Economic pressures

[Danny B]

Bank profitability,,, Hierarchy of need

The productive loop of the economy has NO NEED of currency expansion above and beyond the level of expansion created by increased productivity.
Monetary inflation is strictly the province of bankers. The same is true for the State. It too must depend on currency expansion. Here is an article that lays out the current situation.

BOJ Offers To Buy Unlimited JGBs After Yields Surge, USDJPY Tumbles
So, their central bank offers to buy government bonds without limit.
"the BOJ is set to launch a full-scale investigation to mitigate the side effects of its yield-curve control policy on bank profitability and government bond trading, "
" Deutsche Bank complaining vocally about the ECB's policies) similar concerns have spread in Japan where both banks and pension funds have been agitating for at least some yield curve steepening to increase NIM and support bank profitability."
"another factor that is likely playing a key role is the ongoing decline in BOJ bond purchases, which both the bond and FX markets have so far been sternly ignoring."
The private sector refuses to buy all that stinky paper.

Here is a chart of 10 year yields around the world.

http://thesoundingline.com/wp-content/uploads/2018/06/10-Benchmark-yields-for-g10-countries.jpg

Obama Ex National Intel Director Says Barry Is
Behind The Entire Russian 'Witch Hunt'
"Hence, this is a battle shaping up for the future; the final conflict over Marxism, which began with the fall of Communism in 1989. This final battle began 26 years from 1989.95."

https://www.armstrongeconomics.com/world-news/sovereign-debt-crisis/the-ship-is-sinking/

The currency war is just a war of confidence. The Chinese print to feed the dragon. America raises interest rates to starve the dragon.

[Danny B]

Speedbumps, pensions

Gresham's Law states that a bad currency will drive a good currency into hiding. Here is a perfect example. The Cook Islands produced a note that has gold in it. It is obvious that people will save it and put it aside. No fiat currency can compete with a currency of tangible value. This causes constant deflation of the circulating money supply.
Alt.Wedding For Gold Note | Thom Calandra's TCR Network

https://www.zerohedge.com/news/2018-07-24/warning-bond-yields-are-going-wrong-way

Powell is raising interest rates to draw in fleeing capital. The above article shows the flip side of the effects of trying to draw in new capital. As the ten-year bond goes up, it becomes more expensive for everybodymoney rather than familial support. Private saving for retirement just didn't happen. The reset will be a disaster for anyone who can't go out and work.

https://www.zerohedge.com/news/2018-07-24/retirement-industry-collapsing-can-blockchain-turn-back-tide

A couple of years ago in Germany, demonstrators in the street were yelling, "Merkel to Siberia, Putin to Berlin. " Expressing their dis-satisfaction with Frau Merkel.
Kunstler proposes that America trade Trump for Putin to have somebody respectable leading America.
Russia Attacked Us - Kunstler

https://www.goldmoney.com/research/goldmoney-insights/how-quickly-will-the-dollar-collapse

ALL currencies eventually crash. Gold will return after it's short vacation on the sidelines.

Understanding gold, https://safehaven.com/article/45806/...ot-About-Price

[Danny B]

Canadian debt


The builders built McMansions for everybody,,,, regardless of income.
Public pension survey, Overpromising has crippled public pensions. A 50-state survey | Wirepoints

Canada, China, Hong Kong Top BIS Worry List on Banking Crisis Risk story
11/29/2017 Canadian Households Most Debt-Heavy in the World story
11/17/2017 Canadians Paying Dearly for Their Housing story
11/09/2017 When Canadian Homeowners Walk Away From Negative Equity, Taxpayers at Risk

https://www.financialsense.com/danielle-park/canada-racing-down-wrong-track

https://www.globalresearch.ca/heroin-dealer-in-chief-afghanistan-source-of-90-of-the-worlds-heroin/5502813

[Danny B]

More speed bumps

US Lawmakers to Introduce Bill to Sanction Russia's Sovereign Debt
It's only 6% of gdp ? Their stock market is doing great.
Germany, France, Italy become biggest foreign investors in Moscow's economy
U.S. sovereign debt is about 120% of gdp but, who really knows?

