Category Archives: Economy

What Possible Disruption Is Coming That Requires China To Massively Stockpile All Possible Commodities Now?

(By Michael Every of Rabobank) Today is like one of those rare occasions when the Broadway understudy for a leading role finds out that the star has the ‘flu (not Covid-19) and so they get to go in front of the audience for once. Yes, Europe, today is your time to shine: “Everything’s coming up Milhouse!”.

Or not. Because the pressure is certainly on.

First, we have the ECB. The market whisper is that they have decided that a global backdrop where the Fed, BOE, RBA and RBNZ, among others, have all flagged that things remain grave, and that far more easing can still be; where a second wave of the virus is clearly evident; and where we are worryingly close to a Hard Brexit, is the right time to sell sunny economic uplands ahead. Or at least that is what the markets will perceive the outcome to be if we indeed see their economic forecasts revised upwards without the right serious tone. They will take that to mean that while everyone else is close to doing more, the ECB isn’t. And the impact, if we haven’t already seen it in buy-the-rumour, sell-the-fact manner, will be appropriate.  

Second, we have the EU trying to deal with Brexit, where the UK is, on its own admittance, steering towards acting like a rogue state and unilaterally breaking international law. There is an emergency meeting today between the two sides and, frankly, it’s unclear if the UK is going to talk or declare “There is a bomb in this briefcase!” One would imagine that part of this might feed into the ECB’s thinking if the meetings overlap(?)

At the same time, the EU is dealing with China. EC executive vice-president Vestager is going to be talking to China’s Liu He, and the South China Morning Post reports the latter will be offering Europe the chance to join it in its proposed new China Network on data security….as opposed to the US Clean Network, being the unspoken part. Once again, we see Europe caught in the middle. Once again, it will probably “try to go its own way”. In the same way Europe doesn’t rely on the US in NATO and on the USD in the Eurodollar markets. The understudy, indeed.

Let’s see how Milhouse does when the spotlight shines.

Meanwhile, here is something to study. China has announced it plans to boost its strategic commodities reserves to assuage anxiety over energy and food security. Starting in 2021, it will make what Bloomberg calls “mammoth” purchases of crude, strategic materials, and farm goods, officials apparently say. This is being done to ensure China can ride out any repeat of this year’s supply disruptions, or a deterioration in trade relations with the US, for example. This is apparently part of the shift to “internal circulation”, or greater self-reliance, which is already being flagged, and which will kick in for the five year plan 2021-25.

Actually, those in the know know that this has already been happening across the board for some time: China has been swallowing up raw materials and strategic goods far in advance of what the economy needs right now. That means the drop in other imports –which are still down y/y overall even including this commodity surge– is even larger. (And why aren’t FX reserves rising even as the trade surplus soars…? Mmmm.)

Here’s the understudy way to study this: go long commodities! – because obviously China buying in vast quantities for years to come, right? Expect lots of stories like that.

Here’s the star way to think about it: what does it really say if China is stocking up so much? Has there ever been a point during trade tensions where anyone has ever threatened not to sell to China? The issue is always that trade partners don’t ONLY want to sell raw materials and unprocessed commodities to it, but rather to hold more of the technology and value chain themselves. That is as true for Europe as it is for the US.

What possible disruption could be on the horizon that would require China to have a large enough buffer of all conceivable inputs –in remote inland areas to boot– that it needs to use up its precious USD reserves in a bulk splurge now?

“Geopolitics”, as we say euphemistically? That hardly suggests the benign, sunny uplands that ECB is going to try to sell today, with its eyes firmly on its own shoes, RBA-style.

It can’t be on *imminent* concerns of the US acting on China’s USD access because all these purchases will presumably still be made in those precious USD, even in vast size,… right? Or is the idea with THAT much buying, a shift to CNY can be accelerated? For commodity sellers, that’s something to consider. So is that this would be a multi-year bull-run – and then a very sharp stop.

Indeed, theoretically China would no longer have to worry about not having enough of X, or Y, or Z; and it could simply stop buying from industry/country X, or Y, or Z for a year or two if prices were too high,….and watch them collapse,…until prices were again amenable, or the asset was for sale, or the relevant government ‘came to its senses’ on foreign policy.

I am not saying this is what China *IS* doing. Yet this is how anyone seeing trade geostrategically, or fearing that others are going to do the same, would think – and act. We have more than enough examples from history from all round the word; and our domestic economies are replete with monopoly and monosophy, and at the firm level we see the same game play out.

Is everything really coming up Milhouse, Milhouse?

But let’s ignore all that and watch Christine Lagarde try to explain why there may be marginally more of the inflation the ECB never generates ahead than the previous set of forecasts predicted, underlining why such forecasting is not worth doing anyway.

Source: ZeroHedge

“Ghost Town”: Shocking Dystopian Video Of NYC Shows An Abandoned And Boarded Up 5th Avenue

De Blasio’s New York has finally hit an all-time low: the once bustling city is now on the verge of looking like a demilitarized zone. Between the pandemic and the riots in the city, iconic 5th Avenue now looks more like a dystopian nightmare in a recently shot video posted to Twitter.

The video follows a car driving down a deserted 5th Avenue, with almost all of the area’s high end stores boarded up and shut down. There are few people seen on what is usually a busy street. 

“Look at everything. Everything’s boarded up. Even the hotel. Boarded up,” the video’s narrator, who is obviously fed up with how the city looks, says.

He continues: “This is all Manhattan, boarded up. Have you ever seen Manhattan look like this? The media will not report this.”

“Everything boarded up. They don’t want to show this to you people because they’re afraid. Saks 5th Avenue – boarded up from end to end. They put up barbed wire. Everywhere you see boards, windows are gone. Look at New York City – what happened,” he says. 

The video runs over 2 minutes and shows dozens of boarded up businesses. You can watch it here:

The video was originally posted as a response to another Tweet that seems to tell the developing tale about DeBlasio’s New York:

Source: ZeroHedge

Prepping: 15 Things That Will Mostly Happen In Cities When The Economy Finally Collapses

We should all be prepared for what’s coming next.  In order to prepare effectively, we need to know what will happen when the economy finally collapses under its own weight.  The creation of trillions in excess (((currency))) out of thin air can only go on for so long, and we are approaching the end.

Epic Economist put together a great video detailing the 15 things (and yes, some are a little scary) that will happen when the economy collapses.  At this point in time and history, it is no surprise that an economic collapse is coming for us. When the world’s largest economy is deep down in a recession, many other countries will not be late to follow the same path.

The financial breakdown the world is about to face over the next several years will be an unprecedented catastrophe, especially considering that the underlying problems from previous crashes were never fixed, only mended together. A real repair would require a complete restructuration in the system, and the elites were never interested in fixing the system that they set up to screw the rest of us out of everything we’ve worked for.

These are the 15 things that will happen that you should be prepared for:

1 -Fuel Shortages, or rationing of fuel
2 -Carjackings rise
3- Interstate Trucking is compromised, limiting the supply of essential goods
4-Defaults in garbage disposal and urban sanitation
5- Food scarcity, a disruption in food supply chains
6-Water quality drops and municipal supply disruption
7-Survival mode slaughtering of local wildlife and zoo animals for food.
8-Pets go missing
9-Civil agitation leads to turbulence in the streets
10-Attacks become more frequent
11-Kidnappings Increase
12-Gang Activity Increases
13-Banks Close
14-Hospitals become Overloaded
15-Martial Law Enacted

Knowing that these things are likely to happen when the economy collapses should help give you an idea of what you’re going to need to be prepared.  Make sure you know how to defend yourself and your family. Make sure you have a way to filter water.  You will need to be able to avoid crowds and live on your own, potentially off the grid. Become self-reliant and do not put your faith in the system.  Most people are still desperately fighting to keep the system intact in spite of the awareness that it’s rigged and corrupt.  Instead, leave the system, put your faith in yourself, improve critical thinking skills, and create your back up plans.

Source: ZeroHedge

***

From the linked comment section …

Perry Colace

Here is my story. Some of you may have read it, but, I like to post this to let you know that SOME headed the warnings early on. Back around 2000 I started to read about the founding of this nation, where we are now and how it is vastly different than the intentions of those who built this nation. I was in NJ at the time, and starting listening to the early version of podcasts, mainly from an older gentleman who lived through the Great Depression and had relocated in anticipation of it…..or worse…..happening again. He talked about the unsustainable debt, mass inflows of people from incompatible cultures, advancing surveillance/police state, the vulnerabilities of the power grid and ‘just in time’ delivery of household goods. And, most importantly, how the average American had become complacent and used to all things flowing to them, rather than working to provide for some of the basics in life: Water, food and shelter.

I was in NJ at the time (I grew up there), and purchased a book called ‘Strategic Relocation: North American Guide to Safe Places’. After reading it, I said: ‘I have to leave very soon. I do not know how much time I have remaining, but, this is a bad place to be when everything turns upside down’. So, I visited several areas mentioned in that book. In 2004 I landed in the Missouri Ozarks and immediately was drawn to it. I said, ‘This is where I want to move’. Back then, civilian contracts on military bases for pharmacists (my profession) were easy to find and VERY lucrative. I moved to the Fort Leonard Wood area in 2006 and went to work. I had 3 goals: Pay off my consumer debt (approximately $150,000.00), save for a piece of land in the countryside with NO MORTGAGE, and create a food storage supply which would be enough for me for about 5 years (that includes open pollinated seed storage and junk silver savings, too).

I was free from debt in June 2009, had my food storage goal reached by 2012 and had enough money saved for the property I currently live on by 2014. The previous owners and I went back and forth in negotiations (they did NOT want to move in 2014, but, did the following year) until we settled in Sept. 2015. I moved to the Southern Missouri Ozarks in November. I live on 20 acres, 2100 sq ft home, 75×25 workshop (which includes a leanto for animals and firewood on one side, and an additional shelter for vehicles on the other. I have a private well, septic tank, home is heated with wood, backup generator which runs on propane….of which I have over 1,000 gallons in reserve. I had been working for a large pharmacy chain at the time and transferred to this area. After working for it for a little over a year, I left and started to work for 5 small independent pharmacies, on a part time or per Diem basis. My income dropped by about 30%, but, with no debt, low taxes and regulations (my county has NO zoning and planning and property taxes are $500.00 annually….no typo, either $500.00), I could afford the pay cut. Working less for wages, it gave me more time to work on the farm with gardening and home improvement projects.

Fast forward to today, when 2020 went from the mundane to a completely chaotic world, I was ready. Still scared, but ready. When people needed food, they got it. When someone needed money, I had it. When others had their work projects dried up, I needed a skilled professional. My life has not changed much. Here is a good thing to remember too. When things like this happen, it is wise to not boast and brag about how you prepared and they did not. Help them any way you can. Be kind and peaceful. I own firearms, but, I do not believe that I am going to sit here and act like that is how I am going to live through this. I will do so by being friendly and loving to my neighbors and others (we are having a neighborhood barbecue in a couple of weeks to discuss what is happening and how we can lift each other up).

So, while the rest of the world was fiddling, I was working and saving and preparing. Now that we are here, I want to help those that I can and give advice and hope to those who are fearful. If you are of a mind to do so, turn to God and be thankful for what you have and support those worthy of your help.

***

Bounder

For those of you thinking about this choice – you can do it.  We went from living in a major city in a huge house and running a business and paying over $55,000 a year in property tax on the house and business – and 5 years later we are 100% self sufficient in a beautiful area of the country with everything paid for. Its not easy, and there are a lot of sacrifices to make it work, but it is the best damn thing I have ever done. And our property tax for the same size house with 26 acres and a running year round creek, along with the the large commercial building in the industrial park area of the city for our business is now only $5,600 a year – and the people at the tax assessor apologize because it so high! One tenth of what we were paying in Texas!

In Collin county where we were, they literally spat on you every year and said point blank to you should count your self lucky to be paying only $55,000 a year and acted like they were doing you a huge favor. It was sickening.

Our are area is one of the most “conservative’ in the country and also the most self reliant. Our county can feed itself, provide plenty of hydro electric power and also is one of the most heavily armed areas of the country.

And we are way more than a gas tank away from any blue **** infested hell hole city.  

***

Perry Colace

Same here. I am about 4hrs from St. Louis, at least 5 from Kansas City, 3hrs from Little Rock and at least 5 from Memphis. The closest city of any size near me, and the one in which I work about 50% of the time, is Springfield, MO. It is a little over an hour from me, has a relatively low crime rate and a population of 160k, 90% of which is white. My biggest costs are fuel and vehicle maintenance. I am fastidious about keeping them in top condition, because that is how I make my money. 

That said, I had friends of mine call me earlier in the week. They are very old friends, married with two children. Half joking and half serious, they said, ‘Do you have room for 4 more there?’. They still live in NJ and are freaked out by what has been going on. The most sobering and sad thing they said was, ‘You know, you have been talking about this for years… and you were right’. So, they have ZERO preparations, a mortgage, car payments, kids in the mass retardation facilities called ‘schools’, jobs they do not want to leave, etc. You know the drill. With all of that, my friend’s wife says, ‘We have been talking about buying a taser. What do you think?’. I almost laughed. They have never owned any form of self defense and are prepared for nothing. Yet, buying a taser is their bright idea. I said, ‘You better be prepared to hunker down right where you are. Get together with your neighbors. Develop good relations with them and support each other’. After I hung up the phone with them, I sat there and thought about our conversation. When they opened up with, ‘Please take us in’, I concluded the following… and no malice towards them, of course. They were not thinking of this, only their own survival. What they were in essence saying was, ‘We spent all of those years vacationing, spending time and money on frivolous things, relying on today’s calm to predict tomorrow’s future and laughing at people like you “Doom and Gloom” types, while you were working, being busy and goal oriented and hurrying to put your plans in place… NOW, we want YOU to bail our chestnuts out of the fire’. I love them. They are responsible for their own undoing, if that is what happens.

