Economic pressures

[Danny B]

TASS: World - China vows to maintain global peace, stability jointly with Russia

Trump wants to bring the military home from Syria to rebuild America. How MUCH of the military will he bring home? Will he bring back the military who are protecting the poppy crops in Afghanistan? That would allow the Taliban to RESUME the eradication of the opium business. How many bases will he close?

[Danny B]

Abraham Lincoln said war was over taxes
The Civil War began because of an increasing push to place protective tariffs favoring Northern business interests and every Southern household paid the price. In 1828, northern politicians forced the south to buy goods from the north by passing federal laws that placed high taxes on goods imported from Europe. This angered many southerners,
Abraham Lincoln repeatedly stated his war was caused by taxes only

https://www.theautomaticearth.com/2018/03/the-core/

Very interesting article on the dis-solution of Venezuela, https://www.theorganicprepper.com/ve...lued-currency/
Very interesting vid on what happens when the internet goes down, Puerto Rico. https://www.youtube.com/watch?v=GjzeFOKUR04
Just in case that you have any illusions that the State is looking out for you.

https://www.zerohedge.com/news/2018-02-18/how-kill-300000-americans-and-get-away-it

BTC news, https://www.zerohedge.com/news/2018-...C0%2C0%2C0%2C0


Stockman has some good observations on that.
"That's why Bezos can kill established businesses with impunity. The casino allows him to run a pernicious business model based on "price to destroy", rather than price for profit and a return on capital.
And why not. At the end of the mini-correction in February 2016 Amazon's market cap was $230 billion, but just 25 months later it was worth $775 billion at its March 12 peak.

That staggering $545 billion gain in market cap had absolutely nothing to do with financial performance, of course. "
You have it right there. ALL excess capital creation must flow into MAL-investment. How could it be otherwise?

" As we also recently explained, give its cloud business the most expansive PE multiple imaginable and you still have more than one-half trillion dollars of bottled air:"at how many atmospheres of pressure?
"It is not by accident that the US has 5-15 times more retail space per capita than the rest of the developed world. For instance, Australia has 16 square feet per capita and the square footage per capita for UK, France and Germany are all in the single digits.

Needless to say, after all of this cheap-finance driven excess and mal-investment, Bezos now comes in with his half-trillion dollar e-Commerce sledge-hammer and pounds the chart below to smithereens."
VERY good article, http://davidstockmanscontracorner.co...ails-an-acorn/

[Danny B]

Competing business models, China and the Anglo world

Dunno if anybody is interested but, I want to write about the Yuan-oil market. Most commodities are priced in U.S. dollars. After WW II and Breton Woods, dollars flooded the world. This was partly due to the Marshall Plan. The U.S. dollar had the most stability because it was so widely used. Both producers and speculators must have a stable currency. If not, they must raise their profit margins to compensate for unstable prices. The same is true for people who rent their money. The more stability, the less interest that they need.

China has stated off with oil because it is the most traded commodity. Russia is a willing partner, accepting Yuan for oil. China hopes to broker oil to many other States. That is why it has opened a futures market. China plans to create more Yuan-denominated markets for other commodities. At the same time, China has been plagued by widespread corruption in internal commodity markets. This doesn't inspire much confidence in would-be traders.

Here is an excellent article on the Yuan oil market.

https://www.zerohedge.com/news/2018-03-30/yuan-oil-futures-contract-gold

Chinese Invade Oil Realm: PetroDollar Kill
The article goes on and on and on about Chinese deals for mutual benefit. Contrast this with the American model of thrashing everybody within reach to steal their resources.

Post WW II, America went round the world fighting communism. Communism eventually fails by itself because a command-economy always goes broke. Just the same, we fought communism. I suppose that we saved South Korea from being absorbed by China. You can see what wonderful communism did for North Korea. Somewhere along the line, we discovered that prolonging a war was very profitable for certain groups. Probably in the Korean peninsula. CERTAINLY in French Indo-China. The Viet-Nam war was kicked off after the Gulf of Tonkin incident,,, that the military recently admitted never happened.

America morphed from being the world's policeman to being the world's bully. We destroyed States right and left. If they had resources, we stole them. If they resisted, we bombed them. WHO brought about this change in mentality. WHO made America into the great satan?
England handed off the baton of empire when she could no longer pay for empire. According to Churchill, WW II was started strictly for the bankers. That would be the London Bankers. England may have handed off the baton of empire but, she retained a LOT of control through the banking system. If war made good sense to London bankers, then, it made good sense to New York bankers. War has always been profitable to a small group. China is following a strategy that is good for the much larger group. Mutual prosperity appeals to the Middle-East a lot more than unlimited drone attacks.

