Economic pressures

[Danny B]

The fear index,,, rackets in place of commerce,, Kunstler and Saudi

The VIX was the "fear index". Now, the BIS says that the dollar is the new fear index; https://www.bloomberg.com/news/artic...eless-bis-says
The latest fear index is the SKEW. A popular stock-market ‘black swan’ gauge is at a record - MarketWatch If the VIX has been forced down, how far above is the SKEW in reality?
Years of ZIRP has given us years of malinvestment. By blocking all loses, the FED has blocked all rationality and people are staring to get worried.

The financial economy just hums along no matter how bad the real economy gets.
"Retailers Are Running Out Of Time": Channel Checks Show 13% Collapse In Traffic | Zero Hedge
Finance used to be 5% of the economy. Now, it is 40% even though actual wealth production is falling. Who knows how long this can continue?

"Trump won by making promises that he’ll never be able to keep under the current circumstances. The main promise was to restore the standard of living enjoyed in bygone decades by former industrial workers and clerks. His promise was based on a misunderstanding of history: the notion that the industrial organization of daily life was a permanent part of the human condition. You could detect by the early 21st century that this was not so anymore. That was exactly why we tried to replace it with an economy of rackets. When there’s nothing left, a lot of people are going to try to get something for nothing, because there’s nothing else to do."

"The new financialization was, in effect, setting a matrix of rackets in motion. What had worked as capital management before was allowed to mutate into various forms of swindling and fraud — such as the bundling of dishonestly acquired mortgages into giant bonds and then selling them to pension funds desperate for “yield,” or the orgy of merger and acquisition in health care that turned hospitals into cash registers"
"What remains of the accustomed standard of living in America is supported by wishing and fakery and all that is now coming to a climax as we steam full speed ahead into Murphy’s law: if something can go wrong, it will."
"What can go wrong awaits in markets, banks, currencies, and the immense dark pools of counterparty obligations that amount to black holes where notions of value are sucked out of the universe."
Kunstler, of course. Full Speed Ahead for Murphy's Law - KUNSTLER

The Central Banks are trying to achieve some kind of equilibrium. This idea can no longer work, https://www.bloomberg.com/news/video...ilibrium-video
Far too many people have been displaced from the labor market for the economy to function on debt-money from private banks. https://www.sovereignmoney.eu/

Saudi Arabia is destined to go to the trash heap, http://www.zerohedge.com/news/2017-0...hale-one-chart
Deutsche bank is back in the news; http://www.zerohedge.com/news/2017-0...evenue-warning
"The history of modern monetary and banking arrangements and government’s complete failure to manage society begs for meaningful reform. However, the likelihood of such reform is zero without the Crash & Burn"
https://www.armstrongeconomics.com/a...or-capitalism/

[Danny B]

Jim Willie and the latest speculation

China definitely has problems. They MAY have a planned exit to overcome these problems. Jim Willie says that China is moving forward with it's plans Re; gold.
"The sleazy central banker crew defaulted on the gold lease from 1999, evident in 2014. The same sleazy vile crew have used tricks like bank derivatives to create phony bond demand, tricks like Reverse REPO to undo the last rate hike by ramping up to dangerous levels the bond leverage, alongside massive bond default on legacy bonds from nearly a century ago. The fact that a bond is old does not invalidate the bond’s integrity and requirement for honoring it. The criminal central banker crew in all likelihood stole at least $3 trillion in Saudi USTBonds as well, which serve as ESFund core. "

"The Western bankers have a long history of lies, deceit, betrayal, subterfuge, sabotage, and pilferage. " "He expects their harsh clear revenge to follow, with the launch of the long awaited Global Currency RESET to come next."
"China likely perceived a maneuver to sabotage Trump by the banker cabal, and the Beijing leaders yelled PUNT, game over, no more cooperation."
Front Seat in Shanghai: Jig is Up

[Danny B]

Rollover, judas goat,, cash only for RE

Armstrong says that the crash will be in the public-debt sector. Maybe so. That doesn't mean that the private sector won't crash first OR concurrently. There are signs that the markets are starting to roll over.
1987, "Stocks declined by more than 22% on October 19. Now, looking at the present, Michael said on my show on March 14 that the T-Bond market broke through that same comparable 1987 floor about one week ago and on Tuesday"
Oliver?s Market Summary as of March 14, 2017 - Investing Video & Audio Jay Taylor Media

"As shown in the chart below, on a cumulative 4-week basis the slowdown in C&I loan creation tumbled by 2.8% as of the latest period: this was the biggest monthly slowdown going back to the financial crisis."
It seems that loan origination is crashing,
Banks Slash Loan Books While Equities Hover Near All-Time Highs; Someone Is Massively Wrong | Zero Hedge
Pump it up and crash it down AND buy up the pieces for pennies.

