Greek interests.
We have learned US Elite and US Media are lying, cheating scumbags. EU elite and EU media are the same."

The cheerleaders are hard at work;
2/27 Orders for durable goods in US rebounded 1.8% in January – Bloomberg
2/27 Another smelly durable goods report – Mish

[Danny B]

The Event Horizon

Kunstler DOES have a way with words; A Hole in the Head - KUNSTLER
The winding down of the post-war boom was anticipated decades ago. Evidently, a lockdown from the Deep State was seen as the "answer". Deep State's Message: Prepare For Totalitarianism - The Daily Coin
Aside from the police state, we have the tribe doing a huge push to socialism. Not content with the proven loser of socialism, they are also instigating wars in MENA to flood Europe, et al with refugees. Multi-culti seems to be the watchword of the day.
The neocons caused the wars in MENA. Soros, et al provided transportation for the resulting "refugees" to flood Europe in hopes of destroying existing cultures. The tribe had been kicked out of every place they descended. Destroy nationalism and they would be less likely to be kicked out.

"Just a few days ago Josef Schuster, the leader of the Jewish community in Germany expressed alarm at the rise of the anti-Islamic immigration party, Alternative für Deutschland (AfD). Incredibly, he insisted that Jews need to align themselves with Muslims against Germans who vote for that anti-Islam party."
News - ...AND YOU THOUGHT WE WERE A WEIRD MOB? - The Pickering Post
"The strengthening of multicultural or diverse Australia is also our most effective insurance policy against anti-Semitism. The day Australia has a Chinese Australian Governor General I would feel more confident of my freedom to live as a Jewish Australian."
--Miriam Faine, editorial committee member of the Australian Jewish Democrat"
http://www.theoccidentalobserver.net...e-part-4-of-5/

So, they believe that destroying everything to make a world safe for the tribe is the main objective. One has to be extremely stupid to think that destroying social cohesion is the road to greater security.
America is scheduled for a final collapse in 2032---2036. (Armstrong). Igor Panarin says that it will break into 6 sections.
Trump may drain the swamp but, he can't undo 40 years of bad fiscal management.

[Danny B]

Falling wages makes everything look expensive

More and more States have caught on to the fact that you can't have an economy if you don't have people. China has reversed their one-child policy and is now paying you to have kids. Evidently, they aren't paying enough to get people to comply.
https://www.rt.com/news/378864-china-second-child-pay/

"Central banks are designed to create debt, and since 1913 the U.S. national debt has gotten more than 6800 times larger."
"Barack Obama and his team understood what was happening, and they were able to keep us out of a horrifying economic depression by stealing more than nine trillion dollars from future generations of Americans and pumping that money into the U.S. economy."
"When you add all forms of debt together, America’s debt to GDP ratio is now about 352 percent."
"That is the inevitable consequence of 100 years of credit expansion from virtually nothing to $250 trillion, plus global unfunded liabilities of roughly $500 trillion, plus derivatives of $1.5 quadrillion. This is a staggering total of $2.25 quadrillion. "
March 2017: The End Of A 100 Year Global Debt Super Cycle Is Way Overdue

"absent energy no wealth can be created." "our book (Hall and Klitgaard, Energy and the Wealth of Nations, Springer). "
"But Denison’s model did not include energy, but only capital and labor. When Reiner Kummel and his colleagues included energy in the same model they found that the unexplained residual disappeared and that energy was even more important than either Capital or Labor. "
https://www.theautomaticearth.com/20...d-peak-energy/

This is a good article and the guy has given a lot of thought to the end of cheap oil. There is just one flaw.
Of course, the fluctuating value of the dollar makes it very hard to gauge whether oil prices themselves are rising or falling… Oil today at 2 grams(of gold), is about the same as it was in the early 1950s; but if you measure the price in US dollars, you would get the impression that it is about 30 times more expensive today!
Crude Oil
Oil is currently at the price it was at in 1974. It's not so much peak oil that is making energy so expensive, it is peak wages. Wages have gone up 17 fold and prices have gone up 40 fold. There is plenty of oil in the world. People just can't afford it.

