Economic pressures

[Danny B]

The coming margin call

Investopedia;
Margin Call Definition | Investopedia
What is a 'Margin Call'
"A margin call is a broker's demand on an investor using margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin. Margin calls occur when your account value depresses to a value calculated by the broker's particular formula.

You would receive a margin call from a broker if one or more of the securities you had bought (with borrowed money) decreased in value past a certain point. You would be forced either to deposit more money in the account or to sell off some of your assets."

FED GOV juiced the stock market every time that it started to fall. The "Greenspan put" made investors believe that they would never lose. Stocks kept going up even though earnings were flat. The institutional investors have a 1$ trillion short position against the market. If they are correct and the market falls, investors will receive a margin call. Stockman refers to the giant margin call from the sky.
The lack of a freeze in pumping oil will drive down the price. GOV? buyers have flooded the country with oil trying to maintain the demand/price. The storage is all full. Demand is still dropping. The institutional investors know this and have bet against bank solvency. The banks claim that energy is just a small fraction of their portfolios. That is like saying Your heart is just a small part of your body mass.

In the event of a turndown in the stock markets, investors must raise cash. You rarely get to sell what you want to sell. You must sell what others are buying. The great danger in blowing a bubble in the stock market is; when the air escapes, ALL stocks go down and you can't sell anything, except at a huge loss. This leaves either gold or U.S. treasuries. Since most investors don't have gold, they must dump U.S. GOV paper. We'll see.

[Danny B]

As goes oil, so goes banking.Day Of ReckoningOxfam Expert to Sputnik: US Tax System is 'Rigged' to Help the Richest
Then, what happens? The Lesson Of Empires: Once Privilege Limits Social Mobility, Collapse Is Inevitable | Zero Hedge

The rich and powerful are doing a lot of cost-cutting to save bloated corporations and banks. BP CEO to get $3.3 million raise after 12,000 layoffs - Orrazz
What is the result of that?


The S&P is about to make a big move,,, most likely down; "The Big Move" Is Coming | Zero Hedge

Many think that Saudi may crash the economy if they are forced to reveal their part in the attacks in NYC. The FED says NO. The FED says that J.P. Morgan is most likely to take down the system. Who knows? Maybe it will be China to kick things off the cliff? http://www.zerohedge.com/news/2016-0...ses-record-low

Harry Dent says that IT is coming; http://www.zerohedge.com/news/2016-0...rry-dent-warns

For thousands of yeas, the price of gold went up when interest rates fell. The "invention" of paper gold ended that link. When gold went up in the early 80s, Paul Volker raised interest rates up into the low %20s. You can bet that rates won't ever rise like that again. The West tried to banish gold from the consciousness of investors and savers. It worked for a while until the Indians and Chinese came on the scene.
Gold drains investment from the bond market. The welfare-warfare State didn't want any drain so, they invented paper gold. China does NOT have a sovereign bond market. China can well afford to see wealth stored as gold. The West shudders at the prospect.

http://www.telegraph.co.uk/business/2016/04/17/gold-is-the-spectre-haunting-our-monetary-system1/

If it doesn't work,,,, keep doing it over and over.

[Danny B]

World economy is terminally broken

The profit went out of oil.... confidence in bank debt went with it. The bond market is MUCH larger but, stocks are more visible. What about confidence in the stock market?
OK, so they go higher. 50%? of companies go bankrupt unable to service debt.The West plans to crash the whole system down to introduce the SDR as the world reserve "note". The East plans to crash the whole system down to re-introduce gold as the world reserve store-of-value.What could go wrong?California’s Pension Hubris | City Journal

https://www.youtube.com/watch?v=EmC26RuO26g

[Danny B]

Institutionalized fraud, lying and corruption

Charles Hugh Smith;
This can't be said politely: the entire status quo in America is a fraud. oftwominds-Charles Hugh Smith: The Entire Status Quo Is a FraudThe Elephant Cometh - KUNSTLERThat debt is counted as wealth by those who hold it. BUT, it isn't wealth and that makes a difference.I'm ON it. The Ron Paul Institute for Peace and Prosperity : What Did Fed Chairman Yellen Tell Obama?