Dollar detox: Russia's gold reserves near 2000 tons to set historic ...

https://www.rt.com/business/434197-russia-gold-reserves-record-high/

Sanctioning Russian sovereign debt won't have any effect. Maybe that was the way that it was planned.

BRICS launches practical dialogue on mutual payments in national currencies
You get the idea that Trump is trying to de-globalize with his sanctions.
Most In US Support Latest Trump-Putin Summit
I guess that the tweet is mightier than the pen.


But, but, but, the FANGS are the irrepressible darlings.
Busting balls,

Back in the '30s, all the farmers were going broke and losing their farms to the banks. Congress looked into this and figured out that there would be a HUGE national disaster if the banks took the farms.
No doubt.

NOBODY wants to take a good look at derivatives.

https://www.philstockworld.com/2018/07/24/wall-streets-derivatives-nightmare-new-york-times-does-a-shallow-dive/

Yeah, right

Trump incidentally side-swiped NATO and blew them out of the water.

https://www.strategic-culture.org/news/2018/07/23/nato-trumped.html

Merkel produced a feeble retaliation that was probably just what Trump wanted.

https://www.rt.com/business/434072-us-sanctions-india-oil-iran/

The "art of the deal" is the art of manipulation.

[Danny B]

The cost of the military (in)security complex

Most of you are aware that John Perkins wrote "Diary of an Economic Hit Man in 2004 about how the various international jackals go around raping the world. He later wrote an updated version where he claimed that 'they" were going after the biggest prise, America.

https://en.wikipedia.org/wiki/John_Perkins_%28author%29

https://cluborlov.blogspot.com/2018/07/us-intelligence-community-as-collapse.html

This would be a mega blob state organization.

[Danny B]

Wouldn't post, had to break it up

The possibility of A hard Brexit is starting to cause a bit of panic.

https://wolfstreet.com/2018/07/24/cliff-edge-brexit-threatens-34-trillion-of-derivative-contracts-uk-regulator/

"The path ahead narrows to a binary option: the status quo either enters a crisis that can no longer be pushed forward with financial trickery or another systemic "save" emerges by 2024 - 2025"
Good article.
oftwominds-Charles Hugh Smith: When Long-Brewing Instability Finally Reaches Crisis


No kidding. All of a sudden, wages become important. China and India set the ceiling on wages. Viet-Nam, et al reinforced the ceiling.
Robby the robot is pressing down from above.

Pakistan, like the Philippines has too high a birth rate and, too low an education rate.

Yes, Krakatoa in Beijing.

Did I mention that Powell was bring the ship-of-state up to ramming speed?


The short answer is, NO! The R.O.W. is in an economic war against Imperial America centered in Langley.

[Danny B]

Deflation by evaporation,,, FB,,, The Great Alignment

My post just got zapped. I'm leaving Saturday
morning so, There will be a few days interruption. Current posts will be abbreviated.
Saudi Arabia Halts Oil Shipments through key waterway after attack on tanker
I've always claimed that the oil passages will be closed by the insurance companies demanding higher rates.
Top US Shale Oil Fields Decline Rate Reaches New Record...Half Million Barrels Per Day
A NEW record

Why EU Unlikely To Become 'Massive Buyer Of US LNG'
We charge 30% more.
Turkish Lira Plunges After Trump, Pence Threaten 'Large Sanctions' If Pastor Not Released
The Lira is crashing any way. We're just attacking because they plan to buy Russian weapons.
'Plague Of Rats' Heading To Britain Lets hope that they infest the House of Lords.

Facebook Loses $150 Billion - 20% Of Value - In 2 Hours Over Growth Slowdown Projection
Zuckerberg Loses 16 Billion In 5 Minutes As FB Shares Crater - Big Stockholder Calls For His Head
EVERYTHING is controlled by confidence. Nobody came in and stole $16 billion. We will see huge deflation of valuations. Many of these devaluations will be based on a loss of confidence in future business. This will be the source of our coming "deflation".

Dem Congressman Intros Bill To Stop Trump From Using Office To Enrich Himself & Family
That's UN-AMERICAN v
Feds Spending Watchdog Site Riddled With Errors
I'm SHOCKED , I tell you,,, shocked.