So, while Yuan denominated commodity markets might normally have a weak start, Pox Americana has provided a HUGE motivation for the R.O.W. to subscribe to the new market structure. The British East India Company set the pattern for State-sponsored corporate raiding. It was chartered to do just about anything,,, even to start wars. It used India for a greenhouse to produce opium to enslave China. The Chinese are locking up oil production in many areas, not just the ME. The Anglo-American juggernaut obtained oil by predation. The Chinese propose to get oil by mutually beneficial agreements.
The Chinese have a far better business model that Pox Britannia / Americana.

[Danny B]

When will the LBMA and COMEX fail?

Gold is very much maligned because it just sits there and does nothing. China is buying up mines, bullion, dore and ore concentrates. Here is a graph of the purchasing power of the dollar, http://theeconomiccollapseblog.com/w...ar-300x199.png
So, anything that appears to have price stability must be compared to gold. http://node_charts_production.s3.ama...239e019ebf.png Gold is a convenient benchmark because it doesn't get consumed. The one use of gold is for, hoarding. There are plenty of other examples to illustrate price inflation over time.
There is a long-running discussion of price vs value. Here is a long article discussing all the possibilities.
FOFOA: The Value of Gold

"Probably the most common misconception is that price and value are the same thing. They are not. They are related but different. Price can be precisely known, but true value can only be estimated or guessed. And because price changes, price is always wrong while true value is always right, even though it is unknown. So price and value are always different. Value is always either higher or lower than price."

The Bretton Woods agreement tried to bring stability to the world by locking in currency creation to a proxy for gold,,, the U.S. dollar. The agreement lasted for about 20 years. In the mid-60s, the politicians violated it. The temptation was too great for the scum of the Earth. The East wants to bring back a gold standard with no proxy and no fractional BS.

Jim Willie, "The Petro-Dollar system has stood for 45 years. It has decayed into tatters. Its derivative foundation is being liquidated, a long painstaking process. A new disruptive model was forged in 2014 when Iran sold India oil, which was paid in gold, but delivered from Turkey. Gradually emerging is the Gold Trade Note, first in oil payment then later in general payments in shipped goods. It is evolving within the Chinese market from Russian energy sales, all conducted outside the USDollar sphere."
Gold Trade Note Sighted
The news claimed that oil traders could convert their oil profits (only) into gold on the Shanghai exchange. This is true to a point. the gold MUST be sourced from outside China. The Shanghai exchange is a physical only market. The 3 biggest refiners have all signed on.

https://news.goldcore.com/us/gold-blog/china-moves-to-dominate-gold-market-with-physical-exchange/

That means that the gold flowing to China stays in China. This will put enormous price pressure on the LBMA and COMEX markets. They typically do about 1% physical delivery. As soon as traders start to require physical; delivery, COMEX and LBMA will dry up and blow away.
There are 15 benchmark contracts for different delivery dates between September next and March 2019.

"The Chinese are likely to ensure trading liquidity continues to build in its new oil contracts before its oil suppliers routinely use them against physical oil deliveries. Presumably, this is one reason the first delivery date is in September, while actual shipment is never more than a month or so."
" liquidity continues to build" OK, just how much of this liquidity will call on the LBMA and COMEX for physical delivery of gold?

"A new report by Thomson Reuters GFMS shows that it is one of the most leveraged financial markets with trading volumes many multiples of annual mine output.

Global trading volumes in 2014 was three times more than the 183,600 tonnes of the precious metal that have been produced in human history.

At an estimated $22 trillion trading value per year, the gold market dwarves turnover on the Dow Jones Industrial Index and that of the S&P 500 combined, German and UK government bonds and even some of the top currency pairs." 2015tangibles. Nobody can run a trade deficit.