"T-Bond market’s signal that higher rates means our economy is strong. If the Fed says T-Bonds are signalling a stronger economy, what more do you need?

But if you trust the Fed, then you may as well trust the “Tooth Fairy.” As James Bullard of the St. Louis Fed recently pointed out, the Fed is beyond clueless when it comes to predicting interest rates. "
Bullard has long been cursed with a streak of honesty.
"Michael Oliver’s brilliant technical work has led him to perceive that the U.S. T-Bond is a “Judas Goat.” Yep, lead them to slaughter.
Is the U.S. T-Bond a Judas Goat? - Investing Video & Audio Jay Taylor Media

Armstrong; "We must understand that property values are LEVERAGED, so if the money for fixed rate loans dries up because of interest rate hikes and political uncertainty, then real estate prices MUST fall. This is all because of the leverage that was deliberately injected into the real estate market during the Great Depression for property fell in value so far, only cash buyers could buy anything. Farm land fell in value to below what it was sold for by the government more than 80 years before."
"Real estate is different from stocks and gold. Yes it is a place to park money. However, be careful because without mortgages available, it falls further than other tangible assets because it has been LEVERAGED! "
Martin Armstrong Explains Why Real Estate is DIFFERENT From Stocks and Gold | Silver Doctors

[Danny B]

Fleeing capital causes price inflation,, the end of the rentier economy

A lot of investors have bought up tons of RE to park money. This has upheld residential RE prices in spite of falling wages. The end result is that the wage earner is priced out of the market. The renter is slowly being squeezed for everything that he has. This won't end well,,, or soon.

"Authored by Charles Hugh-Smith via OfTwoMinds blog,
What will replace the current system after it self-destructs? That's the question."
"Here is a table of the growth rate of the GDP.
If we use $18 trillion as the approximate GDP and a growth rate of, say, 3.5%, the total of goods and services would increase one year to the next by about $600 billion.
Meanwhile, referencing the Grandfather national debt chart with the USDebtClock data, the annual interest bill is $3 trillion. "
Our "growth rate" is negative.

"As both of us have stated, you can create all of the money you want, however, production of real things cannot be accomplished with a keystroke.
Then there is the issue of liberty. Each Federal Reserve Note is a liability of the Fed and gives the bearer the right but not the obligation to purchase — whatever the Fed deems appropriate. How much one can purchase keeps changing base on a theory-driven experiment that has never worked. Since the Fed is nothing more than an agent of the Central State, the ability to control what the wages of its workers will purchase, is a dangerous power for any government.
If a Federal Reserve Note is a liability of the central bank, then what is the asset? The only possible answer is the nations productivity. So, in essence, an agent of the government, the central bank, most of which are privately owned (ownership is cloaked in secrecy) owns the entire productive output of free and democratic nation-states. "
Then there is the solution, default. That only resolves the books, the liability of human needs remain. Bankruptcy does not resolve the residue of social misery and suffering left behind for the masses who became dependent on lofty promises (debt). These promises (debts) were based on theories that have reappeared throughout human history under different guises but have never worked.
More debt will not resolve debt. The individual’s liberty is nonexistent if he does not own his labor. A people should consider carefully the viability (arithmetical consequences) of borrowing, at interest, to consume their own production. The asset of our labor cannot simultaneously be a liability we owe to ourselves at interest."
"What is the alternative to the present system of debt serfdom and rising inequality? There is none in our financialized, Neofeudal-Neocolonial State-Cartel Rentier Economy that creates and distributes credit-money at the top of the wealth-power pyramid."
Dear America: Better Read The Fine Print On Your Credit Card Statement | Zero Hedge

You see the great problem. The current system is collapsing but, there is no replacement system on the horizon. While this system is collapsing, people will want to continue to eat. As more rich people become aware of the coming collapse, they will try to retreat into tangibles. IF they don't retreat into gold, they will cause increasing price inflation that will continuously price the wage-earner out of the markets. The State has tried to get the rich to store their money in bonds. Bonds are looking increasingly bad.
It is dangerous to price the common man out of housing.
3/21 Toronto home prices may jump 25% this year – Bloomberg
He has already been priced out of having a family. IF/when he is priced out of eating, then, we will see big trouble. The State is desperate to keep the money in the bond market but, the fools created ZIRP to try to save the banks.

All the happy-talk from GOV is an effort to keep money from parking in whatever appears to be the safest bet. Shadowstats says that price inflation is running about 10%. The aggregate earning power of the working class is falling. As prices rise, the market dies. Liar-loans are supporting several markets at this point. As loan origination falls, there will be more and more segments of discretionary spending that will wither away. We have shrinking credit and a shrinking workforce.
If T-bills are a judas-goat and stocks are starting to roll over, where will capital flow? Kunstler said that it would be sucked into a black hole.