So, it's no longer" unpayable", it is now irretrievable.

This means the death of Italian banks.

America has the only dollar printing press. The emerging markets have $13 trillion in dollar-denominated debt. We have apparently shut off this press.

Reportedly, The Great Alignment is on schedule.

https://www.armstrongeconomics.com/armstrongeconomics101/understanding-cycles/the-great-alignment-on-schedule/

"ANSWER: What these people who also tout gold will rise and nothing else fail to understand, is when confidence in government collapses, EVERYTHING rises. The Great Alignment appears to be on schedule."
I have to take issue with this. I'm not going to hold my breath waiting for wages to rise. If everything rises but wages, the working man will be much poorer.

https://www.theguardian.com/business...o-reveal-names
Rothschild Bank Under Criminal Investigation For Money Laundering ...
https://nworeport.me/2018/.../rothsc...ation-for-mone...
There seems to be a lot of investigation of people who were formerly untouchable.
Someone at B of A has a little side business,

https://sacramento.cbslocal.com/2018/07/26/safe-boxes-stolen-drilled/

[Danny B]

Large mixed bag

There is no possible way that I can catch up for time missed in Oregon.
I'll post some links with a heading for the subject.
A big bond fund suspended redemptions.

https://www.zerohedge.com/news/2018-08-02/gam-fund-suspends-redemptions-all-billion-dollar-fund-investors-should-worry

The pension funds seem to have a $5 trillion shortfall.

https://www.zerohedge.com/news/2018-07-31/doomed-5-trillion-us-pensions-shortfall-now-size-japans-economy

Philly looking for tax money to cure mismanagement.

https://www.zerohedge.com/news/2018-07-31/bankrupt-philadelphia-plunders-its-property-owners-cash

Chicago is as crooked as you might expect.

https://www.zerohedge.com/news/2018-07-27/chicago-funnels-third-property-taxes-mayor-managed-slush-funds

The corporate tax cuts are a last hail mary.

https://stephenlendman.org/2018/07/near-lowest-ever-us-corporate-taxes/

A timeline of the disintegration of the Euro.

https://www.project-syndicate.org/commentary/twilight-of-the-euro-by-hans-werner-sinn-2018-07

Greek debt is back in the news.

https://www.zerohedge.com/news/2018-07-31/euro-tumbles-imf-warns-greek-debt-sustainability

It appears that Uncle Sam needs a lot of extra money after he drastically cut taxes.

https://www.zerohedge.com/news/2018-07-30/us-debt-sales-surge-treasury-raises-2018-borrowing-need-133-trillion

John Hussman famously lost a LOT of his clients money from mis-calculating.

https://www.hussmanfunds.com/comment/mc180725/

YES, but, Armstrong said that Treasury debt is going to completely crash going into 2020. Keep in mind that ALL sovereign debt eventually crashes. In the interim , it is considered risk-free.
"Put simply, despite long-term economic growth, the real return on stocks can be zero or negative for very extended periods of time when measured from a valuation extreme like today "
Excellent article.

Chinese oil-futures contracts.

https://www.zerohedge.com/news/2018-07-30/chinas-oil-futures-contract-beginning-show-its-teeth

The FAANG stocks are turning ugly.

https://www.peakprosperity.com/blog/114231/faang-nary-coal-mine#comment-217259

The corporatocracy.

http://cafr1.com/TheWay.html

The new aristocracy. The 9.9%

https://www.theatlantic.com/magazine/archive/2018/06/the-birth-of-a-new-american-aristocracy/559130/

[Danny B]

Markets floundering, revolution in Italy

"I have a rather simple Bubble definition: "A self-reinforcing but inevitably unsustainable inflation."
"China's central bank injected Rmb502bn ($74bn) into its banking system on Monday to help fortify a weakening domestic economy"
"Italy's Target2 liabilities rose $16.3 billion during June to a record $481 billion, with a two-month gain of almost $55 billion. It's worth noting that Italy's liabilities surged from about zero in mid-2011 to $289 billion at the height of the European crisis back in August 2012"

https://creditbubblebulletin.blogspot.com/2018/07/weekly-commentary-latent-fragilities.html

The article talks about fragility in the Italian banking system. The Italian GOV is getting ready to blow the banking system to smithereens in it's search for taxes.
Revolution in 2020, https://www.armstrongeconomics.com/w...isis-for-2021/

"Amazon, Netflix and Microsoft together this year are responsible for 71 percent of S&P 500 returns and for 78 percent of Nasdaq 100 returns.