The claim is made that the FOREX market is the most important market. It is at the moment but, it is inefficient. $Billions are lost due to speculation and fees. LOTS of people make a living doing currency speculation.
"Average spreads in the global OTC gold market range anywhere from 50 to 85 cents per ounce. Depending on the dollar price per ounce, it comes out to be around 0.04% to 0.07%"
So, you see that gold trades at the lowest fees / spread. This also means that there is no profit in gold speculation. This is the definition of stability. The physical gold will be stored in huge vaults. China bought a 1500 ton vault in London. The gold trade notes WILL be convertible. Most people will just hold the notes to avoid vaulting fees. The East couldn't introduce the gold trade note until it had enough to allow a lot of to be removed for personal hoarding.

The Yaun-oil contract platform was delayed a few times. Was that necessary to have time to accumulate a few hundred more tons of gold?

[Danny B]

The economic air is fast leaking out

More technicals;
"Julian Brigden of Macro Intelligence Two Partners reminded readers why the bear case for both bonds and equities ,,,,based on the notion that stocks and bonds can't sell off at the same time.
According to Brigden's modelling, a break above the 3.25% level on the 10-year yield would slice through its 100-month moving average - something that hasn't occurred since the mid-1980s."
"Brigden believes that a break above this level in nominal yields (while real yields remain anchored thanks to a runup in inflation) will lead to chaos in both bond and equity markets. "
"Treasury investors lost 36% of their money in real price terms. 36%. A third. And you never got it back. Never got it back. So I do think the analogy is relatively similar."
Most of the article is pure BS but, you have to take what you can get.

https://www.zerohedge.com/news/2018-04-01/julian-brigden-break-above-325-10-year-could-trigger-next-20-correction-stocks

"Over the past month as Libor continued its relentless upward creep and is now higher for 37 consecutive sessions, the longest streak of advances since November 2005"
The takeaway from this is; the banks don't trust each other.

https://www.zerohedge.com/news/2018-03-30/how-much-debt-linked-soaring-libor

"We're rationalizers. We try to force our perception of reality to fit our beliefs; rather than the other way around.
Which is why the vast amount of grief, angst and encroaching dread that most people feel in western cultures today is likely due to the fact that, deep down, whether we're willing to admit it to ourselves or not, everybody already knows the truth: Our way of life is unsustainable."
"The only remaining question concerns how fast the adjustment happens. Will the future be defined by a "slow burn", one that steadily degrades our living standards over generations? Or will we experience a sudden series of sharp shocks that plunge the world into chaos and conflict?"
Where the money comes from, http://media.peakprosperity.com/imag...0_11-17-33.jpg

The article is pretty good but, most of the growth is a chimera. We don't have the population growth. After the reset, things will stabilize at a lower level. If the fusor replaces fossil fuel for power generation, that will help the bio-sphere. Most of the world is working towards reducing population. Africa is a different story. They have mucked up their nest because they have a population but, NOT a society. They want to leave the sullied nest.
Over 700 million Blacks from Sub-Saharan Africa want to flee to EU & USA! – AfricanCrisis

This article is a great run-down on the whole situation. I won't excerpt it.

https://northmantrader.com/2018/03/31/bull-market-requiem/

Here is a long article that discuses "This was because it runs completely contrary to their theory that free trade leads to economic liberalization, which in turn leads to political liberalization."
The article is of some interest. But, just what is "political liberalization"? The economy is a business. Do you let businessmen run the economy OR, do you let liberals like Hugo Chavez run the business? There are many hard-and-fast economic rules that are mostly related to / are governed by human nature. You can't escape that.

https://angrybearblog.com/2018/03/the-grand-illusion-2-0.html

Excellent article on compounding and doubling of population, specifically in the Middle East.

https://www.zerohedge.com/news/2018-04-01/peak-fragility-why-middle-east-doomed

Socialism, at it's worst, pays to bring children into this world regardless of whether or not they will have good support from the parents and/or a job niche. What does history have to say about cultures that have "unlimited" reproduction but, limited resources?
The Maya lived on a limestone peninsula with almost no mineral soil. After centuries of recurring famine and population crashes, the adopted ritual warfare to kill each other off in competing city-states.
Greece always had poor soil. They adopted teenage homosexuality to keep reproduction limited to those men who were able to support a family.
Can Africa survive with a population that doubles every <20> years? We'll soon find out.

The companies (tapeworms) who floated along in the cash stream from the FED rose higher and higher. This cash stream is closing down. Tesla is toast. Amazon has a business model that only works with free FED money. Amazon is toast. Facebook is under investigation by 32 State attorneys General.
Investor sentiment is turning fast. https://dollarcollapse.us1.list-mana...e&e=b8ad7fb68a
"ANSWER: Actually, the primary target for a peak in any Greco-Turkish war will arrive in 2022"

https://www.armstrongeconomics.com/world-news/war/greco-turkish-war-is-it-inevitable/

[Danny B]

liquid?