"Adding a sense of urgency to all of this, three federal trust funds — covering highways, Social Security Disability and Medicare Hospital Insurance — are headed for insolvency over the next eight years, with a fourth set for depletion in 2030 (Social Security Old-Age Trust)."
How We Got Here In One Sentence - DollarCollapse.com

[Danny B]

poison pills and energy flux density

Politicians of all stripes really love Ponzi schemes. It allows them to give to voters the proceeds of the future work of their children. Socialism always breaks the bank because politicians promise too much.
Armstrong; "So welcome to the pre-arranged time-bomb of Obama and Boehner. The press will blame this all on Trump. In the end, they will destroy socialism and contribute to the breakup of the United States"
"So the debt crisis looming on the horizon depends entirely upon how bad the Democrats and the press try to spin this to hurt Trump, but they will shoot themselves in the foot and help to destroy socialism and Western Culture if not unleash civil unrest."

"Trump inherits a pre-programmed time-bomb and Obama has organized protests to try to make sure Trump is blamed for everything Washington created since World War II."
"Yes, this debt crisis is right on time with our forecast made decades ago. Of course, the politicians will be faced with the collapse of socialism. Where will the money come from to keep all of these programs going? "
"The debt deal struck by President Barack Obama and the then House Speaker John Boehner back in October 2015, was done purposefully to ensure that the debt crisis would not unfold under Obama and the Democrats. The debt deal was absurd that the $20 trillion mark for the US debt ceiling as of March 15, 2017 would become permanent"
https://www.armstrongeconomics.com/w...r-debt-crisis/

More Ponzi; "Local 707’s fund pays out $48 million a year — and takes in $7.5 million in contributions. "
https://www.armstrongeconomics.com/w...goes-bankrupt/

"Energeia
Darwinian evolution itself can be characterized as increasing energy consumption and efficiency at the individual and species level. The key to biological evolution is to become better and better at capturing external energy supplies. The same goes for economic “evolution” if we think of the economy as an evolving organic system full of complex human beings."
\Energy flux is the driver of change in our galaxy. Nothing happens without a flow of energy. And what is energy? Energy is the ability to perform useful work. And in physics, what is useful work? Work is useful if it overcomes inertia or resistance in order to generate motion.

Energy not money makes the world go round. Energy is destiny.
Darwinian evolution itself can be characterized as increasing energy consumption and efficiency at the individual and species level. The key to biological evolution is to become better and better at capturing external energy supplies. The same goes for economic “evolution” if we think of the economy as an evolving organic system full of complex human beings.

Equilibrium? Wait…Whut?

Energy flux(change) is so fundamental to how our universe operates, yet a large amount of economic analysis depends on the incorrect idea that economies are in equilibrium or want to be in that state. The concept of equilibrium in physics or economics means a state in which essentially nothing happens. Unfortunately as Heraclitus and other ancient luminaries have often reminded us, change is the only constant.
We clamor for economic growth yet our experts’ models depend on the concept of equilibrium which is almost oxymoronic if our goal is growth. There is no growth or change in a state of equilibrium."
Energy, Money, And The Destruction Of Equilibrium | Zero Hedge

Crosspost, nobody is sure where Trump is going; Neocon Or Isolationist? Who Cares! The Future Is All About Russia, Iran, And China | Zero Hedge
It took the U.S. mint 3,000 bucks to release a report on how much gold the Treasury holds, "Then, finally, on 23 December 2016 the Mint delivered the documents I paid for. Sort of. Instead of 1,200 pages I received 223 redacted pages that contained 68 pages of reports I didn’t ask for and 21 pages that were copied twice. Effectively, I got 134 pages related to my FOIA request."
The report would have been much shorter if they just said; the gold is gone. US Mint Releases New Fort Knox "Audit Documentation": First Critical Observations | Zero Hedge

Energy flux density and society; https://larouchepac.com/energy-flux-density
http://schillerinstitute.org/economy...ws/ross4L.html

[Danny B]