The three stocks make up 35 percent, 21 percent and 15 percent of S&P 500 returns, respectively, while making up 41 percent, 21 percent and 15 percent of Nasdaq 100 returns."

https://www.financialsense.com/chris-puplava/and-then-there-were-none-0

Investors know that the stock indices are a pile of hot steaming BS. They don't seem to care. Investors know that 95 million are NOT in the labor force. They just read the 3.9% unemployment numbers and, go with that.
The interest-rate death spiral, https://www.dollarcollapse.com/inter...iral-starting/


I guess that 1 million percent inflation is a pretty good indicator.

[Danny B]

Borrowing money like there is no tomorrow

Armstrong, "This is why low rates in Europe have FAILED to stimulate demand when people lack confidence in the future, they will NOT borrow at any rate. Expectations of profit MUST exceed the level of interest rate before people will borrow. They function differently than governments which are addicted to debt and borrows all the time with no cyclical expectation."
Government has NO plan to repay what it borrows. It acts like a 10 year old with an unlimited credit card.

https://www.armstrongeconomics.com/markets-by-sector/interest-rates/european-banks-lending-in-usa-rather-than-europe/

"The mother of all credit crises is coming to China with over a quarter-trillion dollars owed by insolvent banks and state-owned enterprises, not to mention off-the-books liabilities of provincial governments, wealth management products and developers of white elephant infrastructure projects."

https://news.goldcore.com/ie/gold-blog/heres-where-the-next-crisis-starts/

About that Dragon;

https://www.zerohedge.com/news/2018-07-30/record-18-chinas-gdp-goes-debt-service

A Record 18% Of China's GDP Goes To Debt Service

Canada is squeezing the taxpayer even harder.

https://www.armstrongeconomics.com/world-news/taxes/canada-global-warming-tax-up-to-1000-per-household/

Yep, you max out your credit card when it becomes apparent that you can never pay back the debt.


I'm SHOCKED, I tell you,,, shocked

John Hussman fell for this one. It takes more than extreme valuations to bring on a crash. He came to the conclusion that extreme valuations MUST be coupled to a fall in investor confidence to finally crash the bubble. Since the CBs have been buying up everything in sight, the markets retain a picture of confidence. FED GOV continues to report totally BS labor and growth statistics and, the investors lap it up.
Eventually, fear will overcome greed. Meanwhile, FED GOV needs to borrow $1.3 trillion to buy another boatload of confidence.

The CB in Japan threw all caution to the wind and, eventually bought up 70% of exchange traded funds. They had been expecting enormous price inflation to go along with all the money creation. This did not happen. All the quantity of money theorists found that their theories just didn't work out. The money is stuck in the upper loop and does not cause much price inflation in the lower loop.
In about 500 years, somebody will "discover" that an economy can not have much price inflation when wages are static and the population is falling. Asset inflation is related to money printing. Price inflation is related to an increase in wages and consumptive power.
The low-wage economies have set a concrete ceiling on wages. They have impoverished their best customers and everybody is stuck on the bottom.
Just as no State can have a gold-convertible currency, no economic regime can afford to raise wages.

The blob state is millions of bureaucrats that are determined to keep their paychecks rolling in. NO tax is too high,,, no fine is too exorbitant. They have descended on Europe like a plague of locusts.