"Now let us add the stock market, which is liquid. That reached $30 trillion by the end of 2017.It's only liquid until too many people head for the exits.
Therefore, the liquid assets/cash position stood at $85.4 trillion at the end of 2017. Now let us add total personal real estate (homes) in the United States which stood at $31.8 trillion. If we include illiquid real estate, now we are up to $117.2 trillion. "
Sure thing, dude. Add ALL real estate to the liquid asset total.

https://www.armstrongeconomics.com/armstrongeconomics101/economics/monetary-policy-is-a-complete-failure-will-shutting-down-the-fed-solve-all-the-problems/

Investor sentiment has turned, https://dollarcollapse.com/stock-pri...ogy-dark-side/
The bubbles have started popping, https://dollarcollapse.com/money-bub...big-ones-next/
Just wait til that Yuan-oil market gets going.

[Danny B]

Keep in mind that GDP is just a measure of money in the economy.

https://econimica.blogspot.mx/2018/04/q1-2018-was-disaster-for-america.html

https://www.zerohedge.com/news/2018-04-02/subprime-auto-bubble-just-burst-buyers-are-suddenly-missing-showrooms?items_per_page=50&sort_by=thread&sort_order=ASC&page=0%2C0%2C0%2C0%2C0%2C0%2C0%2C0%2C2

$199 trillion,,, You don't say!
"If these trendlines break (as I expect they will in the coming weeks) it will mark the beginning of the end for The Everything Bubble.
All told, there is over $199 trillion in debt outstanding and an additional $500+ trillion in derivatives trading based on these bond yields.
So when this bubble bursts (as all bubbles do) we will experience a crisis many magnitudes worse than 2008."
Everyone tends to do a time-compression and forecast a crash quite a bit early. BUT, the speed of communication is picking up. This speeds up the spread of contagion.

The London Interbank overnight Rate LIBOR is going up fast. Bond yields have broken the trendline and are heading up. LIBOR is going up. Trust and confidence are going down.
Gold and silver never had a market meltup so, they don't have a meltdown.

[Danny B]

Avoiding the dollar,,, tech wobble,,,Deflation by a change in perception

"Foreign holdings of local-currency debt of developing nations have swelled to near a record $745 billion, according to data collected by Deutsche Bank AG. With much of their buying at the expense of the greenback, according to this metric investors have never been so exposed to a sudden turnaround in the U.S. currency."

https://www.bloomberg.com/news/articles/2018-04-03/dollar-has-record-745-billion-in-bond-market-betting-against-it

Foreign investors are buying local-currency to avoid holding dollars. NOBODY wants to hold Euros. So, what do Europeans hold?
Well it's actually 500 billion US dollars worth.
If you scoot down to table A7 on page 144 of this BIS report (152 of 358 in pdf form) you will see the reverse image of foreigners holdings of swiss francs.
The snb lends to other swiss banks who, net of intra company loans, engage in all sorts of financial transactions backed by absolutely nothing at all. Non-banks also engage in all sorts of shenanigans.
Claims in local currencies (bottom of the table) exceed liabilities in local currencies by 500 billion US dollars.

https://www.bis.org/statistics/bulletin1803.pdf#page=328

Hmmm, the emerging markets have about $13 trillion in dollar-denominated debt. They need dollars to service this debt. There is going to be a squeeze somewhere.

"the Federal Reserve, through its suppression of interest rates and quantitative easing programs, combined with excessive government deficit spending, have created a new bubble of far greater proportions: government debt. Just like the housing bubble poised the greatest risks to the US economy in the late 2000s, it is government debt, and the seemingly unanswerable question of how to orderly unwind it, that pose the great risks today."
Good graph, http://thesoundingline.com/wp-conten...e-1024x678.jpg
Chart of the Day: How US Debt Has Changed - The Sounding Line
The FED is trying to carry everything.