Along with institutional corruption, we have institutional blindness; Institutionalized Lying—— Why Central Bankers Never See Bubbles | David Stockman's Contra Corner

[Danny B]

We haven't reached peak stupidity

Where to start? There are so many things going on that it is hard to know which problem will unfold first. Some problems are going to cause a cascade of other problems. In a general sense, EVERYTHING will default.
I read a lot of BS information and try

http://etfdailynews.com/2016/04/19/this-will-be-the-largest-evaporation-of-wealth-in-modern-history/

Armstrong; "There will be a new base of currency and it will most likely be electronic. The reason for this is political. The USA peaked as did Britain. The financial power will move to Asia, and Europe along with the USA will crash and burn because they are caught in this fictional world created by Marx. Russia and China collapsed under Marxism. It is just our time."

https://www.armstrongeconomics.com/future-forecasts/surving-the-coming-transition/

Maybe that is because Belgium rode roughshod on everybody's rights and welfare. All the ships are full and looking for a buyer / consumer. WHAT are they going to do with all that steel?That meshes nicely with the largest bubble in history.Stupidity has no limits.Somebody has to kick off the party.

[Danny B]

Squeezing the little guy until he stops reproducing

The University of California (UC) is a public university system in the U.S. state of California. The University of California's projected operating revenue for 2011-12 is $22.5B More than 800 startups with UC patents have been founded since 1980.
The UC system has $91 BILLION Tuition has gone up at 3 times the rate of inflation,,, books, even more.

The UC system is a PUBLIC college generating a 1/2 billion a week in revenue with $ 91 billion in it's fund.
Keynes said that within 80--100 years, we would be so rich that we wouldn't need to work. Walter Burien says that there is no need at all for taxes. GOV is sitting on so much cash and investments that it doesn't need any tax income. CAFR1 Home PageAnother Record Collection from Federal TaxesThe Personal Income tax proves that you are a serf. | THE TRUTH ABOUT THE LAW

For much of man's history, it was prohibited,, anathema to tax a man's labor. "They" couldn't allow the common man to get too rich and stop working. So, now we have a tax on everything to keep us working. The U.C. system has no need for the tuition money. Same for U.S. GOV. They don't need income tax revenues.
If you are already rich, you might get some protection; Plans to stop collecting data on wealthiest 1% in UK criticised by IFS | Politics | The Guardian

Labor is taxed as gross income. This keeps us all down if you depend on work for income. This is no accident; Oxfam Expert to Sputnik: US Tax System is 'Rigged' to Help the Richest

It keeps the poor from reproducing too fast. Now that we are reproducing too SLOW, "They" have a new problem.

[Danny B]

We need to pull away from creative destruction

The U.C. system is self-funding and doesn't need to charge tuition. They have many $ billions stashed away. The FED shoots for a 2% inflation rate. The Grace Commission reported that not one dime of our income tax money goes to support GOV. GOV prints what it wants. Besides taxes, GOV charges us fees for EVERYTHING. GOV sells mineral leases and has many other sources of income. After many decades of raking in money, GOV reports once a year how much money it's various agencies are holding. This is the yearly Comprehensive Financial Report CAFR.

The agencies hold a cumulative total of over $ 100 trillion. Much of this is in investments in productive industry. So, both big GOV and small GOV rake in a lot of money. The U.S. Treasury is what represents the wealth of the public. It is flat broke. GOV, the edifice is doing well. GOV, the people is screwed.
All those GOV investments pay off very well so, there is a constant income stream. Cumulatively, these GOV agencies own a lot of the productive economy. When we spend money, part of this money flows back to GOV through it's ownership of private enterprise.
Decades of printing money to buy up the private economy is paying off very well. Since GOV is first spender of this new money, it gets the greatest benefit.

GOV is sitting on mountains of cash and investments but, an economy only works if there is circulation. GOV withholds money from circulation to keep us poor and working. GOV circulates money by spending and creating GOV jobs. The vast general wealth that Keynes predicted must be blocked. BUT, general employment must be provided to keep us occupied and productive.

How can we continue to be productive without becoming too rich? How can GOV provide jobs and still limit productive outcomes? Easy, just pay people to do make-work. Then, there is the problem of the private economy becoming too productive and creating too much wealth.
The richer that America becomes, the more wars that it engages in. Our productivity must be bled off somewhere to keep us working.
The Report from Iron Mountain makes it VERY clear that peace is very undesirable. The threat of a common enemy is a big part of what holds the country together. The CIA is hard at work to create as many enemies as possible.
Then, the military comes in and does the follow up work. They destroy as much stuff as possible. Then, they order replacements from companies that are owned partly or wholly by GOV. War keeps the economy going and the wheels turning.
Russia and China bring the threat of world peace. A lack of big ticket wars would allow the general populace to get too rich. Creative destruction would be blocked. The F-35 may be a turkey BUT, it is an expensive turkey that employed a lot of people. Without the war industries, GOV would find it much harder to provide jobs. Do NOT worry. The neocons are hard at work starting a new cold war so that we can continue to circulate wealth via the war industries. How The American Neoconservatives Destroyed Mankind’s Hopes For Peace -- Paul Craig Roberts - PaulCraigRoberts.org