Nothing huge today, just more slipping.
"We have discussed the 60% debt ratio danger threshold in this article. But there is an even more dangerous threshold of 90% debt-to-GDP revealed in the Rogoff-Reinhart research. At that 90% level, debt itself causes reduced confidence in growth prospects — partly due to fear of higher taxes or inflation — which results in a material decline in growth relative to long-term trends."
"If inflation is allowed to rip to 4% and Fed financial repression can keep a lid on interest rates at around 2.5%, then it is possible to achieve 6% nominal growth" So, a growth in money supply is counted as GROWTH ??
Written by Jim Rickards,,, the SDR guy.
https://dailyreckoning.com/next-signal-watch/

"My own thinking is that Fed is now in a tightening mode because even the die-hard Keynesians have finally come to realize that their money printing policies of QE1, QE2, the Taper, and QE3 all have failed miserably. So they are pretending that the economy is on the mend to give them cover to allow rates to rise in order to restock ammunition for the next major economic catastrophe."
3/02 US initial jobless claims drop to lowest in almost 44 years – Bloomberg
3/02 Data-dependent Yellen running out of reasons to delay hike – Bloomberg
So, Yellen is going to use these positive indicators to justify a raise in rates.
"Given their humanistic hubris, policy makers saw no harm in allowing debt to grow exponentially while income in the system grew at best in a linear fashion as the chart above illustrates.

Therefore, paradoxically, the more debt money that is created, once the system no longer can expand, the more insolvent and less liquid the system becomes"
“Looking back through more than a century of financial data, the long-term average P/E ratio for the S&P 500 has been about 15.

As of yesterday afternoon, the P/E ratio for the S&P 500 stock index reached 26.5."

“That’s high– more than 75% higher than the long-term average.
“More importantly, since the 1870s, there have been a total of THREE periods in which the average stock P/E ratio was above 26.5.
“The first time was around the Panic of 1893.
“The second was around the 2000 dot-com crash.
“And the third was around the 2008 financial collapse."

“Right now, for example, the total size of the US stock market according to Federal Reserve data is $22.6 trillion.
“Meanwhile the total size of the US economy is $18.8 trillion. BS
“This puts the Buffett valuation at around 1.2, meaning the stock market is about 20% larger than the entire US economy.
“Historically speaking, this is expensive. Stock markets start getting into trouble when the ratio surpasses 1.0. (The Buffett ratio was 1.11 before the 2008 crash…)"

“General Motors made $16.5 billion from its ongoing business operations in 2016.
“But they had to spend an incredible $29 billion in capital expenditures just to sustain the business."
“In order to make ends meet, GM increased total debt by an incredible $40 BILLION over the last two years."
What Financial Disaster Awaits Us Next? - Investing Video & Audio Jay Taylor Media

"Aren’t you glad that the Dow leaped to 21,000 today
.I mean, just three weeks ago its low for the day was 20,015. In fact, on November 22, 2016 the Dow crossed 19,000 for the first time. " Free money will do that.
"the President of the Federal Reserve of Minneapolis, Neel Kashkari
,that his recent statement that “we are keeping our eyes open for asset prices to try and look for signs of bubbles”
Great graphs; https://media.wix.com/ugd/1f610b_d64...1eec3a76dc.pdf

“We don’t need a $54 billion increase in defense when the budget already is ten times bigger than that of Russia. We don’t need $6 trillion of defense spending over the next decade" Keynes said that we need perpetual war to keep the economy stimulated.
David Stockman: Trump Will Create a Debt Crisis Like Never Before | Fox Business

Across the pond, there is nothing but bad news for the bond market;

Brexit, United Kingdom: 24 June 2016. Vote Yes. Wow, never saw that coming! Oh, wait!
USA: 8 November 2016. Vote Chairman Trump. Wow, never saw that coming! Oh, wait!
Auxit, Austria: 4 December 2016. Vote Freedom Party (FPÖ). Close, so close.
Itexit, Italy: 4 December 2016. Vote ‘NO’, support Lega Nord (LN). You sensing a trend here?
Nexit, Netherlands: 15 March 2017. Vote Party for Freedom (PVV)