If the debt ceiling is NOT raised, there will not be any "new" money flowing into the markets. How can the old debt be serviced by new debt if there is no new debt? Congress needs to raise the debt ceiling as soon as possible. When it is much too late, they will see the error of gridlock.

[Danny B]

What happens when you cut up the national credit card?

Armstrong was a professor and has a good talent for getting an idea across. Here is a vid where he does just that. https://www.armstrongeconomics.com/u...he-solution-3/
Keep in mind that he has his viewpoint as an investor. He blames everything on GOV and socialism. Though, he also blames everything on the interest burden. He decries interest but, makes no mention of debt-free money. He decries socialism but, makes no mention of automation.

"People thought that Quantitative Easing was a drastic increase in money supply that would be inflationary. It was not. What they do NOT look at is that because government debt in the form of bills, notes, and bonds, all can be used as collateral in a loan, the entire national debt has now become simply cash that pays interest. In the 1960s, you could not borrow against an E-Bond. That meant it was less inflationary to borrow than to print. Today, that is no longer true and you can keep your cash in T-Bills at any brokerage house. Essentially, the entire national debt has already been monetized yet it has become currency that merely pays interest."

This is an important thing to understand. We have had a huge bout of monetary inflation since we went off the gold standard. The debt ceiling is hugely deflationary. Wage deflation has been hugely deflationary to the upper loop of the economy. That's why the finance sector has to print so much new "money". Finance used to be 5% of the economy. The FED printed like crazy and monetized the debt like crazy so that the finance sector is now 40% of the economy.
The finance sector is using monetary injections from the FED to make up for our lost wages. Congress wants to put the brakes on to trip up Trump.
Without new funds, the defaults start at the top and cascade down.

New issuance T-bills are sent to the FED to be monetized. Then, they are sent to the primary dealers to be resold to investors. All of this has to be rolled over. Various sovereigns are dumping T-bills and now, the Easter Bunny is buying them. Freezing the system with a ceiling will also cause huge problems with eurodollars demanded / needed to service dollar-denominated debt in a hundred other States.

The rest-of-the-world will suffer from the debt ceiling more than America will.
"ANSWER: Historically, capital tends to flow first from the financial capital of the world to the outer provinces or state. This was how it functioned in the Roman times as was the case for postwar when US capital flowed outward to rebuild the rest of the world. Then what happens is as an empire begins to die (in this case Western Culture), the capital flow reverses and then moves back toward the core economy which is the financial capital of the world."

"When the Sovereign Debt Crisis hit in 1931, government simply defaulted. The bonds were then delisted never to come back again.

What transpires at that moment when government moves into a Crash & Burn, is that all tangible assets rise together, albeit at different rates of advance. This is what I call the Great Alignment."
"Therefore, we will see gold rise WITH the stock market – not counter-trend. Likewise, real estate survives provided you do not enter into a Dark Age when not even gold survives – only food."
The stock market depends on consumption.
https://www.armstrongeconomics.com/a...d-then-inward/

[Danny B]

The long decline

Well, the long predicted end of the Trump reflation is now upon us. The bonehead investors figured out that the bonehead congress wasn't going to play ball with Trump. https://dailyreckoning.com/trump-fac...feat-tomorrow/
The stock market has ALWAYS been a place where money moves in and out based on fear & greed. BUT, free money never has pangs of fear. The stock market never suffers a reset due to bad fundamentals. The CB refuses to let fear get in the way. Earnings are stagnant but, prices just keep going up. With the markets WAY above historical values, the fear is slowly starting to seep in.
Garret/Galland Investment Research You Can Trust

The drop has started; Have We Reached A Turning Point For Stocks? Tuesday Was The Worst Day For The Stock Market In 6 Months
So, at what point will investors get back in the stock market? Earnings are dead. WHY should they get back in the markets?

3/24 Reflation trade hangs in the balance as health care vote looms – Bloomberg It is not looming. It is DOA.
3/24 San Francisco median home price now over $1.3 million – Dr. Housing Bubble
3/24 Italy falls out of love with euro: Beppe Grillo on the rise – Mish The headline should read, Italy falls out of love with poverty.
3/24 Populism may be a bigger deal than monetary, fiscal policy – Bloomberg Starvation has a way of doing that.

[Danny B]

How much default can the system take?

The CB is insistent on pumping in new debt regardless of economic fundamentals.
"By 2007, the total value of these subprime RE loans hit a whopping $1.3 trillion. Remember that number."

"Over the last decade or so, there’s been an absolute explosion in student loans, growing from $260 billion in 2004 to $1.31 trillion last year.

