Economic pressures

[Danny B]

Bureaucrats, Keynes, credit... Taxes&fines... fire or ice

Socialism is the firewall between non-producers and Darwinian pressures. The average bureaucrat who is employed by the State knows very well that he is of no particular use to the productive sector. An economy that is focused on profit-making has little use for State bureaucrats. When John Keynes came along with an operating system that was hugely benevolent to the bureaucrats, they all jumped on-board.
"2. The dominant economic theory for the past 80 years is Keynesianism, i.e. the notion that the state and central bank must aggressively manage private-sector consumption (demand) and lending via centrally planned and funded fiscal and monetary stimulus during downturns (recessions/depressions). "

"The greatest single invention of all time in the Keynesian universe is credit, because credit enables people to borrow from their future earnings to consume more in the present. Credit thus expands aggregate demand for more goods and services, which is the whole purpose of existence in this world-view: buy more stuff."
"In the Keynesian universe, this self-reinforcing contraction of imprudent credit and widespread losses of speculative wealth are Bad Things. Very Bad Things. Important, Powerful People tend to own issuers of credit (banks), and losses are not something they signed up for.

If all the Little People stop borrowing more money, the Powerful Owners of the credit-issuing machines (banks) can no longer reap enormous profits from issuing more credit, and that is a Very Bad Thing."
"The Keynesian answer is simple: the government should borrow and spend lots of money to replace all the money that the private sector is no longer borrowing and spending"
Of Two Minds - The Keynesian Cult Has Failed: "Emergency" Stimulus Is Now Permanent

Millions of bureaucrats worldwide lament the advent of the computer that promises to erase what little justification previously existed for their jobs. They implement V.A.T. taxes and carbon taxes and every other tax they can dream up. They pass a million new laws so that they can impose a million new fines. They salivate like a dog at the prospect of the new taxes generated by the legalization of marijuana. They use asset seizure to steal more than all the burglars.
Like the highwayman of old, they pull you over and demand to see your cash. If you have any, it MUST be the proceeds of criminal activity. No matter that most of the people they shake down like this have less than $200. There is no tax or fine that embarrass them.
Democrats Have Found A Way To Directly Tax "White Privilege" And They Are About To Implement It In Seattle

The socialists and communists have had plenty of economic crashes to their credit. It looks like the technocrats and bureaucrats must be given credit for the next crash.
What form will it take? The reserve-currency status allowed us to inflate like crazy over the years.
" The Federal Reserve was designed to create an endless spiral of government debt, and since the day it was created the U.S. national debt has gotten more than 5000 times larger and the value of the U.S. dollar has declined by about 98 percent."
Over The Last 10 Years The U.S. Economy Has Grown At EXACTLY The Same Rate As It Did During The 1930s

There are endless claims of coming hyperinflation. Keep in mind that we have had long-running inflation. GOV can print but, can it actually inject more fresh money into the economy? It easily injected lots of liquidity into the upper loop. if it did the same to the lower loop, we would all stop working.
The Automatic Earth and many other writers are celling for enormous deflation. Smith writes about the 2 possibilities.
oftwominds-Charles Hugh Smith: Does the World End in Fire or Ice? Thoughts on Japan and the Inflation/Deflation Debate
Armstrong said that hyperinflation is for peripheral economies, not central economies. Everything runs on credit. Paper money is only 4/10s of a percent the entire money supply. What happens to credit when confidence disappears? If nobody advances credit, what happens to spending?
I believe that TAE is correct in calling for a total deflationary collapse. Armstrong said that we would have both inflation and deflation.
It will most likely appear as a rise in prices of necessities and a drop in prices of non-necessities.
They key is China and our trade deficit.

5/24 Moody’s downgrades China rating to A1 from Aa3 – CNBC
5/24 Chinese banks are in big trouble – Zero Hedge
5/24 The day China’s version of the Lehman crisis explodes – Japan Times
The Chinese are long-term planners,,, as opposed to the West. They let their shadow-banking system run wild knowing that it would blow up. They will fine-tune the meltdown depending on what the West does. They have avoided ALL mention of gold because they don't want the price to rise until they have all of it.
While the West is totally absorbed with protecting it's pedophiles, rackets, and criminals, China is busy building the new Silk Road.