Gerexit, Germany: before 27 August 2017. Vote Alternative for Deutschland (AfD)

Swexit: Sweden, 9 September 2018. A vote for Sweden Democrats (Sverigedemokraterna)? Could it happen?
"Like it or not, Europe is actually the periphery of a collapsing star. That star is the United States."
"As with any collapsing star, ultimately the star will collapse but not before the periphery collapses first."
https://capitalistexploits.at/2017/0...h-4-catalysts/

[Danny B]

Icarus, Humpty Dumpty,,, smoking dusted weed

Wolfgang Schäuble is the German minister who is hell-bent on punishing Greece and driving it out of the EU. Germany has done VERY well in the currency union. The EU was formed as a currency union that did NOT include a debt union. It was impossible to force both items down the throat of the Europeans at the same time. It was reckoned that the debt union would come after the inevitable collapse. Wolfgang Schäuble is adamant that the EU be held together.
Apparently, it never occurred to him that; the institution of a debt union would create a common bond market. This would create a perpetual transfer of money OUT of Germany. NOBODY wants Italian bonds. With a common debt market, they would have to buy "Italian" bonds.
https://mishtalk.com/2017/03/02/drag...-life-support/
With a one-size-fits-all interest rate, Germans would pay much higher interest rates to cover potential defaults from the weaker economies.

"However it is what happens after this blow off top phase that is more interesting: that is the moment the "Icarus" trade becomes the "Humpty Dumpty" trade."
" On March 15th the Fed will likely tighten for the 2nd time in 3 months.
As if that wasn't enough, March 15th is also the date of the Dutch election, and also when the US debt ceiling will be - hopefully - reinstated and immediately surpassed."
AMAZING chart; http://www.zerohedge.com/sites/defau...%20rates_0.jpg
"Meanwhile, with US consumer confidence at 15-year highs, small business optimism at 12-year highs, US ISM at a very high 58, and European PMI’s at 6-year highs, " wtf are they smoking?
Bank Of America Sets A Date For The Market's "Great Fall" | Zero Hedge

Then, there is malware; https://arstechnica.com/security/201...und-the-globe/
"Michael Feroli, chief U.S. economist at JPMorgan said, in a note, the Fed may be worried it is going to overshoot on full employment " wtf are these people smoking?
Three reasons the Fed wants to hike rates in March

[Danny B]

Crypto currencies

Currently, pretty quiet.
MATASII has a pretty good article about the collapse of retail stores causing a collapse of retail property values. They think that the retail RE crash will be worse than the collapse of residential RE.
https://matasii.com/the-coming-finan...out-the-banks/

All the bankers and Central Banks are talking about starting up Digital currencies. Most of our sovereign currencies only exist in electronic form already. The complete loss of bearer currencies represents a complete transfer of control from the individual to the State. The State developed TOR for it's own uses, No Conspiracy Theory Needed: Tor Created for U.S. Gov't Spying | Network World

Bitcoin has had a LOT of problems;
"The cyber theft—the second largest by an exchange since hackers took roughly $350 million in bitcoins at Tokyo's MtGox exchange in early 2014—is hardly a rare occurrence in the emerging world of crypto-currencies.

New data disclosed to Reuters shows a third of bitcoin trading platforms have been hacked, and nearly half have closed in the half dozen years since they burst on the scene."
Risk of Bitcoin Hacks and Losses Is Very Real | Fortune.com
"Many like to say bitcoin, the protocol, was never hacked, but it was and very early on. Some clever unknown guy found on August the 6th 2010 an exploit which allowed him to “print” one billion coins or however much he liked – 184 billion."
https://hacked.com/biggest-bitcoin-hacks-thefts-time/

"Organizations dedicated to advancing the technology and its adoption are emerging. They include E-Currency, the sole purpose of which is to promote “central bank-governed digital fiat currency.”
"Third, the paper makes a leap of faith to suggest that central bank-issued digital currency can bring trust to a trustless distributed ledger, and moderation to negative human instincts.