***

Saatva Hodaya

I have done all this also. All the situations that are occurring now “out there”, I have remained completely untouched.  The whole system does not need to fall for a person to exhibit a little common sense.  I was prepared for all this currently happening – and in fact don’t even have to go “out there” except once a month just to replenish a few perishables.  Of course, people can sit around and call this author a doomsdayer but as a person who just missed the great depression, common sense dictates that a person who works toward being as little dependent on the outer world, is a wise person.  My taxes are also less than $450 a year.

***

Perry Colace

I agree 100%. When I moved out here, family and friends laughed at me. LAUGHED and mocked. ‘What are you moving there for, END OF THE WORLD?’. ‘Don’t you get lonely? You should consider moving to a city. There are more single women there’. Everyone gave me practical advice for which I never asked, nor had any use. When you tell city people that you are moving to the country, they say the most ignorant things. Truly ignorant: ‘Are you gonna be a farmer?’. ‘What are you going to do with all that land?’. ‘It’s too quiet in the country. I need the sound of traffic’. I used to question myself and my motives, even within the past year. With all of the outside opinions being completely contrary to my goals, I was letting the peer pressure get to me. I am human. After January, my focus reemerged and I have been getting up every single morning thanking God for bringing me here, providing me with what I need, my good health and all else around me.

I did watch the video linked above and you know what common element all of the 15 problems have? They all happen in CITIES. Even in the destruction of Germany at the end of WWII, the Bavarian Alps saw very little impact of nearly 6 years of war. If you had a farm there, which was the norm, you provided for yourself just fine.

China Plans To Win The Pandemic War

Imagine if that Taiwan lady who’s been robo calling all our call phones has been trying to warn us about about eminent rapid Chinese colonization but we couldn’t understand?

(Matt Bracken) By accident or on purpose, Pandemic World War One has already begun, even if we don’t fully realize it yet. A few examples to make the point: the American super-carrier Roosevelt is in Guam, with over 100 of its crew infected after a scheduled port visit in Vietnam, and half of its 5,000 member crew under quarantine. Parris Island, the USMC’s east coast boot camp, has many troops infected, with no new recruits inbound, and graduating Marines quarantined on base indefinitely. Our thousand-bed USNS hospital ships Mercy and Comfort are deployed to Los Angeles and New York. U.S. military medical personnel are being sent to American Coronavirus hot spots to augment their civilian medical staffs.

If Pandemic World War One was launched intentionally, then naval vessels and isolated ChiCom special forces bases will become significant force multipliers, because they can be kept scrupulously free of Coronavirus, held back for later use when Western military forces are infected, depleted, and not battle ready. Even if the Covid-19 pandemic was not released on purpose, getting a head start on quarantining key military assets for later use becomes a critical factor, and such total isolation is far more easily achieved within China’s totalitarian dictatorship.

But intentionally begun or not, now that PWW1 is underway, Communist China plans to win it. By March of 2020 they had totally sealed their borders to inward travel without strictly scrutinized visas with a high rejection rate, followed by a very harsh 2+ week quarantine under CCP control at the traveler’s expense. Now China has little to worry about from a new phase of the pandemic that they could launch against the West.

In this emerging global environment, an even deadlier Covid-20 would become a nearly ideal weapon of mass destruction, because unlike nuclear-tipped ICBMs, its Chinese origins would be deniable and unprovable. The Chinese Communist Party would claim that Covid-20 was a natural mutation that sprang up in the West. They would be able sit back and watch while America and Europe were destroyed as economic and military powers, and Africa and many other Third World cities and nations were laid prostate and thus open for rapid Chinese colonization.

For example: Guayaquil, Ecuador is one of a handful of major seaports on the west coast of South America, and it has the best location and by far the largest natural harbor. Guayaquil touts itself as the main port city and gateway to the Pacific Rim, including China. Now Coronavirus is breaking out in Guayaquil at about the same pace it did in Milan a month ago, but Ecuador does not have a slim fraction of Italy’s medical capacity to deal with it. In a month, Guayaquil might be a medical catastrophe, and America will be in no position to send help.

If Pandemic World War One goes in China’s favor, their plans will include sending “rescue and relief” ships to Ecuador which would become the basis and beachhead of Chinese control and colonization. A similar pattern would emerge across Africa, where Chinese infrastructure projects are already omnipresent. In the thrall of an accelerated pandemic, America and Europe would be too weak to oppose these Chinese “rescue missions.” The president of the Philippines has already announced he is eager to be “rescued” by China. And it’s worth mentioning that Chinese firms already control the container ports on both ends of the Panama Canal, as well as a gigantic new container port in Freeport, in the Bahamas. In fact, such Communist Chinese beachheads already exist around the world.

Now factor into the equation that China has thirty million more men than women as a result of their former one-child policy. During times of economic hardship this surplus of unmarried adult men will present a grave danger to the CCP. The obvious solution is to send as many of them as possible abroad on foreign “rescue missions” or other military adventures that will quickly become invasion and colonization efforts. Their sheer numbers are impressive. If China sent just ten of its excess thirty million men abroad on colonization missions, they could attack 200 targets around the world with 50,000 troops each.

Roll-on/roll-off ships loaded with armored personnel carriers would provide them with all of the offensive punch required to assure victory in most cases. Advanced vehicle-borne and shoulder-launched anti-armor and anti-aircraft missiles would easily defend these invasion forces against almost any plausible Third World counterattacks. Very few nations have any meaningful way to defend against such a simple “locust swarm” invasion strategy. For example, New Zealand has completely scrapped its last remaining jet fighters as too expensive and unneeded.

Switzerland, America and New Zealand – the Kiwi is Low-Hanging Fruit  by Matt Bracken, March 15, 2015

Logistically supporting and sustaining these invasion forces from mainland China would not be critical to their success, because these men would have been intentionally sent on one-way colonization missions. The commanders of these troops would be told to find wives, land and treasure in their target countries. No matter if a particular force succeeded at invasion and colonization, or if they were defeated and destroyed, they would never again present a problem for the CCP to deal with back in China. They would be leaving China with no return ticket. Even if their troop ships were sunk at sea, their permanent disappearance from China would be counted as a net gain to the Chinese Communist Party’s survival.

But China is only strong today because the West allowed it grow economically many fold over the past forty years, due to our short-sighted stupidity and our lust for ever-cheaper consumer goods, and even for cheaper medical supplies. In the new environment of a global pandemic originating from China, that paradigm is over. Now China has no choice except to make both regional and global military advances while it is able. If it does not, it will soon be in a strategic position similar to Japan in 1941 after harsh Western economic embargoes were imposed, particularly those which cut off Japanese access to American petroleum and iron.

The CCP has 1.4 billion Chinese mouths to feed, and they can’t begin feed them from within their own boundaries. China today is a hot-house flower farm after the greenhouse glass has been smashed and hail is coming down instead of sunshine. When the rest of the world radically reduces their imports, China will soon be unable to feed itself. I believe that the CCP leadership realizes that they stand today poised on the creaking hinge of history, and that they must make bold strategic moves while they still hold temporary advantages which they may lose in the coming years.

If the CCP waits for America to recover economically and militarily, they will lose the Pandemic World War. As its export clients look elsewhere, China will rapidly shrink in power. In contrast, America is inherently a great continental power that can feed itself and provide its own energy. America can manufacture anything it needs, including advanced military technology. At least when seen from the Chinese perspective, America stands to make a rapid economic recovery once the pandemic has run its course.

I believe that Pandemic World War One will transition into a war of economic embargo against China. Understanding this, the CCP has no alternative other than to make bold strategic moves while they are able. A Western boycott against China will result in their economic collapse, famine, massive nationwide riots, and ultimately a grass-roots revolution against the discredited Chinese Communist Party.

But until then, China will be a cornered dragon: wounded, trapped, desperate, and capable of almost unimaginably evil acts, including the release of new and even deadlier viruses into the West, in order to win Pandemic World War One.

See also: Will China Win the Pandemic World War? by Matt Bracken, February 26, 2020

China is Preparing to Start a War with America, by William Gensert for American Thinker, April 2, 2020

Source: by Matt Bracken | American Partisan 

Poll: 100% Of Americans Expect To Get COVID-19

A new survey has discovered that every single American is convinced they will get the coronavirus, highlighting just how entrenched the message about the crisis has become in the US.

The poll by Survey USA finds that 100 percent of respondents said yes to the question “Based on what you know at this hour, what would you say that the chances are that you, yourself, will get sick from the Coronavirus?”

The survey was conducted last week, just as the peak of the panic was hitting. It also found that 21 percent of Americans say their daily life has “been turned upside down” by the virus, which originated in China.

A further 42 percent say it has “changed noticeably”, while 31 percent say it has “been impacted only slightly”.

Six percent say life has “not been impacted at all,” although that has probably changed by now.

Interestingly, only five percent of respondents said that they personally know someone who has been officially diagnosed with the virus, while an overwhelming 92 percent say they don’t.

When asked how concerned they are about the virus, and whether they will be able to get adequate medical care if they catch it, sixty-six percent of respondents over the age of 50 said that they are “extremely concerned” or “concerned”.

Seventy-one percent responded that think the worst is “still ahead,” while just 8 percent believe it is “behind us.”

Asked when they think thinks will return to “normal”, 17 percent pointed to June 2020, while ten percent said they expect the entire year to be lost to coronavirus, and are looking to 2021 for normal life to return.

This is in stark contrast to President Trump’s comments yesterday when he said he’d like to see things get back on track by Easter.

Source: ZeroHedge

The Corvette

The Corvette.    A man named Tom Nicholson posted on his Facebook account the sports car that he had just bought and how a man approached and told him that the money used to buy this car could’ve fed thousands of less fortunate people. His response to this man   made him famous on the internet.

 

READ his story as stated on Facebook below:

 

A guy looked at my Corvette the other day and said, “I wonder how many people could have been fed for the money that sports car cost?

 

I replied I’m not sure;

it fed a lot of families in Bowling Green, Kentucky who built it,

it fed the people who make the tires,

it fed the people who made the components that went into it,

it fed the people in the copper mine who mined the copper for the wires,

it fed people in at Caterpillar who make the trucks that haul the copper ore.

It fed the trucking people who hauled it from the plant to the dealer

and fed the people working at the dealership and their families.

BUT,… I have to admit, I guess I really don’t know how many people it fed.

That is the difference between capitalism and the welfare mentality.

 When you buy something, you put money in people’s pockets and give them dignity for their skills.

When you give someone something for nothing, you rob them of their dignity and self-worth.

Capitalism is freely giving your money in exchange for something of value. Socialism is having the government take your money against your will and give it to someone else for doing nothing.

I’M OVER IT! 3 Points on The Virus

This topic is quintessential to preparedness for all doomsday preppers, homesteaders, survivalists, militia, minuteman, city prepping, rural prepper, urban prepper, normal people, or looking to prepare for SHTF WROL TEOTWAWKI or natural disaster. Whether your own personal SHTF is the 2020 elections, economic collapse, civil unrest, martial law, food crisis, civil war, food shortage, EMP or CME, black swan event, or whatever, a prepper needs to be prepared for this topic. ***

Virus End Game: New Digital Financial System Roll Out

In this report, Spiro Skouras recaps the events leading up to the current global coronavirus outbreak, while looking ahead at the looming financial crisis and how the virus will likely be blamed, providing cover for the crimes committed by the central bankers.

Spiro also analyzes the potential outcomes of the current situation, which includes a major step towards a cashless society and global governance, as the current crisis seems to be playing right into the hands of the central bankers and the United Nations.

Links

The Banking Digital Arms Race, video that proceeds the one embedded above
https://www.activistpost.com/2019/12/the-banking-digital-arms-race.html

The U.N. & Central Banks: A Rockefeller & Rothschild Coup
https://www.activistpost.com/2020/01/the-u-n-central-banks-a-rockefeller-rothschild-coup.html

Did Bill Gates & World Economic Forum Predict Coronavirus Outbreak? An Inside Look May Shock You!
https://www.activistpost.com/2020/01/did-bill-gates-world-economic-forum-predict-coronavirus-outbreak-an-inside-look-may-shock-you.html

US Biowarfare Act Author: Studies Confirm Coronavirus Weaponized
https://www.activistpost.com/2020/02/us-biowarfare-act-author-studies-confirm-coronavirus-weaponized.html

UN Troops Featured in Military World Games in Wuhan China Weeks Before Coronavirus Outbreak
https://www.activistpost.com/2020/02/un-troops-featured-in-world-military-games-in-wuhan-china-weeks-before-coronavirus-outbreak.html

Nearly 10K Military Personnel From 110 Nations In Wuhan China Weeks Before Coronavirus Outbreak!
https://www.activistpost.com/2020/02/nearly-10k-military-personnel-from-110-nations-in-wuhan-china-weeks-before-coronavirus-outbreak.html

Can cryptocurrency become the UN money of the future?
https://finance.yahoo.com/news/cryptocurrency-become-un-money-future-120035529.html

UNICEF launches Cryptocurrency Fund
https://www.unicef.org/press-releases/unicef-launches-cryptocurrency-fund

NYSE Announces Disaster-Recovery Test Due To Virus Fears
https://www.zerohedge.com/markets/nyse-announces-disaster-recovery-test-due-virus-fears


Follow Spiro on BitChute bitchute.com/channel/spiro/ Follow on Twitter https://twitter.com/o_rips

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Supply Chain Domino’s Are Falling – COVID-19 – Get Preps!