So, the total value of student loans in America today is LARGER than the total value of subprime loans at the peak of the financial bubble."
"the student loan default rate is 11.2%, almost the same as the peak mortgage default rate in 2010.
This is particularly interesting because student loans essentially have no collateral."
"Federal Reserve data once again show that, for at least 25% of college graduates, salaries are no higher than for people with just a high school diploma."
This New Bubble Is Even Bigger Than The Subprime Fiasco | Zero Hedge
Then, there is the problem with auto loans, 6 million borrowers are 90 days late on their car loans - Dec. 1, 2016

Oil is still in the news. There are a few new mega-projects that will soon come on line. Oil is not doing well.
Crude Inventory Build Sends Oil Prices Into a Nosedive | Oil Price | FINANCIAL SENSE
So, just how high can default rates go before things go SPLAT?
" 73% of consumers had outstanding debt when they were reported as dead"
Americans Are Dying With an Average of $62K of Debt | Fox Business
I guess that dying is the ultimate default.
Kunstler said that we don't have an economy. We have a web of rackets. He just might be right, https://www.yahoo.com/tech/hackers-t...101801427.html

[Danny B]

Terror & bonds,, debt ceiling & bonds

Every attack in Europe raises the possibilities of Le Pen getting elected. BUT, Le Pen has promised to (effectively) destroy the bond market and the Eurozone. Parliament has come out and said, "this wasn't an islamic attack". Every attack, in Brussels, France, Sweden, Germany, GB, et al is one more dagger in the heart of the European bond market.
The chosenites are using the financial power of the bond market to bring about the cultural destruction of Europe.
http://www.energeticforum.com/299835-post144.html

Every nationalist candidate and/or leader is a threat to the bond market. This is especially true for Trump and the FED. De Gaulle and JFK were previous threats to the power of the financial rulers.
Armstrong has called for a crash of the sovereign bond market. Le Pen, Trump, Grillo, et al, are just moving it along. A crash of the sovereign bond market would seriously reduce the power of the one-worlders.

The problems at Deutsche bank have essentially confirmed that the European banking system is not long for this world. The America banking system is slightly better because of capital flight from weaker systems. BUT, America is burdened by the horrendous cost of it's many wars.
https://biblicisminstitute.wordpress...-relationship/

A crash of sovereign debt would remove much of the power of the finance class but, it would also cause widespread misery and death. Russia will be exempt from this crash due to many fundamentals that are in their favor.

The debt ceiling & budget battle have essentially set a timeline for the collapse of the bond market. There is a small possibility that the FED would be allowed to monetize tons of new Treasury issuance in time to save the Euro-dollar market but, it isn't likely. If / when the European banks go down, they will bring down a lot of other banks with them.
The battle to stop Trump will undermine the bond market that is the source of power for those trying to stop him.
It wouldn't be the first time that politicians have shot themselves in the foot.

Now seems to be the time to buy silver. Dead Men Walking? | SilverSeek.com
China wants to pull a rabbit out of the hat with all that gold they have accumulated, John Hathaway – China To Radically Reprice Gold Higher In 2017 As Demise Of The COMEX & LBMA Accelerates | King World News

[Danny B]

The deep state cracking,, the narrative crashing

Charles Hugh Smith has a fantastic ability to envision, describe and project things around us that we don't "readily" analyse.
"This is why the Deep State is fracturing: its narratives no longer align with the evidence."
"The New Yorker is right about one thing--the Deep State is not a "conspiracy:" it is a vast machine of control that is largely impervious to the views or demands of elected representatives or the American people. The key to understanding this social-political-economic control is to grasp that control of the narratives, expertise and authority is control of everything."
"We can now define the Deep State with some precision. The Deep State is fundamentally the public-private centralized nodes that collect, archive and curate dominant narratives and their supporting evidence, and disseminate these narratives to the public via the media and to the state agencies"

"Curation is a critical factor in maintaining control of the narrative and thus of control; the evidence is constantly curated to best support the chosen narrative"
"The primary claim of each Deep State node is that its expertise and authority cannot be questioned. In other words, while the dominant narrative can be questioned (but only cursorily, of course), the expertise and authority of the institutional node cannot be questioned."
"This is why the Deep State is fracturing: the expertise and authority of its nodes are delaminating because its narratives no longer align with the evidence. " "There is indeed a Deep State, but its control of dominant narratives, and thus its source of control and power, is crumbling. "
oftwominds-Charles Hugh Smith: The Deep State's Dominant Narratives and Authority Are Crumbling
I suppose that this article could also be posted at American Ruling Class
The deep state is definitely having a heart attack over losing control of the information flow.

"For the last three years, the political establishment in Italy and beyond have had a field day attacking, ridiculing, and vilifying Beppe Grillo’s 5-star movement. Yet his party still leads the polls. And that lead is growing."
"economists including Deutsche Bank AG’s Marco Stringa are calling Italy, not France or Greece, the “main risk” to euro-area stability."What stability?
"country already with public debt of over €2 trillion, youth unemployment of almost 40%, and an economy that is 12% smaller than it was 10 years ago, "
Side note; "If the latest surveys of business intentions are to be believed, the euro zone economy is sparkling, growing at a pace that easily explains the hints from some European Central Bank policymakers of a pull-back from their easy-money regime."
Euro zone economy sparkles, lights way for ECB pull-back | Reuters
Eurozone Whistles Past its Biggest Threat | Wolf Street
The Italians are definitely misaligned with the truth.