For instance, it makes a case for banks to serve as “trusted intermediaries” to verify ownership, and even to safely retain private keys. This without any reference to the separation of deposit and investment functions, or to fractional reserve banking.
Is any of this credible or desirable?"
"First, cash has played little or no part in the largest financial crimes in history.

These include the rigging of the London Inter-Bank Offer Rate (or ‘LIBOR’), in which several of the world’s most prominent banks were complicit and are responsible.
These institutions siphoned off gains from a derivatives market that was worth between US$300 and US$350 trillion. "

"Western creditors were morally and economically wrong about the African debt crisis in the 1980s and 1990s. They were wrong with the Asian financial crisis in the 1990s. They have been wrong with the crisis in the Eurozone.

They continue to misdiagnose the nature of the current “balance sheet recession.” You cannot overcome debt and debt trauma with more supply.
In each episode the negative human consequence has been large and multifold.
These are monumental failures."
"Their effects can be measured in the spike in suicides, social dislocation and delinquency, structural levels of unemployment and under-employment, inter-generational inequality, environmental degradation, demonisation of minorities, political reaction, and so on.
This is the backdrop against which we are invited to trust the banking system with central bank-issued digital currency against."

A couple of comments;
If you treat the digital Dollar and Bitcoin as currencies, then Bitcoin is far better, as there is a restraint on its issue. Digital Dollars are conjured out with absolutely no control over the quantity created.
Central Bank-Issued Digital Currency will never happen, because everyone could bypass the private banks. It would put - as even the Bank of England found in a study - our monetary system upside down. People would demand all their deposits in central bank digital currency, because you can transmit it to everyone and store it securely without banks. We would end up in a full reserve system. Never going to happen.

What could possibly go wrong with just adding some binary digits into somebody's account without adding value to a countries fake Gross Domestic Product ?
It's worked a treat so far.

We're going in to a credit collapse. Considering the blighted record, of banks, the State, and crypto currencies, it doesn't look like ANY of them engender trust. Rickards may talk up the SDR until our ears go numb but, at the end of the day, it can be produced in any quantity. Our trading partners aren't going to accept something that the West can conjure up without limit.
Wages have crashed,,, the consuming population has severely diminished, discretionary spending has crashed.
Crypto currency isn't even a bandage.

Remember, if Bloomberg and the bankers want it, you DON'T
The Monetary Reset: E Dollar Concept is Being Pursued by The BOE, PBOC, and Yes, The Fed.

[Danny B]

Hopium and desperation in the Eccles building

Currently, the FED funds rate follows ~exactly the population of 15---62 year old consumers. The consumer base is falling. The FED funds rate is stuck on the floor trying to stimulate the economy. They are trying to use low-interest to stimulate increased spending. The credit system can't tolerate a shrinkage in consumption. In the run-up to the next FED meeting, we see that hopium is going to decide the day.
3/02 US initial jobless claims drop to lowest in almost 44 years – Bloomberg
#1 “Ninety-four million Americans are out of the labor force”
#2 “Over 43 million people are now living in poverty”
#3 “Over 43 million Americans are on food stamps”
#4 “More than one in five people in their prime working years are not working.
#9 “Our trade deficit in goods with the world last year was nearly 800 billion dollars”
11 Quotes From Trump?s Speech To Congress That Show That The U.S. Economy Is In A State Of Collapse

"A widespread movement into metals at this time would damage the Bank State and its umbrella organization, the Deep State, because their future profits require the control and progressive expropriation of the people’s money.
Therefore, a March rate hike is guaranteed, for three primary reasons. "
"Third, the Federal Reserve System is now 100% politicized, and run by sneaky, die-hard political ideologues who lie about why they do what they do and what they really think. Those who run the Fed are despondent that despite implementing for eight YEARS an interest rate policy specifically designed to enable Obama to create a totally false illusion of economic “recovery” by massively increasing government spending with trillions of phony, deficit, zero-interest-rate “dollars,”

"Therefore, the power- and money-obsessed functionaries at the Fed and within the Deep State, who all totally buy into the scorched earth agenda, are going to bring down the economy and markets, even if it means that every single private pension fund and the net worth of every non-connected citizen collapses with it."