This…

Has lead to this… 

Supply chain issues continue to extend beyond automotive and tech; now it’s starting to affect household product supply chains. According to Forbes (Link) the American giant Procter and Gamble (2019 revenue: 67.68bn USD) says that it too now has significant problems. “We access 387 suppliers in China that ship to us globally more than 9,000 different materials, impacting approximately 17,600 different finished product items,” Jon Moeller, Procter & Gamble’s chief operating officer and chief financial officer, said Thursday at a conference in New York. “Each of these suppliers faces their own challenges in resuming operations.” The article adds that this will affect P&G’s profits in the China retail market.

www.forbes.com/sites/andriacheng/2020/02/20/chinas-coronavirus-outbreak-threatens-to-send-global-supply-chain-into-a-tailspin-pg-alone-has-17600-items-that-could-be-affected/#55888483156f

Bloomberg – another automotive runs into problems; Nissan is warning of disruptions in plants as far as the US due to the virus epidemic leading to parts shortages. They procure more than 800 parts from factories in Hubei and are concerned that many of these pats will run out (including such things as brake hoses and air conditioning controllers) if the plants do not come back online by today (the date the government indicated most production could resume). This could lead some Nissan output in Japan to be suspended as early as Jan 23rd with Malaysia following not longer after. Plants in the US, UK, India, Mexico, Russia and Spain may also have to stop production. A survey of their suppliers found only 58% said they’d be able to resume by Feb 10th with many others saying they couldn’t because they couldn’t get necessary government approval. Of those that have gone back online, only half of them could get the majority of their workforce working. (Link)
www.bloomberg.com/amp/news/articles/2020-02-19/virus-havoc-could-shut-down-a-nissan-factory-half-a-world-away

Reuters – major automotive parts manufacturer Valeo (19.48bn EUR revenue in 2019) says that most of its Chinese factories are now back online but not at full operational capacity. It expects production to fall by 2% this year and adds that that it is too early to evaluate the impact of the virus on the company’s 2020 results and the wider auto industry. (Link)
mobile.reuters.com/article/amp/idUSKBN20E2KC

The International Air Transport Association (IATA) says that Asia-Pacific airlines could lose $27.8 bn to coronavirus according to Philstar (Link). The estimate is based on projections of a 13-percent full-year decline in passenger demand, mostly in China. IATA’s CEO says that this will be the first time since the 2008-2009 financial crisis that demand for air travel has declined and that stopping the virus is a top priority. Airlines in China’s domestic market alone are estimated to lose around $12.8 billion in revenues, reversing an expected 4.8% growth into a 8.2% contraction.
www.philstar.com/business/2020/02/21/1994974/asia-pacific-airlines-could-lose-278-bn-coronavirus-iata

Food prices – China produces 80-90% of the worlds garlic supply (depending on which article you read) and the price of it is rising sharply. Prices in the US are up 29% from last year whilst wholesale prices are up even more to 60% higher than this time last year. The reason is difficulties in transportation and a shortage of labour as most people are yet to return to work (either because they’re unwilling or they’re physically unable). (Link).
www.livemint.com/market/commodities/here-s-something-that-you-will-think-stinks-super-high-garlic-prices-11582267581189.html

Amazon is beginning to worry about Prime day in July – the Seattle Times reports (link). Third party merchants account for about 60% of its sales and it has reached out to these merchants to understand how they might be impacted. Over the past few weeks, Amazon has responded to the crisis by making larger and more frequent orders of Chinese-made products that had already been shipped to the United States, according to company emails and consultants who work with major brands. Some of its suppliers have cut back on advertising and promotions on the site so they don’t run out of products too quickly. “Out of an abundance of caution, we are working with suppliers to secure additional inventory to ensure we maintain our selection for customers,” an Amazon spokeswoman said. The company later added, “We are monitoring developments related to the coronavirus and taking appropriate steps as needed.” Amazon’s algorithms have now asked for six to eight weeks of supply on products made in China instead of just two or three weeks.
www.seattletimes.com/business/when-you-click-buy-on-amazon-it-may-be-sweating-the-supply/

The Taiwanese commonwealth magazine has a thoroughly interesting read on whether Taiwanese companies can cope with the Coronavirus (link). It focuses on The Formosa Plastics Group (revenue: 67.2bn USD) first which has forecast that the coronavirus scare will hit it far harder than did the SARS crisis in 2003, with first quarter revenues, which were originally expected to take a turn for the better, likely to slump from the previous quarter. If China shuts down for an extended period of time and inventories build up, “under the worst case scenario, the crack spread [the difference in price between a refined product and crude oil] would fall below US$2, and we would cut production, which would mean we were producing below cost,” Formosa Petrochemical Corp. President Tsao Minh explained. Other industries are examined; automotive has significant issues which we all now know, but steel should be OK from a supply perspective because raw material comes from Australia, Brazil or Canada. The article finishes by explaining that the worst may yet be to come for the entertainment and tourism industries.
english.cw.com.tw/article/article.action?id=2656

Getting workers physically back to work – the SCMP (South China Morning Post) reports (link) that provincial governments in China’s east coast manufacturing hubs are chartering buses, planes and trains to get workers back into their factories to get things moving again; passenger traffic on public transport is only 1/5th of what it was this time last year. Couples returning to work at open factories are eligible for a one-off subsidy of 500 yuan (US$71), while a company that hires more staff than in the same period a year earlier can also receive subsidies up to 300,000 yuan (US$42,800) whilst the city of Yiwu is refunding bus and train tickets for workers who return if they arrive before tomorrow.

Economic woes spread to companies who don’t have supply chains: the Epoch Times has an article (link) waring that many small to medium sized enterprises don’t have large cash reserves and may struggle if the situation continues for a sustained period. Just 34 percent of nearly 1,000 small and medium-sized firms said they could survive for a month on current cashflow, a recent survey by Tsinghua University and Peking University showed. A third said they could last for two months, while 18 percent said they could stick it out for three months. One analyst estimates that total job losses in China could be as high as 4.5 million.
www.scmp.com/economy/china-economy/article/3051445/coronavirus-chinas-east-coast-provinces-offer-chartered

Apple’s Foxconn and Pegatron factories might be open, but don’t assume they’re fully staffed says MPR News (link). “One production line used to have 4,000 people. Now there are about a dozen remaining. My own production line usually has 1,000 workers, with about 60 now remaining,” says a female hanjia worker at Foxconn. (Hanjia means winter break, i.e. people who continue working through the spring holiday that most Chinese take off). Smaller manufacturers are having a harder time. A rare earths magnet maker that normally employs about 300 people in the city of Hangzhou, south of Kunshan, received permission to reopen from local authorities last week. The factory was able to begin manufacturing again with a skeleton crew after buying a large disinfectant machine. Rare earth magnets are used in everything from electronics to motors. For any factory to reopen now, “There’s paperwork that has to be submitted to the local government, and that includes guaranteeing masks, some other protective gear that employees can wear, a disinfecting schedule,” says manager Jen Ambrose, one of the few Americans who works at the magnet company.
www.mprnews.org/story/2020/02/19/npr-the-wide-ranging-ways-in-which-the-coronavirus-is-hurting-global-business

A white paper has arrived! Dun and Bradstreet have done a great report on the economic impact of the coronavirus. If you’re into economics, this is definitely worth a 15 minute read. Some takeaways: 90% of all active business in China are affected. At least 51,000 companies around the world have one or more direct tier 1 suppliers and at least 5 million have at least one or more tier 2 suppliers. Alternative countries for suppliers: Electrical machinery and parts could come from Brazil, the nuclear industry could tap Chile or Singapore, Furniture, plastics, toys and games could be covered by Mexico and Brazil, Motor vehicle parts as well as optical and surgical products could be covered by Chile, Colombia or India. Growth is certainly going to drop below previous forecasts but how much by depends on how fast the virus is contained.
www.dnb.com/perspectives/supply-chain/wuhan-coronavirus-business-impact.html?SERV=UPPCPOHP323237

If coronavirus isn’t brought to heel, economic bedlam awaits..

www.telegraph.co.uk/business/2020/02/22/coronavirus-isnt-brought-heel-economic-bedlam-awaits/

Covid-19 interrupting supply chains from watches to lobsters

www.thestar.com.my/news/regional/2020/02/22/oh-dear-covid-19-interrupting-supply-chains-from-watches-to-lobsters

Gloomy data, virus weigh on Wall St
‘UNKNOWN SITUATION’:There is a break in the supply chain as well as in the demand for products, which presents a challenge to global growth, an advisory firm manager said

www.taipeitimes.com/News/biz/archives/2020/02/23/2003731446

JCB to cut UK production as coronavirus hits supply chain

The private company will reduce the working hours of about 4,000 employees from Monday from 39 to 34 hours a week.Workers will be paid for a 39 hour week and bank the hours, working them back later in the year. Overtime will also be suspended, the group said on Thursday.

www.ft.com/content/ef3b2caa-4e73-11ea-95a0-43d18ec715f5

Southeast Asia’s garment supply chain torn up by virus

asia.nikkei.com/Spotlight/Coronavirus/Southeast-Asia-s-garment-supply-chain-torn-up-by-virus

YA THINK? Maybe Global Supply Chains Were A Bad Idea: The coronavirus outbreak exposes the peril of far-flung parts networks and the risk of paralysis.

www.bloomberg.com/opinion/articles/2020-02-21/coronavirus-forces-a-rethinking-of-supply-chains

… and then there’s this …

This economy is dead. The corpse only appears alive because of all the parasites living off what remains, and each other.

Get ready…

Source: Investment Watch

The Cost Of Covid-19 Quarantine: Will You Be Financially Prepared?

(Daisy Luther) As the world tries frantically to contain a rapidly spreading outbreak of Covid-19, schools, public venues, tourist attractions, and workplaces are being closed in an attempt to keep even more people from contracting the illness. Quarantines and self-isolation protocols are also being instituted across the globe for those who may have been exposed.

Of course, everyone knows that millions of people in China have been in lockdown for more than a month. People are told to stay home, many businesses have ceased to operate, and Chinese New Year celebrations simply didn’t happen this year. China’s debts are all coming due now, at the worst possible time as the financial loss for the country has been astronomical. For example, car sales are down 92% and Lunar New Year celebrations and travel that usually earn a billion dollars were canceled.

While the numbers cited here are outrageously large, obviously, these losses aren’t only going to affect “the economy” and “the businesses.” They’re going to have devastating effects on normal folks who just want to go to work, pay their bills, and keep living their lives normally.

A great deal has been written about the economic hits on a global scale as well as the shortages we could soon expect as production in China grinds to a halt, but what about simply being able to pay your rent when your workplace or business is ordered to shut its doors?

Something nobody is really talking about is the financial hit that people will be taking during such closures. This is a very real concern, and for families who already live paycheck to paycheck, the loss of income could prove devastating.

How will containment efforts affect average folks financially?

Continue reading

Money Manager Michael Pento – Upcoming Economic Data Rancid Beyond Belief

People, especially in the West, just don’t get it yet. COVID-19 is the world changer, the reset of civilization. This bad little piece of manufactured bug is in the process of wiping out the whole Chinese economy. Because China is the start of 70-90% of the world’s supply chain, most countries’ economies and supplies are going to evaporate.

Ask yourself this:

1) What do I use every day/week/month that I cannot live without and has any part of its supply chain anchored in China?

Well, that ****’s going away. And, not for just a week, or even a few months. It’s going away for in all likelihood a couple of years at least.

2) What do I buy/eat if the local grocery stores are all closed? How long can I go without being able to shop at one?

A chain, they say, is only as strong as its weakest link. The supply chain that puts food in your local grocery store is built on so many supply chains that it would boggle your mind. Truck parts, refrigeration pumps, packaging machines, plastic wrap, the list goes on and on. All of it is going away.

3) How cheaply are you willing to work?

Figure out what you think your “price” is and then ask yourself why any manufacturer would produce anything from gasoline to chick pot pies? Because the moment they can no longer produce at a profit, they will shut down.

4) When you believe, rightly or wrong, that in leaving your home to work/shop for food could be a death sentence to not only you but to those you live with, and any of those people’s departure from the home could mean the same, what would you leave your house for?

This is the thought process that will paralyze all society. Once people realize that this beastie has a window of being asymptomatically infectious, (super spreaders), for up to 24 days, and that if you happen to get it and beat it, you have just as good a chance to catch it again, and that the second time it has much better odds of killing you than it did the first time. What are you leaving the house for again?

The folks just do not understand it yet. But they will soon.

***

Coronavirus CNBC coverage analysis by Dr Paul Cottrell

Don’t let the CCP and their traitorous American partners throw you off with xenophobia bullshit. Cali is the American seed center because majority of Asians arrive here via LAX . So far we’ve been lucky but the ballooning could be happening very soon here.

The Coronavirus Outbreak Could Affect Availability and Cost of THESE Essential Products From China

(Daisy Luther) The effects of the Wuhan coronavirus could end up being far more widespread than the illness itself. It is already affecting China’s economy, potentially to the tune of $60 billion. Other predictions are even less optimistic, suggesting that if the outbreak isn’t rapidly contained, Chinese banks could face $6 trillion disaster.

And the fallout won’t stop with China. The United States and China are intimately linked economically. The coronavirus outbreak could directly affect our economy, as well as the availability of many essential products that are made in China.

Continue reading

Steep Federal Crop Insurance Budget Cuts Coming In 2021

The Office of Management and Budget (OMB) today released a proposed Fiscal Year 2021 budget that includes steep cuts to the Department of Agriculture and federal crop insurance.

