Economic pressures

[Danny B]

The cost of war II

"The American Empire is the hypertrophied remains of two players in the Cold War. The Soviet Union is gone, but the U.S. is still there and has taken advantage of the absence of competitors to monopolize global power.

In 1991, logic would have had Washington using its resources to develop its business and prosperity. But after several hesitations, the Republican Congress foisted its global imperialism on President Clinton in 1995 by voting for rearmament even though there were no more opponents."
Towards a World Without the United StatesPressTV - As ye sow, so shall ye reap

There you have it. Eisenhower warned us about the military industrial complex. When America ran out of enemies to justify a military buildup, it had to invent and manufacture enemies. Lacking enough external enemies, GOV had to find and classify internal enemies.
Activist Post: 72 Types Of Americans That Are Considered “Potential Terrorists” In Official Government Documents
America was bankrupted in a vain attempt to create/maintain an empire.

Belligerent empires all come to the same end eventually. Same story,,, different century. GOV created the "plunge protection team" to ensure market stability. Markets go up and markets go down. The PPT ensures that markets only go UP. Markets don't work that way and exuberance eventually outruns reality.
"There Will Be No Place To Hide" - Markets Are Over 50% More "Exuberant" Than In 1996 | Zero Hedge
Time for "duck and cover".

[Danny B]

Dirty money and GOV

Willie Sutton was asked, "why do you rob banks?" He replied, "that's where the money is".
Decades ago, organized crime recognized that it would get increasingly more difficult to hide the ever-growing amounts of dirty money. They started buying legitimate businesses to clean up the money. Brown-Ferris Industries was a good example of a business created with Mob money. A lot of Mob people were quite wealthy and had to move a lot of money.

http://www.kepplerspeakers.com/literature/Franzese%20M-Article%20%28Fortune%20-%2050%20Biggest%20Mafia%20Bosses%29.pdf

Since the Mob had always been into loan sharking and "numbers", it made sense to go into banking. Since the Mob had always bought off politicians, it made good financial sense to continue this. This created new monopolies that had new "protections". The Graham-Leachy bill gutted the Glass-Steagal Act.
This is just logical business practice. You can see all this at work in that NOBODY in the financial industry has been indicted or prosecuted. The SEC and A.G. Holder have been very accommodating. ALL the banks have been involved in money laundering. The courts have been very accommodating also. When M F Global stole hundreds of $ millions of customer money, the 9th circuit court held them blameless.
Gerald Celente has a lot to say about the Mob running the banking industry.
Gerald Celente Financial mafia controlling US and Wall Street.mov - YouTube
When John Corzine was a member of congress,he voted in favor of the Sarbannes-Oxley Act. This act made it a personal felony if the CFO did not know where all the money was. When Corzine was later hauled in front of congress to testify about the huge disappearance of funds under his control, he replied, "he just didn't know what happened to all that money".

ALL banks had been laundering money and several received token fines. NO PROSECUTIONS or indictments.
The Vatican bank was used to launder huge amounts of Mafia money. The Pope stepped down because he didn't have enough remaining time or energy to clean up such a huge mess. The new Pope crashed the laundering system and it is rumoured that the southern Mafia wants a "hit".

Software developers who specialized in tracing hot money have been murdered also. Not all Mob money has gone legit and there are still plenty of Mob bosses around.
Top 15 Crime Bosses and Drug Lords in 2012 - Listverse
There is fairly transparent control of banking by the Mob. They made a LOT of bad bets and are forcing the public to cover their loses.
The corporate control of GOV is referred to as fascism. Mussolini said that it should be called "corporatism". We see corporatism everywhere. The bankers sit at the top of the corporate heap (control structure).

They own and control the FED and IRS. In true Mob fashion, they control the guns. They get the laws that they want. The U.S.A. is a corporatocracy at the highest levels. Since both GOV and MOB are parasites, they have little concern of our welfare or survival. The corporatocracy is our enemy.
We Are Your Enemy - YouTube

Since the corporatocracy has transferred our wealth to themselves, we are much poorer. We are expected to work off all the debts that they transferred to the public sector. The wealth that they stole is no longer circulating in the lower loop of the economy and unemployment is rising FAST. The imagine that we are increasingly unhappy with this situation and are unrolling a police state to keep us under control. A police state requires a high level of control so, we have a surveillance state to go along with it.

