Economic pressures

[Danny B]

Trade war, pensions, fertility,,,, wobbly China

The upper loop of the economy is at all time highs. Here is a graph of trade flows in real stuff.
https://www.zerohedge.com/sites/defa...?itok=JRhwydO0
It has turned down quite a bit. This is BEFORE tariffs, sanctions and trade wars have show their effect.
https://www.peakprosperity.com/blog/...ins-gonna-fall

" in just 16 years (1960–1976), fertility in the US dropped from 3.65 births per woman to only 1.76. "
"How can a shrinking group of working-age people support a growing number of retirement-age people? The easy and quick illustration to this question is to talk about the number of workers supporting each Social Security recipient. In 1940, it was 160. By 1950 it was 16.5. By 1960 it was 5.1. I think you can see a trend here. As the chart below shows, it will be 2.3 by 2030."
https://upload.wikimedia.org/wikiped...ency_ratio.png

"How can one worker support two or three retirees while still working and trying to raise a family with mortgage payments, food, healthcare, etc.? Obviously, they can’t, at least not forever. But no one wants to admit that, so we just ignore reality. "

"States' pension funds have nearly $4 trillion of stock investments, but somehow haven't benefited from soaring stock prices.

A new report by the American Legislative Exchange Council (ALEC) shows why this is true. It notes that the unfunded liabilities of state and local pension plans jumped $433 billion in the last year to more than $6 trillion."
"This means in six years, without the $6 trillion being somehow restored (magic beans?), pension underfunding will be at $8.4 trillion or thereabouts, even if nothing else goes wrong."
"I noted last week in Debt Clock Ticking that the total US debt-to-GDP ratio is now well over 300%. That’s government, corporate, financial, and household debt combined."

"you find that the US governments from the top to bottom owe over $30 trillion, which is well over 150% of GDP. Technically, we have blown right past the Italian debt bubble. And that’s not even including unfunded Social Security and healthcare benefits, which some estimates have well over $100 trillion"
The Pension Train Has No Seat Belts | Mauldin Economics

"It is my strong view that nations that aspire to solve their shrinking population problem must first abolish their interest-based monetary and financial system and replace it with systems that are based on risk-sharing principles."
"I hope Europe, the US, Japan, Singapore and others that are faced with shrinking population problem would replace their interest-based monetary system with interest-free systems to ‘save’ their populations and unique cultures. In this regard, Islamic finance comes to mind and indeed is something all nations can consider."
https://www.ahamedkameel.com/interes...ertility-rate/
The Islamic banking system COULD be a positive solution to the current system. It has been forcefully stamped out whenever possible.

"I would argue that China's runaway mortgage finance and apartment Bubbles at this late stage of the cycle significantly increase the risk of systemic crisis."
"China's private-sector companies of all sizes, even large ones, had long faced challenges in obtaining loans. But the credit squeeze on them this spring has been particularly painful. 'It's very bad, and we see not just small and medium-sized enterprises defaulting but even big companies defaulting,"
"With the Trump administration Friday announcing $50 billion of tariffs on Chinese goods - supposedly with a list of an additional $100 billion ready to go - and China retaliating with its own tariffs on $34 billion, there are concerns for an escalating trade war. Returning to the potential for an upside dollar dislocation, China is today unusually financially and economically vulnerable."
https://creditbubblebulletin.blogspo...t-fallacy.html
The trade war is getting off to a running start.

"something remarkable happened last week: the entire global bond curve just inverted for the first time since just before the financial crisis erupted."
"As for the timing, well it's troubling to say the least: it did so just before the last two bubbles burst."
https://www.zerohedge.com/news/2018-...ay-be-imminent

6/17 Trump’s tariffs add $9,000 to the price of a new home – Idaho Statesman
6/17 A 1-bedroom in Oregon is now unaffordable for the average worker – OPB
6/17 Higher home, mortgage prices mean first-time buyers pay 19% more – Dallas
The hot money continues to chip away at affordability.
https://twocents.lifehacker.com/youl...ent-1826831468
"Today, the migration patterns are purely economic, but they are inspired by socialism whereby they need only show up and receive automatic income and benefits."
https://www.armstrongeconomics.com/a...are-migration/

"A national debt is the single greatest way we transfer wealth among citizens as well as nations. I kept yelling on Capitol Hill that Quantitative Easing would fail, it would not “stimulate” the economy for a very simple reason. The assumption that the Fed would buy 30-year bonds and then the banks would lend into real estate with lower interest rates was crazy."
Of course it was crazy. The BRICs put a roof on wages and therefore, a roof on discretionary spending.
https://www.armstrongeconomics.com/a...eans-anything/

[Danny B]

VZ oil,,, China and American oil,,, CORRUPTION

Norges, biggest sovereign wealth fund, takes tough line on corruption ...
https://www.thetimes.co.uk/.../bigge...-line-on-corru...
Some leaders are corrupt, some aren't. Unfortunately for Malaysia, there is at least $100 billion missing.
https://www.armstrongeconomics.com/i...goldman-sachs/

VZ can't pay the oil engineers but, it spends $ 3.6 million a day for spoiled daughters.
Report: Hugo Chavez's Daughter Is Richest Person in Venezuela
VZ doesn't have enough money to buy the light crude needed to blend with it's "axle grease". In addition, the State spent LOTS of money on welfare and, almost nothing on it's oil workers.
https://www.zerohedge.com/news/2018-...ons-fall-apart

China is the largest customer for U.S. crude......................................
"On Friday, Beijing threatened to impose tariffs on US energy products in response to $50 billion in tariffs imposed by US President Donald Trump. Such tariffs would inhibit Chinese refiners from buying US crude imports, potentially crashing US energy markets "
https://sputniknews.com/world/201806...ff-US-suprise/
Trump is a RE mogul. He has to depend on his advisors to let him know about possible fallout to his planed decisions. Sabers were rattled at North Korea and,,,, China sent bombers to patrol Taiwan. Is everybody in the State debt so stupid that they didn't foresee that?
Trump sanctions China to cause a reduction in the trade deficit. Did State totally ignore the possible repercussions?

Something you knew all along, https://www.zerohedge.com/news/2017-...new-poll-finds
Derivatives were created to generate fees when banking became TOO crowded. It is still too crowded. Not only that, it is just an information business.
https://mrtopstep.com/bank-ceos-says...k-employees-2/
Super Mario said that he is going to turn left AND right at the same time.
"We are simply at the end of the road of this complete insanity. So buckle up. Get ready for the ride of a lifetime and make sure you keep your hands and feet safely inside the vehicle. Is the ECB risking a total collapse in public confidence when they discover you cannot keep rates artificially low and end QE simultaneously?"
https://www.armstrongeconomics.com/w...lly-ending-qe/
While I might advise that you buy more popcorn, that does not mean that I am insensitive to the plight of Europeans who will see millions of deaths and a drastic reduction of your living standards. All I can do,,, I do here on this blog.