"We believe that there is actually a more specific reason for the demonization of Russia than the above, usual suspects. This is a case where one should not just follow the money; one should follow the gold.

For the past fifteen plus years, physical gold supplies have been like Lazarus: they keep rising from the Dead. Just when it appears that a serious supply-demand imbalance is about to precipitate futures market delivery problems and therefore increased prices, supply miraculously appears out of nowhere to alleviate the shortage and stabilize or depress prices.

This surprise supply has primarily come from sovereign central banks: for example, 1,500 metric tonnes from one-time sound money nation Switzerland; 600 from France; 430 from the United Kingdom"
"The fact that the paper gold price manipulation fraud is reaching the end of the line due to deteriorating supply – demand fundamentals is exactly why we are seeing a radical, concurrent Deep State escalation of the War on Cash. "
Russia and China Team up Against Washington’s Gold Racket

The Central Banks sold off their gold (for paper that they can print without limit) for several years to depress the price (raise the perceived value of their currencies.
https://srsroccoreport.com/wp-conten...-2003-2015.png
They are hard at work trying to block gold from being considered as a store of value.
NEW UNCOVERED INFORMATION: Why Central Banks Were Forced To Rig The Gold Market | Zero Hedge
"They’re practically hollering a March 15 rate hike. Coincidence? It seems more like an open-air conspiracy…
But will a March rate hike start the Fed on a destructive cycle? There’s evidence for it, as you’ll see shortly. But first that open conspiracy…"
"Their forecasts have been consistently wrong by orders of magnitude for years. Actual data show unemployment higher, growth lower and inflation lower than the Fed expects."
https://dailyreckoning.com/feds-open-conspiracy/
So, they get their rate hike and then,,,, are forced to walk it back. The prime interest rate is solidly tied to consumption by the (shrinking) consumer class.

If the FED raises rates, the dollar gets stronger.
" have warned that rates will rise BECAUSE the Federal Reserve will be criticized if they fail to do so when they are faced with a stock market that is rising. However, while one by one, several Fed officials have all signaled in recent days that the Fed is ready to resume raising interest rates as soon as this month, the real crisis for the Fed will be raising rates will strength the dollar and put even more pressure on Europe and emerging markets. Hence, the 64 billion dollar question is will the Fed abandon international policy objectives for domestic?"
https://www.armstrongeconomics.com/w...o-raise-rates/
If the FED raises rates, that will put pressure on European banks. Reportedly, a few European banks are owners of the FED.
"Domestic Policy Objectives will win out over International. This will only have the same impact of causing capital inflows for the dollar will rise. Yet the Fed has no choice. To do nothing will invite attacks by the Democrats who will say they are only helping the rich get richer watching the stock market rise irrespective of the economy. What we are facing is asset inflation FIRST. "
"nomy. What we are facing is asset inflation FIRST. That means Draghi and the ECB will be in even a more difficult position trying to maintain negative interest rates that have completely FAILED to revitalize the European economy. It has been 8 years of a complete brain-dead economic policy by the ECB." The EU and ECB are toast.

3/04 Eurozone capital flight intensifies: Target2 imbalances widen again – Mish
Raising rates will exacerbate the capital flight from both China and Europe. That means that NOBODY will be buying European bonds.
"Speculation began after Janet Yellen’s testimony to House and Senate committees last month. She said a solid job market and an overall improving economy suggested the Fed would likely resume raising rates soon. "
"Under my scenario, the stock market is headed for a brick wall in April or May" "My take is that the Fed is desperate to raise rates before the next recession (so they can cut them again)"
"the White House and Congress are moving toward fiscal stimulus, while the Fed is moving toward monetary tightening."
https://dailyreckoning.com/feds-gett...aise-weakness/

So, the FED desperately wants to raise rates so that they can lower them when the next recession hits. BUT, raising rates will bring on a huge market retraction.
The election of populists in France, Netherlands and Austria will send even more capital fleeing. The upcoming forced devaluation of the Yuan will cause more capital flight.