America is definitely misaligned from all the happy talk, The retail apocalypse has officially descended on America - Business Insider
Probably something to do with the great loss of discretionary spending as a result of the global mean wage.

"Americans fled Europe because of all the political infighting. They were isolationists and felt Europe should fend for itself. It was the politicians who lied and did whatever it took to maneuver the opinion to support their desire for war. We are merely returning to a period of isolationism after countless wars and attempts to create nation building so politicians can pound their chests.
FDR went to Boston to promise their sons would NEVER go to Europe to defend the British.
By no means should we view the Dutch elections as this being the end of populism. It is just getting started because politicians have abused the people countless times. "
"have indeed still ushered in the dawn of a new populism in Europe, which is always against the establishment. That was in fact what swept FDR into office in 1933, Hitler in Germany also in 1933, and Mao also in 1933."
"The important change in trend will come in May" ??
https://www.armstrongeconomics.com/i...-here-to-stay/

In Canada, I was in a discussion with a socialist politician. I was shocked at the response to their view of the economy that everything you earned belonged to the state and they decided how much you were allowed to keep. "
"The CRA is now selling socialism by relabeling this as a new “sharing economy”
"You are not capable of being able to manage your own affairs and are way too stupid to understand what is the best way to spend money. Therefore, the CRA explains that the tax obligations for individuals or small businesses involved in the “sharing economy” means they MUST report ALL income earned"
https://www.armstrongeconomics.com/w...aring-economy/

The BS data is misaligned from the reality on the ground; http://www.zerohedge.com/sites/defau...324_PMI4_0.jpg
http://www.zerohedge.com/news/2017-0...e-6-month-lows

[Danny B]

QE did nothing for earnings in assets

Armstrong says that investment will move from the failed public bond market back into private investment. I have to disagree with him because private investment depends on consumption and profits. Only the public sector is "immune" from the necessities of profit-making.
Stocks; "This is saying over the next 25yrs, there will be three new sellers per every new buyer and sellers are mandated to sell over twice as fast as it is hoped that buyers accumulate (assuming there is adequate full time job growth and wage growth providing the excess income for retirement savings"

"And if we make an assumption that the significantly slower growth in full time jobs and wage growth results in just a 15% reduction in retirement savings among the 25-60yr/old population, the mandated sellers overwhelm buyers in about 15yrs from now."
https://econimica.blogspot.com/2017/...ns-spells.html
Even today, stock earnings are non-existent.

Earnings per share;
"Again, the primary problem was in fundamentally misreading and misinterpreting what QE was – it was not money printing no matter how many times the media repeats the assertion supposedly derived from the editorial standards for what constitutes good authority. What should have been considered to a greater degree was how these views on QE amounted to little more than confirmation bias. All the evidence to that point suggested QE wasn’t working and hadn’t worked"
"Therein lies our stock market revisit with the dot-coms, not just in terms of valuations but more so the psychology of them. Stock investors wanted QE to work just as they wanted to believe in the late 1990’s Alan Greenspan was a genius who had engineered a “new normal” then of unparalleled, low volatility prosperity."

" At $94.54, ttm EPS are almost exactly the same now as when QE3 started, and are only 6.8% more than Q1 2012 all those years ago! "
http://www.alhambrapartners.com/2017...rse-of-keynes/
All that free money pumped in just helped valuations. ONLY consumption can help earnings.

Apparently, Canada is going to emulate Europe; Canada Passes 'Blasphemy' Bill To Silence Critics Of Islam | Zero Hedge

"I am not at all surprised that Democratic senate minority leader Chuck Schumer has recently vowed to throw the debt ceiling talks into disarray if Trump continues to pursue a rollback of Obamacare, the building of the southern border wall, or the defunding of Planned Parenthood. Schumer has specifically warned of a government shutdown designed to prevent the Trump administration from instituting such policies."
Watch These Geopolitical Flashpoints Carefully | Zero Hedge
Right on schedule.
Russia has their alternative to SWIFT up and running; https://www.rt.com/business/382017-r...-central-bank/

[Danny B]

The State is criminal from ANY viewpoint

This is what Bastiat had to say about the "State";
"I wager ten to one that for six months you have been making utopias; and if you have been making them, I wager ten to one that you place upon the state the responsibility of realizing them.
And you, madame, I am sure that you desire from the bottom of your heart to cure all the ills of mankind, and that you would be in no wise embarrassed if the state would only lend a hand. "
Bastiat: Selected Essays, Chapter 5, The State | Library of Economics and Liberty

Lord Acton, "power corrupts and absolute power corrupts absolutely".
So, we "give" great power to the State and expect it to cure all of our problems. We act surprised when the State uses this power to cure it's problems. All States are socialist in that they redistribute wealth. All States are fascist in that they distribute wealth to their rich controllers.
Bastiat, " I, too, long to have at hand that inexhaustible source of riches and enlightenment, that universal physician, that limitless treasure, that infallible counselor, that you call the state."