Here is an article on tech stocks. "Netflix has achieved rapid growth and stock market riches via the incineration of cash: Free cash flow registered negative $2.02 billion in 2017,'

https://www.zerohedge.com/news/2018-04-02/grants-almost-daily-dear-mr-fantasy

https://www.rt.com/business/423030-great-depression-stocks-plunge/

Armstrong says that we have a couple hundred $trillion in liquidity. When confidence changes, it is no longer liquid at the price that you might desire. By definition, this is deflation. Since most of the money supply is debt and credit, any reduction in credit is a reduction in the money supply.

China has the fastest shrinking work force. China plans to morph from an export-driven economy to an internal consumption model. China has set the roof on wages for most of the world. THEY can't escape this roof. Wait and see.
They can't do buybacks of stocks in the weeks leading up to earnings reports so, they're buying their own bonds instead.

We import almost no steel from China. The biggest pork producer is Smithfield Foods of Virginia,,, owned by China. These are 2 of the main items that will have a tariff.


Many more to come.
Naturally, it couldn't have anything to do with the muzzies.
I'm shocked ! Do you hear me?,,, SHOCKED.
Get used to it.

[Danny B]

Same old fraud,,, nobody goes to jail this time

French GOV debt is, Government Debt to GDP 97.00 The French GOV spends 56.5 % of the GDP. This is in violation of the Maastricht treaty.
"French President Emmanuel Macron has come out an made public debt one of the key points of his policy. Macron is supporting austerity "
"With Macron embracing austerity and the guidelines of the Maastricht Treaty, we are watching the gradual collapse of socialism. All the promises of government to provide the safety-net are crumbling before our eyes. Austerity supports the bondholders against the people"

https://www.armstrongeconomics.com/history/europes-economic-history/france-embracing-austerity/

Mal-investment on steroids.

https://www.zerohedge.com/news/2018-04-04/blain-horrible-foreboding-sense-something-happening-and-we-dont-know-what-it

Excellent article on margin debt. Even if you aren't clear on the importance of this debt, you can look at the benchmarks for previous crashes on the graphs. We are WAY above the previous crashes.

https://www.advisorperspectives.com/dshort/updates/2018/04/02/margin-debt-and-the-market

We don't nee no profits,,, we have fees.
Will the Stock Market’s Tech Rout End Like the Dot.com Bust?

Excellent article on the whole picture of tariffs. https://www.theautomaticearth.com/20...akes-xi-happy/
As you all know the private banks create the bulk of the money supply in the form of credit. FED Head Marriner Eccles complained in the '30s that America had no permanent money supply. The FED creates base money but it generally goes just to member banks as bank reserves. There is no money but what the banks create as debt. This gives them a huge amount of control. If the control everything financial, you can bet that the banks will always come out on top. Sweden has pretty much gone cashless. Suddenly, alarm bells are starting to go off.

https://sorendreier.com/swedes-turn-against-cashlessness/

https://www.theguardian.com/world/2018/apr/03/being-cash-free-puts-us-at-risk-of-attack-swedes-turn-against-cashlessness

[Danny B]

Buying real things with fake money,,, deflation waiting in the wings

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered." Jefferson
The Swedes are slowly waking up to the fact that a cashless society society means only banks create the entire money supply. Every penny you earn is controlled by some banker. There is no holding back. But, the banks have no skin in the game when they are gambling with your money. They have always proven to be reckless.

So, the CBs can create "unlimited" free money. In the name of stability, they create mountains of free money,,,, to rescue the markets, of course. If you had a free money machine, what would you do? You would go on a buying spree, of course.
"Other central banks have been busy purchasing assets, as well. Central banks have accumulated assets in excess of $21 trillion. See chart below."
So, the FED receives interest on bonds but, GOV told them to give it back.
Jan 9, 2015 - The Federal Reserve said Friday it made a record $98.7 billion in profits last year, mostly from interest on the more than $4 trillion in bonds it has
Federal Reserve to send record $98.7-billion profit to Treasury

http://www.goldtelegraph.com/rch-content/uploads/Screen-Shot-2018-04-04-at-2.32.41-AM-502x400.png

The new feudalism.