Some of the big money is moving into gold.
https://www.caseyresearch.com/these-...l-chaos-hedge/
6/18 Mattis: Puttin is trying to “undermine America’s moral authority” – Caitlin Johnstone
The awful slice of America that is blowing up the world has ZERO moral authority.
Hopeless European millennials.
https://www.dollarcollapse.com/faile...rope-populist/
Hopeful American millennials, https://www.zerohedge.com/news/2018-...-student-loans

6/18 Consumers stubbornly cling to cash after multiple hacks and system outages – WS
Change "stubborn" to intelligent.
6/18 Emerging Asia hit by foreign investor exodus – Bloomberg Plan "A"
6/18 Financial hole for SS and Medicare even deeper than experts say – MW
Yep SS is bust. Actually, NOT true. SS has a whole pile of Non-negotiable Treasury bonds that it received for it's cash. The cash was desperately needed to make wars in the ME that were necessary for our protection.
6/18 Fed’s Dudley complains unemployment is too low, rate hikes needed – Mish
95 million of working age who are not in the labor force. A crippling skills-gap that can't realistically be overcome. Just wait til a couple hundred thousand bankers hit the pavement.
Plant a garden AND buy more popcorn.

[Danny B]

Trade war NOT predictable

The entertainment du jour is the trade war. Bretton Woods made the dollar the reserve, anchored to gold. The anchor chain was broken. If a State wanted to sock away reserves, it had to have dollars. It could only get dollars by manufacturing stuff and, undercutting American prices. Under this kind of competition, manufacturing couldn't compete and, left the country.
If America lays on enough tariffs, American manufacturers could be competitive again. 50% of the cost of everything that you buy is for finance so, price competitiveness will be very elusive. Besides that, the bankers use your savings to buy up EVERYTHING. Then, you buy it from the bankers.
The Smoot-Hayley Act raised tariffs and, reduced world trade by 50%. Nobody won.

Blankfein: Trump's Trade Threats Are A Savvy "Negotiating Strategy"
China cuts US investments by 92% amid escalating trade war
https://www.youtube.com/watch?v=A4h-IakgKik&t=1431s

"Approximately 88 years ago (in June 1930), American lawmakers did exactly what the U.S. is doing today – they enacted the now infamous Smoot-Hawley Tariff Act 1930 – and raised tariffs on hundreds of goods imported into the U.S. According to one quantitative assessment, these measures reduced U.S imports by over 40%, sending the world’s trading order into a tail spin. "
"Based on 2017 steel import figures compiled by the U.S International Trade Administration, the top eight economies (in order of magnitude) most likely to be disrupted by the 2018 steel tariffs include:

Canada
Brazil
South Korea
Mexico
Russia
Turkey
Japan
Taiwan
Canada: Prepare for a bloody trade war!

EU To Launch Counter-Tariffs Against US On Friday
India Prepares Duty Hikes On More Goods In Retaliation Over Trump US Tariffs
German Automakers Call For End To EU-US Car Import Tax - Reports
Escalating Trade War Between Trump US & China Sends Shock Waves Through Markets
'Belligerent' US Trade Policy Toward China Will Damage Iconic American Brands

"With over $50 trillion in non financial domestic debt, every 100 basis point ( 1/10 of a percent ) increase in rates produces a $500 billion economic drag."
The yield curve continues to flatten – underscoring the fragility of domestic economic growth.
http://realinvestmentadvice.com/kass-risk-happens-fast/
"The new US tariff will be imposed if China goes ahead and implements its new tariff on American goods, announced last week, the White House said, adding that trade between the two countries “must be much more equitable.” China is currently running a $376 billion surplus in trade with the US, according to the White House.

If Beijing choses to continue its tit-for-tat tariff policy with the US, Washington will impose further tariffs on imports from China in addition to the $200 billion announced, the statement warned."
"French President Emmanuel Macron called the tariffs “not only criminal, but a mistake,” adding, “Economic nationalism leads to war.”
So, the frogs are going to invade.
"Canadian Prime Minister Justin Trudeau called the tariffs “totally unacceptable” and an “affront” to Canada, describing the announcement from Washington as “a turning point in the Canada-US relationship.”
Said the wanker with no leverage.

Italy is in very bad shape, https://www.zerohedge.com/news/2018-...ueled-populist
Depending on how you view the numbers, America has a $1.4 trillion trade surplus.
https://www.armstrongeconomics.com/w...trade-tariffs/
Mixing tariffs with duties, https://www.armstrongeconomics.com/w...y-get-revenue/

"ANSWER: The Government always thinks that throwing more money at something make it better. I have NEVER seen where that has EVER corrected any such trend. The problem lies in the total mismanagement. Governments are simply incapable of operating even a bubblegum machine. They completely fail to understand the economy, human nature, or society as a whole. The only way to actually correct such a problem is to privatize. That installs actual management and employees must actually perform. Government unions demand benefits and they negotiate with themselves. This is why the entire socialist agenda is collapsing"
https://www.armstrongeconomics.com/a...he-sixth-wave/

Russia dumped a bunch of U.S. sovereign debt. This raised bond yields. Remember that everything crashes if bond yields go north of about 3.5 %
This seems to have been a test-run to see how weak the bond market is. China has lots of bonds that they could dump if they thought it necessary.
https://sputniknews.com/us/201806191...s-debt-dollar/
Currency wars and inflation-targeting always take money from the worker.
https://antoniusaquinas.com/2018/06/...rican-workers/

[Danny B]

Hot money in RE

The various CBs created an extra $ 200 trillion. They took impaired loans and put them in a "bad bank". This strategy was supposed to take bad loans off the books of the banks so that they could continue to issue new loans. There was little demand for new credit from people who were credit-worthy. So, they made loans to people who were not credit-worthy.
$200 trillion was just too much to be absorbed into the productive system so, it was circulated in the upper loop of the economy. Unfortunately, much of the money flowed into anything that could be considered a store-of-value. It blew out the price on everything that ran in a short-term cycle. Commodities peaked and crashed. There is one area that has a long-term cycle. Real Estate. The hot money that was conjured up in the upper loop was searching for a home that appeared safe. RE is a long term cycle so, it appeared safe.

Here is a comprehensive article on the price of housing. I’ll do a few excerpts but, you should read the whole thing.
"Since 1960, renters’ median earnings have gone up 5 percent while rents have spiked 61 percent; homeowners earn 50 percent more while home prices have gone up 112 percent.
The Harvard study noted that the cities with the greatest increases in housing costs also have the greatest increases in homelessness. Expensive housing encourages private equity firms and other investors to buy up apartment buildings and evict the current residents.
But wait, it gets worse: The Harvard study found that the fastest rise in home prices is at the low end of the market. “Cheap” homes, or those selling for less than 75 percent of the median price, are appreciating at twice the rate of high-end homes.

The reason for this appears to be that low-cost housing is simply disappearing from the market. Since 1990, more than 2.5 million apartments renting for less than $800 per month have been demolished, upgraded into luxury condos or converted into hotels or offices. Between 2010 and 2017, prices in poor urban neighborhoods rose 50 percent faster than in rich neighborhoods,

"Before the recession, America built around 1.1 million new homes per year. In its best year since, the country built just 849,000. "
VERY strange,, maybe it is because houses are unaffordable.
"America also has a nationwide shortage of construction workers. According to the Harvard report, building firms have 200,000 job openings, the highest number in a decade. And yet, despite persistent labor shortages, construction worker wages are rising slower than the rest of the private sector."
"“In a lot of cities,” he said, “the market can’t supply housing for people making less than six figures.”
"But here, too, the news is grim. In 1988, just one city in America had homes that cost, on average, more than six times the annual median income. Today, 22 of them do. "
https://www.huffingtonpost.com/entry...b056b2263c621e
Keep in mind that the number of owner occupied houses hasn't gone up in decades. Everything is bought up by speculators who are close the the free-money spigot.