It would look bad if millions were starving so, those who have money but are not part of the control group will be robbed of their money to support those who have no income. The middle class will be completely fleeced of everything in the banking collapse. The whip-hand of corporatism will institute socialism to keep the millions of dispossessed from starving or rioting.
We will have fascism for the 1% and socialism for the 99%. Since socialism kills incentive, the economy will continue to implode. It remains to be seen if the police state can contain the 99%.
To make things even worse, fracking is crashing badly and oil production is falling FAST. Energy will be getting ever-more expensive. Since energy is the master resource, everything will go up in price.
The 99% are expected to pay off the debts incurred by the Mob (bankers) but, how can this happen if the 99% are unemployed. The usual outcome is privatization. WE renege on our debts to the bankers so, the take over infrastructure and resources to insure that their progeny are never poor.

[Danny B]

non-dollar oil

The rest of the world is very tired of Anglo American bankers and military stomping around the world and stealing/killing everything in sight.
Any country that tried to escape the dollar and sell oil in some other currency soon found their country bombed back to the stone age.
Iran, Venezuela and Russia have agreed to send all of their oil to China and let China broker it. China said that they are setting up an oil bourse and MAY price oil in Yuan.
China's planned crude oil futures may be priced in yuan - SHFE | Reuters
Ron Paul said that timing the collapse of America would be easy if you watch the petro-dollar.
Timing the Collapse: Ron Paul Says Watch the Petrodollar - International Man

America is producing LOTS of oil from fracking but, the rate of production is falling FAST. Growth here has come to an end and we aren't using as much oil now.
Gregor Macdonald: What Happened to the Future? | Peak Prosperity
BUT, as fracking falls off, we will need to import oil. Our largest supplier, Canada has signed on to export to China. Mexico has run dry. Saudi Arabia demanded that we attack Syria and Iran. We didn't do that and now they are angry.
Gold and oil flow in opposite directions. Our gold is flowing East. We are still receiving oil but, for how much longer?
Things are bad now but, they will probably get much worse. Unemployment is rising fast and people can't survive. There is talk about some very crazy solutions and talk about revolution.
There is talk of revolution in the air - Telegraph

The criminals have run the system right into the ground and there is no saving it. A new system might be instituted/created but, what can it do about low-wage competition?. What about robots and 3D printing?
We can't very well survive on Chinese wages.
There are so many problems because so many pieces of the economy have been destroyed.
Guest Post: 9 Plagues That Are Collapsing Capitalism | Zero Hedge

3D printing holds great promise. BUT, what about manufacturing, warehousing and transportation? While new technologies promise price deflation, they also bring job destruction.
The 1% thought that it was pretty cool that they got all the money. BUT, now, they see a small problem of collapse and destitution. Even Larry Summers is talking about sending a check to every person in the country so that they will be able to afford to live.
The rich hold paper wealth that are promises against future productivity and wealth. The promises aren't worth much if there is no economy.
American consumptive power is falling. As the price of energy rises, more money flows into energy costs and flows out of the rest of the economy. This has a predictable effect on employment.

Many countries have done currency swaps with China. If China opens a bourse and sells oil in Yuan, these countries already have yuan. They can buy oil directly without first buying dollars. They will desert U.S. dollars and treasuries. China recently announced that it had enough money in it's reserve fund. They didn't need any more. They will stop buying U.S. debt.

America rolls over roughly $ 7 trillion in debt every year. The treasury admits that default in rollover is a real possibility;

http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=5802&context=faculty_scholarship

If all the dollar-debt holders turn in their no longer needed dollars at once, GOV could default from illiquidity. Wait and see.

[Danny B]

Marc Faber, Karl Marx and the pathology of bankers/politicians

Marc Faber publishes the doom, gloom and boom report. He has a good background in both academia and investing.
Karl Marx and J.M. Keynes knew a lot about the economy and were right on many questions. Both of them espoused socialism as a cure for runaway capitalism. Karl Marx had this to say about capitalism;

"So it would seem to me that Karl Marx might prove to have been right in his contention that crises become more and more destructive as the capitalistic system matures (and as the "financial economy" referred to earlier grows like a cancer) and that the ultimate breakdown will occur in a final crisis that will be so disastrous as to set fire to the framework of our capitalistic society."
Marc Faber Warns "Karl Marx Was Right" | Zero Hedge

"Not so, Bernanke and co. argue, since central banks can print an unlimited amount of money and take extraordinary measures, which, by intervening directly in the markets, support asset prices such as bonds, equities and homes, and therefore avoid economic downturns, especially deflationary ones. There is some truth in this. If a central bank prints a sufficient quantity of money and is prepared to extend an unlimited amount of credit, then deflation in the domestic price level can easily be avoided, but at a considerable cost."