[Danny B]

March of the muppets,,, bankruptcy of the FED GOV

The stock market just goes higher and higher. The fact that returns are terrible doesn't seem to dissuade investors (gamblers). The big boys have set all this up and they know when to get out. The mad stampede is slowing down and, they will get out in time. What about the little guy who only recently bought in?
"Investors poured $62.9 billion into exchange-traded funds in February, pushing the year-to-date world-wide tally to $124 billion, the fastest start of any year in the history of the ETF industry"
"All of the money is going into the cheapest and most boring ETFs. This is the retail investor getting back into the market with a vengeance,”
"Why is this a sign of a market top? Because small investors tend to trade on emotion rather than logic or expertise."

"And why are individual investors only the second dumbest money? Because governments are even less astute and more emotional than individuals, and their plunge into equities is just beginning. "
The Second Dumbest Kind Of Money Is Pouring Into Stocks - “With A Vengeance” - DollarCollapse.com

FED GOV is RAPIDLY running out of cash. It's near vertical on a graph.
"I think what people are missing is this date, March 15th 2017. We are burning cash at a $75 billion a month rate. By summer, they will be out of cash."
"So, with two weeks left until the debt ceiling suspension expires, Treasury's cash balance plummeted to $109 billion this week as of Thursday"
Then we will be in the mother of all debt ceiling crises. Everything will grind to a halt."
This Is The Only Chart Americans Should Be Worrying About Right Now | Zero Hedge
6 weeks of cash left.

"The ObamaCare quandary. A fiasco for sure. Under it, not uncommonly, a family pays $12,000-a-year for a policy that carries a $5,000 deductible. That’s an interesting number in a land were most people don’t even have enough ready cash for routine car repairs. The cruel and idiotic injustice of such a set-up could only happen in a society that has normalized pervasive lying, universal accounting fraud, and corporate racketeering. "
"The average cost for a normal (non-surgical) hospital childbirth in America these days is $10,000. WTF? An appendectomy: between $9,000 and $20,000 depending on where. WTF? These days, a hip replacement runs about $38,000. "

"Last time I had a hip replacement, I received a single line-item hospital charge report from the insurance company that said: “Room and board, 36 hours… $23,000.” Say what? This was apart from the surgeon’s bill and the cost of the metal implant, just for occupying a bed for a day and a half pending discharge."
"Beyond the markets, grave problems with currencies and banks await an epochal readjustment in the value and price of everything. The event could easily shut down the global banking system for a period of time, and it’s liable to be an interruption that advanced economies can’t recover from"
POTUS at SOTUS - KUNSTLER

"Here are some examples from the real world. In 1952, it cost $30 to have a baby in an excellent hospital. If we adjust that by official inflation as measured by the Bureau of Labor Statistic's inflation calculator to 2017, the cost would be $275. ($1 in 1952 = $9.16 in 2017)."
" My father paid 1.8% of his wages for "hospital group insurance" in the early 1950s (for a household of four kids and two adults.) For someone earning $1,000 a week, the equivalent today would be $72 a month out of a monthly gross income of $4,000.
My spouse and I pay $1330 a month for barebones healthcare insurance in today's sickcare system."
This is an excellent article on the enormous cost of crony-capitalism, oftwominds-Charles Hugh Smith: Why Is the Cost of Living so Unaffordable?

"They and other central bankers have become the standard bearers of a system that can best be described as a reverse Robin Hood scheme, one that takes from the poor and gives to the Rich. It’s just that in this tale, the ‘poor’ means everybody not in the top 1%. "
"Step 4: Sit back and watch with glee as everyone with savings silently and steadily has their purchasing power transferred to the debtors, be those public or private entities. You see, lower real interest rates not only reduce the government's costs of servicing its debts, but they erode the real value the debts themselves. The government is deliberately killing the value of the money we've worked hard to earn and save, for the sole purpose of avoiding the consequences of its reckless borrowing. "
https://www.peakprosperity.com/blog/...ealth-transfer

The PBGC guarantees about 24,000 pensions.
The clock is ticking for 71 penniless union pension funds that rely on a federal insurance company to support their retirees — because the agency itself is also running out of cash, its director said Wednesday."
"In order to keep afloat, PBGC doesn’t try to match a retiree’s union pension. The payouts are cut, often down to about one-third of what the worker is due.