The National Crop Insurance Services released this statement in response:

“Last year brought unprecedented challenges for rural America. Even now, farmers and ranchers across the country are dealing with the lingering consequences of weather events that destroyed fields and ruined crops. And there looks to be no reprieve from the ongoing rural recession: The USDA estimates that farm cash flow will tighten this year, dropping more than $10 billion, or 9%, from 2019.

“The federal crop insurance program reacted quickly and efficiently to keep many farmers afloat during this difficult time. It’s no wonder then that the nation’s farm organizations teamed up in late 2019 to ask Congress to reject any attempts to cut crop insurance and weaken the farm safety net when it’s needed most.

“It’s inexplicable as to why OMB would target such a critical risk-management tool for budget cuts. The proposed cuts will make crop insurance un-affordable and unavailable for farmers, seriously undermining the farm safety net.”

CROP INSURANCE STATS

  1. Crop insurance protects more than 90% of America’s planted crop land acres.
  2. Farmers spend $3.5 to $4 billion per year to purchase crop insurance and bear a significant portion of losses through deductibles.
  3. Crop insurance policies provide to bank and credit lenders who assist farmers through operating loans, especially during a time of low commodity prices.
  4. The federal government spends less than a quarter of 1% of its budget on the farm safety net, including crop insurance.

Source: Successful Farming

How Much Longer Until The Engineered Financial Collapse Of The U.S. Hits?

(Brandon Smith) There are a multitude of false assumptions out there on what the collapse of a nation or “empire” looks like. Modern day Americans have never experienced this type of event, only peripheral crises and crashes. Thanks to Hollywood, many in the public are under the delusion that a collapse is an overnight affair. They think that such a thing is impossible in their lifetimes, and if it did happen, it would happen as it does in the movies – They would simply wake up one morning and find the world on fire. Historically speaking, this is not how it works. The collapse of an empire is a process, not an event.

Continue reading

“Global Economic Decline Is Now Inevitable” – Dennis Meadows On ‘The Limits To Growth’

Fifty years ago, an international team of researchers was commissioned by the Club of Rome to build a computer simulation of exponential economic and population growth on a finite planet.

In 1971, its findings were first released in Moscow and Rio de Janeiro, and later published in 1972 under the title The Limits To Growth. The report concluded:

  1. Given business as usual, i.e., no changes to historical growth trends, the limits to growth on earth would become evident by 2072, leading to “sudden and uncontrollable decline in both population and industrial capacity”. This includes the following:
    • Global Industrial output per capita reaches a peak around 2008, followed by a rapid decline
    • Global Food per capita reaches a peak around 2020, followed by a rapid decline
    • Global Services per capita reaches a peak around 2020, followed by a rapid decline
    • Global population reaches a peak in 2030, followed by a rapid decline
  2. Growth trends existing in 1972 could be altered so that sustainable ecological and economic stability could be achieved.
  3. The sooner the world’s people start striving for the second outcome above, the better the chance of achieving it.

Few reports have generated as much debate, discussion and disagreement. Though it’s hard to argue that its forecasts made back in the early 1970s have proved eerily accurate over the ensuing decades.

But most of its warnings have been largely ignored by policymakers hoping (blindly?) for a rosier future.

One of the original seventeen researchers involved in The Limits To Growth study, Dennis Meadows, joins us for the podcast this week. Fifty years later, what does he foresee ahead?

Decline is now inevitable.

We’re without any question moving into the remainder of a century which is going to see, by the end of these decades, a much smaller population, much lower level of energy and material consumption and so forth.

Whether we retain equity among people and avoid the more violent forms of conflict remains to be seen. But sustainable development is no longer an option.

This is one of the most important discussions we’ve ever recorded among the hundreds produced over the past decade.

Click the play button below to listen to Chris’ interview with Dennis Meadows (55m:24s).

Authored by Adam Taggart via PeakProsperity.com,

Source: ZeroHedge

Canada Must Decide: More Trade With Communist China, Or Live Up To Our Values

Decoupling our economy from China before we become too dependent is the path our nation must take.

The increasingly brutal crackdown on Hong Kong protesters by Communist China, combined with China’s increasing aggression and provocation – not to mention their continued arbitrary detention of two Canadian Citizens – is raising difficult questions for Canada.

We now face a clear choice, and that choice is increasingly unavoidable:

Live up to our values, or increase our trade with Communist China.

Because, at this point, we can’t do both.

Even powerful American companies and brands (like the NBA) are discovering that the more you do business with China, the more you are forced to sacrifice your own values to the whims of the Communist Party.

The result is that China is exporting their authoritarian Communist system to the rest of the world, using trade as the cudgel to put other countries into a state of dependence.

And beyond that, we’ve already seen the hollowing out of Canada’s manufacturing sector, in large part because of China’s deceptive trade practices, currency devaluation, and dumping of product in markets across the globe.

Additionally, the majority of fentanyl coming into Canada and causing so much devastation arrives here from Communist China.

So, for all of these reasons, it is essential that we begin to decouple our economy from China.

Some will say that there is too much money to be made in China for us to decouple, and that trade is worth any cost to our values. But if that’s the direction Canada ends up taking, what is even the point of being a country?

If we have no values, no standards, and no willingness to defend what we claim to believe in as Canadians, then how can we hold our heads up high as a nation?

China doesn’t want trading partners, they want vassal states.

Now, some trade with China is certainly acceptable, in areas where China is desperate and thus can’t enforce demands in return. For food and natural resources which China can’t supply on it’s own, Canada loses nothing from trading with China, but when it comes to technology and manufacturing, trade with China puts our own economic and national security at risk.

And even in terms of food and natural resources, we must limit the expansion of trade with China, because relying too much on their market brings it’s own risk.

Thus, the solution is for Canada to impose large tariffs on imports from China in areas such as metals, military technology, and telecommunications (ban Huawei 5G), while putting limits on the exports of Canadian products to China. At the same time, producers should be compensated for losses from decoupling and we should seek out other markets (like India), where we can trade without throwing our values or national security in the trash.

We live in a dangerous world, and being dependent on trade with a nation like China represents far too big a risk to Canada. We must get rid of that risk before it’s too late, and that means we must begin the process of decoupling as soon as possible.

Source: Spencer Fernando

Negative Interest Rates Are The Price We Pay For De-Civilization

Do central bankers really think negative interest rates are rational? 

“Calculation Error,” which Bloomberg terminals sometimes display1, is an apt metaphor for the current state of central bank policy. Both Europe and Asia are now awash in $13 trillion worth of negative-yielding sovereign and corporate bonds, and Alan Greenspan suggests negative interest rates soon will arrive in the US. Despite claims by both Mr. Trump and Fed Chair Jerome Powell concerning the health of the American economy, the Fed’s Open Market Committee moved closer to negative territory today — with another quarter-point cut in the Fed Funds rate, below even a measly 2%. 

Negative interest rates are just the latest front in the post-2008 era of “extraordinary” monetary policy. They represent a Hail Mary pass from central bankers to stimulate more borrowing and more debt, though there is far more global debt today than in 2007. Stimulus is the assumed goal of all economic policy, both fiscal and monetary. Demand-side stimulus is the mania bequeathed to us by Keynes, or more accurately by his followers. It is the absurd idea, that an economy prospers by consuming and borrowing instead of producing and saving. Negative interest rates turn everything we know about economics upside down.

No society has ever survived consuming more than they can produce.

Under what scenario would anyone lend $1,000 to receive $900 in return at some point in the future? Only when the alternative is to receive $800 back instead, due to the predicted interventions of central banks and governments. Only then would locking in a set rate of capital loss make sense.

By “capital loss” I mean just that; when there is no positive interest paid, the principal itself must be consumed. There is no “market” for negative rates.

The future is uncertain, and there is always counter party risk. The borrower might abscond, or default, or declare bankruptcy. Market conditions might change during the course of the loan, driving interest rates higher to the lender’s detriment. Inflation could rise higher and faster than the agreed-upon nominal interest rate. The lender might even die prior to repayment.

Positive interest rates compensate lenders for all of this risk and uncertainty. Interest, like all economics, ultimately can be explained by human nature and human action. 

If in fact negative interest rates can occur naturally, without central bank or state interventions, then economics textbooks need to be revised on the quick. Every theory of interest contemplates positive interest paid on borrowed capital. Classical economists and their “Real” theory say interest represents a “return” on capital, not a penalty. Capital available for lending, like any other good, is subject to real forces of supply and demand. But nobody would “sell” their capital by giving the buyer interest payments as well, they would simply hold onto it and avoid the risk of lending.

Marxists think interest payments represent exploitation by capital owners lending to needful workers. The amount of interest paid in addition to the capital returned was stolen from the debtor, because the lender did not work for it (ignoring, of course, the capitalist lender’s risk). But how could a borrower be exploited by receiving interest payments for borrowing, i.e., repaying less than they borrowed? I suppose Marxists may in fact cheer the development of negative rates, and perversely see them as a transfer of wealth from lenders to borrowers (when, in fact, we know cheap money and credit overwhelmingly benefit wealthy elites, per the Cantillon Effect). So negative rates require Marxists to drastically rethink their theory of interest.

Austrians stress the time element of interest rates, comparing the lender’s willingness to forego present consumption against the borrower’s desire to pay a premium for present consumption. In Austrian theory interest rates represent the price at which the relative time preferences of lenders and borrowers meet. But once again, negative interest rates cannot explain how or why anyone would ever defer consumption without payment — or in fact pay to do so!  

It should be noted that rational purchasers of negative-yield bonds hope to sell them before maturity, i.e., they hope bond prices rise as interest rates drop even lower. They hope to sell their bonds to a greater fool and generate a capital gain. They are not “buying” the obligation to pay interest, but the chance of reselling for a profit. So purchasing a negative-yield bond might make sense as an investment (vs.institutional and central bank bond buyers, which frequently hold bonds to maturity and thereby literally pay to lend money). But if and when interest rates rise, the losses to those left holding those $13 trillion of bonds could be staggering.

In the meantime, a huge artificial market for at least nominally positive US Treasury debt grows, strengthening the dollar and suppressing interest rates here at home. Once again, the dollar represents the least dirty shirt in the laundry. Congress loves this, of course, because even 5% rates would blow the federal budget to smithereens. Rising rates would cause debt service to be the largest annual line item in that budget, ahead of Social Security, Medicare, and defense. So we might say Congress and the Fed are in a symbiotic relationship at this point. The rest of the world might call it America’s “exorbitant privilege.”

Negative interest rates are the price we pay for central banks. The destruction of capital, economic and otherwise, is contrary to every human impulse. Civilization requires accumulation and production; de-civilization happens when too many people in a society borrow, spend, and consume more than they produce. No society in human history previously entertained the idea of negative interest rates, so like central bankers we are all in uncharted territory now. 

Our job, among many, is to bring the insights of Austrian economics on money and banking to widespread attention before something truly calamitous happens.

Source: by Jeff Deist | Mises Wire

Whole Foods To Cut Part Time Employee Health-Care Benefits

Amazon-owned Whole Foods will be withdrawing medical benefits for hundreds of its part-time workers starting Jan. 1, 2020, the company said Thursday.

In the past, employees needed to work at least 20 hours a week to buy into the health-care plan. Now they will need to work at least 30 hours. Less than 2% of its workforce, or 1,900 employees, will no longer be eligible for medical coverage, under the new policy, the company said.

The news was first reported by Business Insider.

“In order to better meet the needs of our business and create a more equitable and efficient scheduling model, we are moving to a single-tier part-time structure,” a company spokesperson said in an email. “We are providing Team Members with resources to find alternative healthcare coverage options, or to explore full-time, healthcare-eligible positions starting at 30 hours per week. All Whole Foods Market Team Members continue to receive employment benefits including a 20% in-store discount.”

In 2018, Amazon raised its minimum wage to $15 for all employees, including those at Whole Foods. Amazon also announced last week that it was planning on adding more than 30,000 permanent jobs in its tech, corporate and fulfillment departments.

Source: by Jasmine Wu | CNBC

New World Order In Meltdown

Last week was full of portentous events. Only somebody who has not been awake for the last few years will fail to realize how these at first sight unconnected events are part of the same matrix. There was the ever louder talk in mainstream media about an approaching global recession, inverted yield curves and the negative yields, which tell us that the Western financial system is basically in coma and kept alive only by generous IV injections of central bank liquidity. By now it has dawned on people that the central bankers acting as central planners in a command economy and printing money (aka quantitative easing) to fuel asset bubbles are about to wipe off the last vestiges of what used to be a market economy.

Continue reading

Trump’s Farm Bailout Flows To “City Slickers,” a D.C. Lobbyist and ‘Farms’ on Golf Courses

About 9,000 “city slickers” living in luxurious neighborhoods of the nation’s largest cities received a farm bailout from the Trump administration to minimize the impact of the trade war with China, an updated Environmental Working Group (EWG) analysis of Department of Agriculture data shows.

The EWG analysis of USDA data revealed that “many recipients live not in farm country but in the nation’s 50 largest cities or in other decidedly non-rural locations.”

Urban recipients of the bailout include members of farm families, landowners, and investors. These people provide land, capital, or equipment for farms and make high-level decisions for operations.

EWG said bailout recipients include 70 people in San Francisco, 65 residents in New York City, 63 residents in Los Angeles, 61 residents in Washington, D.C., and 19 Miami.

Forward Observer Dispatch: Economic Warning

What follows is the Economic Warning portion of this week’s (Forward Observer) Watch Report.

In this month’s FOMC meeting, Federal Reserve chairman Jerome Powell acknowledged that there was soft economic data emerging — a potential warning sign of recession. Many investors expect a cut to interest rates next month to stave off a recession. Some economists expect two rate cuts this year, regardless of when they happen. One asset manager said he expected four rate cuts this year.