6/21 American cities are so expensive that they risk ‘demographic bomb’ – BI
6/21 LA home prices surge past new record – Patch
6/21 A $24 million tear down on Nantucket? Island prices breaking records – CNBC
6/21 15 US cities where home prices are skyrocketing – CNBC
6/20 Home price insanity: $2.6 million for 900 square feet – CBS

"The headline figure is striking: global debt has hit a new high of 225% of world GDP, exceeding the previous record of 213% in 2009. So, as the IMF points out, there has been no deleveraging at the global level since the 2007-08 financial crisis."
"The IMF’s recommendation to governments is that they should fix the roof while the sun is shining: accumulate a fiscal surplus, or at least reduce deficits,"
Yep, raise the snot out of taxes.
"Since the crisis, far tougher capital requirements have been introduced for banks"
And immediately gutted.
"At a time when economic growth is robust almost everywhere, financial markets are relaxed about debt sustainability."
Growth in the sector of the economy that produces NOTHING is robust.
https://www.theguardian.com/business...nancial-crisis

In the Baaken field they are flaring off natural gas to the tune of 1,800, 000 Bbl. equivalent of oil every day. They don't have the infrastructure to do anything else.
https://www.bloomberg.com/view/artic...-shale-dilemma
6/21 Fed Chair Powell calls case ‘strong’ for more interest rate hikes – CNBC
6/21 Americans still aren’t saving, despite the booming economy – Bloomberg I'm glad to hear that everything is booming. Before long, we are going to hear one BIG BOOM.
The feces-for-brains at the FED look at the extremely low unemployment rate and conclude that the economy is close to overheating. The 95 million Americans of working age who are not in the labor force evidently isn't an important consideration. They just want to raise rates to attract capital inflows AND save the pension funds. So, what can we expect for results?
"With over $50 trillion in non financial domestic debt, every 100 basis point ( 1/10 of a percent ) increase in rates produces a $500 billion economic drag."
So, 2/10s of a percent rise will extract and extra $1trillion in debt service. The FED is raising rates to try to accumulate "ammunition" to fight the next recession. This isn't ammunition that they are accumulating. It is "fissionable" debt that they are stacking up in one place. It is increasing at the rate of $1.5 trillion a year. At some point, it will reach critical mass.

The FED funds rate has been dropping in tandem with the birth rate. This is all tied to the consumptive rate of the 16---62 year olds.

Keep in mind that all GOV is socialist. They attract the corrupt and, the non-producers. They never reduce their predations. Good article.
https://lara-murphy.com/wp-content/u...May-Horton.pdf
Global debt in real time.
http://www.imf.org/external/datamapper/datasets/GDD

[Danny B]

Eurozone debt

The consumer spends less and less. She is tapped out. The actual economy shrinks. Mergers and acquisitions increase. Historically, M&A action increases as the economy falters.
https://www.dollarcollapse.com/disne...ox-end-bubble/
M&A is increasing. The yield curve has inverted. Both of these are indicators of an impending crash. It is hard to say just how much the capital inflows will change the dynamic.

German bankers loaned to Greece knowing that Greeks were perennial deadbeats. When Greece couldn't pay, Merkel and Schäuble bailed out the banks embraced the Greek debt as being debt owed to the German State. Germany put Greece over a barrel and rogered them well. This has been profitable.
https://www.rt.com/business/430541-g...arns-billions/

"They suffer from low profitability and carry an estimated total bad loan exposure of around 759 billion euro, which accounts for roughly 30 per cent of their equity capital."
"While US bank stocks are up 24 per cent since the beginning of 2006, the index for euro-area bank stocks is still down by around 70 per cent. Perhaps most notably, ’Germany’s two largest banks, Deutsche Bank and Commerzbank, have lost 85 and 94 per cent, respectively, of their market capitalization."
Of course they lost capitalization. What would you do if your bank faced a "bail-in"? America has plenty of bad loans but, they are "hidden" in the GSEs like Freddy and Fanny. The bad loans will blow the private banks in Europe and, the public debt in America.
The Central Banks removed ALL moral hazard and financial risk. Did it ever occur to them that this might cause bankers to run wild?
https://www.zerohedge.com/comment/11868040

"Then there's a horrendously unexpected crash. The status quo panics, and the Federal Reserve and the Savior State rush to provide massive stimulus--tax cuts, tax rebates, more federal spending, lower interest rates, bond buying, easier lending standards, increased liquidity, and so on.

Asset prices respond to these constant injections of uppers very predictably: they leap higher as participants realize the "Fed put" is in place: the central bank will not let markets decline, so the profitable strategy is "buy the dip."

"Note that the quantity of stimulus required to "fix" the markets increases exponentially every bubble-pop. Where a sharp decline in interest rates and conventional monetary stimulus stopped the 2002 crash in its tracks and reinflated asset bubbles, the next bubble-pop crash in 2008-09 required an unprecedented range of unconventional stimulus to stop the crash and reinflate the era's third asset bubble: zero interest rates (never done before), $4 trillion in bond and mortgage purchases (never done before), ending mark-to-market pricing of financial instruments (never done before) and unlimited liquidity to the banking sector and financial markets (never done before). "
https://www.oftwominds.com/blog.html

"Even if we look at the hatred poured on Trump, this is indicative of how civilization collapses. It does not matter if you agree or disagree with Trump. This sort of hatred and the personal attacks, especially led by CNN, is so destructive I fear what comes AFTER Trump. There is absolutely NO POSSIBLE WAY that anyone who would really try to help the situation will come to power. CNN has guaranteed that nobody in the right mind would dare to be president."
https://www.armstrongeconomics.com/f...rd-do-we-fall/

To the readers on the continent, you're going to get hit the worst. Brussels keeps printing to keep the European version of the blob-State well paid. Millions of paper pushers depend on the printing press.
"Keep in mind that the Federal Reserve’s balance sheet never exceeded 25% of US GDP. "
No mention of the back-door money from the PPT and ESF.
"To put €4.5 trillion in perspective, it is over 40% of the annual GDP of the 19 countries comprising the Eurozone (€11.35 trillion)."
"The ECB’s balance sheet has grown by 8.9% since this time last year, far faster than the overall Eurozone economy (2.4%),
"and by an amount far greater than the combined GDP growth of the entire Eurozone (€372 vs €278 billion). In other words, the ECB has been printing money and buying Eurozone debt roughly 33% faster than the economy of the Eurozone has been growing. As if that weren’t enough, the ECB bought significantly more bonds in the last year than the entire increase in the national debts of all the Eurozone countries combined in 2017."
"and by an amount far greater than the combined GDP growth of the entire Eurozone (€372 vs €278 billion). .

"Both public and private emerging market debt raised money in dollars. A 2% increase in interest rates could spark a sharp rise in the proportion of emerging market corporate debt issues at risk of default. This is true especially in Brazil, Turkey, and India.' 1/2 of the BRICs
https://www.armstrongeconomics.com/i...coming-crisis/
The trade war has the potential to completely screw up world trade. As if that isn't enough, Trump wants to revamp GOV.
https://www.upi.com/Top_News/US/2018...8;utm_medium=2
He wants more efficiency. The State specializes in inefficiency so that it can give jobs to buy votes,,, and hold down crime.