Bernanke has the depth of knowledge of a wading pool. That is why he is in academia where nobody criticizes each other's stupid ideas.
HE CAN'T PRINT JOBS.
He cheapens the currency to create jobs in the value-added industries like manufacturing. This just starts/continues a currency war. EVERY country wants to create and hold on to value-added jobs. Every country wants to have a positive balance of trade. It doesn't work that way. For every country that has a positive balance, some country much have a negative balance.

China has a positive balance of trade but, much of this was accomplished by having vendor-finance. Japan at one time held $ 867 billion of U.S. paper. We bought Toyotas,,, sent the money to Japan,,, Japan sent it back to U.S. GOV. U.S. GOV spent the money for welfare/warfare. The various buyers of treasury debt have left the scene of the crime and the FED is buying 97% of new issuance.

Marx, "so disastrous as to set fire to the framework of our capitalistic society."
When an industrial economy fails, the people must revert to an agrarian or hunter-gatherer economy. When Rome was failing, the emperor forbade Romans from fleeing to the countryside to do subsistence farming.
The State has very little control in rural areas compared to urban areas. Agenda 21 shows clearly that GOV prefers that people are concentrated as much as possible in urban areas. Control is the main objective. Smart water and A.C. meters will insure compliance.

The criminals are running the show and they know that they won't have to pay for the consequences of their actions.

" It's little wonder so many sociopaths end up in positions of power: power attracts the ruthless unencumbered by empathy.

There is an ontological darkness in centralized power, and it flows from the disconnect between authority, responsibility and consequence."
"All centralized power carries the same pathology: those with the authority are never exposed to the consequences of their authority"
"This pathology is not the result of individual psychology or character; it is the result of centralized, concentrated power itself"
charles hugh smith-The Dark Heart of Centralized Power

Mussolini and Ceausescu were rare exceptions. they were killed by their own people. The powerful protect each other. Idi Amin killed about 1.3 million. He died peacefully in his sleep in a Saudi palace.
DE-centralization is the real solution.
Kill them all - Crixus - Spartacus [ORIGINAL] - YouTube

[Danny B]

money drain for inflation and energy

James Kunstler makes his money writing doom books and reports. He centers his writings on peak oil. He has a lot of facts going for him. There has been a lot of recent oil discoveries like Coober Pedy and the oil kitchen.
BUT, there haven't been any major discoveries in America. There is lots of drilling for shale oil but, it's mostly hype. It's declining FAST.


"Also last week the IEA released
its most recent Energy Outlook which predicts that the U.S. shale boom
will peak in 2020 and that we are in for a future of higher oil prices."

Kunstler has made a pretty good argument that; as energy prices rise, we spend more for energy and have less to spend for everything else.
Kunstler is undoubtedly right, "Lafakis said that every penny that gasoline prices rise costs consumers a billion dollars over the course of the year."

That is just for gasoline and doesn't include heating oil, etc. Oil was $ 29.49 in 2002. Historical Oil Prices: InflationData.com
Higher energy prices are choking off much of the rest of the economy.

Cheap domestic oil peaked a few years ago. Mostly because of inflation.
The Rising Price Of the Falling Dollar - Forbes
We have reached and passed peak cheap oil 5 or 6 years ago. The problem is that we reached and passed peak-wages . This is relevant because "peak wages" occurred a few decades ago. There is no wage-price spiral. The credit driven economy will eventually revert to where it is commensurate with actual wages and productivity. America will become like many other countries. Few people will have private cars. Cheap peak American oil is here to stay.

Oil didn't get more expensive so much as wages dropped. GOV still makes more on a gallon of gas than the oil Co. Kunstler claims that the fast rising cost of energy caused a fast falling drop in other economic activity. This was papered over by extending more and more credit.
Bernanke is printing to (effectively) drop American wages and gain market share in manufacturing. He says that he will print until unemployment drops to 6.5 %. We may gain a bit of market share in manufacturing.