5/24 A look at JPMorgan Chase’s 20 years of watching Madoff commit crimes – Forbes Yep, 20 years of laundering mob money for dirty banks.
5/24 India cancels plans for huge coal power stations – Independent
5/24 AZ utility signs game-changing deal halving solar power prices – ThinkProgress
It took a long time but, once wind and solar got a foothold, carbon energy is fast declining.

[Danny B]

Stocks won't crash until the sheeple are in the pen,,, maybe

Historically, the CB and finance industry execute Pump & Dump on the stock market to yank the rug out from the small investors. The current rationale is; we can't be in a bubble because the small investor isn't in the market yet.
"The reluctance of retail investors to buy stocks as the Dow hits new highs suggests that the rally has further to run. Just be ready to grab your coat once Mom and Pop show up at the party. That’s a sure sign it’s time to go."
"One reason we remain cyclically positive on the broad market is that retail investors still have not participated… It is doubtful that the equity market would cyclically peak before the retail-investor enthusiasm for stocks had reached a more fevered pitch."
"They bear date of July 23, 2007 — just 2½ months before the global financial crisis began."

"Worry not, they say. The stock market is not yet a bubble. Fear remains the dominant note. “Mom and Pop” remain sidelined with their cash and their Treasuries."
"Maybe the bubble bursts before euphoria takes hold and before “mom and pop” investors return.

Maybe pessimism has ironically lulled Mr. and Mrs. Contrarian into a false security."
https://dailyreckoning.com/lost-lesson-july-2007/

So, the FED and treasury are pumping up the bubble. Are they doing it specifically to rob the little guy?
" the government’s "plunge protection team" is the only thing propping up the current market rally"
"We’ve noted in the past that there appears to be a rule against mentioning the team on CNBC – with guests routinely getting “Schiff’d” for doing so."
Legendary Investor Asher Edelman Says "I Have No Doubt" PPT Behind Market Rally | Zero Hedge
5/23 Trump’s $3.6 trillion budget cuts hit his own supporters hard – Bloomberg
So, don't mention that the PPT is holding up everything waiting for the small fry to jump into the frying pan. How soon is the heat going to start under the frying pan?
The private banks have cut WAY back on lending. The FED is getting ready for a rate hike. Both of these are deflationary. Just how much deflation can the stock market ignore?
It appears that the finance industry plans to crash the system with deflation to fight Trump.
https://www.washingtonpost.com/news/...=.bdfbc6d12c03
Since the FED is always incorrect in their projections, we can assume that they won't survive the default cascade.

Europe is even worse than America when it comes to GOV stealing money.
"tickets for everything in Europe where speeding tickets are fined a proportion of your net worth. "
https://www.armstrongeconomics.com/w...eitures-taxes/
Trump's budget cuts will be deflationary. A hike by the FED will be deflationary.

[Danny B]

Unstable bubble dynamics... debt collection

The financial pundits claim that we can't possibly be in a bubble because the fish haven't jumped into the frying pan yet. Never mind that stock prices, "But today’s CAPE ratio is 182% of the median ratio of the past 137-years."
"With the likelihood of a bubble clear, we can now turn to bubble dynamics. The analysis begins with the fact that there are two distinct types of bubbles.
Some bubbles are driven by narrative, and others by cheap credit. "
"The credit-driven bubble has a different dynamic than a narrative-bubble. If professional investors and brokers can borrow money at 3%, invest in stocks earning 5%, and leverage 3-to-1, they can earn 6% returns on equity plus healthy capital gains that can boost the total return to 10% or higher. "
Notice that no new wealth has been created by all this shuffling.

"A credit bubble bursts when the credit dries up. The Fed won’t raise interest rates just to pop a bubble " They might raise interest rates to stop Trump.
"The other leading cause of bursting credit bubbles is rising credit losses. Higher credit losses can emerge in junk bonds (1989), emerging markets (1998), or commercial real estate (2008)."
The current default rate is rising fast.
https://dailyreckoning.com/bubble-break-world/

"Savings backed 100% of U.S. credit needs until about 1973"
" Forty-five years later, America saves scarcely 20% as much as it issues in new credit.
The other 80% is “funny money” – credit created out of nowhere by the Fed, by banks"
" The Bank of Japan already owns 40% of outstanding Japanese government debt. It apparently sees no barrier to buying all of it *– financing Japan’s deficits with make-believe money.