[Danny B]

The transactional currency can never be used as a a store-of-value.FOFOA shows good logic to believe that gold will eventually settle in to a price that has the equivalent purchasing power of $55,000 an ounce.Not that simple but, go on.Gold backed sovereign bonds, NOT currency. Remember, it is inflation of the bond market that is utilized to finance wars, not currency inflation.

https://www.theautomaticearth.com/2018/08/gold-yuan-crypto/

Jim Willie, "the emerging Systemic Lehman Event in a global financial crisis during the climax global breakdown underway, as nothing was resolved since 2008 while all major sovereign bonds have turned subprime and many banking systems in ruins, the gradual installation & implementation of the Gold Standard from the many substantial Eastern endeavors, where the United States must source the gold for a new gold-backed currency with the ongoing concurrent risk from the $600 billion trade deficit, which must be eliminated, "
"Three requirements stand as critical in establishing the Gold Standard for the USDollar. They will be extremely difficult to implement and to satisfy. Several giant treasure troves of gold are coming to the fore. They can potentially alter the global financial setting in a significant way."
GOLDEN JACKASS.COM - The Golden Jackass Knows Gold, Currencies & Bonds"

The whole system is expected to blow. We live in a multi-polar world, NOT a post WW II world. America will NOT be dictating the shape of future world finance. There will be NO move to a gold trade note and / or gold backed sovereign bonds until it all comes crashing down. The current lock on finance held by the FED will NOT go quietly into the night.
Bretton Woods depended on trust in politicians. The world will NOT make that mistake again.
One (blockchain) to rule them all.

[BroMikey]

The future is closing in on us and

The whole system is expected to blow.

The current lock on finance held by the FED will NOT go quietly into the night.

I wonder how much extra cash will be in hand after pedophiles in Rome
have all of their assets taken away and put into US banks, oh and the rest
the people in the mob, ISIS and more get their's ceased?

We are talking trillions. The USA has declared marshal law on serious
human rights violator WW. The corruption in congress and all forms
of govt are wealthy thru trafficking.

Time is up, time to pay up and the banking system will return to a more
stable system.

[Danny B]

The very small future of the banking industry

Most of the banking system is just going to disappear. It is inefficient and archaic. Something like Blockbuster
Banking was invented to get around some bottlenecks.
"Coincidence of wants is the reason that money is so important in an economic system. Or rather, I should say money is important because it is rare to have a coincidence of wants. Coincidence of wants occurs when two people have goods or services that they want to trade with one another."
Enter the computer.
The Exploding Business of Bartering - Harvard Business Review

https://hbr.org/2012/09/the-exploding-business-of-bart

Sep 12, 2012 - Companies are bartering everything from cars to jet fuel to legal services. ...
Banks were used to store excess wealth and put it to work in the form of loans. They long ago left this behind. After the default cascade, nominal paper wealth will be reduced by at least 90%.

SS graph, http://media.peakprosperity.com/imag...2018-07-20.jpg
FED GOV interest payments, http://media.peakprosperity.com/imag...2018-07-20.jpg

https://www.peakprosperity.com/blog/114209/america-insolvent

Reportedly, Powell is trying to slowly deflate the bubble.

https://www.zerohedge.com/news/2018-08-03/everything-bubble-has-founds-its-pin-pins-name-jerome-powell

Just wait until China and the Eurozone hit the wall.


Everybody is selling tacos out of the back of their car.

Give it time and, you won't have to travel to Brazil to see this chaos.

"Before Keynes there were macro considerations, which were firmly grounded in human action, the personal preferences and choices exercised by individuals in the context of their own earnings and profits. In order to give a role to the state, Keynes had to get away from human action and devise a positive management role for central planners. "

https://www.goldmoney.com/research/goldmoney-insights/macroeconomics-has-lost-its-way?gmrefcode=dollarc

It took a while but, that idea is blowing up.
"With sound money, that is money that is gold, or substitutes that are fully backed by physical gold, human behaviour is self-correcting through the price mechanism,"

https://www.goldmoney.com/research/goldmoney-insights/macroeconomics-has-lost-its-way?gmrefcode=dollarc

The State doesn't want any "correcting".