This will be more than offset by the huge losses in the domestic economy caused by higher prices (reduced wages).
Easy money causes hard times for most people. Those who print the money or get it for free don't feel any pain.
The Mythical Merits of Paper Money

[Danny B]

Interest and negative interest

Post-war America had a lock on manufacturing and wages went way up. This came to a sudden end when we went off the gold standard in 1971.

http://upload.wikimedia.org/wikipedia/commons/7/73/US_productivity_and_real_wages.jpg

Since then, we maintained our standard of living by spending tomorrow's wages,,, today. Now, we are credit saturated and can't maintain our standard of living. Crony capitalism was/is used to fight off natural price deflation. Wages froze about 40 years ago and credit grew to match the loss in buying power. Debt saturation occurs when the cost of debt service erases the "advantage" of using credit.
NO PROBLEM !!
Banks/GOV just keep dropping the cost of debt service by forcing down the interest rate. Zero interest rate percentage, ZIRP.
The desired effect of ZIRP is to force savers to speculate in higher-return investments AND to force banks to loan money... to force up the circulation (velocity) of money.
A promissory note has a value of it's original face value PLUS the additional value of the interest that is due upon maturity. The interest value is multiples of the original face value.

http://www.anunews.net/blog/wp-content/uploads/2012/07/aa-compound-interest-chart-of.gif

SO, ZIRP severely reduces the total value of a promissory note.
As interest rates go down, the value of capital is destroyed

The central banks print enormous amounts of currency to hold down interest rates. At the same time, zero interest rates destroy the value of notes (capital). The nominal value of a mature note is enormously reduced ahead of maturity by ZIRP. THIS is capital destruction.
Currency printing creates new "money" at the same time that it destroys capital. Reportedly, we are in a net loss situation. Existing capital is being seriously deflated. New capital is being force-fed into the NON-productive sector of the economy. The productive sector of the economy is only "inflated" by the creation of new wealth, NOT by new money.

A paper dollar is not interest bearing so, people move to cash when investments do not offer any actual return. A debt note is worth (interest minus inflation) over the value of a federal reserve note (FRN). If the spread between interest and inflation is too low, people don't risk an investment,,, better to stay in cash.
GOV tries to inflate the dollar but, ZIRP is destroying capital faster than new capital is being created. GOV lowers the interest rate to try to get money off the sidelines. That didn't work so, GOV has a new solution.

DEMMURAGE CURRENCY
Demurrage (currency) - Wikipedia, the free encyclopedia
Capital is charged for being on the sidelines.
There is even a "bitcoin" that is a demurrage currency. Freicoin - easy-to-use demurrage currency
The new answer to economic malaise is negative interest rates.
"But even that might not be enough: Some economists think interest rates should be much, much lower than zero: Maybe negative four percent, before adjusting for inflation. Summers recently warned that the U.S. and other big economies could be in a near-permanent state of malaise -- like Japan since the 1990s -- because interest rates are still too high even at zero"
Larry Summers' Desperate Depression-Fighting Idea May Soon Be Reality
This becomes very interesting when you consider that the major religions forbid interest.

Here are a few more links on negative interest rates. The thing that they have in common is that they claim that this is a sign of desperation.
Dan White: Negative interest rates a desperate act - Independent.ie
This desperation is caused by high unemployment.
"4. After several years of near-zero Fed funds rates and QEs, employment lingers in the 7 to 8 percent range. At best, this is an optimistic statistic, in that it excludes all those who have dropped out of the labor market after not finding a job."
Ahhh yes, 7--8%.
Do you believe that 87 million Americans don't want a job?
Real Unemployment Rate Is Over 30% : Freedom Outpost

http://qzprod.files.wordpress.com/2013/09/civilian-unemployment-rate-_chartbuilder-1.png?w=1024&h=576

America’s huge mistake on monetary policy: How negative interest rates could have stopped the Great Recession in its tracks – Quartz

" but negative interest rates in the neighborhood of 4% below zero would have brought robust recovery by the end of 2009. "
Zero interest rates are for the banks only. You and I still pay3,4,5,6, %
This is all done to provide a profitable spread for the banks. I suspect that nobody thought this through. This would result in capital flight.

An article on the origin and justification of interest;
"Daily Bell: You stated previously that "the fratricidal war between the Time Preference School and the Productivity School of Interest must end." Can you explain the differences between these two theories? Antal Fekete: The Time Preference School teaches that interest exists because of our innate preference for present goods as opposed to the same quantity and quality of future goods. The Productivity School teaches that interest exists to the extent of greater productivity pursuant to the application of better tools. It never occurred to interest-theorists that both theories may be correct simultaneously. This omission resulted in a stagnation of the theory of interest that has remained the most backward chapter in economics to this day. - See more at: http://www.thedailybell.com/exclusive-interviews/34698/Anthony-Wile-Dr-Antal-Fekete-on-Real-Bills-Quantity-of-Money-Theory-and-the-New-Austrian-Economic-Manifesto/#sthash.GJRdfo8B.dpuf"

" the two theories can be merged in a happy synthesis. Just as the price of goods is not monolithic but splits into bid and asked prices, so the rate of interest is not monolithic either but splits into floor and ceiling rates. These two must be studied separately. The ceiling rate can be understood in terms of marginal productivity; the floor rate in terms of marginal time preference."