This is not going to happen. Readers will be quick to remember why. Our little secret: Unlike the real-money system that prevailed until 1971, this system – with its heavy reliance on credit – is, surprise, surprise, extremely vulnerable to the credit cycle.

This is the “doomsday bug” buried in the world’s money system.
When the credit cycle turns – when people begin to notice that the whole system is FUBAR and become reluctant to lend – the world’s money disappears…"
Free money seems like a good idea BUT, it makes the "credit cycle" far more volatile and always blows up.
"In the U.S., $2.5 trillion in new credit is required every year – just to stay in about the same place." " But total savings in the U.S. amount to only about $500 billion."
Fed Will Blink | Casey Research

Here is a very interesting article from Economica. His contention is that; our money supply has far outgrown our population. It has even far outgrown the world population. What he doesn't see or mention is that; the reserve-currency status has caused enormous amounts of liquidity to flow to America.
By the Bretton Woods agreement, a State can NOT print unlimited amounts of national currency. They have to save U.S. dollars and THEN , they can print more national currency. They effectively have to sell us stuff on credit to get enough dollars to print more national currency.
https://econimica.blogspot.com/2017/...elerating.html

China; "Total outstanding credit grew to around 260 percent of GDP at the end of last year, from 160 percent in 2008 -- one of the biggest and fastest expansions ever. "
"Chinese leaders might be able to keep the final bill down if they take steps now to eradicate zombie firms, strengthen bank balance sheets and allow the market more say in the allocation of capital. Moody's, however, was dubious: “We do not think that the reform effort will have sufficient impact, "
https://www.bloomberg.com/view/artic...ze-of-the-bill
Debt collection to Western Banks is normally enforced by the U.S. military. With the one-belt, one-road program, Asia and the East are turning away from the West. The R.O.W. has seen the enormous flows of capital into America far beyond our productivity. Bretton Woods and the petro-dollar brought enormous riches to America.

5/25 U.S. warship challenges Beijing’s claims in South China Sea – Reuters It is highly doubtful that the U.S. military can enforce debt collection in Asia. We can rattle sabers but, neither Russia, nor China are going to back down. Russia has their new jamming system that (currently) can stop all Western systems. Russia has their long-range cruise missiles that can bypass any ABM system.

America is currently linked up with Saudi Arabia. Saudi is on fire with hatred of Iran. This matched nicely with Tel Aviv's new-found fear of Iran. Tel Aviv has a long-standing hatred of Russia because of their competition in the pipeline wars to send gas to Europe.
5/25 Iran says it has built third underground ballistic missile factory – Reuters
Tel Aviv can't directly attack Iran. Even if the U.S. military was enlisted to attack Iran, Tel Aviv would still be a field of cinders. Military sources there claim that they will receive 11,000 missiles a minute. THAT is an old number.
Pox Americana can't realistically attack, Iran, Russia, nor China. This will all come into play when it is debt-collection time.
If the U.S military gets too aggressive in the South China Sea, China can EASILY pull the rug out from the financial system. The resulting chaos WILL end most East-West trade.

Trump only has a limited amount of control. Events will dictate the outcomes.
Trump appeared at the wailing wall (The Wailing Wall is actually the remains of a Roman fortress called “Fort Antonia” built north of the actual Temple) but, that doesn't mean that he will acquiesce to every demand from Tel Aviv. Time will tell.

[Danny B]

More confiscation,,, more rate hikes

Markets are quiet waiting for the muppets to be drawn in. The fact that the "CAPE ratio is 182% of the median ratio of the past 137-years" has kept quite a few investors from moving in. The PPT just keeps pumping it up. Who knows how far they can pump it before it just implodes on it's own?
The various funds desperately need interest-income to survive.
Armstrong almost died in prison,,, was in a coma after a severe beating in his cell. A guard showed up with some big guy and let him in the cell to do the dirty work. He somehow survived. Armstrong was the center character in the movie, The forecaster. He recounts that every other principle character pictured in the movie is dead. You can imagine that he is somewhat circumspect in what he writes. Keep that in mind.

"The Pension Crisis is serious and is the catalyst that will bring everything down. Nearly 600 State & Local governments are now in the hole and has reached nearly $1.2 trillion of unfunded pension liabilities in FY 2014. This reflects total pension liabilities of $4.798 trillion"
"Government pensions are what destroyed the Roman Empire and history is going to repeat.