Edit; The neocons want to continue with a uni-polar world BUT;
'Russia, China and India Building Multipolar World' That Neo-Cons Don?t Get
It was Keynes who proposed constant warfare to stimulate the economy. It was Roosevelt who drug us into WW II to stimulate the economy.
We need a new operating system that doesn't embrace creative destruction just to bring jobs and circulation.

[Danny B]

The Shocking Reason for FATCA… and What Comes Next | International Man

[Danny B]

Interest ratres will never come back,, banks can't survive

There are many claims that this crash was purposely manufactured to bring a new system. Our current system has a modicum of capitalism with a heavy overlay of socialism and fascism. The "one world" plan would decrease capitalism and increase socialism. Currently, Russia and China signed on for FACTA because they needed access to the SWIFT system. They now have their new system up and working. We'll see.

The West is trying the same tired BS to save the banks. ",,, effectively give free money to the banks to lend to the real economy. This means the banks will be receiving cash for borrowing from the central bank." The same tired BS in an economy where nobody wants to borrow. Can THIS be a game-changer for central banks?

U.S. GOV has bought up LOTS of the stock market. This raises indices but, stocks still don't have any earnings. Confidence is fast fading because stocks are so over-valued. A Wall Street Witches Brew——Hockey Sticks And Financial Engineering Games | David Stockman's Contra CornerOn The Impossibility Of A Soft Landing | David Stockman's Contra CornerThe FED sends money to companies to buy back their own stock. Everybody gets bonuses even though there is no commerce.We have had a steady decline of wages and purchasing power. The bankers have given us a steady decline of interest rates to keep us spending. This is cumulative over time and the CBs can no longer use their major tool. They can't possibly pull investors out of gold.
"A better understanding of negative rates may lead you to our opinion that the concept of a NIRP is sheer desperation akin to a last second Hail Mary pass in football, but with even lower probability of success. "
NIRP Hail Mary | Zero Hedge
The CBs used low interest rates to bring forward consumption that we could no longer afford with our global-mean wages. They have run out of steam.

The credit cycle has turned. High interest rates would act as a "detonator" for any remaining commerce.

[Danny B]

[Danny B]

The downside of automation and socialism

Productive workers are the only ones who create wealth. More and more of productive work is done by automatic machinery. 102 million Americans of working age are not in the labor force. Workers pay gross tax on their labor. Machines pay no tax. Owners of those machines pay tax just on profits. The ratio between retirees and workers just goes higher and higher.
We "carbon units" have to compete with machines who pay no tax and need no salary.
We lose our jobs to competitors who are plugged in to the wall. Our cumulative consumption power is falling. The whole purpose of automation is to bring price deflation. It ALSO brings wage deflation. It destroys numerous job niches.
The PTB have determined that socialism is the answer. Socialism kills all motivation. Socialism rots the brain. The little voice inside your head tells you that you are NOTHING. We derive our self-worth and status from our employment. The ghettos and indian reservations have a huge drug and alcohol problem from people trying to silence that little voice in their heads.

Substance abuse is just a feeble attempt at suicide by people who have no center in their lives,,, no self worth. They will try anything.
Smoking Scorpions in South Asia - A Dangerous Addiction | Oddity Central - Collecting Oddities

https://www.youtube.com/watch?v=CqRbmG1edV0

[Danny B]

Socialism for the masses,, facism for the banks

Georg Wilhelm Friedrich Hegel believed that GOV should own the whole economy. Communitarianism is a 20th Century political doctrine which emphasizes the interest of communities and societies over those of the individual.The SPV Loophole: Draghi Just Unleashed "QE For The Entire World"... And May Have Bailed Out US Shale | Zero HedgeKuroda can dish out $ trillions to banks but, not one penny to the people because of "legal hurdles".