6/22 New Jersey heads for budget clash, possible shutdown – US News

[Danny B]

Overview from Rickards,,, oil-yes,,, SDRs-no

Jim Rickards has a LOT of experience in world capital markets. Here, he writes a very good article focused on defaults in emerging markets. It is well worth a read.
"Once that happens, even the stronger countries such as China lose reserves rapidly and end up in default. In a worst case, a full-scale global liquidity crisis commences, this time worse than 2008."
"The IMF will soon run out of lending resources and will have to pass the hat among the richer members. But the Europeans will have their own problems, and the U.S. under President Trump is likely to reply, “America First,” and decline to participate in bailing out the EMs with U.S. taxpayer funds.

At that point, the IMF may have to resort to printing trillions of dollars in special drawing rights (SDRs) to reliquify a panicked world. SDRs are essentially world money. Elites are working behind the scenes to ultimately replace the dollar with SDRs as the leading reserve currency."

https://dailyreckoning.com/a-new-glo...sis-has-begun/
These "elites" who are hard at work are all in the West.
The crash is definitely coming. The IMF hopes to create megatons of SDRs. This will be our new "one world" currency.
There is a slight possibility that this scheme would work if America and the West did not have to import anything. There is a slight possibility that this would work if America did not need markets for exports.
More to the point, the IMF plans to have everybody accept SDRs for payment of oil. NOT GOING TO FLY.

Combined Compliance For OPEC, Non-OPEC Hits 86% | OilPrice.com
https://oilprice.com › Energy › Oil Prices

"Congress Is Considering A Bill Enabling Anti-Trust Litigation Against OPEC"
https://www.zerohedge.com/news/2018-...n-against-opec
Do you see the coming tug-o-war? Russia, China and Iran are buying up all the oil,,, blending it and, brokering it to consumers.

Russia Looks to Strengthen Ties with Mexico as NAFTA ... - PanAm Post
https://panampost.com › North America › Mexico
Targeted by Trump, Mexico Courts Putin's Russia, Xi's China | Civic ...
https://www.usnews.com/.../targeted-...ssia-xis-china

Canada is pissed off. Mexico is pissed off and looking to Russia. Venezuela oil production is falling fast. Our close-in oil suppliers are not looking so good.
The East would rather chew barbed wire than accept SDRs from the great satan. Pox Americana is going around the world trying to whip everybody into line using sanctions, fines and lawsuits. The deep State would prefer to also use the military but, it has been gutted by corruption from the MIC.
Immediate implementation of the FUSOR + our existing oil supplies would allow us to survive. But, our export markets would still be moribund.

The FUSOR won't get immediate implementation.
The coming battle is between gold and the SDR. The US/IMF would like to strongarm Russia and Iran into accepting SDRs for oil.

[Danny B]

Yield curve,,,, slowly melting

Well, there is a lot going on. Emerging market debt is on a slow boil as interest rates rise. Their debt just becomes too expensive to service. At the same time, domestic U.S. debt is on a fast boil. 2/10 of a percent rise in interest rates claws out an additional $1 trillion in interest charges from the economy.
" the ECB has been printing money and buying Eurozone debt roughly 33% faster than the economy of the Eurozone has been growing."
Eurozone debt is the deep-fat fryer, not the hot-pot.
"Ten-year Treasury yields fell three bps to 2.90% (up 49bps). Long bond yields slipped a basis point to 3.04% (up 30bps)"
This is the feared inverted yield curve. You can see that it isn't yet inverted,,, just close. When Russia recently dumped a whole slew of bonds, it drove up the 10 year. That pushed things closer to inverted. You can also see why GOV has to lie about price inflation. At the true 10% price inflation, the long-bond is a big loser.

"With such complexity in the world, central bankers should be disinclined from grand experiments. A decade of central bank rate manipulation, "money" printing and market intervention has ensured deep structural changes in the marketplace."
They didn't fix anything because they don't have a clue of how the system works. All they cared about was saving the banks,,,, at any cost. Well, the cost is here and, they are not going to like it.

"Thursday from Zero Hedge: "This Is The Greatest Short-Squeeze In History." The Goldman Sachs Most Short (50 highest short interest names above $1bn) is up 18.8% y-t-d. From May 3rd intraday lows, the GS Most Short has surged 20%"
These are people betting on a crash.
https://creditbubblebulletin.blogspo...nce-chase.html

You Brits are going to get blown out of the water,,,, at the same time that you blow up the EU. Good thing that you have your own currency. The Irish are getting revenge for the potato famine.
https://www.theguardian.com/politics...claude-juncker
Here is a graph of the DOW. https://deviantinvestor.com/wp-conte...d-image-9.jpeg
Here is a good graph on the breakout of interest rates.
https://deviantinvestor.com/wp-conte...-image-10.jpeg
"The US government has borrowed and increased official debt an average of 8.8% per year since 1913. "
https://deviantinvestor.com/10116/sa...y-know-better/

6/23 Europe hits back at Trumps tariffs as trade tensions mount – Bloomberg
6/23 China moves to quell systemic bond risks after wave of defaults – Bloomberg
The tariffs are going to do a lot of damage.
6/23 Water wars: India facing “worst crisis in its history” – Zero Hedge
Pakistan: Pakistan may soon have world's third largest nuke stockpile ...
https://economictimes.indiatimes.com › News › Defence
And
In Kashmir, Pakistan and India race to tap the Himalayas | GulfNews.com
https://gulfnews.com/.../pakistan/in...tap-the-himala...

[Danny B]

Trade wars, playing chicken,,,chicken in Hormuz,,, multilateral world

Blankfein: Trump's Trade Threats Are A Savvy "Negotiating Strategy"
Nope, this is like beating the snot out of your wife. You can't undo it.
This unfolding trade war shows just how ignorant American negotiators are. Many things are produced in one place and, assembled in another. Raw materials could be sourced anywhere. Capital some place else. The Chinese put a tariff on pork. The largest American pork producer is owned by the Chinese.

U.S. corporations moved manufacturing to China to take advantage of low-cost labor. These US Corporations then retain the enhanced profit margins from the low cost manufacturing in offshore tax havens to evade US Corporate taxes.
Many also don't understand that the bulk of the "Trade deficit" with China comprises the import into the US of US brands such as Apple and many others. There is a lack of understanding that even such imports of US brands are still IMPORTS!!
China is not the problem but US Corporations. And they will NOT onshore manufacturing if a full trade war breaks out with China but simply shift manufacturing to Thailand, Vietnam, Indonesia etc.