[Danny B]

Compound Interest

I wanted to do a comparison of the end value of debt notes at different interest rates to look at capital destruction. Historical rates of interest have been 5---6%. Volker pushed that to about 24% but, that is not the norm. .25% seems to be in vogue now.
$1,000 @ .25% compounded for 30 years yields a net payoff of $1,077.92
$1,000 @ 6% compounded for 30 years yields a net payoff of $5,743.80
I did this on an adding machine with a paper printout. Seems to be correct.

Since the value of bonds has gone way down, the FED is buying 93% of new issuance. Low interest also means that few institutions want to do new lending. Corporate loans are going off a cliff;

http://www.gordontlong.com/Articles/art-2013-C-Meltup_Monitor-Euro_Pressure_Going_Critical/art-2013-C-Meltup_Monitor-Euro_Pressure_Going_Critical-6.png

International investments are crashing. A big part of this is because Western European banks have HUGE exposure to crashing Eastern European loans;

http://www.gordontlong.com/Articles/art-2013-11-B-Meltup_Monitor/art-2013-11-B-Meltup_Monitor-8.png

Gordon T Long : Global Macro Economic Research

Goldman Sachs took over the GOV and got the laws (lack of) that they wanted. http://www.erikjheels.com/Images/art...hs-800x600.jpg
Fascism is a marriage of GOV and corporations. The corporatocracy ordered that taxes be reduced to nothing so that they could make a lot more money.

http://www.gordontlong.com/2010/Tipping_Points-2010-Articles-Extend_and_Pretend/04-19-10-Corporate_Tax-3.GIF

Extend & Pretend - Is the US Facing a Cash Crunch?
They ran with their overpowering greed and locked away many $ trillions. Not surprisingly, joe consumer has run out of money. The corporatocracy just figured that they would put their money to work earning interest. They never figured that plan wouldn't work in a world without consumption.
Everybody with extra money would get very rich loaning out their money.

This got too crowded and nobody was doing anything productive. They ALL planned to live off their portfolio. Einstein called compound interest the most powerful force in the universe.

As Karl Marx wrote on compound interest:
[Usury] does not change the mode of production, but clings on to it like a parasite and impoverishes it. It sucks it dry, emasculates it and forces reproduction to proceed under ever more pitiable conditions.

As the credit and debt system became more sophisticated, Marx saw money lending as a force that allowed Capitalists to extend control over others.

Read more: Compound Interest Is Responsible For Modern Civilization - Business Insider

Since bonds have lost a huge amount of value, money has moved into stocks. The PPT has pumped several $ trillion into the stock market to make it look good even though there are no earnings.
Plunge Protection Team (PPT) Definition | Investopedia
Just the same, the Russell index is screaming CRASH !

Money has also flowed into high-dollar collectibles.
At some point, everybody is going to head for the exit.

[aljhoa]

Labor Force Participation

In February 2013, there were approximately 38.9 million youth (16 to 24 years old) in the U.S. with 21.4 million participating in the labor force, that is, either working or unemployed. In other words, 55.1% of the youth population was in the labor force, corresponding to what is known as the participation rate (Figure 1).
Spotlight on US Youth



Lyndon LaRouche's November 15th 2013 Webcast - YouTube


Al

[Danny B]

Youth labor participation

Participation in Europe is even worse.
Europe's Peak Youth Unemployment Gets Peak-er | Zero Hedge
What happens to a country when you steal the future from the youth?
It's gotten so BAD that some people in Greece are purposely contracting AIDS so that they get some kind of support.
The elderly see that they aren't going to get a pension so, they keep working til they drop.
We had a head-on collision with low-wage competition. When containerized shipping was perfected, it threw all of our manufacturing into low-wage competition. The lowest wage producer squeezed out all the others.

http://3.bp.blogspot.com/-2Km8cpnUFhk/UIRyOqEU3HI/AAAAAAAAQWo/6FoO2TJezkM/s640/Imports+from+Asia.png

We thoughtlessly bought from our competition. Our main value-added industry was tossed out. We were warned years ago about that "giant sucking sound".
China was allowed into the W.T.O. and given , "most favored nation" trading status. It's not like any of this is a surprise. The PTB can point to the failure of capitalism and convince us that socialism is the answer.