While the BOJ owns about three-quarters of Japanese ETFs

"first by inflation, then by deflation" Well, the inflation has reached a peak. The markets have peaked and, are starting to roll over. Armstrong claims that there is $ 200 trillion worth of assets. What is the true price of all this stuff if nobody has money to buy them? Powell of the FED is dialling back QE and raising interest rates. Trump seems to have started a trade war.

https://www.philstockworld.com/2018/04/04/retaliation-wednesday-the-empire-strikes-back/

Chicago&apos;s pension precipice: It&apos;s worse than you thought. - Chicago Tribune


China essentially has a public banking system where debt doesn't matter. They don't have a huge interest burden to put the brakes on new money creation. Unfortunately for them, every pisspot state official has approved TONS of new debt for their favorite cronies. They have lost control. This comes at the worst time. They want / need to internationalize the Yuan. How can they do that when millions of bureaucrats and bankers are creating new debt by the trainload? China created more new debt than America, Europe and Japan put together. China moved 300---400 million to the cities and gave them jobs financed by new money creation.
China can't very well send them back to the farm. Halting all government projects is going to put the brakes on at the same time that Trump has started a trade war.


It doesn't work that way. Currency inflation from the upper loop will work it's way into the lower loop. Price inflation in the lower loop will just cause the consumer to cut back. Defaults will rise. The consumer economy will just shrink even more. Ho hum
NYC is having a growing problem with the NYPD.
NYPD Cops So Bad, Lawmakers Forced to Ban Them from Having Sex With People They Arrest

[Danny B]

https://cdn.theatlantic.com/assets/m...and-gdp-03.png
FED GOV did a lot of arm-twisting and legal changes to squeeze out war funding.

https://mises.org/library/how-fed-helped-pay-world-war-i

Only 13 years after the FED was created, came the Great Depression I.

https://cdn.theatlantic.com/assets/media/img/3rdparty/2012/11/debt-and-gdp-main6.png

https://wolfstreet.com/2018/04/04/worlds-most-wanted-bank-whistleblower-arrested-falciani/

The Greek tax man is squeezing HARD.
"Greek tax offices have seized more than than 1.72 million bank accounts in 2017, that is 12 percent more than 2016"
Greek tax offices seize more than 1.72million bank accounts in 2017
"525,758 owes up to 10 euros. "
Greek Tax Officials Plan One Million Confiscations in 2018 -
"The seizures of bank accounts, pensions and assets of more than 180,000 Greek taxpayers in 2017 didn't cut down the rising debt to the state" "Feb 23, 2018 - A million Greek taxpayers with debts to the state could see their bank accounts and deposits raided. "
It's disgusting that they squeeze the poor for owing just 10 Euros.

The FED has pretty much won the currency war with the Euro. In the 2008 crash, it shipped $20? trillion to European banks so that they wouldn't default on dollar-denominated debt. It is a different story this time.

Too much debt and not enough money remain a diagnosis for deflation and not inflation(1.5%)The FED giveth and, the FED taketh away.
"What may be even more unpleasant is that the US Federal Reserve may not be minded to pay any attention to their distress."
"The Fed has told us that it will destroy US$380bn of high-powered money in this calendar year. Almost nobody in the financial markets takes that pledge seriously," High-powered money is money that is created by the CB and does not have to be paid back. Low-powered money is created as debt.http://www.visualcapitalist.com/visu...united-states/
The ring of fire, http://www.icis.com/blogs/chemicals-...-ring-of-fire/
The "doom loop" https://worldview.stratfor.com/artic...ne-edge-crisis

OK, so the FED shuts off external dollar liquidity. There is going to be a lot of big craters around the world.

https://www.zerohedge.com/news/2018-04-04/russell-napier-feds-ammuniction-just-ran-out

https://www.armstrongeconomics.com/m...strong-dollar/
Posted Sep 12, 2017 by Martin Armstrong ... You stated multiple times now that 'only a rising dollar will break the world monetary system'
Looks like the path has been set.
The brave ones are even guessing a date.

https://www.youtube.com/watch?v=IFkceczF7Hc

China has more EXCESS steel capacity than the total capacity of Europe and America combined. how can they keep employment going? Trump has kicked off a trade war that is unsettling markets. Powell has choked off external dollar flows. The emerging markets need dollars to service dollar-denominated debt. Will the trade war cut back on new dollars to the EMs? Will the rising cost of dollar debt service break the back of the EM?
Dunno but, Europe is toast in any case.

[Danny B]

https://www.rt.com/business/423222-sberbank-gold-india-china/

https://www.zerohedge.com/news/2015-...y-your-problem
Keep in mind that;as China weakens it's currency, it becomes MUCH more difficult to service dollar-denominated debt. As the dollar rises independent of Chinese weakening efforts, debt service becomes more expensive. China works to sell us more stuff and receive needed dollars. Trump works to buy less from China and choke off the dollar supply. The U.S. doesn't have any Yuan-denominated loans. It doesn't need Yuan like china needs dollars.