Recession And Trump’s Re-election Chances:

This month, Jeffrey Gundlach, Morgan Stanley, and JPMorgan Chase all revised their expectations of recession forward to 2020. JPMorgan’s Bruce Kasman said it might even start this year. That’s a big shift from what these firms were saying last month, so I agree that we can expect the Fed to cut interest rates in order to stave off a recession. Gundlach, who has no faith in the Fed’s predictive capability, believes that by the time the Fed has to cut rates, it will already be too late.

This, of course, will have major implications for President Trump’s reelection chances. High profile managers like Scott Minerd and Kyle Bass both believe that the recession will be average or mild, respectively. Others, like Gundlach, have warned that this recession is going to present more difficult challenges.

If this recession poses the risks that Gundlach describes (below) then Trump’s chances of reelection will be seriously threatened. If that’s the case, then it’s time to batten down the hatches for higher taxes and wealth redistribution based on what we saw during this week’s Democratic debates and what’s been proposed in the lead up.

The problem with cutting interest rates this year to stave off a recession next year is that the Fed will have less to cut once a recession does hit, which increases the likelihood that the recession is more painful than “mild.”

This week, Fed chair Jerome Powell acknowledged that’s the case, saying, “Interest rates are lower than in the past and likely to remain so. The persistence of lower rates means that when the economy turns down, interest rates will more likely follow close to zero [which] poses new problems to central banks and calls for new ideas.” (Bold for emphasis.)

In the past two recessions, the Fed has cut interest rates from 5.25 percent to basically zero percent during the 2008 recession, and cut from 6.5 percent prior to the 2001 recession. Today, the federal funds rate sits around 2.25 percent — that’s before any cuts this year. That does not bode well for the Fed’s ability to soften the severity of the next recession. The Fed has 50 percent less to cut, which means that a hard landing during the recession is more likely.

Earlier this year, Bridgewater’s Greg Jensen warned of a period of poor economic conditions in the U.S. “We think that the secular conditions and cyclical conditions are combining to create this situation where you’re going to have this long, protracted weakness in the developed world economies… So basically what we expect to see is weaker growth and a movement to [Quantitative Easing]… The struggle in Europe is probably going to click first.”

That mirrors what billionaire investor Stanley Druckenmiller believes. He said earlier this year that, “The highest probability is we struggle [economically] going forward.”

So who’s right? Are we going to have a mild recession or will this be the beginning of a ‘secular’ — i.e., long term — period of persistently weak growth and economic malaise?

Right now, my money is on what Gundlach had to say earlier this month: “When the next recession comes, there’s going to be a really big problem… with the national debt… [We’re going to see] basically money printing, I think, to combat the next recession.”

Gundlach describes that money printing will lead to increases in long term interest rates, which will actually make the recession worse. And maybe that’s why Fed chair Jerome Powell is openly calling for “new ideas” to reverse the effects of the next recession.

In light of changes to this month’s Recession Matrix (out later today for Warning subscribers), there’s a solid argument to be made that the next recession is closer than previously thought, and that it may rival the duration of the 2008 recession at 18 months, followed by persistently low economic growth in the years following. We could be headed towards the Great Recession 2.0.

Consider that we may have about 12 months before this kicks off, followed by the 2020 election four months later — in other words, at the worst possible time. If you haven’t considered kicking your preparedness into a higher gear, then now is the time. – S.C.

If you’re not already a member, you can sign up for a free 7-day trial to the Forward Observer Warning Service and stay ahead of political, social, and economic threats with reports like this one.

***

“It’s coming guys, the pace is quickening, time to dial it up”

BLOFTW

Buy lots of food this week…

Legal and financial expert Wayne Jett says,

“The key to your financial stability between this side of the chasm and the other side of the chasm is owning precious metals, owning gold and silver. These are most likely the types of things that will hold their real value. Therefore, on the other side of the chaos of this chasm, when you declare the present currency system has ended. . . I think the President is trying to make this pending period of uncertainty as short as possible, between the time when the old currency dies and the new currency is in place.”

When is this going to happen? Is it before or after the 2020 Election? Jett predicts, “I think it is before the 2020 Election. I don’t think we can make it that long, especially with the global cabal trying to start a world war or trying to have a currency failure right now.” Join Greg Hunter as he goes One-on-One with Wayne Jett, founder of ClassicalCapital.com.

“The Fed is an outpost of a foreign power that controls our economy, most of our politics and our financial future. It’s an instrument of the Rothschild global cabal. It always has been since 1913 and we need to rid ourselves of it as soon as possible”

In other news…

NYT: U.S. Escalates Attacks on Russia’s Power Grid
***

South America blackout leaves tens of millions without power
***

Gold Likely To Soon Be Lifted By Rising De-Dollarization Surge

Next Stage Of The Engineered Global Economic Reset Has Arrived

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(Brandon Smith) When discussing the fact that globalists often deliberately engineer economic crisis events, certain questions inevitably arise. The primary question being “Why would the elites ruin a system that is already working in their favor…?” The answer is in some ways complicated because there are multiple factors that motivate the globalists to do the things they do. However, before we get into explanations we have to understand that this kind of question is rooted in false assumptions, not logic.

The first assumption people make is that that current system is the ideal globalist system – it’s not even close.

When studying globalist literature and white papers, from Aldous Huxley’s Brave New World, to H.G. Wells’ book The New World Order and his little known film Things To Come, to Manly P. Hall’s collection of writings titled ‘The All Seeing Eye’, to Carol Quigley’s Tragedy And Hope, to the Club Of Rome documents, to Zbigniew Brzezinski’s Between Two Ages, to former UN Director Robert Muller’s Good Morning World documents, to Henry Kissinger’s Assembly Of A New World Order, to the IMF and UN’s Agenda 2030, to nearly every document on globalization that is published by the Council on Foreign Relations, we see a rather blatant end goal described.

To summarize: For at least the past century the globalists have been pursuing a true one world system that is not covert, but overt. They want conscious public acceptance of a completely centralized global economic system, a single global currency, a one world government, and a one world religion (though that particular issue will require an entirely separate article).

To attain such a lofty and ultimately destructive goal, they would have to create continuous cycles of false prosperity followed by catastrophe. Meaning, great wars and engineered economic collapse are their primary tools to condition the masses to abandon their natural social and biological inclinations towards individualism and tribalism and embrace the collectivist philosophy. They created the current system as a means to an end. It is not their Utopian ideal; in fact, the current system was designed to fail. And, in that failure, the intended globalist “order” is meant to be introduced. The Hegelian Dialectic describes this strategy as Problem, Reaction, Solution.

This is the reality that many people just don’t seem to grasp. Even if they are educated on the existence of the globalist agenda, they think the globalists are trying to protect the system that exists, or protect the so-called “deep state”. But this is a propaganda meme that does not describe the bigger picture. The big picture is at the same time much worse, and also more hopeful.

The truth is that the old world order of the past century is a sacrificial measure, like the booster stage of a rocket to space that falls away and burns up in the atmosphere once it is expended. If you do not accept the reality that the globalists destroy in order to create opportunities for gain, then you will never be able to get a handle on why current events are taking the shape they are.

Of course, in public discourse the elites have learned to temper their language and how they describe their agenda. Public knowledge, or at least general awareness of the “new world order” is growing, and so they are forced to introduce the idea of a vast societal and economic shift in a way that sounds less nefarious and is relatively marketable. They also have a tendency to hint at events or warn about disasters that are about to happen; disasters they are about to cause. Perhaps this is simply a way to insulate themselves from blame once the suffering starts.

The International Monetary Fund began spreading a meme a few years ago as a way to describe a global economic crash without actually saying the word “crash”. Managing Director Christine Lagarde and others started using the phrase “global economic reset” in reference to greater centralization of economic and monetary management, all in the wake of a kind of crisis that was left mostly ambiguous. What she was describing was simply another name for the new world order, but it was one of the first times we had seen a globalist official actually hint that the change or “reset” would be built on the ashes of the old world system, rather than simply built as an extension of it.

Lagarde’s message was essentially this: “Collective” cooperation will not just be encouraged in the new order, it will be required — meaning, the collective cooperation of all nations toward the same geopolitical and economic framework. If this is not accomplished, great fiscal pain will be felt and “spillover” will result. Translation: Due to the forced interdependency of globalism, crisis in one country could cause a domino effect of crisis in other countries; therefore, all countries and their economic behavior must be managed by a central authority to prevent blundering governments or “rogue central banks” from upsetting the balance.

The IMF and the CFR also refer to this as the “new multilateralism”, or the “multipolar world order”.

I believe the next stage of the economic reset has now begun in 2018 and 2019. In this phase of the globalist created theater, we see the world being torn apart by the “non-cooperation” that Lagarde and the CFR warned us about in 2015. The trade war is swiftly becoming a world economic war drawing in multiple nations on either side. This scenario only benefits the globalists, as it provides perfect cover as they initiate a crash of the historically massive ‘Everything Bubble’ which they have spent the last ten years inflating just for this moment.

As I predicted in my article ‘World War III Will Be An Economic War’, published in April of 2018, the tariff conflict between the US and China has become an excellent catalyst for the global reset. In my article ‘America Loses When The Trade War Becomes A Currency War’, published in June of 2018, I stated:

One question that needs to be addressed is how long the current trade war will last? Some people claim that economic hostilities will be short-lived, that foreign trading partners will quickly capitulate to the Trump administration’s demands and that any retaliation against tariffs will be meager and inconsequential. If this is the case and the trade war moves quickly, then I would agree — very little damage will be done to the U.S. economy beyond what has already been done by the Federal Reserve.

However, what if it doesn’t end quickly? What if the trade war drags on for the rest of Trump’s first term? What if it bleeds over into a second term or into the regime of a new president in 2020? This is exactly what I expect to happen, and the reason why I predict this will be the case rests on the opportunities such a drawn out trade war will provide for the globalists.”

The economic world has a very short attention span, but a year ago in the alternative media the trade war was being treated by Trump cheerleaders in particular as a novelty – a non-issue that would be resolved in a matter of a months with Trump victorious. Today, those same people are now vocal trade war fans, waving their pom-poms and screaming for more as they buy completely into the farce. Mentioning the fact that the trade war is only serving as a distraction so that the globalists can complete their economic reset agenda does not seem to phase them.

They usually make one of two arguments: Trump is an anti-globalist that is tearing down the “deep state” system and the trade war is part of his “4D chess game”. Or, the globalists don’t have enough control over the current system to achieve the kind of “conspiracy” I describe here.

First, going by his associations alone, it is clear that Donald Trump is controlled opposition playing the role of “anti-globalist” while at the same time stacking his cabinet with the very same elites he is supposedly at war with. As I have outlined in numerous articles, Trump was bought off in the 1990’s when he was saved from possible permanent bankruptcy by Rothschild banking agent Wilber Ross. Trump made Ross his Commerce Secretary as soon as he entered the White House, and Ross is one of the key figures in the developing trade war.

At this point I have to say that anyone arguing that Trump is “playing 4D chess” with the banking elites while he is surrounded by them on a daily basis must be clinically insane. Every economic and trade policy Trump has initiated in the past two years has served as a smokescreen for the globalists controlled demolition of the economy. As the reset continues in the midst of the trade war, it will be Trump and by extension all conservatives that get the blame. Trump is a pied piper of doom for conservative movements, which is why I have always said any attempts to impeach Trump (before the crash is completed) will fail. The globalists like him exactly where he is.

Second, there is a globalist controlled central bank in almost every nation in the world, including supposedly anti-globalist countries in the East like Russia and China. All of these central banks are coordinated through the Bank For International Settlements in Basel, Switzerland. The globalists covertly dictate the economic policy of nearly the entire planet. They can easily create an economic collapse anytime they wish. This is a fact.

However, what they do not control is how elements of the public will react to their reset agenda. And this is where we find hope. They do not have their “new world order” yet, which is why they have to resort to elaborate theatrics and psychological operations. They know that an awake and aware segment of the population could annihilate them tomorrow with the right motivation, and so, they continue to distract us with a swarm of other concerns and calamities.

The purpose is to convince the masses to focus on all the wrong enemies while ignoring organized and psychopathic elites as the root of threat to humanity. We are supposed to hate the Russians, or hate the Chinese, or hate people on the left, or hate people on the right, and so it goes on. But these conflicts are just symptoms of a deeper disease. The great danger is that the focus on globalists as the virus will fade from public consciousness and conservative circles in particular as the trade war becomes a world war and economic collapse results in financial pain.

The reset is upon us. The narrative of the collapse is being written before our eyes. The end game rests not on the globalists, though, but proponents of liberty and sovereignty. Either we keep our crosshairs on the true enemy, or we get sucked into the maelstrom and forget who we are and why we are here. If the latter occurs, then the globalist reset will be assured.

Source: by Brandon Smith | Alt-Market

American Pay-to-Play Fascism Is Financial Tyranny

If you drive a car, I’ll tax the street,
If you try to sit, I’ll tax your seat.
If you get too cold I’ll tax the heat,
If you take a walk, I’ll tax your feet.

Don’t ask me what I want it for
If you don’t want to pay some more
‘Cause I’m the taxman, yeah, I’m the taxman…
And you’re working for no one but me.
— George Harrison, “Taxman”

We’re not living the American Dream. We’re in the grip of a financial nightmare.

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“We the people” have become the new, permanent underclass in America.

(John Whitehead) We get taxed on how much we earn, taxed on what we eat, taxed on what we buy, taxed on where we go, taxed on what we drive, and taxed on how much is left of our assets when we die, and yet we have no real say in how the government runs, or how our taxpayer funds are used.