[Danny B]

parasites, socialism and motivation

Society has always had some percentage of non-producers or people who produced less than they consumed. It started out with holy men who interceded with the gods. Then, along came thieves and beggars. Tom Waites adds lawyers to this list.
Tom Waits/Cookie Monster mashup - God's Away On Business - YouTube
America has 4% of the world's population and 50% of the worlds lawyers. They consume 1.6% of the GDP. They make sure that they have employment;
"Dodd-Frank Act, Aka The 2010 Full Employment Act For Lawyers, Accountants, And Consultants"

So, add bureaucrats to the list of people who don't actually offer anything productive to the economy. Add in most bankers and politicians.

Natural law does not favor non-producers. Non-producers do not favor natural law. Non-producers favor socialism or better yet.... communism with a nice fascist core reserved for them. They preach about the importance of the "collective". The collective may or may not be a good idea but, it runs completely counter to human nature. Man competes, IT'S THAT SIMPLE.
If he is frozen out of competition, he stops working. Look at the GDP of communist countries.
This doesn't stop non-producers from continually trying to impose totalitarian socialism on everybody else.

Control of credit and currency and food is always a good place to start. Crash a phony economy to show that socialism is a better system. Seattle just elected a socialist council woman who wants the workers a Boeing Aircraft to take over the plant and run it for themselves,,, and take the profit away from Boeing.

At this point, it is difficult to point to some action and say that it is a move towards socialism.
Keynes was a great proponent of socialism and a very smart guy. He proposed that interest rates be drive down to zero so that those who lived off only their money (rentier) would have to invest productively instead of just hoarding it. His "general theory" covers this;
The General Theory of Employment, Interest and Money by John Maynard Keynes
He calls it "euthanasia of the rentier"
Here is a doc examining the possibility of continual ZIRP.

http://www.itk.ntnu.no/ansatte/Andresen_Trond/she-f/att-0076/euthanasia_section_4.doc

As I posted above, Summers is calling for a negative interest rate to get money out of hiding and into circulation. This sounds suspiciously Keynesian.
Market Oracle has a good article on this "euthanasia".

http://www.marketoracle.co.uk/Article38764.html

There are a lot of calls for GOV to do something about the very high poverty. One thing that I recently read was a call to give everybody free money. That should do wonders for motivation.

It most certainly WILL do wonders for control.
"Allowing individuals to hold accounts at the Fed would result in a payments system that is insulated from banking crises."
"But the greatest benefit of such a policy would lie elsewhere, in providing the Fed with a vastly superior monetary transmission mechanism. In a brief comment on Macroeconomic Resilience a few months ago, I proposed that an account be created at the Fed for every individual with a social security number, including minors."


What a marvellous idea. To combat fraud, every individual would have a biometric ID card,,, or implant. Just wave your hand and look into the scanner. Paper money would disappear. Every facet of your life would depend on the integrity of a database. Every movement would be recorded.
Every penny that you didn't ( or couldn't) spend would be available for the bankers to invest.
The data base would look out for your best interests;
Ordering Pizza in the Future - YouTube
Socialism runs counter to human nature. The more that you remove motivation, the more non-producers you create.

[Danny B]

New news

This page has an interesting chart showing various countries' economies relative to their employment.
Currency Wars and the Euro

"The chart that compares pre-1929 and today is uncannily identical. "
Getting Ready for the Big One: February 2014 | Zero Hedge

TAE has a good article about U.S. states having financial troubles because they can't print currency.


An excellent article on Bitcoins;
Bitcoins: The Second Biggest Ponzi Scheme in History

The Euro area doesn't seem to have a workable plan;
OECD calls Europe's crisis policy unworkable, fears 'virulent episodes' in emerging markets - Telegraph

Then, there is talk of a whole new direction;
The Justification of Revolution

Reportedly, the military is unhappy with the direction in the district of corruption;
A Military Coup Will Remove Obama | Dave Hodges – The Common Sense Show

The mega state seems to be having problems;
Wired's Louis Rossetto on the Death of the Mega-State and the Digital Revolution - YouTube

A good vid on gun control;
Why Good People Should Be Armed - YouTube

[Danny B]

Credit and debt are not the same.

A good article on FLOWS: LIQUIDITY, CREDIT & DEBT
Gordon T Long : Global Macro Economic Research
At one time, all commerce was barter of tangible goods. Slowly, this was replaced by barter of receipts for tangible goods. Now, we have receipts for debts rather than receipts for tangible goods. Most wealth is based on debts.
In the West, if you want to be wealthy, you must work to accumulate a stack of debt claims. OR, you can just print them up like banks and GOV do.