I have stated before that there are people on Capitol Hill who support confiscating all private 401K plans in the country and replacing them with an allotment monthly. We know what will happen to that one, so you better have something else besides cash. "
https://www.armstrongeconomics.com/w...up-full-speed/
"Minutes from the Fed’s May policy meeting showed board members thought that if jobs growth remains healthy with a rebound in investment and consumer spending then rates could rise “soon”, which many took to mean June"
https://www.armstrongeconomics.com/w...rates-minutes/
The Onion weighs in on the situation, Financial Advisor Recommends Keeping One Bullet In Chamber Just In Case - The Onion - America's Finest News Source

[Danny B]

Blowing up China

As I've previously written, I believe that Armstrong advised the Chinese in 2007, that they should crash their own economy to defuse the upturn in the war cycle.
"The money supply (M1) raced from a mild 10% annual growth rate to 25% year-over-year."
"Just between 2007-2014, its debt exploded from $7 trillion to $28 trillion (simply incomprehensible numbers)."
" China’s economy has exploded thanks to trillions of debt and other means of fiscal stimulus. They’re doing their best to keep the trillions in bad loans from spiraling out of control. "
China?s Lehman Moment Is Coming! | Andrew Zatlin | FINANCIAL SENSE

The Chinese money multiplier has hit an all time high, https://assets.bwbx.io/images/users/...v2/1000x-1.png
https://www.bloomberg.com/news/artic...-all-time-high

China has created/allowed "annual growth rate to 25% year-over-year." of the money supply. I believe that this is intentional. The Chinese are long-term planners. They would never allow credit creation to hit 25% a year believing that it was healthy or sustainable. They allowed this for another reason.

5/25 U.S. warship challenges Beijing’s claims in South China Sea – Reuters
5/25 Chinese banks dominate ranking of world’s biggest public companies – Independent
China Accuses US Warship Of 'Trespassing' In Disputed Waters

Beijing Crackdown Cuts Chinese Investments In US Assets
The capital markets are global. Much of the West depends on liquidity from China flowing into markets. China can cut off internal liquidity and create fallout in global markets. The West is sleepwalking into all of this.
Ore prices have collapsed and other commodities will follow.
http://www.financialsense.com/sites/...ore-prices.png

The Chinese can easily take out the gold market and the FOREX. There is about 4,500--5,000 tons of gold traded daily. There is a daily turnover in the FOREX of $5.1 trillion a day. If China suddenly offered to buy any and all gold for 20% over yesterday's Yuan price, they would crash both markets.
Meanwhile, Tel Aviv on the Potomac continues to shoot America in the foot.
US To Review Boeing, Airbus Sales To Iran And Will Impose Addition Sanctions
Iran is undercutting Saudi oil so, we attack Iran. They will buy their airplanes from somebody else. This will make our trade deficit that much worse. Oil is down under $50 and is killing the oil majors, bankers and saudis.
But, there is a difference between poking a stick in a rattlesnake's nest and poking your finger in a rattlesnake's nest. No anti-ballistic missile system can intercept 300,000 missiles from Iran. Iran will continue to trade East rather than West.
We continue to HELP the East build their new Silk Road system that will displace the corrupt West. Western leaders continue to protect their rackets no matter how bad the consequences.

[Danny B]

Crypto currencies will completely change the financial system,,,,

Until they get a bullet in the brain
Well Eurasia had their big economic pow wow and America was a no-show. When the G7 have a big pow wow, they exclude China and Russia. Even the EU is barely represented.
G7 Summit Excludes Russia and China
Pox Americana is doomed because the leaders look inward and ignore the R.O.W. Trump came out and said that he was going to put a 35% tax on German cars. Their profit margin is 4% so, I don't see this working out well.

The interesting news unfolding now is the huge climb in Bitcoin. I believe that as soon as it hides away too much wealth from the tax man, the GOV will just jump in and take it all. Here is an excellent article on Bitcoin. It also has a LOT of info on "Initial Coin Offerings. So what are ICOs?"
There is a whole zoo of crypto currencies and tokens being introduced. When the pot gets REALLY big, GOV will come in and scoop it up.