"It is the unfortunate primitive tendency which all men have to divide their complex lot in life into two parts, shifting the pains to others and keeping the satisfactions for themselves"
"The State is the great fiction through which everyone endeavours to live at the expense of everyone else. " "each of us, more or less, would like to profit from the labor of others."
"It will be the arbiter, the master, of all destinies. It will take a great deal; hence, a great deal will remain for itself. It will multiply the number of its agents; it will enlarge the scope of its prerogatives; it will end by acquiring overwhelming proportions. "
Bastiat: Selected Essays, Chapter 5, The State | Library of Economics and Liberty

Our slide to a global mean wage has brought destitution to the working man. The bankers used the State to hold back their incipient destitution. The repeal of Glass -Stegal was an overt milestone. The State is a parasite that continually grows. The State relies on the tax base to fund the parasite.

Armstrong, "What I can equate this to is Aristotle and Plato. To them, the Greek doctrine is very clear on this subject. The very essence of the state consists of, is the essence of force. The existence of force is for Plato and Aristotle alike, a sign not of the state dignity or Majesty, but of a state’s utter failure. The more a state moves toward economic bankruptcy, the more they will use force to retain power."
" The best states are closely knit together so that the interests of one person are the same as the interests of all. Consequently, a person who acts for his or her own interest must also act for the interest of all fellow citizens."
" The good of the individual is subordinated to the survival of the state. "

Side note, The State has reached a new milestone. GOV now steals more than "conventional" burglars; https://www.rutherford.org/publicati...set_forfeiture
https://www.washingtonpost.com/news/...=.f551553d15a8

“Government Is Not Reason, It Is Not Eloquence — It Is Force” is a correct statement. " https://www.armstrongeconomics.com/a...e-it-is-force/
The State naturally tries to maintain a monopoly on violence. BUT, all this control is quite expensive. The tax base is shrinking. Theft only makes up a small part of the deficit. Those people who depend on the State for their daily bread are getting quite nervous. They would willing vote for a raging criminal to be their leader as long as she kept the food trough full.

The weak point of both socialism and the Hegelian Dialectic is; they both kill motivation and productivity. Socialism is the firewall between non-producers and Darwinian pressures. Socialism generates and regenerates non-producers until the balance between accounts receivable and accounts due become unsustainable.

[Danny B]

Chris Martensen

This article is so packed with good information, you have to read all of it. I’ll only do a couple of excerpts.
"Money is not wealth; it is merely a claim on wealth. Debt is a claim on future money. The only way to have faith in our current monetary policies is if one believes that we can always grow our debts at roughly twice the rate of GDP -- forever. "
"But bankruptcy is a legal process, and it’s not possible for an entire economy to enter a legal process, so what do we mean when by talking of a looming bankruptcy? Simply put, all those the claims represented by all the debt and excess printed currency have to be destroyed, or reduced, to bring things back into balance. "
"Our current debts and other national liabilities now total more than 1,000%(!) of the nation's annual income, a.k.a GDP.

US economic growth began slowing due to its accelerating ‘too much debt’ problem back around 2000. Instead of allowing natural market forces to clear out the excessive debts, the Federal Reserve chose to go into overdrive to ‘remedy’ the problem."
"The fact that savers and pension plans have been utterly decimated by these low (even negative rates in some parts of the world) is not even a passing concern to the Federal Reserve. Their only goal has been to get credit expanding again as fast as possible. "
"Regrettably, though, that’s the ‘plan’ of every major central bank around the world right now.

Because it's mathematically guaranteed to fail, our only job as private individuals is to understand the situation accurately and to then take actions that are in alignment with the reality of living within such a broken system. "
"That right there, in a nutshell, describes the systemic abuse by the banking elite that began under Greenspan when he bailed out Wall Street in 1998 (during the LTCM debacle). This was followed closely by the repeal of Glass-Steagall under Clinton in 1999. Since then, it has been an orgy of exploitation. And after a brief pause during the Great Recession (during which the banks paid themselves record bonuses while receiving taxpayer bailouts), it got worse than ever."
Chris Martenson: "Why This Market Needs To Crash (And Likely Will)" | Zero Hedge

[Danny B]

The cause and result of the gridlock in D.C.