"the US currently imposes a 2.5% tariff on imported passenger cars"
"EU imposes a 10% tariff on all imported U.S. cars"
"Not long after Trump's tweet, the European Union vowed it was prepared to retaliate immediately should the tariffs be imposed, saying it would continue tit-for-tat escalation in its trade dispute with the U.S. "
"Earlier in the week, the EU imposed retaliatory tariffs on €2.8 billion ($3.3 billion) of American products "
"Europe is convinced that Trump would have no choice but to reverse direction once there is sufficient outcry from either politicians, business or if the market itself were to crash:"
There is little appreciation for the fact that; when the markets crash, they won't get up again.
"That suggests that some of the tariffs may indeed have to take effect (they can always be rescinded afterwords). All that means is that there's a greater risk for escalation in the trade dispute and a more severe market selloff."
The markets can not survive a big selloff.
The article goes to great length to show that the effects of a full-blown trade war would be minimal.
https://www.zerohedge.com/news/2018-...war-could-look

Game of Chicken: US vs China on Tariffs
https://www.youtube.com/watch?v=c2sMNjpVzvg&t=12s
So, just how much is this trade war worth at the moment?
Jerome Powell is Playing “Chicken” With $10 Trillion in $USD Shorts
https://www.zerohedge.com/news/2018-...ion-usd-shorts
"Jerome Powell has emphasized that he is more concerned with the real economy than the financial markets.
Put another way, the Powell Fed, unlike the Bernanke or Yellen Feds before it, is willing to sacrifice stocks in the name of normalizing monetary policy provided the economy can withstand it.
As a result of this, the Powell Fed intends to continue with its rate hikes as well as the increase in QT (we go to $50 billion per month in July),"
Here is a graph of what QT has done to Brazil.
https://www.zerohedge.com/sites/defa...GPC6-23-18.jpg

"there is a significant risk that the markets might actually enter a free fall. Powell is playing a dangerous game. "
https://www.zerohedge.com/news/2018-...ion-usd-shorts
It seems to me that Powell is depending on capital inflows to prop up American markets.
Evidently, he has turned a blind eye to corporate debt.
Evidently, he has turned a blind eye to the EMs defaulting to American banks.
Evidently, he has turned a blind eye to the looming collapse of the EU banking system.
Evidently, he has turned a blind eye to the fact that China will soon have to devalue. A minimum negative 10% to u.S. markets.

"Iran could effectively shut down the Strait of Hormuz, the narrow channel connecting the Persian Gulf to global markets. It is the only sea route from the Persian Gulf to the open ocean.

Tankers moving oil from Iraq, Iran, Saudi Arabia, Qatar, Kuwait, and the United Arab Emirates all have to pass through the strait. That translates into roughly 35% of the world’s oil traded by sea.

Nearly $2 billion worth of oil passes through the Strait of Hormuz every day. It’s the most critical oil choke point in the world.

In the event of an all-out war, Iran would quickly shut down the Strait of Hormuz. It’s been blatantly clear about this.

Credible studies have shown that—in a best-case scenario for the US Navy—Iran could seal off the Strait with sea mines and asymmetrical warfare techniques for at least a month before the US could reopen it. The Pentagon itself has admitted as much."
https://www.caseyresearch.com/the-th...ock-is-coming/
Not in a month,,, not in a year. The Suez was closed for 7? years.

"In one week President Trump confirmed that his first concern is the United States, that he has what may be a workable vision for its place in the world, and he loathes globalism and the globalists."
"It’s hard to say if Trump’s dislike of Angela Merkel is business—she’s one of the world’s most visible and vociferous proponent of globalism, or personal—it’s always her way or the highway."
"That Trump is willing to blow off Europe suggests that he may be blowing off empire. "
"As global competition moves from military to economic, Trump is also going to make sure he tilts, as much as possible, the rules of that competition back towards the US. There are the existing trade arrangements with Europe, Canada, and Mexico that he’s willing to blow up, presumably to obtain better arrangements."

"he may get some breathing room to address the intractable second and third realities: the trajectory of US spending and debt, and the fundamentally corrupt government. On the debt, all the breathing room in the world isn’t going to save him. "
most of America’s rulers and its captive media are speaking out against a peace initiative, not on the merits of the initiative itself, but because Donald Trump was one of its initiators.
https://www.zerohedge.com/news/2018-...ragon-and-bear

[Danny B]

How long has this cycle been extended?

How long is the average economic cycle? Well, it averages 10--12 years. The banking system became far too crowded. Everyone was clamoring to rent out their wet-ink money. The tech bubble crashed because everybody was throwing money at enterprises that had no earnings. The housing bubble crashed because everybody was throwing money at borrowers who could not pay it back.
John Hussman writes about how this cycle has become hyper-extended by the free-money FED. He has been very wrong about timing on investments because he was timing the cycle as if it were a normal cycle of 10--12 years. He readily admits as much. NOBODY thought that the FED would inject so much nor, extend the cycle so much. Excellent article if you want a good understanding of where we are in this new, "extended" financial world.
https://www.hussmanfunds.com/comment/mc180604/

"With just 42 days trading days left until the S&P500 bull market becomes the longer of all time, Morgan Stanley's chief cross-asset strategist, Andrew Sheets, writes that investors are now more sanguine about how much time they have until the next recession than at any point since 2010. "We’re 8 ½ years into an expansion, and many investors finally are finally confident that there is plenty of time left on the clock."
"All this is taking place against a backdrop in which key market elements are vastly different from a year ago"

"Presenting, Bank of America's Charts of Darkness"
https://www.zerohedge.com/sites/defa.../darkness1.jpg
This is a good article enumerating the various peaks.
https://www.zerohedge.com/news/2018-...apocalypse-dow

Technical traders has a good article.
https://www.thetechnicaltraders.com/...be-setting-up/
Bill Bonner has a questionable article where he speculates that GOV will get rid of both paper currency and the private banking system. I'm doubtful.
https://bonnerandpartners.com/the-fi...e-war-on-cash/
ZH claims that China is doing a stealth devaluation of the Yuan as part of the trade war. Keep in mind that; as the dollar goes up, it is much more difficult to service dollar-denominated debt.
https://www.zerohedge.com/news/2018-...C0%2C0%2C0%2C1

Various writers speculate that China could dump it's U.S. treasury debt and crash American markets. This would cause the Yuan to rise when China wants it to fall.
https://www.rt.com/business/430645-t...s-debt-keiser/

American infrastructure is falling apart. The money goes to the military.
https://www.rollingstone.com/politic...t-2019-w521788
Much of it goes to the safety net also and, that is being steadily cut back. Military spending rises and Social Security spending falls.
https://www.cnbc.com/2018/06/21/soci...udy-shows.html
Trump is further stirring things up with China.
https://www.cnbc.com/2018/06/25/trum...wsj-repor.html
So, it IS different this time. The economic cycle and the 1/2 cycle have been extended.

[Danny B]

Military Narcissism,,, privately issued money

Yesterday, I mentioned a stealth devaluation of the Yuan. Today is a different story.
https://www.rt.com/business/430788-c...aluation-yuan/
Trump is kicking more a$$ on trade. I think that he is using a weapon that is just too blunt.
https://www.theepochtimes.com/trump-...m_2572647.html
The FANG stocks had a great run but, are now correcting
https://www.zerohedge.com/news/2018-...fall-continues

Military budget, (repost), https://www.rollingstone.com/politic...t-2019-w521788
Ron Paul, "Without being technically at war with anyone in particular, the U.S. is dropping a bomb somewhere in the world every 12 minutes, around the clock.
The U.S. has 1,000 military bases scattered across the planet."
"The Pentagon’s own numbers show that it can’t account for $21 trillion. "
"1. The amount of money supposedly in the stock market is $30 trillion.
2. The GDP of the United States is $18.6 trillion."
"“[The July 2016 inspector general] report indicates that unsupported adjustments are the result of the Defense Department’s ‘failure to correct system deficiencies."
" This would explain how Donald Trump’s military can drop well over 100 bombs a day that cost well north of $1 million each.