Case in point: Lawmakers across the country have been acting as fronts for corporations, sponsoring more than 10,000 model laws written by corporations, industry groups and think tanks such as the American Legislative Exchange Council.

Make no mistake: This is fascism disguised as legislative expediency.

As a recent investigative report by USA TODAY, The Arizona Republic and the Center for Public Integrity points out, these copycat bills have been used to “override the will of local votersand advance the agendas of the corporate state. “Disguised as the work of lawmakers, these so-called ‘model’ bills get copied in one state Capitol after another, quietly advancing the agenda of the people who write them.”

In this way, laws that promise to protect the public “actually bolster the corporate bottom line.”

For example, “The Asbestos Transparency Act didn’t help people exposed to asbestos. It was written by corporations who wanted to make it harder for victims to recoup money. The ‘HOPE Act,’ introduced in nine states, was written by a conservative advocacy group to make it more difficult for people to get food stamps.”

Talk about Orwellian.

So we have no real say in how the government runs, or how our taxpayer funds are used, but that doesn’t prevent the government from fleecing us at every turn.

This is true whether you’re talking about taxpayers being forced to fund high-priced weaponry that will be used against us, endless wars that do little for our safety or our freedoms, or bloated government agencies such as the National Security Agency with its secret budgets, covert agendas and clandestine activities. Even monetary awards in lawsuits against government officials who are found guilty of wrongdoing are paid by the taxpayer.

We’re being forced to pay for endless wars that do more to fund the military industrial complex than protect us, for misguided pork barrel projects that do little to enhance our lives, and for the trappings of a police state that serves only to imprison us within its walls.

All the while the government continues to do whatever it likes — levy taxes, rack up debt, spend outrageously and irresponsibly — with little thought for the plight of its citizens.

We’re being played as easy marks by hustlers bearing the imprimatur of the government.

Truly, if there is an absolute maxim by which the federal government seems to operate, it is that the taxpayers — who fuel the nation’s economy and fund the government’s programs — always get ripped off.

Examples abound of wasteful government spending.

$28 million for a camouflage pattern for the Afghan National Army’s uniforms that had to be discarded because it clashes with the desert; $80 million to corral wild horses that would fare better unpenned; $5 million for a study to conclude that fraternity and sorority members drink more than their peers; and more than $1 billion worth of small arms, mortars, Humvees, and other equipment that has gone “missing” in Iraq.

If Americans managed their personal finances the way the government mismanages the nation’s finances, we’d all be in debtors’ prison by now.

Still, the government remains unrepentant, unfazed and undeterred in its money grabs.

Because the government’s voracious appetite for money, power and control has grown out of control, its agents have devised other means of funding its excesses and adding to its largesse through taxes disguised as fines, taxes disguised as fees, and taxes disguised as tolls, tickets and penalties.

With every new tax, fine, fee and law adopted by our so-called representatives, the yoke around the neck of the average American seems to tighten just a little bit more.

Everywhere you go, everything you do, and every which way you look, we’re getting swindled, cheated, conned, robbed, raided, pickpocketed, mugged, deceived, defrauded, double-crossed and fleeced by governmental and corporate shareholders of the American police state out to make a profit at taxpayer expense.

The overt and costly signs of the despotism exercised by the increasingly authoritarian regime that passes itself off as the United States government are all around us: warrantless surveillance of Americans’ private phone and email conversations by the NSA; SWAT team raids of Americans’ homes; shootings of unarmed citizens by police; harsh punishments meted out to schoolchildren in the name of zero tolerance; armed drones taking to the skies domestically; endless wars; out-of-control spending; militarized police; roadside strip searches; roving TSA sweeps; privatized prisons with a profit incentive for jailing Americans; fusion centers that collect and disseminate data on Americans’ private transactions; and militarized agencies such as the IRS, Dept. of Education, the Smithsonian and others with stockpiles of ammunition, to name some of the most appalling.

Meanwhile, the three branches of government (Executive, Legislative and Judicial) and the agencies under their command—Defense, Commerce, Education, Homeland Security, Justice, Treasury, etc.—have switched their allegiance to the Corporate State with its unassailable pursuit of profit at all costs and by any means possible.

We are now ruled by a government consumed with squeezing every last penny out of the population and seemingly unconcerned if essential freedoms are trampled in the process.

While we’re struggling to get by, and making tough decisions about how to spend what little money actually makes it into our pockets after the federal, state and local governments take their share (this doesn’t include the stealth taxes imposed through tolls, fines and other fiscal penalties), the police state is spending our hard-earned tax dollars to further entrench its powers and entrap its citizens.

If you want to know the real motives behind the government’s agenda, follow the money trail.

When you dig down far enough, you quickly find that those who profit from Americans being surveilled, fined, scanned, searched, probed, tasered, arrested and imprisoned are none other than the police who arrest them, the courts which try them, the prisons which incarcerate them, and the corporations, which manufacture the weapons, equipment and prisons used by the American police state.

It gets worse.

Americans have also been made to pay through the nose for the government’s endless wars, subsidization of foreign nations, military empire, welfare state, roads to nowhere, bloated workforce, secret agencies, fusion centers, private prisons, biometric databases, invasive technologies, arsenal of weapons, and every other budgetary line item that is contributing to the fast-growing wealth of the corporate elite at the expense of those who are barely making ends meet—that is, we the taxpayers.

Those football stadiums that charge exorbitant sums for nosebleed seats? Our taxpayer dollars subsidize them.

Those blockbuster war films? Yep, we were the silent investors on those, too.

This isn’t freedom.

You’re not free if the government can seize your home and your car (which you’ve bought and paid for) over nonpayment of taxes.

You’re not free if government agents can freeze and seize your bank accounts and other valuables if they merely “suspect” wrongdoing.

And you’re certainly not free if the IRS gets the first cut of your salary to pay for government programs over which you have no say.

If you have no choice, no voice, and no real options when it comes to the government’s claims on your property and your money, you’re not free.

As former Congressman Ron Paul observed, “The Founding Fathers never intended a nation where citizens would pay nearly half of everything they earn to the government.”

Unfortunately, somewhere over the course of the past 240-plus years, democracy has given way to kleptocracy (a government ruled by thieves), and representative government has been rejected in favor of a kakistocracy (a government run by the most unprincipled citizens that panders to the worst vices in our nature: greed, violence, hatred, prejudice and war) ruled by career politicians, corporations and thieves—individuals and entities with little regard for the rights of American citizens.

The American kleptocracy continues to suck the American people down a rabbit hole into a parallel universe in which the Constitution is meaningless, the government is all-powerful, and the citizenry is powerless to defend itself against government agents who steal, spy, lie, plunder, kill, abuse and generally inflict mayhem and sow madness on everyone and everything in their sphere.

This dissolution of that sacred covenant between the citizenry and the government — establishing “we the people” as the masters and the government as the servant — didn’t happen overnight.

It didn’t happen because of one particular incident or one particular president.

It has been a process, one that began long ago and continues in the present day, aided and abetted by politicians who have mastered the polarizing art of how to “divide and conquer.”

By playing on our prejudices about those who differ from us, capitalizing on our fears for our safety, and deepening our distrust of those fellow citizens whose opinions run counter to our own, the powers-that-be have effectively divided us into polarized, warring camps incapable of finding consensus on the one true menace that is an immediate threat to all of our freedoms: the U.S. government.

We are now the subjects of a militarized, corporate empire in which the vast majority of the citizenry work their hands to the bone for the benefit of a privileged few.

Adding injury to the ongoing insult of having our tax dollars misused and our so-called representatives bought and paid for by the moneyed elite, the government then turns around and uses the money we earn with our blood, sweat and tears to target, imprison and entrap us.

All of those nefarious government deeds that you read about in the paper every day: those are your tax dollars at work.

So what are you going to do about it?

There was a time in our history when our forebears said “enough is enough” and stopped paying their taxes to what they considered an illegitimate government. They stood their ground and refused to support a system that was slowly choking out any attempts at self-governance, and which refused to be held accountable for its crimes against the people. Their resistance sowed the seeds for the revolution that would follow.

Unfortunately, in the 200-plus years since we established our own government, we’ve let bankers, turncoats and number-crunching bureaucrats muddy the waters and pilfer the accounts to such an extent that we’re back where we started.

Once again, we’ve got a despotic regime with an imperial ruler doing as they please.

Once again, we’ve got a judicial system insisting we have no rights under a government which demands that the people march in lockstep with its dictates.

And once again, we’ve got to decide whether we’ll keep marching or break stride and make a turn toward freedom.

But what if we didn’t just pull out our pocketbooks and pony up to the federal government’s outrageous demands for more money?

What if we didn’t just dutifully line up to drop our hard-earned dollars into the collection bucket, no questions asked about how it will be spent?

What if, instead of quietly sending in our tax checks, hoping vainly for some meager return, we did a little calculating of our own and started deducting from our taxes those programs that we refuse to support?

As I make clear in my book Battlefield America: The War on the American People, if we don’t have the right to decide what happens to our hard-earned cash, then we don’t have any rights at all.

After all, the government isn’t taking our money to make our lives better.

Source: by John Whitehead | The Rutherford Insititute

Cyberattacks, Solar Storms, & EMP Weapons: US Power Grid Extremely Vulnerable, Extended Blackout Is Inevitable

A lot of Americans are mocking Venezuela right now, but the truth is that what has happened to them could also happen to us very easily. 

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(Michael Snyder) As you will see below, DARPA is so concerned about the possibility of a cyberattack taking down our power grid that they held an extended exercise recreating such a scenario late last year.  And even though scientists tell us that it is inevitable that a “solar tsunami” will absolutely devastate our power grid at some point, our leaders on the federal level refuse to spend the money that it would take to protect our basic electrical infrastructure.  In addition, Russia, China, North Korea and others have developed extremely advanced EMP weapons, and we have absolutely no protection against them.  One way or another, an extended blackout will eventually happen in the United States, and so we should try to learn some lessons from what is going on in Venezuela right now.

And without a doubt, life is hell in Venezuela at this moment.  The following comes from NPR

Signs of the crisis are everywhere you look in the Venezuelan capital. “Drive around Caracas, and you see long lines of cars waiting for hours at the few gas stations still operational,” NPR’s Philip Reeves reported from the city.

“Motorists park on highways, cell phones aloft, searching for a signal. The rich have taken refuge in luxury hotels. The poor stand in lines in the street,” Reeves added.

The power outage has affected water pumps in some Caracas neighborhoods, meaning that people are waiting to fill water bottles at public locations such as springs.

As food supplies run out, people are becoming increasingly desperate, and desperate people do desperate things.

Hundreds of stores are being looted, and the overwhelmed police are instructing store owners to fend for themselves

Looters smashed shop windows and made off with merchandise in more than 300 businesses across the state along the border with Colombia, the Zulia chapter of business organization Fedecamaras said in a statement.

“About 100 people came into the store and took all the food, the point of sale terminals,” said Maria Centeno, 29, the owner of a store selling food and furniture that was looted on Sunday. “They were people from the community. The police came by and they told me to sort it out myself.”

Of even greater concern is the fact that many people are dying from a lack of medical care.

Without power, there is little that the doctors are able to do, and one mother was forced to actually carry the body of her dead daughter through the streets to a morgue after the local hospital was unable to help her

A severely malnourished 19-year-old girl died in her mother’s arms after doctors in Venezuela were forced to turn her away because a massive blackout shut down a hospital.

Heartbroken mother Elizabeth Díaz was forced to carry her daughter’s body, which weighed just 22 pounds, through the streets to a morgue.

A lot of Americans are mocking what is going on in Venezuela, but the truth is that the exact same thing could happen here too.

Many believe that the extended blackout in Venezuela was caused by a cyberattack, and unfortunately the truth is that the U.S. power grid is also quite vulnerable if someone decided to attack us in the same manner.

Last November, DARPA held a seven day exercise that simulated what would happen if a massive cyberattack suddenly took down our grid…

The Defense Advanced Research Projects Agency exercise, which took place from Nov. 1 to Nov. 7, was fictional, but it was designed to mimic all the hurdles and uncertainty of a real-world cyberattack that took out power across the nation for weeks on end–a scenario known as a “black start.”

To add realism, the exercise took place on Plum Island, a federal research facility off the north fork of Long Island, where DARPA researchers were able to segregate a portion of the island on its own electric grid.

Over the course of the seven-day exercise, more than 100 people gathered on the island, filling every necessary role to mimic an actual black start.

Of course that is not the only way our power grid could go down for an extended period.

Our sun is capable of producing a “solar tsunami” that could absolutely cripple our electrical grid at any time.  Earlier this week, I came across an article about a gigantic solar tsunami that hit out planet approximately 2,700 years ago

Roughly 2,700 years ago, an unusually powerful solar storm swept past the Earth, scientists announced in a new study. Though it had little to no impact on people in that long ago, pre-industrial and pre-technological world, such an event today would cause widespread power outages along with potentially disastrous communication and navigation failures.

The solar storm in 660 B.C. was about 10 times stronger than any known event in the past 70 years, study lead author Raimund Muscheler said.

But we don’t have to go back that far to find the kind of solar storm that I am talking about.

In 1859, an absolutely enormous solar storm known as “the Carrington Event” hit the United States…

The solar storm of 1859 (also known as the Carrington Event)[1] was a powerful geomagnetic storm during solar cycle 10 (1855–1867). A solar coronal mass ejection (CME) hit Earth’s magnetosphere and induced one of the largest geomagnetic storms on record, September 1–2, 1859. The associated “white light flare” in the solar photosphere was observed and recorded by British astronomers Richard C. Carrington (1826–1875) and Richard Hodgson (1804–1872). The now-standard unique IAU identifier for this flare is SOL1859-09-01.