TC: Is there a concern that U.S. regulators will crack down on these ICOs?
SM: Lawyers are relying on case law that defines what a security is. The most well-known case is the “Howey Test,” created by the Supreme Court for determining whether certain transactions qualify as investment contracts. If they do, then those transactions are considered securities and are subject to certain disclosure and registration requirements. When tokens are structured basically as the sale of a service or product, they’re designed to make sure the various prongs of the test are not triggered."
A New Financial System Is Being Born | Zero Hedge

So, all these "crypto" savers are depending on one Supreme Court decision. The article talks about completely doing away with the current financial system. If there are backdoors into every system,,,, and even the NSA got hacked, what makes these people think TOR and the blockchain are safe? GOV is expected to eventually grab all the private retirement funds. They certainly aren't going to leave crypto currenices alone.

5/26 Here’s how blindingly fast bitcoin has been surging – MarketWatch
5/26 Fred Wilson throws cold water on bitcoin enthusiasts – CNBC
5/25 All digital currencies are up as boom times arrive – CryptoCoins News
The welfare society is getting more and more expensive, Handout Nation: Combined Enrollment In America?s 4 Largest Safety Net Programs Hits A Record High Of 236 Million
5/26 China’s reforms not enough to arrest mounting debt – Reuters The news is going to full of 2 things; the budget & debt-ceiling battle AND the implosion of China.

[Danny B]

The slow death of the oil industry

There is SO MUCH information readily available that there is NO excuse for being ignorant. Apparently, the Sauds don't read. They have a "30-year-old Deputy Crown Prince Mohammed bin Salman, the second in line to the King, who has emerged as one of the most powerful figures in the Saudi government." He says that they are going to completely change the Saudi economy away from it's dependence on oil. The Sauds just can't understand why the price of oil won't rise. OPEC is going to have a 9 month extension on the production cutbacks.

There is an economic pecking order in the world that is governed by; when did your country enter and embrace the industrial revolution? The Saudis don't have a prayer of diversifying. This new royal technocrat hasn't got a clue.
Saudi Arabia Releases Ambitious Plan To Diversify Economy | OilPrice.com

Apparently, the OPECers can't read the writing on the wall. Carbon is a fuel,,, solar & wind are a technology. The banking industry has come to the conclusion that the oil business is a dead end.
Wall Street Throws Up On OPEC: Barclays Sees "No Light At The End Of The Tunnel"; MS Cuts WTI Price Target | Zero Hedge
Here is the graph that shows that OPEC is dead-in-the-water, Soaring growth of solar power demonstrated in one chart

5/27 Solar power breaks UK records thanks to sunny weather – Guardian
5/27 Coal country’s power plants are turning away from coal – NY Times
5/27 Abu Dhabi awards contract for largest solar power plant in the world – Utilities-Me
Carbon energy did everything it could to avoid being undercut by ZPE. It ignored wind & solar because it was SO expensive. The U.S. oil majors are spending 86% of profits on debt service. They believed in Hubbert's Peak. They have enormous sunk costs that are probably losses.

The Saudis will go down in flames because they are stupid. They let their blind hatred of Iran guide them into siding with israel and AGAINST Russia. They fired their most experienced ministers and put in dreamers.
Abu Dhabi can see the writing on the wall but, not the stupid Wahabbis.
Every solar panel and wind generator is another cut. They will perish from 1,000 cuts.
"My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel" Rashid bin Saeed Al Maktoum

[Danny B]

Self-perpetuation of the banking industry

A couple notes on Canada.
"The great depression devastated Canada for much of the 1930’s. At this time, hundreds of American banks had failed, yet none of the Canadian banks had failed during this time."
"Among them was Canada’s 10th prime minister William Lyon Mackenzie King who amended the Bank of Canada Act in 1938 which led to the nationalization of the Bank of Canada."
"It was Mackenzie King himself who had once said,

Once a nation parts with the control of its currency and credit, it matters not who makes the nations laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of sovereignty of parliament and of democracy is idle and futile."
"For many decades since 1938, the Bank of Canada provided near interest free loans to the Canadian government.