This is a fools game and always comes to tears,,, unless you are a banker.
In the East, they know better. Paper money for transactions and gold for savings. Bernanke called gold a barbaric relic. Ron Paul asked him why central banks buy and hold gold. He replied, "Tradition".
In the East, they rightfully have no faith in paper for long term wealth protection.
America has about 3.5% of world population. Europe has a bit more. The West may claim that gold is useless but, the East doesn't believe it. This matters because the East has a huge economy and a huge potential. China has a lot of the world economy tied up because they are a powerhouse of manufacturing. There are a LOT of them and they have a LOT of markets.

http://pbs.twimg.com/media/BMTZCwDCAAA4sss.jpg:large

They do not need the West. If we want to trade with them, we will have to do it on their terms. If they want gold, we will have to pay in gold.

http://www.24hgold.com/english/news-gold-silver-the-eastern-lust-for-gold.aspx?article=4746514416G10020&redirect=false&contributor=Peter+Schiff&mk=1

China has stopped buying American debt. They aren't going to increase the holdings in their sovereign wealth fund. BUT, they can keep importing $ billions worth of stuff and just send back our debt instruments. The banks that are primary dealers for U.S. bonds have to accept them. The U.S. could default but, the Chinese could confiscate tangible assets of American companies in China.

The Chinese are currently on a huge buying spree to get rid of dollars. they are buying stuff all over the world. They are paying in part with U.S. debt notes. That means that Chinese-held U.S. debt is now in the hands of others. We would have to default to many other countries that now hold it.
Could get messy.

[Danny B]

The Corporatocracy

Many of the original North American colonists fled Europe to escape the control and predations of royalty. Royalty was not eager to lose control. There are relatively strong claims that the colonists produced a constitutional amendment to prevent royalty or their agents from gaining control. It is claimed that this amendment was never ratified.
Original 13th Amendment Is Missing

We seem to have a new royalty that wants total control.
Are Economic Royalists Leading the US Over a Precipice?5 Red Flags of Imminent Economic Collapse | munKNEE dot.com
The lag between a energy price spike and economic collapse seems to be about 5 months.

One could expect the economy to shrink. Employment and aggregate wages are shrinking.
"#4 There are 1,148,000 fewer Americans working today than there was in November 2006. Meanwhile, our population has grown by more than 16 million people during that time frame. "
PressTV - 37 reasons why 'the economic recovery of 2013' is a giant lie
Considering that the West crashed into a low-wage competitor, it comes as no surprise.

GOV always wants to preserve the status-quo because THEY are in power. GOV doesn't look to employ people who might rock the boat. Bernanke is a good example. He has no imagination. He printed up trainloads of money. This drove investors out of the bond market and he was able to drive interest rates down close to zero.
Banks are always happy to loan to GOV because GOV has the guns to force the tax slaves to work. Banks always front-run the Central banks.
When interest rates dropped to zero, the big banks created synthetic instruments that were essentially bets that interest rates would never rise. There are currently about $ 441 trillion in these interest rate swaps.
Since the banks consider themselves too big to fail, they plan to just sit back and collect from GOV when interest rates rise.

BUT, the bets are just too big to pay off. Too big to fail has become too big to bail. The FDIC has about $ 23 billion in capital. They insure about $ 72 trillion. This is illustrative of the ratio of capital to potential losses in the system. Another entity that nobody is talking about is the Pension Benefit Guarantee Company. The PBGC guarantees 44,000 private pensions. Since most pension systems are expected to crash from the zero interest rates, the PBGC will crash along with them.
The PBGC’s perfect storm | BenefitsPro

The people who predicted all of this are claiming that massive GOV printing pulled us out of the great recession but, consequently threw us into the greater depression.
SPDR Gold Trust (ETF)(NYSEARCA:GLD), iShares Silver Trust (ETF)(NYSEARCA:SLV): Gerald Celente, Jim Rogers, Marc Faber, and Harry Dent Tell What's Coming In 2014 | ETF DAILY NEWS
Wait and see.

[Danny B]

The re-crash and unintended consequences

I hope that y'all weren't expecting good news
At the base of everything is one very important fact. America is a high-wage state that crashed into a low wage competitor. Since manufacturing was our primary value-added enterprise, a drastic reduction in manufacturing will bring a drastic reduction in employment and income. Congress has greatly exacerbated the situation though.

Here are 83 facts that outline some of the recent changes in employment and income.
83 Numbers From 2013 That Are Almost Too Crazy To Believe
They are claimed to be "crazy". Possibly true but, pretty much logical.