A solar storm of this magnitude occurring today would cause widespread electrical disruptions, blackouts and damage due to extended outages of the electrical grid.[2][3] The solar storm of 2012 was of similar magnitude, but it passed Earth’s orbit without striking the planet, missing by nine days.[4]

If such a storm hit us right now, electronic devices would be fried from coast to coast and the power grid would be down for the foreseeable future.  Life would dramatically change for all of us, and chaos would be unleashed all across this nation.

This is just one of the reasons why I so strongly encourage people to get prepared, because our government is most definitely not preparing for this kind of threat.

Lastly, I want to also mention that Russia, China and North Korea have been developing highly sophisticated “Super-EMP weapons” that we have no defense for.  The following is from the Washington Free Beacon

Several nations, including China and Russia, are building powerful nuclear bombs designed to produce super-electromagnetic pulse (EMP) waves capable of devastating all electronics—from computers to electric grids—for hundreds of miles, according to a newly-released congressional study.

A report by the now-defunct Commission to Assess the Threat to the United States from EMP Attack, for the first time reveals details on how nuclear EMP weapons are integrated into the military doctrines of China, Russia, North Korea, and Iran.

For much more on the threat that we are facing, please see my previous article entitled “Amerigeddon: Are You Ready For The Chaos That Will Ensue When The Power Grid Is Brought Down?”

Sadly, most Americans do not understand how vulnerable we are, and when the power suddenly goes out someday they will have no idea what is happening.

So keep a close eye on Venezuela right now, because the exact same things that are happening there will eventually happen here too.

It is just a matter of time.

Source: ZeroHedge

US Cities Face “Moment Of Reckoning” As China Halts Trash Imports

In the Trump era, the American garbage business is changing in ways that Tony Soprano never could have anticipated. And it’s creating serious problems for American cities, who might soon find themselves with nowhere to turn to export their trash and recyclables (most of which have almost no value above rubbish due to contamination, and are typically disposed of in the same fashion).

And while an unrelenting river of garbage with nowhere to go might be a mafioso’s dream, small towns like Chester City, PA., a small town in Delaware County that is best known as Philly’s waste pit, is demanding that something be done since China’s sleeper ban on recycling imports – which arose from Beijing’s desire “not to be the world’s landfill” – has led to a host of new deadly contaminants polluting the impoverished town’s air as its incinerators now burn more of the plastics that China will no longer accept.

As we explained last year, since 1992, China and Hong Kong have taken in approximately 72% of global plastic waste according to a study in the journal Science Advances. However, since January 2018, Beijing stopped accepting most paper and plastic waste in accordance with new environmental policies.

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What they do still accept: cardboard and metal, now has an extremely low contamination threshold of just 0.5% – a level far too low for current US recycling technology to handle. Where China used to take 40% of the US’s paper plastics and other trash, that trade has now ground to a halt.

It is “virtually impossible to meet the stringent contamination standards established in China”, according to a spokeswoman for the Philly city government. Because of this, the city’s garbage problem has become a “major impact on the city’s budget”, at around $78 a ton. Now, half of the city’s recycling is going to the Covanta plant.

Making matters worse is that US waste handlers believe that China is on track to close its doors to all recycled materials by 2020, an impossibly short deadline to build new incinerators or find somewhere else to dump America’s garbage (other than the ocean).

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Since China implemented the ban last year, about 200 tons of recycling material are incinerated every day at the Covanta plant in Chester, according to the Guardian.

The incinerator’s impact on public health in Chester is already staggering: Nearly four in 10 children in the city have asthma, while the rate of ovarian cancer is 64% higher than the rest of Pennsylvania and lung cancer rates are 24% higher. And community activists worry that could get worse: Experts believe the burning of the “recyclable” plastics could unleash a new fog of toxic dioxins in to the town’s air.

So they’re organizing to do something about it, as one local told the Guardian.

“People want to do the right thing by recycling but they have no idea where it goes and who it impacts,” said Zulene Mayfield, who was born and raised in Chester and now spearheads a community group against the incinerator, called Chester Residents Concerned for Quality Living.

“People in Chester feel hopeless – all they want is for their kids to get out, escape. Why should we be expendable? Why should this place have to be burdened by people’s trash and shit?”

Of course, this dilemma isn’t unique to Philly and Chester. The problem of what to do with the growing backlog of American waste is playing out across the country.

Contrary to the common wisdom that recycling will save the sea turtles, the reality is that most of the recyclables collected in the US are incinerated or thrown in a landfill (sorry, turtles).

Ironically, while China has a reputation for being inundated with pollution and smog according to the American popular perception, now that the Chinese aren’t taking our trash, we have no idea what to do with it.

“The unfortunate thing in the United States is that when people recycle they think it’s taken care of, when it was largely taken care of by China,” said Gilman. “When that stopped, it became clear we just aren’t able to deal with it.”

To make waste disposal in the US more palatable for small towns, incinerators will need to be reengineered to meet higher environmental standards, and the whole US recycling system will need to be overhauled.

There isn’t much of a domestic market for US recyclables – materials such as steel or high-density plastics can be sold on but much of the rest holds little more value than rubbish – meaning that local authorities are hurling it into landfills or burning it in huge incinerators like the one in Chester, which already torches around 3,510 tons of trash, the weight equivalent of more than 17 blue whales, every day.

“This is a real moment of reckoning for the US because of a lot of these incinerators are aging, on their last legs, without the latest pollution controls,” said Claire Arkin, campaign associate at Global Alliance for Incinerator Alternatives. “You may think burning plastic means ‘poof, it’s gone’ but it puts some very nasty pollution into the air for communities that are already dealing with high rates of asthma and cancers.”

If a solution isn’t found soon, garbage will continue to eat up a larger share of city budgets, pushing them further toward financial instability.

Or towns like Chester might follow the example set by Sopranos antagonist Richie Aprile.

Source: ZeroHedge

Billionaire Club’s Fear Of The Next Downturn Is Likely Understated

Eddie, Iron Maiden

“What scares me the most longer term is that we have limitations to monetary policy — which is our most valuable tool — at the same time we have greater political and social antagonism.” –Ray Dalio, Bridgewater Associates

Dalio made the remarks in a panel discussion at the World Economic Forum’s annual meeting in Davos on Tuesday where he reiterated that a limited monetary policy toolbox, rising populist pressures and other issues, including rising global trade tensions, are similar to the backdrop present in the latter part of the Great Depression in the late 1930s.

Before you dismiss Dalio’s view, Bridgewater’s Pure Alpha Strategy Fund posted a gain of 14.6% in 2018, while the average hedge fund dropped 6.7% in 2018 and the S&P 500 lost 4.4%.

The comments come at a time when a brief market correction has turned monetary and fiscal policy concerns on a dime. As noted by Michael Lebowitz yesterday afternoon at RIA PRO

“In our opinion, the Fed’s new warm and cuddly tone is all about supporting the stock market. The market fell nearly 20% from record highs in the fourth quarter and fear set in. There is no doubt President Trump’s tweets along with strong advisement from the shareholders of the Fed, the large banks, certainly played an influential role in persuading Powell to pivot.

Speaking on CNBC shortly after the Powell press conference, James Grant stated the current situation well.

“Jerome Powell is a prisoner of the institutions and the history that he has inherited. Among this inheritance is a $4 trillion balance sheet under which the Fed has $39 billon of capital representing 100-to-1 leverage. That’s a symptom of the overstretched state of our debts and the dollar as an institution.”

As Mike correctly notes, all it took for Jerome Powell to completely abandon any facsimile of “independence” was a rough December, pressure from Wall Street’s member banks, and a disgruntled White House to completely flip their thinking.

In other words, the Federal Reserve is now the “market’s bitch.”

However, while the markets are celebrating the very clear confirmation that the “Fed Put” is alive and well, it should be remembered these “emergency measures” are coming at a time when we are told the economy is booming.

“We’re the hottest economy in the world. Trillions of dollars are flowing here and building new plants and equipment. Almost every other data point suggests, that the economy is very strong. We will beat 3% economic growth in the fourth quarter when the Commerce Department reopens. 

We are seeing very strong chain sales. We don’t get the retail sales report right now and we see very strong manufacturing production. And in particular, this is my favorite with our corporate tax cuts and deregulation, we’re seeing a seven-month run-up of the production of business equipment, which is, you know, one way of saying business investment, which is another way of saying the kind of competitive business boom we expected to happen is happening.” – Larry Kudlow, Jan 24, 2019.

Of course, the reality is that while he is certainly “spinning the yarn” for the media, the Fed is likely more concerned about “reality” which, as the data through the end of December shows, the U.S. economy is beginning to slow.

“As shown, over the last six months, the decline in the LEI has actually been sharper than originally anticipated. Importantly, there is a strong historical correlation between the 6-month rate of change in the LEI and the EOCI index. As shown, the downturn in the LEI predicted the current economic weakness and suggests the data is likely to continue to weaken in the months ahead.”

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Limited Monetary Tool Box

As Dalio noted, one of the biggest issues facing global Central Banks is the ongoing effectiveness of “Quantitative Easing” programs. As previously discussed:

“Of course, after a decade of Central Bank interventions, it has become a commonly held belief the Fed will quickly jump in to forestall a market decline at every turn. While such may have indeed been the case previously, the problem for the Fed is their ability to ‘bail out’ markets in the event of a ‘credit-related’ crisis.”

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“In 2008, when the Fed launched into their “accommodative policy” emergency strategy to bail out the financial markets, the Fed’s balance sheet was only about $915 Billion. The Fed Funds rate was at 4.2%.

If the market fell into a recession tomorrow, the Fed would be starting with roughly a $4 Trillion dollar balance sheet with interest rates 2% lower than they were in 2009. In other words, the ability of the Fed to ‘bail out’ the markets today, is much more limited than it was in 2008.”

But it isn’t just the issue of the Fed’s limited toolbox, but the combination of other issues, outside of those noted by Dalio, which have the ability to spur a much larger.

The nonprofit National Institute on Retirement Security released a study in March stating that nearly 40 million working-age households (about 45 percent of the U.S. total) have no retirement savings at all. And those that do have retirement savings don’t have enough. As I discussed recently, the Federal Reserve’s 2016 Survey of consumer finances found that the mean holdings for the bottom 80% of families with holdings was only $199,750.

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Such levels of financial “savings” are hardly sufficient to support individuals through retirement. This is particularly the case as life expectancy has grown, and healthcare costs skyrocket in the latter stages of life due historically high levels of obesity and poor physical health. The lack of financial stability will ultimately shift almost entirely onto the already grossly underfunded welfare system.

However, as for those with financial assets heading into retirement, after two major bear markets since the turn of the century, weak employment and wage growth, and an inability to expand debt levels, the majority of American families are financially barren. Here are some recent statistics:

  1. 78 million Americans are participating in the “gig economy” because full-time jobs just don’t pay enough to make ends meet these days.
  2. In 2011, the average home price was 3.56 times the average yearly salary in the United States. But by the time 2017 was finished, the average home price was 4.73 times the average yearly salary in the United States.
  3. In 1980, the average American worker’s debt was 1.96 times larger than his or her monthly salary. Today, that number has ballooned to 5.00.
  4. In the United States today, 66 percent of all jobs pay less than 20 dollars an hour.
  5. 102 million working age Americans do not have a job right now.  That number is higher than it was at any point during the last recession.
  6. Earnings for low-skill jobs have stayed very flat for the last 40 years.
  7. Americans have been spending more money than they make for 28 months in a row.
  8. In the United States today, the average young adult with student loan debt has a negative net worth.
  9. At this point, the average American household is nearly $140,000 in debt.
  10. Poverty rates in U.S. suburbs “have increased by 50 percent since 1990”.
  11. Almost 51 million U.S. households “can’t afford basics like rent and food”.
  12. The bottom 40 percent of all U.S. households bring home just 11.4 percent of all income.
  13. According to the Federal Reserve, 4 out of 10 Americans do not have enough money to cover an unexpected $400 expense without borrowing the money or selling something they own. 
  14. 22 percent of all Americans cannot pay all of their bills in a typical month.
  15. Today, U.S. households are collectively 13.15 trillion dollars in debt.  That is a new all-time record.

Here’s the problem with all of this.

Despite Central Bank’s best efforts globally to stoke economic growth by pushing asset prices higher, the effect is nearly entirely mitigated when only a very small percentage of the population actually benefit from rising asset prices. The problem for the Federal Reserve is in an economy that is roughly 70% based on consumption, when the vast majority of American’s are living paycheck-to-paycheck, the aggregate end demand is not sufficient to push economic growth higher.

While monetary policies increased the wealth of those that already have wealth, the Fed has been misguided in believing that the “trickle down” effect would be enough to stimulate the entire economy. It hasn’t. The sad reality is that these policies have only acted as a transfer of wealth from the middle class to the wealthy and created one of the largest “wealth gaps” in human history.

The real problem for the economy, wage growth and the future of the economy is clearly seen in the employment-to-population ratio of 16-54-year-olds. This is the group that SHOULD be working and saving for their retirement years.

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The current economic expansion is already set to become the longest post-WWII expansion on record. Of course, that expansion was supported by repeated artificial interventions rather than stable organic economic growth. As noted, while the financial markets have soared higher in recent years, it has bypassed a large portion of Americans NOT because they were afraid to invest, but because they have NO CAPITAL to invest with.

To Dalio’s point, the real crisis will come during the next economic recession.

While the decline in asset prices, which are normally associated with recessions, will have the majority of its impact at the upper end of the income scale, it will be the job losses through the economy that will further damage and already ill-equipped population in their prime saving and retirement years.

Furthermore, the already grossly underfunded pension system will implode.