As a result of these loans, Canada had increasingly become prosperous and developed quite substantially"
"The effects of King’s decision would last all the way until 1974, when the Trudeau government made the decision to halt the borrowing of money from the Bank of Canada, and instead, choosing to borrow from the private banks at compounded interest."
"The Bank of Canada used to be a government lending institution, creating near interest free loans that built much of Canada’s infrastructure during the 50’s and 60’s. In 1974 at the Bank of International Settlements in Basel Switzerland, Trudeau Sr. was convinced by fellow Bilderberg attendees to dismantle this crucial function of the Bank of Canada,"

The stagflation of the 70s was caused by the oil shock BUT, blamed on the lack of a Central bank.

"the government borrowed from private banks based on the recommendations of the Basel Committee."
Here is a graph of before & after Canada was bestowed with a Central bank.
Yikes!, the url seems to be hundreds of lines long. Here is a link to the page, Prudent Press | The History of the Bank of Canada

The private banks couldn't possibly compete with a CB that passed out near interest-free loans to GOV. After GOV started borrowing from the private banks at compound interest, Canadian debt rose at 20%. Not only that, GOV bailed out the banks after they went too wild with bad loans. The private banks turned around and loaned the SAME money back to the GOV at interest.
Canada's Central Bank Scam

[Danny B]

Trum torpedos carbon credits

A very large part of the State is an enormous horde of bureaucrats that reach ever-deeper into private wealth to pay their salaries. Their latest cause celebre seems to be global warming and carbon taxes. Dilbert weighs in on global warming,
http://onecitizenspeaking.typepad.co...99c4752970d-pi
"About those economic models – Nobel Laureate and Economist Hayek pointed out that adopting the trappings and mathematical methodology of the physical sciences did not imbue chaotic economic studies with any more certitude than a probabilistic coin-toss."
DILBERT: SCOTT ADAMS NAILS GLOBAL WARMING SCIENCE AND ANNOYS THE LIBERALS ... - One Citizen Speaking
So, we blithely sail on in our Keynesian flagship using charts (economic models) that are faux science and have never worked.

The Trump submarine just fired a torpedo into the Keynesian Navy, Merkel Furious With Trump After "Unprecedented" G-7 Failure To Reach Consensus On Climate Change | Zero Hedge

[Danny B]

The future of Germany??

The Canadians got thoroughly screwed when their system was changed to rely on credit-money. Adolph Hitler instituted an economic system in Germany that was focused on labor and property as the backbone of the economic system. Germany became the most prosperous State in Europe in a very short time. This was such a glaring bad example that he was promptly handed a war.
http://library.flawlesslogic.com/express.gif

"Germany is too strong. We must destroy her."- Winston Churchill, Nov. 1936.
""The war was not just a matter of the elimination of Fascism in Germany, but rather of obtaining German sales markets." - Winston Churchill. March, 1946."
"I felt sorry for the German people. We were planning - and we had the force to carry out our plans - to obliterate a once mighty nation." - Admiral Daniel Leahy; U.S Ambassador
The Myth Of German Culpability

Germany now has about a 1 trillion dollar trade surplus.
https://sputniknews.com/europe/20170...an-economy-eu/
There is much talk of Germany joining the Eurasian trade group. Germany is a $ trillion ahead of the game and the rest of Europe is about a $trillion in debt. Will Germany be forced to pay for the deficits in Europe? Merkel comes up for election in September. Will Germany hold on to it's trillion?

[Danny B]

Shortage of dollars,,, avoiding the reset

There has been talk for years about a new worldwide economic system. Pox Americana likes the old system very much,,, thank you any way.
Part of the reason for Germany's huge economic success before the war was; it could undercut the prices of States that had a central bank. Churchill made it clear that the war was just for the bankers.
The Bretton Woods agreement was an attempt to forestall currency wars and the often-resulting, kinetic wars. Bretton Woods made the U.S. dollar the reserve currency. This might have seemed like a good idea at the time but, it wasn't thought through thoroughly. The entire Western world was going to use the dollar as a reserve currency but, the dollar supply could only grow at the rate that America grew.
Europe, America, and the rest of the States that used the dollar for a reserve had FAR too much economic growth for all of it to be denominated in just dollars. If the dollar supply could only grow at the rate that the U.S. supply of gold grew, the R.O.W. would be starved for dollars.

As nations re-industrialized after the war, they had no medium to use to store surplus wealth. This was slightly alleviated by the over-printing for the welfare-warfare State. This came to an end a few years later, when the dollar lost value and various States demanded gold. It was leaving the treasury at the rate of 100 tons a week in the summer of '71.