[wayne.ct]

The relationship between love, hate, inflation and deflation

It is a convenient shorthand to put people in groups and treat them as groups and not individuals, so it happens from time to time that you can refer to a group and then, without intending it, the meaning changes. I like to short change this problem of "interpretation" or meaning by the use of some basic yardsticks so that my metrics make sense to me. If I am not clear, I apologize in advance.

A "basic" yardstick that I like to apply is the love-hate yardstick or metric. It may be hard to quantify in a numeric sense but it really comes into play, in my mind, when I look at economics. My personal actions and lack thereof in the the financial realm ultimately relate to what I love and what I hate. It has to do with my preferences and pet ways of thought. I buy this item NOW or I put off buying THAT item for my own personal reasons and because of the value I place on the objects involved, namely the fiat currency at my disposal and the physical objects I need and want.

It has to do with love and hate, the two polar extremes.

Now, switching to the various "collectives" in the macro economy, some groups out there feel like they are "masters" of debt and indulge in the luxury of being in debt, either corporately or personally or individually or whatever. What is it that they "love" and what do they "hate"? They don't seem to fear the consequences of having a negative net worth. If not, what do they fear? Obviously, they have fears and hate the consequences of "those" fears. So, to quickly summarize, it is like the game of Monopoly or Careers where you have to trade Fame, Fortune, Family or what else you may have.

Bring it back to real life by considering the following: What does Soros love? What does he hate? What does Trump love? What does he hate? etc. etc.

The powers that be in charge of increasing and decreasing debt, currency, M1, M2, etc. etc. have lost control of inflation. They seem to want to avoid deflation but they can't control that either. If they can't get enough people to buy the bonds and bills and stock, the debt bubble will collapse. Result? Deflation! Why? Too many people are in debt, personal debt. They are forced to cut back their lifestyle (i.e. expenditures) because they either go bankrupt or use their discretionary income to pay off debts.

Therefore, at least for now, paper money holds its value. However, if you are smart enough to see the hazards in the current situation, you still pay off your debts and spend your money on tangibles; guns over butter.

The "upper loop" seems to maintain and express a measure of confidence or a feeling of having things under control, being "in control" at least for now. When they begin to fear the loss of control, their love for the status quo will turn to hate. Some will already have substantial tangible wealth and negligible debt. Others will be in the opposite situation. Both groups will bid up the price of real estate and hard assets. THEN is when the common citizen will realize their money is worthless paper and join the fray.

The evidence points to the ongoing movement in that direction. I.e. deflation now, inflation in the future.

On the global situation, China and Russia have been on that path for many years now and are in no mood to pull back. They will have the gold and the US will have the buildings, vehicles, mines and infrastructure to support whatever the people are willing to do (and pay for) if they are prepared. Some will suffer for lack of preparation.

This stuff about a trade war is overblown. I don't see 100 billion making much of a dent in the macro-economic picture.

Thanks for reading... Tell me where you think I might be wrong.

[Danny B]

Preparing for war OR abandoning war?

Wayne, I don't see anything wrong or incorrect about what you wrote. Though, I would add survival and procreation as motivations.

Here is a good article explaining the difference between a gold standard and a Gold exchange standard.
"Therefore, the effect of a gold exchange standard is the opposite of a gold standard. A gold standard puts the requirements for the quantity of money in circulation entirely in the hands of the market, to which the central bank mechanically responds. A gold exchange standard allows a lending central bank to inflate its money supply through inward investment"

https://www.goldmoney.com/research/goldmoney-insights/why-a-dollar-collapse-is-inevitable?gmrefcode=gata

A gold exchange standard depends on the honesty of politicians. History repeatedly shows that politicians or bankers of generals will jack up the money supply to create and finance wars. The Report from Iron Mountain says that peace must be avoided at all costs.

http://stopthecrime.net/docs/Report_from_Iron_Mountain.pdf

"Throughout the last four decades there is a direct link between the actions of the Federal Reserve and the eventual economic and market outcomes due to changes in monetary policy. In every case, that outcome has been negative."
Everybody is throwing stones at the FED. It wasn't the FED that voluntarily elected to buy State debt in the run-up to WW I. Though, if truth be told, the banks made a lot of money on the world wars. The U.S. Treasury
sends over bonds to the FED to be monetized. The FED sends back money for wars.
Alan Greenspan, " I never said that the FED was independent".