From the Chris Martensen article; "The boomer generation in charge has a lot to answer for in this story; from their inability to lead boldly, to their selfish pushing-off of the repercussions of their own poor decisions onto future generations"
The boomer generation worked hard but, lost control of the political process. The control matrix went into overdrive and we rarely heard the truth. If we protested the wars, we were brutally repressed. The military-industrial-banking complex made sure that any anti-war movements were vilified. Out of ignorance of the facts, we elected some bad politicians. But, the war party was the only party that we could chose "from".
Our "poor decisions" consisted to a great degree on believing the promises from GOV. We assumed that the politicians had the best interests of Americans at heart, not the best interests of israel.
We made fatal decisions based on the info presented by MSM. We are / were chemically dumbed down so as not to question the State narrative.
https://www.youtube.com/watch?v=TsUjRvYtDU8

The endless deceit has led the country into a financial impasse. All that is left is a consortium of rackets. EVERYONE is fighting to hold on to their advantage and sinecure. It doesn't matter what happens to everyone else as long as I continue to get my "due" share. It doesn't matter if I produce nothing,,, just so long as I get my rewards.

Here are some comments;
This is what ZIRP is doing the the economy - creating a buildup of zombie banks and corporations, captured regulators and bad debts that is smothering the economy. At some point there will be a combination of factors - an exogenous or endogenous shock, and there will be an economic firestorm that no amount of money printing can paper over.

We already know the legislature is not well-functioning. If they do not compromise, and if you do not accept compromise, then you reject America - and everything which America stands for! You are not a real American, if you're against compromise. Compromise is the only reason for the existence of the legislature.
Be arrogant, if you must. Be sold on your own narrow but utterly impossible little prophetic vision for how the world should work. But know this, though you will laugh it off, mock it, you were one of those who formed the basis of the destruction of the systems of govenment.

The fourth turning is here, and plain. Gone are the old men who could compromise.

10,000 large and small mill towns and manufacturing cities are dead, supported by McDonalds, Social Security, Disability, town/county shuffle jobs.

20 million illegals taking jobs, pumping up welfare burdens, sending cash home. 5 million H1B keeping tech fat. 1 million legal from 3rd world bring grandma with the brain tumor over.
I do not speak of fairness. I speak of the fourth turning. What do you think representative democracy is for? The whole point is to reach compromises. But the Baby Boomers are a bunch of spoiled brat arrogant idiots, who insist on always getting their way. Now they drive the ship of state into the ground.
But let's be clear. If you cannot abide by compromise, then you aren't even an American. You're an overgrown baby that cannot call himself an adult.

No compromise? No legislative government. No America.
Your mind is captured by a perverse dynamic that is dominated by politics.
We have not had a free market democratic republic since the Civil War.
What we have is an immoral warfare state funded by an entirely unsustainable debt based monetary system. This cannot be reformed. It must be blown up.
The headlines should be dominated by talk of enterprize, prosperity and caring. But they are dominated by politics, war and monetary central planning.
What do you think the purpose of a legislature is? Do you suppose the point is to NOT compromise? What a JOKE!

The comments are very harsh on baby boomers. It must be remembered that the average boomer had no immoral part in the destruction. The boomer politicians are a different story; McCain: "The New World Order Is Under Enormous Strain" | Zero Hedge

[Danny B]

Liquidity traps and pension collapses

" If repealing Obamacare is tough, just wait for tax reform and the debt limit."
"And the Bernanke Fed surely thought at the time that doubling its balance sheet during the 2008/09 crisis was a one-time response to a once-in-a-lifetime financial dislocation."
The productive economy crashed and the FED stepped in to save the banks,,,,, somehow thinking that it would be a one-off save. They had to be pretty stupid to just ignore the fundamentals.
Credit Bubble Bulletin : Weekly Commentary: Discussions on the Fed Put
"There’s a counter argument that stimulus measures and monetary inflation got completely away from Dr. Bernanke - and global central banks more generally. Today, peak global monetary stimulus equates with peak securities market values and peak optimism – all having been powerfully self-reinforcing"
Yep, self-reinforcing of THE UPPER LOOP ONLY.

“I started tracking this issue in 2004 after the Orange County Board of Supervisors gave a retroactive pension formula increase of 62 percent to county employees,” Oh, but, they wanted it SO badly. " six Los Angeles public safety officers who collected over $1 million apiece last year in pensions, and eight cities that could face bankruptcy when the next recession hits." "The question is why haven’t the headlines presaged pension implosions? As was the case with the subprime crisis, the writing appears to be on the wall. And yet calamity has yet to strike."
"It’s no coincidence that pensions’ flight from safety has coincided with the drop in interest rates." "the average return for public pensions was somewhere in the neighborhood of 1.5 percent."
Gotta save the banks at all cost.