{if the fund were to go broke] Retirees could expect to see their benefits slashed by 80%. In other words, less than one-eighth of the $570 average check PBGC is able to give Local 707 retirees now."
https://mishtalk.com/2017/03/03/pens...ions-affected/

#9 “Our trade deficit in goods with the world last year was nearly 800 billion dollars”
Thanks to the blessings of having the reserve currency, we are spending ourselves down very slowly. It is a different story for Venezuela.
"The Venezuelan government only has $10.5 billion left in foreign reserves, which the government has been using in recent years to pay outstanding debts." " Venezuela will have to pay $2.1 billion by this April, and a total of $7.2 billion by the end of the year. "
"Inflation is expected to increase by 1,660% this year and another 2,880% next year"
http://www.thedailysheeple.com/venez...dwindle_032017
Here in Los Angeles; http://laist.com/2014/09/19/los_ange...t_of_the_m.php

[Danny B]

Stock crash,,, maybe gold,,, maybe

Maybe, if enough people write about the coming slaughter in the stock market, cautious people will make the right decision.
"It is also worth noting that over the past two weeks, BofA has caveated that while retail inflows are seemingly relentless, institutions and hedge funds have recently turned sellers into the rally, and are aggressively offloading to retail,"
"And then there is China.

As a recent NY Fed report pointed out, "China Accounts For Half Of All Global Debt Created Since 2005." This echoes what we have been writing about for years, starting back in 2013 showing "How In Five Short Years, China Humiliated The World's Central Banks", when we showed that in just the brief period since the financial crisis "Chinese bank assets (and by implication liabilities) have grown by an astounding $15 trillion, bringing the total to over $24 trillion. In other words, China has expanded its financial balance sheet by 50% more than the assets of all global central banks combined."

"Citi strategist, who writes that "continuing with the idea that market strength owes more to a wave of technical support than to fundamentals, we remain convinced that the recent explosion of credit in China – visible in the monthly total social financing numbers – is of greater global significance than is widely recognized." WHAT technical support?
Citi's Matt King: "We Think You Should Sell" | Zero Hedge

"Recent dramatic events at COMEX futures exchange, however, increase my level of confidence in my current forecast. As I reported last month, we saw a 729% increase in the demand for delivery of physical gold at COMEX during off-month of January 2017, year over year. This month (February) was a major delivery month, and there was another 230% increase in the delivery of physical gold bars. The huge increase in gross demand for actual physical gold bars is impressive. However, it is not the amount that was purchased but, rather, who was doing the buying that is the most important factor."

"The biggest banks in the western world continued to be the biggest physical gold bar buyers during February."
"HSBC, in particular, was the biggest single buyer this month. HSBC bought just over 10.62 tons worth of physical gold bars."
"J.P. Morgan was also one of the huge buyers this month."

"Oddly, CME, Inc. was also a significant buyer. It has consistently been a significant gold bar purchaser throughout 2016. Like Goldman Sachs, HSBC, J.P. Morgan, Scotia and others, it has been stocking up. The exchange operator didn’t buy as many gold bars as a “too-big-to-fail” megabank, but its purchases were enormous, and way out of line from a historical perspective. Remember, the futures exchange operator is not a bank, a hedge fund or an independent investor. It has no obvious reason to buy physical gold bars"

"The exchange is contractually liable on any default in delivery by clearing members. There hasn’t been any default yet. However, the fact that the company is now buying so many gold bars implies that it is preparing for that to happen. "
"London gold dealers don’t have enough gold to meet demand. Most of the “gold” controlled by LBMA banks is actually not theirs. It is all “stored” under “non-allocated” storage contracts,. "

"Apparently, they’ve been selling and leasing the gold they don’t own for many years. All of it is spoken for, and there isn’t any left. With no stockpiles of their own, and facing the prospect of being cut off from the US Gold Reserve, they seem ready to default on metal delivery obligations. "
President Trump and Gold | AVERY B. GOODMAN BLOG