The FED bought up all the distressed debt when housing crashed. This debt is starting to go bad; U.S. Government Is Now a Major Counterparty to Wall Street Derivatives
The FED has massacred EVERYTHING with ZIRP. They did it to save the banks. It ended up being bad for the banks in the long run. Now, they are trying to stop the damage of ZIRP without killing the banks. The Fed’s Policy Nightmare: How to Raise Rates Without Killing the Big Banks

[Danny B]

China is riding a tiger. If the tiger slows down, it will eat them.
Credit Bubble Bulletin: Weekly Commentary: More on China

The CBs can print all the money their keyboards can generate. BUT, there are other factors. The CBs can do next to nothing about employment. The fallout hits corporate earnings. Free-money to the rich has little effect on employment. When the consumer is broke and unemployed, the stress works it's way up to the upper loop of the economy.
Here is a graph of stress in 2007; http://www.financialsense.com/sites/...s-2007-top.png
The stress in 2016; http://www.financialsense.com/sites/...s-spx-2016.png

The CBs have injected about $ 200 trillion into the upper loop of the economy since 2007. They created enormous price inflation in the upper loop hoping that it would translate into a wage-price spiral that would wipe out the burden of the excessive debt. They got a price spiral in commodities that died out because of a lack of the price spiral in wages. The combination of cheap transportation with our business competitors and rapidly developing automation insured that we would have no wage inflation.

Prices fell down to earth. Wages never achieved lift-off. The debt overhang is still there with the full amount of pain because the spiral failed to materialize.

Chinese Credit growth will likely expand at least 50% more than U.S. Credit this year For years, China has bought up gold, ore concentrates and mines. They just opened the Shanghai gold fix. Apparently, they are pining their hopes on a huge rise in the price of gold after they have cornered most of the market. It looks like they are counting on a huge increase in the P.O.G. to save their financial "skin".
In the paper-gold markets, only about 4% of contracts take delivery. If the Chinese decide that the financial cliff is very near, they can just take a big position in the gold market and demand delivery. There is about 4500 tons of gold traded on paper every day. The gold isn't so much bought and sold. It is used as a value-reference for other trades. The Chinese could crash the gold market and erase the reference of value.
Some of the gold markets are leveraged past 200-1. There is no doubt that the P.O.G. will go way up when 199 people find out that they have no gold. AFTER, China gets as much gold as it can and BEFORE it's financial sector crashes, it may just crash the paper gold market to reprice gold and re-liquify it's banks.

[Danny B]

When Money Fails

Brazil, among many other countries , is famous for corruption. As Olympics Looms, Governor Warns Rio Is "Close To Social Collapse" | Zero Hedge
So, as the moral order fails, the economy fails. Those best prepared to survive are those who are NOT dependent on division of labor.

[Danny B]

NWO, morality, confidence and gold

"Today it is another famous skeptic, SocGen's Albert Edwards who has had enough and says he feels "utterly depressed" because he has not "one scintilla of doubt that these central bankers will destroy the enfeebled world economy with their clumsy interventions and that political chaos will be the ugly result. The only people who will benefit are not investors, but anarchists who will embrace with delight the resulting chaos these policies will bring!"
Albert Edwards Finally Blows Up: "I'm Not Really Sure How Much More Of This I Can Take" | Zero Hedge
We said in 2010 when the Fed launched QE2 that the ultimate outcome would be civil (or more than civil) war"

Commodities crashed not too long ago because consumption has crashed. Money is getting desperate and pouring into,,,, commodities. Meanwhile In China, More Bubble Insanity | Zero Hedge

European banks did irresponsible lending to Greece. This is just stupidity considering the Greek history of default. Sovereign GOV relieved the banks of their failing Greek loans and then put Greece up against the wall for repayment,,, something that the private banks couldn't do. The money just isn't there in Greece and the bankers are destroying the economy.

https://goldswitzerland.com/how-long-before-global-financial-system-fails/

2014

https://goldswitzerland.com/how-long-before-global-financial-system-fails/

The Western ideal of a new world order has THEM in charge of the world with world socialism, ONE currency ( the SDR ) and total economic control. The Eastern ideal of a new world order is a multi-polar GOV with gold as the store-of-value. They ALL know that the transactional currency can NOT be the same as the store-of-value. The West must get rid of competitors.
"For a century, elites have worked to eliminate monetary gold, both physically and ideologically." "Despite formal convertibility of sterling to gold, the Bank of England successfully discouraged actual conversion.

Gold sovereigns were withdrawn from circulation and turned into 400-ounce bars. This form of bullion limited gold ownership to the wealthy"
China bought up all those 400 oz. bars and melted them into 1 kilo bars to ensure circulation in the general economy."A Scramble For Gold Has Begun" | Zero Hedge
There are 20,000 TONS of gold circulating in India.
When morality is gone and confidence fails, gold survives.