Continued

[Danny B]

Paer 2

The closing of the gold window was very fortuitous for America. The worldwide clamoring for dollars did not come to an end just because of the closing of gold-convertibility. We offered the Saudis a deal that they couldn't (safely) refuse. The petro-dollar was born and dollar demand took flight.
https://mishgea.files.wordpress.com/...ng?w=529&h=181
The high demand for dollars continued and everybody wanted to sell us stuff to bring back dollars. We ran/run a huge trade deficit so that they can slurp up all our dollars.
https://mishgea.files.wordpress.com/...ng?w=529&h=181

[Danny B]

three

Had to break it up more.
All this inflow of capital has made America a high-cost and high-wage economy. But, globalism has destroyed the wage base.
https://mishtalk.com/2017/05/27/inve...n-home-prices/
The huge trade imbalances with America, Germany, Japan and China must be carried forever OR, the debt much be liquidated or defaulted.
https://mishtalk.com/2011/07/08/hugo...ine-revisited/

Pox Americana has been actively avoiding the great reset. As the dollar goes up, it becomes more and more wobbly.
The whole trade imbalance in Europe is causing problems that the eurocrate NEVER envisioned, https://www.armstrongeconomics.com/i...te-from-spain/

[Danny B]

Untouchable budget,,,oil mjaors to defrault

"There’s a famous story in which the Comptroller-General of Finances summoned all the government ministers to make deep budget cuts.
But no one could come up with anything substantial.
The overseas colonies were too important to cut.
And they couldn’t cut public hospitals… because too many people were now relying on them. Similarly they couldn’t cut veteran pensions either.
At the end of the session they could hardly find anything to cut that would make a meaningful difference.
All of their fancy programs and benefits had become too ingrained in society at that point; and any cut would have proven politically disastrous."

"The budget slashes $3.6 trillion in spending through 2028 while proposing zero cuts to Defense, Social Security, and Medicare.

And that’s the entire point: just between those three programs, plus paying interest on the debt, the US government already spends MORE than it collects in tax revenue."
"The US government has $20+ trillion in obligations to its creditors, and tens of trillions more in obligations to its citizens.
Simply put, the government has too many obligations. And their only way out is to walk away from some of them.

This means default."
https://www.sovereignman.com/trends/...ad-news-21884/

"According to the data by Bloomberg, the amount of bonds below investment grade the U.S. energy companies need to pay back each year will surge to approximately $70 billion in 2017, up from $30 billion in 2016."
"As we can see, the outstanding debt (in bonds) will jump to $110 billion in 2018, $155 billion in 2019, and then skyrocket to $230 billion in 2020."
"However, according to the Bloomberg data, these companies would need to pay back $110 billion in debt (bonds) in 2018. If they would use all their free cash flow profits to pay back this debt, they would still owe $92 billion."

https://srsroccoreport.com/the-great...get-very-ugly/

[Danny B]

Academic echo chamber... Albert Edwards

In the "old" economic system, one had to actually be productive,,,, or at least, good at stealing. The economy just got too distorted by too many bankers and investors all trying to make a living off too few actual workers/producers. Finance is now 40% of the GDP even though it produces nothing. How did we reach this point?
The FED spends a LOT of money on academia. They are especially generous to "scholars" who publish anything that reinforces the Keynesian mandate. The CBs demand and justify a 2% inflation rate as being critically necessary. There is truth in this belief. Without a yearly 2% growth in the money supply, there would be very little money for the bankers to suck up.
Academia has built a cult/construct that absolutely validates the necessity for monetary inflation.

"What stands out is the failure of economics, as an intellectual discipline, to come to grips with the real world. This was obvious at the time of the global financial crisis of 2007-09. Since then, academic economists have worked on the assumption that their lamentable performance when it came to warning of impending troubles has been forgotten"

"The sadness is that central bankers, in moving to an almost exclusively macro-economic focus in conducting monetary policy, have paid increasing attention to the prescriptions of these self-styled ‘scientists’ of the economy. Virtually all central banks now subscribe to the frankly weird view that economies cannot grow satisfactorily unless they maintain a 2% rate of arbitrarily- defined consumer price inflation. This is despite the evidence in this and earlier ages that economies can grow quite well in the absence of such inflationary price behaviour "
The economy can grow but, the bankers can't.