So why can’t our government also “create” endless money for health care, education, the homeless, veterans benefits and the elderly, "
"Earlier this month, Louisiana sent eviction notices to 30,000 elderly peopleon Medicaid to kick them out of their nursing homes. Yes, a country that can vomit trillions of dollars down a black hole marked “Military” can’t find the money to take care of our poor elderly."
"mainstream corporate media are mouthpieces for the weapons industry. They are friends with benefits of the military-industrial complex. I have seen basically nothing from the mainstream corporate media concerning this mysterious $21 trillion. "
https://mrtopstep.com/ron-paul-heres...nt-in-america/

Comments,
America Suffers From Military Narcissism

the scale of America's military defies sane reason
there are no military solutions to America's imperial dementia
America has no ideological basis for its empire
military culture selects an officer class of defectives
illiterate peasants using IEDs and tunnels easily defeat hyper-expensive weaponry
the Pentagon is corrupt, incompetent and impotent
So, who is leading America around by the nose?
https://www.zerohedge.com/comment/11891598

Saving the dollar by kicking Europe off a cliff.
https://www.zerohedge.com/news/2018-...ade-apocalypse
"It should come as little surprise that the same week the Petroyuan was introduced, Trump released a flood of tariffs on Chinese exports – the first in a series of retaliatory efforts we could expect, setting the stage for an all-out tradewar between the world’s two largest economies."
"This article ignores 4 massively important points! ...

1) Since 1913 what we call "the U.S. Dollar" has really been a PRIVATE currency: the "Federal-Reserve Note"(FRN); issued by the PRIVATE Federal-Reserve Banks(owned by the Rothschild family and friends).
2) Under the Breton Woods agreement after WWII, America agreed to exchange U.S. GOVERNMENT gold for PRIVATE currency (the FRN)[1].
3) So the Rothschilds just kept printing up their FRNs and having front-men in the French government trade them in for gold at the US Treasury, then ship the gold to the Rothschild vaults in London and New York.
4) This went on for 25 years until 1971 all the gold in Fort Knox was gone, and Nixon had no choice to put an end to the "gold-standard".

"Yes, but he should have removed the currency-issuing MONOPOLY from ALL PRIVATE hands and restored it to GOVERNMENT hands. The problem is not that currency-issuing is a MONOPOLY, the problem is that currency-issuing is in PRIVATE hands. Currency-issuing needs to be a GOVERNMENT MONOPOLY as mandated in the U.S. Constitution Article I Sec 8: "The CONGRESS shall have power..To coin money" and as proposed in the Occupy Need Act [2])..

The idea that the problem is that currency-issuing is a MONOPOLY, and that the monopoly should be broken up and put into many OTHER PRIVATE hands, is a Libertarian Austrian-School idea, following the teachings of Ludwig Von Mises, the famous Jewish economist funded by the Rothschilds.

This Libertarian doctrine is the Rothschild's last line of defense. If all else fails, and their currency-issuing monopoly be broken up and put into many other PRIVATE hands, they are confident that soon they could own all those other PRIVATE hands, and be back in business as usual, within a few years. On the other hand, should their PRIVATE monopoly become a GOVERNMENT monopoly, all would be lost for them."
http://www.monetary.org/occupying-the-need-act/2014/04

The job market,
http://charleshughsmith.blogspot.com...tatus-quo.html
6/25 China’s central bank frees up US$100 billion in funding as trade war looms – SCMP
They lowered the amount of reserves the banks must hold. Not the smartest manouver when you are trying to devalue your currency at the same time.

[Danny B]

Hunting taxes to feed the blob State

LOTS of reading. You don't have to read the whole article, just enough to get a general feel for it. The State has the lawbooks, taxing authority and the guns. It attracts the corrupted. It spends without conscience. It is corrupt and, all powerful in it's domain. Why should it concern itself with the problems of the little guy?
"Whenever you add more bureaucracy, that needs to be funded and the net difference falls to the private sector. You can see that despite all the drums and clatter about how the Eurozone would be the largest economy in the world and beat the USA to a pulp, they managed to fall to third place as China has risen to take the second spot."
"The economic growth of Britain peaked the year before they joined the EU. The greater the size of the bureaucracy, the lower the economic growth. This is why I say that socialism is dying. Government is just incompetent and cannot build and grow an economy. "
https://www.armstrongeconomics.com/w...onomic-growth/

"The Supreme Court in SOUTH DAKOTA v. WAYFAIR, INC, just handed down the most devastating and unconstitutional rule perhaps in American history in a 5-4 ruling that we will look back upon as the straw that broke the back of the economy. The Supreme Court has totally rejected EVERYTHING that the United States was built upon – No Taxation Without Representation."
"If you fail to collect sales taxes, they will hit you with penalties and interest rates in the 20%+ level that will far exceed the gross sales in those states. This will simply make it IMPOSSIBLE to conduct business nationwide."

"South Dakota v Wayfair demonstrates the hunt for taxes that I have been warning will tear the United States apart and will destroy the economy going forward contributing to the shift in the Financial Capital of the World to China. So if you wanted a REASON for that shift, you now just received it from the Supreme Court."
"It was the Supreme Court which also ruled that they never made an explicit exception, so the IRS can collect it worldwide. Today, the Supreme Court has once again delivered a devastating blow to the US economy long-term."
"The Supreme Court, therefore, OVERRULED two previous decisions in order to help state hunt down taxes."
"Any alteration to those rules with the potential to disrupt the development of such a critical segment of the economy should be undertaken by Congress. The Court should not act on this important question of current economic policy, solely to expiate a mistake it made over 50 years ago.”
https://www.armstrongeconomics.com/w...unt-for-taxes/

Unlike most people, Armstrong has a list of proposed solutions. VERY good article on separation of powers.

(1) Separate judges from the state and clearly establish human rights.
(2) We must end career politicians for every Republican form of government ends in corruption and surrenders to an oligarchy without exception over 6,000 years of recorded history.
(3) There should be qualifications for politicians.
(4) We need some form of government or we end up with anarchy but at the same time, we cannot surrender all rights, privileges, and immunities to the state.
(5) The Majority must be restrained from suppressing the minority be it religion, race, or gender
(6) Only the People should take up positions in the legislative and they should be limited to one-year terms. If they must return to the private sector then they will never enact legislation that they themselves would not want to live under.
(7) No tax may subject a person to paying greater than 10% of their total income annually with state and local governments.
(8) Federal Government must be prohibited from borrowing and its funding should be serviced by the creation of new money.
(9) Any prosecution for a crime MUST be based upon the complaint of a private citizen and not government unless the crime is against government directly.
(10) No one may be imprisoned or have their liberty constrained except for crimes of violence against another.
https://www.armstrongeconomics.com/i...s-it-possible/

"Taxes are the root of all evil for this is the confrontation against the people that historically leads to civil unrest and then revolution. The American and French Revolutions were over taxes. "
"will come to a head because governments will never reduce their costs and will always demand more and more taxes from the people until the bubble bursts."
https://www.armstrongeconomics.com/w...xes-is-global/

Armstrong, "Our model has been warning is that the bankers are losing control of government and are now becoming their target. While the likelihood of this new legislation coming out of the Senate and over the House may not be so great, nonetheless, this bill illustrates just how desperate the search for money has become. Politicians are the worst enemy of the people for never do they look at their impact upon society and the future. It is always about them and the immediate need – never long-term.