The B.I.S warned ahead of time before the 2007 crash. The B.I.S. now says that credit exposure is FAR higher than we had after Lehman crashed;
BIS veteran says global credit excess worse than pre-Lehman - Telegraph

The FED, ECB and BOJ drove interest rates down so that investors would have a supply of cheap money so that they could still make a buck. It's called, "spread". The bankers looked at these super low interest rates and made gargantuan bets that they would stay that way forever. ( interest rate swaps). They figured that they would lose the bets and GOV would make good their losses. The people at the FED are too stupid to figure out that bankers will always "front run" them.
If interest rates rise, about $ 441 trillion in swaps (bets) will default. American public debt service will rise from current $ 450 billion to about $ 3 trillion a year.

GOV is marvellous at demonstrating their ignorance of unintended consequences. GOV cuts back on unemployment money to the states so; the states transfer all their unemployed people to Federally funded disability So, what happens next? The feds run out of money;
SSA: Disability Recipients Soar, Funding Nearly Depleted Under Obama

China has gone on a buying spree,, buying up everything in sight. They are using U.S. treasury notes to pay. We can't selectively default to China because they have unloaded our debt paper to everybody else.
China has systematically positioned themselves to be the world broker for oil and gold. They are buying gold at $ 2,000--2500 and ounce to load up before it gets revalued. There are 2 big problems; we have pi$$ed off most of the world's oil producers. Domestic shale oil production is falling off fast.

We can tell the R.O.W. to pi$$ off but, we will have to buy their oil in gold or Yuan. The same is true for other commodities. Rare earths come to mind. We have one decent mine in Mountain Pass Ca. China has lots of them and Japan discovered a LOT of them on the local seabed.
Hold on tight to all your NEO magnets.

[Danny B]

killing prosperity with fascism

The FED has a few hundred PHDs working for them. The FED did not see the various crashes coming. MANY in the investment community DID see the crashes coming. The FED is considered to be brain-dead and stupid.
Brandon Smith has written a good article detailing why the FED wants a total crash.
"The powers of financial capitalism had (a) far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole......"
If you read the language in the TPP, it's a complete grab for control of States by technocrats.OK, if the real power resides in UNINCORPORATED banks, I suspect that incorporated banks will be allowed/forced to fail.
The Hidden Motives Behind The Federal Reserve Taper
Brandon claims that we are sliding towards a general default.

In "The Collapse of Complex Societies", John Tainter writes that as a society grows in a linear fashion, it's need for (all kinds of) energy , grows in an exponential fashion. As a society collapses ( usually from a shortage of energy or food), the layers of complexity fail and fall away.
One must remember that; if an industrial society fails to support the people, they must revert to an agrarian society or fall even farther to a hunter-gatherer society.

Food production is a very complicated and integrated process of transforming carbon energy into food energy. Should society experience a loss of layers of complexity, food will become much more expensive.

The Western economies are being crashed by fraud and corruption.
Global Paradigm Shifting Winds: Crisis in 2013 Closes, the Failure in 2014 Begins

As the economy crashes, we look much closer to home for survival. Iliargi writes,
"There are many forms of decentralization - of opting out of the herd before it goes over the cliff. What they have in common is local resilience, a focus on local self-reliance and a thorough grounding in relationships of trust. As economies contract, so does the trust horizon.

Where there is no trust, systems cease to function effectively. Local initiatives work because they operate within the social space where trust still exists, and as they function, they reinforce those foundational relationships."

The Automatic Earth: January 3 2012: The Storm Surge of Decentralization
The "trust horizon"
The Automatic Earth: October 1 2010: Stoneleigh Goes on Sale AND Beyond the Trust Horizon

Keep in mind that; when TRUST is no longer present, productivity and commerce greatly diminish. Since the PTB do not merit or engender trust, the maintain/restore productivity with FORCE.

We crashed into a low-wage competitor. This SHOULD have been known. It was predicted LONG ago.
"If China," says Mr. Stapleton, M.P., to his constituents, "should become a great manufacturing country, I do not see how the manufacturing population of Europe could sustain the contest without descending to the level of their competitors." (Times, September. 3, 1873, p. 8.)."
What About Marx: Echoes of the past: Who are John Stapleton and James Goldsmith?

The globalists moved the money from American 401Ks to China to build them up. Then, they forced "most favored nation" trading status. This gutted American industry. America must be crashed to knock down any resistance to globalization. American beliefs in "inalienable rights" must also be trashed for the "collective" to supersede any personal rights.
Productivity is motivated by gain. If socialism of fascism remove gain and the profit motive, we can expect extensive poverty.