"A more precise statement of the underlying relationship is that inflation occurs when central banks accommodate inflationary forces that usually arise from non-monetary economic and social factors."
Yeah, the demands of welfare and warfare.

"It is telling that the theory on which central bank policies are now based should have assimilated the behaviour of all economic agents to that of the financial markets. This has been part of the move away from output and employment as the goals of economic activity towards the generation of financial returns within a short-term perspective."
"This was the lesson of the 2007-09 financial turmoil but it is a lesson that, by and large, has not been heeded. The post-2008 growth in global credit massively raises the risk of a future crisis"

" The ‘free marketeers’ focus on Smith’s work The Wealth of Nations without paying heed to the ethical presuppositions underlying that analysis. His assumptions were derived from Hutcheson’s moral philosophy and are set out in his earlier publication, The Theory of Moral Sentiments, a work that is usually ignored or denigrated by Smith’s modern-day adherents. To be sure, his view of human nature, as there set out, is rather benign. He makes no allowance for the cheating and exploitation that characterise behaviour in actual market situations. His failure to understand, or at least to recognise, the moral failings of his fellow-men diminishes the value of his economic analysis as a guide to action."
All societies that undergo a moral collapse eventually collapse financially.

"At the same time, in the advanced economies, there has been a growing sense among the many that a few are making off with the fruits of economic progress."
"The positive function of the nation-state is to maintain equity between the social classes. The nation-state is the largest unit that can feasibly fulfill this function."
What does that imply for One-World GOV?
" But Mrs May and her advisers seem to understand the crucial importance of the nation-state in preserving social justice. "
After 47 Years, Stephen Lewis Calls It Quits In A Scathing Critique Of Modern Markets | Zero Hedge

The main problem with academia is that it soon becomes and "echo chamber". Everybody in academia is in agreement on the facts & figures. It is too much trouble to go out and actually collect information. After all, they have BRILLIANT models.

Here is an article by and about a brilliant investor who spent too much time with models.
"When Albert Edwards predicted in late 2016 that a surge in wage inflation was imminent, we were confused by this prediction from the world's pre-eminent deflationist"
"Which is why we have to give Edwards credit: some 6 months after his initial call, he had the courage to do what is never easy and admit he was wrong, and that contrary to his expectations wages are not going up after all.

Talking about wrong, I have to put my hands up. I have been expecting US wage inflation to roar ahead over the past three months to well above 3%, yet every data release has surprised on the downside"
Albert Edwards: "What On Earth Is Going On With US Wages" | Zero Hedge
This is what happens when you do not have a global view. Cheap, containerized shipping allowed our wage competitors to undercut our jobs. Edwards just didn't take into account something that was glaringly obvious.
There is a CONTINUAL vomit of information telling us that unemployment is only 4%. This will contribute to the speed of the final unwinding. All the bad news has been swept under the rug,,, until it blows up.

5/29 Officials grapple with rising pension costs, debt – Simi Valley Acorn
5/29 Growing retirement costs are hitting new state budget hard – Sac Bee
Just wait a bit longer and you won't be "grappling" any more.
5/29 China risks another downgrade if debt bubble not fixed – Guardian They increased their money supply by 25% last year. How do you fix that?
5/29 Europe has no bubbles to fear — for now – Bloomberg The ECB is soon to run out of eligible bonds to buy. They are buying up assets like crazy BUT, they have no bubbles.

5/29 Why bitcoin just dropped 30% – Fortune
5/29 Soaring bitcoin demand & $600 premiums – Crypto Coins News
It's not a currency. It's a speculative instrument.
5/27 Bitcoin market cap passes Deutsche Bank’s amid loss reversal – Coin Telegraph Just give it time.
5/29 New home prices are over 50% higher in Canada than the US – Better Dwelling Tar sand is crashing but, hot Chinese money comes to the rescue.

5/29 Solar energy’s potential $2.8 trillion prize – Motley Fool So, what does that mean for it's competitors?
5/29 Nuclear industry prices itself out of power market – Think Progress
5/28 ‘Coal doesn’t even make that much sense anymore’ – Think Progress
Wait! What about all those sunk-costs that the utilities have in nuke and carbon?