This is the first time in modern history where Capitol Hill has produced powerful members of Congress whom are looking at taking on the Federal Reserve and its member banks. "
https://www.armstrongeconomics.com/i...-for-taxation/

More articles;
https://www.armstrongeconomics.com/w...tution-beware/
https://www.armstrongeconomics.com/i...usiness-is-25/
https://www.armstrongeconomics.com/i...wing-children/
https://www.armstrongeconomics.com/w...ing-everybody/

https://www.armstrongeconomics.com/w...ms-by-the-imf/
https://www.armstrongeconomics.com/w...o-on-everyone/
https://www.armstrongeconomics.com/i...tish-citizens/
https://www.armstrongeconomics.com/h...f-our-economy/

https://www.armstrongeconomics.com/w...unt-for-taxes/
https://www.armstrongeconomics.com/w...ionage-agency/

[Danny B]

Where are the assets truly parked? Italian debt bomb

Armstrong, "During such period of civil unrest, capital contracts and begins to hoard. This is what caused the German Hyperinflation"
"The 3rd century AD is when we have the most hoards, but they tend to cluster also around civil unrest and civil wars. If people are fearful or uncertain about the future, they do NOT spend and they contract. So the global trend I am highlighting with respect to rising civil unrest is important economically. The fact that this trend is WORLDWIDE, is particularly alarming for it further supports the fact that we are in the Sixth Wave and 2032 will be the generational change of monumental proportions."
Excellent article about the generational shift.
https://www.armstrongeconomics.com/w...ing-of-assets/

ZH has an article about where the rich park their money. Here is a graph.
https://infographic.statista.com/nor...e_wealth_n.jpg
You look at the graph and, it seems pretty straightforward and obvious.
https://www.zerohedge.com/news/2018-...rk-their-money
But, then you read the comments;

Heros TheSilentMajority Tue, 06/26/2018 - 01:07 Permalink

Actually the US is by far the biggest money laundering center on the planet. Delaware and Nevada corporations can be owned anonymously, which is a strict AML violation. No other OECD country can get away with this bull**** but JewSA. Only the US has all the obscure taxfree loopholes for Trusts and Foundations ala Clinton Foundation, and only the US has the muscle to make the rest of the world recognize them. This article clearly fails to recognize US trusts and foundations with hidden foreign ownership or beneficiaries.

Switzerland has bilateral OECD wealth and income reporting to all the countries in the EU, the US doesn't and refuses to cooperate. EU citizens cannot hide their wealth tax free in Switzerland, they can in the US.

Then there is unilateral FATCA and FBAR reporting to the IRS through type 1 and 2 bilateral agreements forcing any country using the US dollar to provide reporting all all bank customers with US indicia. Now since TCJA there is the unilateral wealth seizure known as the Transfer tax, and all retained earnings for CFC's will subject to GILTI and taxed at 17.5%.

You also fail to consider art markets and real estate as a method for storage and transfer of ill begotten wealth. Offshore ownership of real estate in Florida alone would dwarf Switzerland, and likely Hong Kong and Singapore too."[/I]


In Italy, the left and the right combined to throw out entrenched eurocrats. Merkel got her teeth kicked in, figuratively.
Well, it didn't stop there. Apparently, the Germans took a hint from the Italians.
6/27 Increasing chance CSU aligns with AfD in Bavaria, completely splitting Germany – Mish

America knows that gold-backed bonds will be introduced to keep the State from doing unlimited currency expansion. America currently exports more gold than it produces.
https://srsroccoreport.com/u-s-gold-...-london-surge/
As many of you know, John Bedini talked about producing elemental gold. In both The Cejka Files and, Petrovoltaics he talks about the subject. I wouldn't be surprised in newly manufactured gold was making it's way into the system.

6/27 Italy’s crunch moment in the bond market – Bloomberg
Italy wants to cancel 250 billion Euros.
5-Star, League want ECB to forgive 250 billion euros of Italy debt: draft ...
https://www.reuters.com/...italy.../...-billion-euros...
This may very well set off a panic in the bond market.

[Danny B]

The source of the trade deficit,,, Italy

Paul Craig Roberts;
"When are America’s global corporations and Wall Street going to sit down with President Trump and explain to him that his trade war is not with China but with them. The biggest chunk of America’s trade deficit with China is the offshored production of America’s global corporations. When the corporations bring the products that they produce in China to the US consumer market, the products are classified as imports from China.

"half of US imports from China consist of the offshored production of US corporations. Offshoring is a substantial benefit to US corporations because of much lower labor and compliance costs. Profits, executive bonuses, and shareholders’ capital gains receive a large boost from offshoring.
In other words, to put it in the most simple and clear terms, millions of Americans lost their middle class jobs not because China played unfairly, but because American corporations betrayed the American people and exported their jobs.
In short, the greedy corporate elite have benefited themselves at enormous cost to the American people and to the economic and social stability of the United States.
With the decline in income growth, the US economy stalled. The Federal Reserve under Alan Greenspan substituted an expansion in consumer credit for the missing growth in consumer income in order to maintain aggregate consumer demand. Instead of wage increases, Greenspan relied on an increase in consumer debt to fuel the economy.
The Federal Reserve responded to the crash not by bailing out consumer debt but by bailing out the debt of its only constituency—the big banks. The Federal Reserve let little banks fail and be bought up by the big ones, thus further increasing financial concentration. The multi-trillion dollar increase in the Federal Reserve’s balance sheet was entirely for the benefit of a handful of large banks.

To be clear, interest rates and bond prices move in opposite directions. When interest rates are lowered by the Federal Reserve, which it achieves by purchasing debt instruments, the prices of bonds rise. As the various debt risks move together, lower interest rates raise the prices of all debt instruments, even troubled ones. Raising the prices of debt instruments produced solvent balance sheets for the big banks.
Consequently today the combination of offshoring and Federal Reserve policy has left us a situation in which every aspect of the economy is indebted—consumers, government at all levels, and businesses. A recent Federal Reserve study concluded that Americans are so indebted and so poor that 41 percent of the American population cannot raise $400 without borrowing from family and friends or selling personal possessions.

Normally so much money creation by the Federal Reserve, especially in conjunction with such a high debt level of the US government and also state and local governments, consumers, and businesses, would cause a falling US dollar exchange rate. Why hasn’t this happened?
The FED looks good as long as the other CBs continue to print more than it does.
It is Washington’s hegemony over Japan, Europe, and the UK that protects the American Ponzi scheme. The moment one of these central banks ceases to support the dollar, the others would follow, and the Ponzi scheme would unravel.
https://www.globalresearch.ca/how-lo...itable/5645482

Jack Rasmus has an excellent article. You should read all of it.
"By 2013 Italy’s real economy had collapsed by 10% below 2008 GDP levels, and unemployment rose to near 20%. Italy government’s debt to GDP has risen from 100% in 2008 to 130% by 2017,
Italy’s crisis deepened. It borrowed still more, to pay the interest on the debt it had previously borrowed–the interest payments going to the Troika, and from the Troika to the northern Europe banks (especially Germany) from which the Troika in turn raised funds with which to lend to Italy (and other economies during the debt crises in Europe 2010-2015).