"The working assumption is that the Pension Tsunami will never make land fall, but the next time you take comfort in the sanctity of pensions given they have yet to self-destruct"
https://www.bloomberg.com/view/artic...kets-to-ignore

Illinois would like to cancel all of it's legacy debt. That includes $130 billion pension debt; Is Bankruptcy For Illinois The Answer? | Zero Hedge
Gridlock has a price; This Is The Nightmare Scenario For The GOP: A $2 Trillion Funding "Hole" | Zero Hedge
Can't forget China; "They should, because as Deutsche Bank puts it, if taken too far, they threaten an "uncontrollable liquidity event", i.e., the financial cataclysm that Kyle Bass and other perma-china-bears have been waiting for."
China has tried and tried to control runaway lending. The banks were stacking logs on the burn pile. Now, they are pouring gasoline on it. On The Edge Of An "Uncontrollable Liquidity Event": The Definitive Guide To China's Financial System | Zero Hedge

"It will in fact be driven by pension funds that cannot pay out what they promised to retirees. According to one pension advocacy organization, nearly 1 million working and retired Americans are covered by pension plans at the risk of collapse."
http://www.zerohedge.com/news/2017-0...nancial-crisis
Brought to you by ZIRP. BUT, it was worth it to save the banks.

China isn't the only State with a liquidity problem, http://www.zerohedge.com/news/2017-0...dity-collapses

India, "Businesses are failing and the poorest are finding employment very difficult to come by. Food prices are still much cheaper than normal, as a result of the economic struggles of poor people. Farmers are facing huge financial pressure in turn." NOT a good sign.
" A huge wave of young, mostly unskilled, untrained and uneducated people – about 12 million – join India’s workforce every year"
http://www.acting-man.com/?p=48912
Both India and Pakistan are going to fall into total meltdown.

Mnuchin says that you can stop worrying about automation; http://www.zerohedge.com/news/2017-0...king-new-repor

3/26 ECB’s next policy moves are in flux: Bundesbank – Reuters Brought on by failure and paralysis.
3/26 Fed’s Williams says goal is to get inflation ‘back to 2% and keep it there’ – MarketWatch
3/26 New research identifies ‘sea of despair’ among white, working-class Americans – WaPo I wonder why?
3/26 NSA spied on Congress, Supreme Court and Trump – Informational Liberation No kidding. That was the whole purpose in their creation.

[Danny B]

Bank stocks, Venezuela, unpopulism, rape from defense contractors

"The Dow Jones industrial average ended about 45 points lower — after falling nearly 200 points earlier, with Goldman Sachs contributing the most losses."
Dow posts 8-day slide, longest since 2011, as Street weighs tax reform prospects
Bank stocks lost 6% in ONE day. The FED will undoubtedly come to the rescue.
StockResearch - Miller's Market Musings

"What I’m strictly relating my argument too is the phenom and psychology that reemerges with a vengeance during what is known as “the topping process.” aka “The late stages of a bubble mentality.”
Long and technical; https://markstcyr.com/2017/03/26/the...-very-worried/

"Graham Stock told Bloomberg that he puts Venezuela’s odds of a default this year at 50 percent."
"The government depends on oil production for more than 90 percent of its export revenues"
"Bloomberg reported that Venezuela’s largest port at Puerto Cabello is quiet, with satellite imagery showing no vessels arriving or departing."
Venezuela In Dire Straits As Oil Production Falls Further | OilPrice.com

Unpopulism, "The share of national income that went to the bottom 90% of the population held steady at around 66% from 1950 to 1980. It then began a steep decline, falling to just over 50% when the financial crisis broke in 2007."
"During the business cycle upswing between 1961 and 1969, the bottom 90% of Americans took 67% of the income gains. During the Reagan expansion two decades later they took 20%. During the Greenspan housing bubble of 2001 to 2007, they got just two cents in every extra dollar of national income generated while the richest 10% took the rest."
"The US economist Thomas Palley* says that up until the late 1970s countries operated a virtuous circle growth model in which wages were the engine of demand growth." YES, wages.
"Unpopulism was touted as the antidote to the supposedly failed policies of the postwar era. It promised higher growth rates, higher investment rates, higher productivity rates and a trickle down of income from rich to poor. It has delivered none of these things." WHAT TRICKLE?

"Populism is seen as irrational and reprehensible. It is neither. It seems entirely rational for the bottom 90% of the US population to question why they are getting only 2% of income gains. It hardly seems strange that workers in Britain should complain at the weakest decade for real wage growth since the Napoleonic wars."
https://www.theguardian.com/business...onomic-failure

The banks love war because war is such good business. Defense contractors love war because they can blatantly screw the pentagon and rarely get caught. http://www.activistpost.com/2017/03/...dod-knows.html
The F-35 is an expensive boondoggle that doesn't work. The next projected boondoggle is even more expensive, https://sofrep.com/77149/new-marine-...t-f-35-really/