All wars have been bankers wars. Is the State forcing the banks to go along? Does regulatory capture of the State by the bankers initiate wars?
This is a very good article and, you should read all of it.
The Next Crisis Will Be The Last | RIA

"According to Claudio Grass, of Precious Metal Advisory Switzerland, the total trading volume in the London Over-the-Counter (OTC) gold market is estimated at the equivalent of 1.5 million tons of gold. Only 180,000 tons of gold have actually been mined up to today."

https://www.rt.com/business/415131-gold-prices-rise-2018/

The Bretton woods agreement was executed to stop competitive devaluations between various states. It had the weak point in that it was tied to a particular currency,,, the U.S. dollar. The next gold standard will not be linked to any currency. It will be a gold-trade note. It will be 100% convertible.
Credit binges are a precursor to war. Will Trump resist the temptation?
This article (repost) goes on and on about all the sectors that will need a federal bailout. Will it happen?
The Next Crisis Will Be The Last | RIA

[Danny B]

Global mean wage = no discretionary spending

Armstrong prides himself on taking every little detail into account. I disagree.
"World trade, even in nominal dollars, peak in 2008. To think that a trade war will somehow reverse the trend is rather absurd."
China impoverished their best customer and, trade is falling.

https://d33wjekvz3zs1a.cloudfront.net/wp-content/uploads/2018/04/China-World-Trade-as-of-GDP-1024x567.jpg

"China has been turning inward building its domestic economy."
I'm not so sure of that. China has the fastest shrinking work force so, that has driven wages up a bit.

https://tradingeconomics.com/china/wages

All that hot money that the PBOC printed caused price inflation, http://3.bp.blogspot.com/-Jic9a2H8zy...ood+prices.PNG100% floated by credit. Americans can no longer afford to buy a trailer.

https://www.zerohedge.com/news/2018-04-04/ubs-warns-americans-can-no-longer-afford-mobile-homes

"Looking at world trade as a percent of GDP around the globe reveals that Canada is 64.3%, Japan 31.23%, Mexico 78.11%, United Kingdom is 58.02%, France 60.46%, Germany is 84.26% and Norway is 67.40% with Sweden coming in at 83.70%. The European Union as a whole stands at 82.62% and the Middle East as a whole stands ar 85.74%. "
We're all going to get rich doing each other's laundry.
World trade can be closely compared to the fortunes of the West, As we slide down towards a global mean wage, trade slides down.

"This demonstrates what I have been saying all along that the US economy is holding up the world. If Americans stop buying, the world goes into a major depression. Both China and Japan are below the 40% mark showing that they have been developing a domestic market more so than Europe"
Both Japan and China have a crashing population number.

https://www.armstrongeconomics.com/world-news/world-trade/world-trade-who-is-really-hurt-in-a-trade-war/

Americans are not going to hold up the world economy. Consumer default has turned way up.


"During the Great Depression, companies tried to support the market and were buying back their shares aggressively during the crash. It not only failed to support the market, it undermined the companies themselves and many failed because they could not raise money nor borrow money as the Great Depression continued."
"None of all this support had any impact in stopping the Crash. As I have stated many times, everything is connected. If the entire market is crashing, a company trying to buy back its own shares to support its share price has NEVER worked even once in reversing the trend."
It's different this time because these companies have free money.
"The analysis being punted around is that the crash from January was caused because companies stopped buying back their own shares. The analysis claims that $4 trillion in buy-backs have taken place since 2009 and they stopped because of regs and that was the cause of the crash."
ABSOLUTE truth.
Bernanke and Yellen kept the stock market alive.

The U.S. poverty rate is about 14%. "Social Security continued to be
the most important anti-poverty program, moving 26.1 million individuals out of poverty. Refundable tax credits moved8.1 million people out of poverty "

https://www.census.gov/content/dam/Census/library/publications/2017/demo/p60-261.pdf

Here is a rundown of China's options in a trade war.

https://www.zerohedge.com/news/2018-04-06/here-are-chinas-five-options-nuclear-trade-war?items_per_page=50&sort_by=thread&sort_order=ASC&page=0%2C0%2C0%2C0%2C0%2C0%2C0%2C0%2C2