To pay for the interest and principal on its rising debt load, Italy was required by the Troika to impose fiscal austerity on its populace. Successive Italian governments extracted the surplus with which to pay its rising debt, causing the Italian economy to stagnate.
"he case of Italy is more dangerous to the Eurozone than was (and is) Greece. Italy’s government debt is 130% of GDP, but its private sector and bank debt is potentially more destabilizing for the Eurozone. No less than $500 billion in non-performing bank loans hang over the private economy in Italy (nearly $2 trillion still Europe wide)"
Now Greeks are taking to the streets in widespread strikes and demonstrations, as another round of Troika-investor austerity and debt is coming up in August 2018.
https://www.globalresearch.ca/italia...lated_articles

[Danny B]

Parallels with the collapse of the USSR

The Syrian military is taking back south western Syria from mercenaries. The U.S. military is NOT attacking as one would expect. I speculated that Trump made a deal to get Russian and Iranian oil when the U.S. could no longer survive on Fracking.
"We should also expect that, once the fracking bubble pops, the US will become dependent on Russian oil and liquefied natural gas, which it will be forced to pay for with gold. (Fracking involves a two-phase combustion process: the first phase burns borrowed money to produce oil and gas; the second burns the oil and the gas.)"

"the United States has told Syrian rebel factions they should not expect military support to help them resist a Russian-backed government offensive to regain opposition-held parts of Syria bordering Jordan and the Israeli-occupied Golan Heights."
"It's quite possible, it seems to me, that what we'll be seeing over the next several days, is the implementation of the same reconciliation strategy that we saw in Eastern Ghouta, Aleppo and other areas where some so-called rebel fighters will lay down their arms and settle their status with the government, others will be evacuated to Idlib and those that refuse, most likely ISIS, will be destroyed. "
https://russia-insider.com/en/politi...-syria/ri23921

I believe that Trump is being pragmatic. Fracking was all done at a loss. He has to make peace.

" thinking through the (for now) gradually unfolding collapse of the American empire, the collapse of the USSR, which occurred close through three decades ago, continues to perform as a goldmine of useful examples and analogies. Certain events that occurred during the Soviet collapse can serve as useful signposts in the American one, "
"But I feel that we non-experts, armed with the 20/20 hindsight afforded to us by the example of the Soviet collapse, can avoid being similarly blindsided and dumbfounded by the American one.

This is not an academic question: those who gauge it accurately may be able to get the hell out ahead of time, while the lights are mostly still on, while not everybody is walking around in a drug-induced mental haze, and mass shootings and other types of mayhem are still considered newsworthy."
Laissez-fair capitalism is also very much dead, supplanted by crony capitalism nurtured by a thorough melding of Washington and Wall Street elites. Private enterprise is no longer free but concentrated in a handful of giant corporations while about a third of the employed population in the US works in the public sector. The US Department of Defense is the largest single employer in the country as well as in the whole world. About 100 million of working-age able-bodied Americans do not work.

A very useful distinction can be made between collapse avoidance (which is futile; all empires collapse) and worst-case scenario avoidance, which will become, as collapse picks up speed, your most important concern. Your approach may involve fleeing to safer ground, or preparing to survive it where you are. You may choose your own collapse markers and make your own predictions about their timing instead of relying on mine.

"But, having witnessed one collapse, and now witnessing another, the one approach I would definitely not recommend is doing nothing and hoping for the best." Interesting article.
https://russia-insider.com/en/politi...d-ussr/ri23855

Armstrong, "I was stunned, for it demonstrated to me that the rise and fall of empires, nations, and city-states was also in part instigated by climate change. When it turns cold, this is when civilization contracts. The bottom of this immediate ECM is January 2020. The forecast for Solar Cycle 24 will bottom around that same time period."
https://www.armstrongeconomics.com/w...ce-model-2020/

"why is it that the Canadian financial sector is so fraud-ridden that Joe Queenan, writing in Forbes magazine in 1989, nicknamed Vancouver the “Scam Capital of the World”, while shipowners in Greece will regularly do multimillion-dollar deals on a handshake?

We might call this the “Canadian paradox”. There are different kinds of dishonesty in the world. The most profitable kind is commercial fraud, and commercial fraud is parasitical on the overall health of the business sector on which it preys."
https://www.theguardian.com/news/201...inancial-fraud

6/28 Brexit: bank contracts worth trillions at risk, says finance watchdog – Guardian
The City of London bankers are adamant that Brexit just will not happen. May and her ilk are stalling everywhere they can. They are also heavily into Russia bashing. You can thank the London bankers and Tel Aviv for that one.
May Wants Euro Powers To Extend Anti-Russia Sanctions
The French are very unhappy about the muslim invasion. Macron has a solution.
https://sputniknews.com/europe/20180...itary-service/
6/28 Indian central bank intervenes as rupee crashes to record low – ZH
6/28 Trump-Putin summit set for Helsinki, Finland on July 16 – CBS
NATO Allies Fear Unexpected Putin-Trump Summit Announcement
"They" are scared witless that peace will break out.

Reportedly, China plans to devalue their currency. This has historically caused a crash.
https://www.zerohedge.com/news/2018-...-crash-markets

[Danny B]

China and a change of course

Draghi says that he will end bond buying from the ECB AND stabilize the Euro. He can't have both. NO possibility.
Evidently, the PBOC is drinking from the same glass of koolaide.
6/29 PBOC signals shift to growth and market stabilization – Bloomberg
The PBOC created more debt than the FED, BOJ and ECB combined. They bought all the growth with wet-ink money. Just the same, growth is slowing. Their workforce is shrinking by 1 million a year. The only way to grow the economy is to grow your markets. They have to drastically raise the standard of living / consumption to grow the markets. China has set the roof on global wages and can't raise the roof. Otherwise, they risk losing market share to low-wage competitors.
Their debt is now more than 300% of GDP. They can't possibly shift to growth with a falling population. Japan proves that. They can't possibility stabilize their markets when their debt bubble is so large.
The impossible trinity (also known as the trilemma, or the unholy trinity) is a concept in international economics which states that it is impossible to have all three of the following at the same time: a fixed foreign exchange rate. free capital movement (absence of capital controls) an independent monetary policy.


6/29 Global stocks see biggest loss of investor cash since the financial crisis – CNBC
6/29 Wall Street braces for Trump’s economic colonic – Vanity Fair
6/29 For stocks, the line in the sand has been drawn – Elliott Wave
Wait for that line to be drawn in blood.
6/29 China slowdown deepens on trade tensions and weak credit growth – Bloomberg
6/29 What China’s recent bond defaults mean for investors – Forbes
A little debt is GOOD but;
Hormesis is a term used by toxicologists to refer to a biphasic dose response to an environmental agent characterized by a low dose stimulation or beneficial effect and a high dose inhibitory or toxic effect.
https://www.armstrongeconomics.com/m...lar-borrowing/ China has a dollar problem.

Apparently, a republic is a terrible form of GOV. Like communism, they always break the bank.
Analysts make grim projections for U.S. debt - The Japan News
They do it with taxes.
https://www.armstrongeconomics.com/w...ially-ruinous/