[Danny B]

Exporting unemployment

We think that America is falling apart. Foreigners like Brazilians want to come here because everything is great. The same is true for the U.S. dollar. It looks great compared to all the rest. Capital flight keeps pushing the dollar higher. As the dollar goes up, employment falls. Trump wants a weaker dollar but, the markets have other ideas. At the core of everything, a weaker currency exports unemployment. A.I. and robotics are chipping away at job niches and the State is desperate to hold on to whatever jobs are still left. At the same time, we have a falling population of consumers and an enormous SKILLS GAP.
There is no solution for efficiency and, automation will continue to chip away at employment. The coming crash of FED GOV in 2020 will put millions on the street who depended on the State to provide make-work to keep them behind a desk. For the time being, every State is trying to export unemployment.

https://www.jpost.com/International/A-closer-look-at-the-currency-war-with-China-564069

Light It Up? - Kunstler

[Danny B]

Who knows how much money is going where?

Interest rates are the big bugaboo right now. Trump wants them held down. Remember that low interest rates wipe out, investment funds, pension funds, insurance funds, savers AND banks. There is a good reason that ZIRP is "never" done. It is just too destructive. Like drinking cheap tequila, the follow-up pain just isn't worth the high. Trump needs to keep in mind that bond buyers will go on strike if they feel that interest rates are too low.

https://dailyreckoning.com/trump-takes-a-page-from-nixons-playbook/

The Quantity of money

https://www.bloomberg.com/view/articles/2018-08-05/how-to-end-japan-s-deflation-abolish-cash

Jun 4, 2018 - Japan's population is shrinking by more than 1000 people per day.
How Japan's ageing population is shrinking GDP | Financial Times

https://www.ft.com/content/7ce47bd0-545f-11e8-b3ee-41e0209208ec

Feces-for-brains planners have overlooked the problem of babies.

Good article from the Mises institute.
"some of the borrowed money is simply not included in the deficit. For example, in fiscal year 2016, they claimed a deficit of $587 billion even though the total debt increased $1,422 billion "
" They hide some of the deficit by simply declaring that some of the increased debt is not part of the deficit."
"The Treasury Department with their Daily Treasury Statements (DTS) gives us an accounting of all deposits into and withdrawals from federal government accounts. The DTS shows that withdrawals more than tripled from $4,036 billion in FY 1998 to $12,995 billion in FY 2017. "

If we define spending as total withdrawals from government accounts, then FY 2017 spending was $12,995 billion and government spending is 67% of GDP. Ah yes, about those tax cuts.

"Government spending is 67% of GDP."
"federal spending is reported to be 20.5% of GDP."
Now you see why interest rates must be held down. The bond buyers will run away when they perceive that federal debt is too high to service.


"Nearly half of Americans say their expenses are equal to or greater than their income.
That leaves 60% of Americans who spend about equal to their income (38%) or who spend more than their income (18%)."
I know guys who spent $70,000 on a pickup truck they didn't need. No tears for them.


The default party will be much bigger this way.

"The net result is whatever actual "growth" has occurred (removing the illusory growth that accounts for much of the GDP "growth" this decade) has flowed almost exclusively to the top of the wealth-power pyramid (see chart below)."
That GDP growth seems to have been accomplished with GOV money, "Government spending is 67% of GDP."
The U.S. Government To Fork Out A Half Trillion To Service Its Debt In 2018
"bogus "growth" story without question because that story is the linchpin of the entire status quo: if it's revealed as inaccurate, i.e. statistical sleight of hand, the whole idea that "growth" can effortlessly fund all future obligations goes up in flames."

It seems likely that US GOV is doing the buying. According to Armstrong, the flames will hold off until 2020.

"6. The core constituencies of politicians are government employees and contractors, as these interest groups are funded by the government, which is nominally managed by elected officials and their appointees. Nobody's more generous (or demanding) than those feeding directly at the government trough. (By "contractors" I mean the vast array of Corporate America cartels that feed off government spending: defense, Big Pharma, Higher Education, etc.)"
Hegel would love this arrangement.
"Once the asset bubbles pop, the illusion that "taxing the rich" will pay for all the obligations pops along with the bubble. "
"That 20% is an interesting threshold, as once federal tax burdens rise above 20%, the higher taxes trigger a recession which then crushes tax revenues."
Good article, oftwominds-Charles Hugh Smith: We'll Pay All Those Future Obligations by Impoverishing Everyone (How to Destroy Our Currency In One Easy Lesson)


Facebook wants to "friend" your bank account,
Facebook Asking Major US Banks To Share Users' Financial Data