An April 2016 Moody’s analysis pegged the total 75-year unfunded liability for all state and local pension plans at $3.5 trillion. That’s the amount not covered by current fund assets, future expected contributions, and investment returns at assumed rates ranging from 3.7% to 4.1%. Another calculation from the American Enterprise Institute comes up with $5.2 trillion, presuming that long-term bond yields average 2.6%.

The massive amount of corporate debt, when it begins to default, will trigger further strains on the financial and credit systems of the economy.

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Dalio’s View Is Likely Understated. 

The real crisis comes when there is a “run on pensions.” With a large number of pensioners already eligible for their pension, the next decline in the markets will likely spur the “fear” that benefits will be lost entirely. The combined run on the system, which is grossly underfunded, at a time when asset prices are dropping will cause a debacle of mass proportions. It will require a massive government bailout to resolve it.

But it doesn’t end there. Consumers are once again heavily leveraged with sub-prime auto loans, mortgages, and student debt. When the recession hits, the reduction in employment will further damage what remains of personal savings and consumption ability. The downturn will increase the strain on an already burdened government welfare system as an insufficient number of individuals paying into the scheme is being absorbed by a swelling pool of aging baby-boomers now forced to draw on it. Yes, more Government funding will be required to solve that problem as well. 

As debts and deficits swell in the coming years, the negative impact to economic growth will continue. At some point, there will be a realization of the real crisis. It isn’t a crash in the financial markets that is the real problem, but the ongoing structural shift in the economy that is depressing the living standards of the average American family. There has indeed been a redistribution of wealth in America since the turn of the century. Unfortunately, it has been in the wrong direction as the U.S. has created its own class of royalty and serfdom.

The issue for future politicians won’t be the “breadlines” of the 30’s, but rather the number of individuals collecting benefit checks and the dilemma of how to pay for it all.

The good news, if you want to call it that, is that the next “crisis,” will be the “great reset” which will also make it the “last crisis.”

Eddie, Iron Maiden

Source: ZeroHedge

Authored by Lance Roberts via RealInvestmentAdvice.com,

Naked Money Grabs

The Unprofitably Incompetent, by Robert Gore

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Those who can’t do, demand.

Profit propels civilization. When a producer can make an item or provide a service at a cost lower than a customer values that item or service, and the customer has the means and the freedom to buy, the difference between what’s paid over cost is profit. That profit is the producer’s incentive to produce, and in turn funds the producer’s consumption, savings, and investment, which creates other producers’ profits. Profit is the necessary prerequisite for consumption, savings, investment, and consequently, progress.

Many of us profit every day. We offer services and provide goods, supporting ourselves at a cost that is lower than what we’re paid. We’re profitably competent, engaging in honest production and peaceful, voluntary exchange. The only alternatives to profitable competence are living off of someone else’s profitable competency via inheritance or charity, or criminality—theft via fraud or violence.

Criminals cloak their thefts in all sorts of justifications, some of which, like socialism, become full-blown political doctrines. Ironically, a larcenous litany of demands and rationalizations are efflorescing at a time when whatever is left of the overall profit pool has been drained. It has been mortgaged multiple times, just as hordes of the unprofitably incompetent, who had no hand in producing it, clamor for their “fair share.” They’ll insist the profitably competent figure out how to pay for it, but the fair share of nothing is nothing, political promises to the contrary notwithstanding.

“Your means, my ends; I wish, you fulfill,” is the foundational fantasy of modern governance. The favored groups shelter in their safe spaces—government and its rackets, crony corporations, academia, the media, and Hollywood—living on the delusion that there will always be someone who will produce, without question or protest, for their benefit. Upon that foundation they’ve constructed a phantasmagorical edifice of illusory constructs and passages to nowhere.

As the foundational fantasy totters, the fantasies it supports become more fantastical. The profit pool exhausted, you would think everything possible would be done to succor the profitably competent who are supposed to replenish it. Instead, that illustrious group is demonized at every turn, and the demands on them become ever more absurd. They are guilty because they’re productive, and must expiate their guilt by producing for the unproductive, whose incompetence makes them morally superior.

The most “toxic” trait often associated with masculinity may be competence. It’s not exclusively masculine, but whether its possessors are male or female it has certainly become toxic, depriving them of any right to what they produce and any right to criticize those who steal it from them. Twits who can’t replace a light bulb demand free schooling and medical care, guaranteed jobs and incomes, trips to Mars, and who knows what else. Those who are to fund it all are to cheerfully regard doing so as a privilege.

The notion of reparations won’t die. Anyone with money (the only people who can pay) supposedly owe the descendants of various victim classes reparations for the supposed sins of their ancestors. To hold individuals guilty of crimes they couldn’t have committed is a moral obscenity. The demands for retribution are simply another naked money grab.

The rhetoric grows increasingly hateful. The slave class can be openly disparaged, denigrated, and deplored based on their race, gender, geographic location, religion, politics, the way they smile at a Native American, or any other characteristic the masters don’t like. But woe to the slaves who utter anything the tyrannical cult deems offensive or incorrect. Transgressors are put through social media hell, ostracized, ruined, and coming soon, incarcerated.

If you’ve found your safe space and you’re incapable of producing marketable value that exceeds its cost of production, you’re dependent on the profitably competent, but their very existence is a constant reproach, a reminder of your own inadequacy. So where gratitude would be appropriate, you instead hate, mock, and abuse your meal tickets. This isn’t PhD in psychology material—spoiled children have been abusing their parents for centuries. Interestingly—at least for psychology PhDs—the dependent get more abusive as they get more dependent.

Their safe spaces require little or nothing in the way of competency. They have become havens for personal predilections and peccadilloes that were once socially unacceptable, virtually free from any standards of comportment or dress, and citadels of venomous, self-serving ideologies.

One month into the partial shutdown of the largest safe space, it’s obvious that not only has the sky not fallen, but unsurprisingly, America is doing just fine without those 800,000 furloughed workers that even the government considers nonessential. Which elicits the question: What were they doing when they were on the job?

“Not much” is not necessarily the right answer. The 100,000 plus pages of the Federal Register and the tax code suggest that they’ve been spending a lot of time gumming up the works for and extracting money from the profitably competent many of them despise. The furlough may accomplish the first step of breaking America’s addiction to government: realizing that most of it is not only useless, but harmful. We’ll see if it leads to the next steps: getting rid of personnel, programs, agencies, and entire departments, and changing policy accordingly (we can dream). If things change in that direction, expect the denizens of what are no longer safe spaces to become increasingly vitriolic.

You can’t reach a point where dependents openly denigrate those who support them without the latter’s tacit or explicit consent. Parents who spoil their children and endure the brats’ abuse get what they deserve. Ayn Rand had it right. The people who make America go could bring it to a shuddering stop simply by stockpiling their resources and walking off their jobs for a month or two. An added turn of the screw would be withdrawing their funds from the banking system (see “The Yellow Vests Get it Right,” SLL).

It’s time to stop funding the abusers, time to stop excusing them with “they mean well, but…”, time to reject their claims to moral superiority, time to stop building safe space sanctuaries, time to stop apologizing for profitable competence, and time to recognize its moral value and reclaim the right to its profits. If it takes a strike to hurl the brats into the maw of their own incompetence and upend the tyrannical cult, so be it. The biggest crime hasn’t been that of the brats and the cult, it’s been the failure of those who haven’t defended what’s rightfully theirs.

Source: by Robert Gore | Straight Line Logic

Massive Truckers’ Strike Exposes Political Chaos as Brazil Gears Up for Elections in October

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It’s rush hour in Brazil’s largest cities. But the traffic, which is nearly always chaotic, is flowing smoothly. It’s as if the inhabitants have fled some lethal epidemic: The main universities are closed; basic items like eggs and tomatoes can’t be found in grocery stores; and nearly half of the city buses sit idle in their garages. Worse yet, most of the gas stations in the country have no fuel to sell — the shortage prompts the closing of 10 major airports. In a country that exports more beef than any other, only two of the 109 meat-packing plants with export licenses are operating.

On May 21, a Monday, disorder seized Brazil, owing to a work stoppage by the country’s truckers, who were protesting the high price of diesel fuel. A large part of the fleet of 1.6 million tractor trailers, responsible for moving more than 60 percent of the goods transported throughout the country, were parked at 600 strategic locations on federal highways. Trucks blocked lanes and prevented the any type of cargo vehicle from making it through. Meat, eggs, and vegetables went undelivered. Organ transplants went unperformed. And livestock reportedly died in the fields after the feed ran out.

The strike that paralyzed the nation’s economy forced average Brazilians to pay attention to what was previously a high-level political affair: the battle over the oil company Petrobras, Brazil’s largest state-operated corporation. During the administration of President Dilma Rousseff, which ended in her impeachment and removal from office in August 2016, the oil giant was used as a means of controlling inflation. Fuel prices were subsidized, and although the price of a barrel of oil increased on the international market, the Brazilian government did not allow that increase to be fully reflected in the pump prices in the country.

The artificially low prices for gasoline and diesel put the company in debt and depleted its coffers, causing it to lose market value. The state of affairs after the subsidies compounded the effects of the sprawling “Car Wash” corruption scandal — which revealed a multibillion-dollar kickback scheme within Petrobras, benefiting executives and politicians from several parties — that has plagued its reputation and put a wrench in its operations since 2014.

https://theintercept.imgix.net/wp-uploads/sites/1/2018/06/brazil-truckers-strike-shortage-1527885972.jpg?auto=compress%2Cformat&q=90&w=1024&h=683View of the empty Brazilian family farmers’ stall at Brasília’s Central Food Supply, CEASA, on May 25, 2018. CEASA is supplied daily by more than 3,000 trucks, but due to the nationwide truckers’ strike, it is receiving less than 50 trucks per day, causing severe food shortages in Brasília, as well as the rocketing in the prices of fruits and vegetables in some places up to 400 percent.Photo: Evaristo Sa/AFP/Getty Images

After Rousseff’s removal, her vice president Michel Temer assumed office and rewrote the rules — one of many radical, pro-market changes he implemented. Temer established a new pricing policy for Petrobras that allowed international market fluctuations to dictate pump prices in Brazil. The company’s stock rallied on the São Paulo and New York exchanges, which thrilled investors. However, the change also resulted in the price of diesel changing 121 times in just two years — previously, readjustments had been made on a monthly basis, which provided transporters with greater predictability when negotiating contracts. In the month leading up to the truckers’ strike, the price of diesel changed 16 times and rose by 38.4 percent.

A few weeks ago, Temer declared himself triumphant on Twitter: “Two years ago, I took the helm of the Brazilian government with a tough mission: to rescue the country from its most severe recession, to stamp out unemployment, to return to fiscal responsibility, and to maintain social programs. In fact, I have done all of that.” But to the majority of Brazilians, Temer lives in a parallel universe. The economy has shown statistical signs of recovery — but a weak one, much slower than after past crises. Yet the shifts have yet to materialize in the lives of ordinary people. Temer even tried to sell new data showing an increase in the unemployment rate as a positive, but was contradicted by the Brazilian Institute of Geography and Statistics, the equivalent of the U.S. Census Bureau. With political disillusionment and economic anxiety raging, the high price of fuel was merely the spark that ignited a powder keg.

Forty-eight hours after the protests began, the price of food had already created an enormous crisis. Two weeks ago, the price of a sack of potatoes was less than $11. By Thursday last week, it had reached nearly $80 in some places. By the third day of the strike, potatoes began to disappear from markets because they could not be transported from the countryside to the cities.

https://theintercept.imgix.net/wp-uploads/sites/1/2018/06/brazil-truckers-strike-military-1527885958.jpg?auto=compress%2Cformat&q=90&w=1000&h=667Soldiers take part in an operation to clear highway Regis Bittencourt, about 20 miles from São Paulo, on May 30, 2018, as a truckers’ strike against rising fuel costs in Brazil that has left much of the country paralyzed is now over. Photo: Nelson Almeida/AFP/Getty Images

The government cannot claim to have been taken by surprise by the truckers’ strike. Last Friday, The Intercept Brasil published a document proving that Temer and six of his ministers had been alerted at least a week in advance that truck drivers were planning a strike to begin on May 21 if their concerns weren’t addressed. The drivers called for an emergency meeting with the president to avoid the chaos that would inevitably ensue, but the government ignored them. So they shut off their engines.

The strike has a novel component for Brazil: Rather than being led by union representatives crowded into trucks with bullhorns leading the marches, the strike emerged out of a haphazard process organized through WhatsApp groups. In those groups, interspersed with self-help messages and pornography, political videos began to appear that inflamed protesters’ sentiments, sometimes offering hearty helpings of “fake news,” upping the octane of the revolt. Eventually, marching orders began to appear, and the protest movement emerged from the digital chats into the real world.

Journalists gained access to the WhatsApp groups in an attempt to make sense of the movement’s structure. They found few real leaders and instead, got a peek into a movement with disputes in every corner of the country — as if some strikers attempted to settle petty feuds while watching Rome burn. Despite a lack of clear leadership, the picket lines were ruthlessly enforced: Truckers that tried to ignore the blockades risked being beaten, some trucks were pelted with rocks or even set on fire.

The federal government reacted with panic. Officials tried to corral the discontent by handing some measure of political power to unions and businesspeople in the trucking sector, with whom they tried to negotiate. But fewer than 10 percent of the truckers belong to a union; no labor leader reigns over the WhatsApp republic. The government and the unions drew up two truces that never materialized.

The strike saw the redrawing of some of the traditional lines between labor and management and an alliance rarely seen in movements in Brazil emerged. Bosses and employees seem to have joined forces to call for a reduction in the price of diesel — a type of coordinated work stoppage considered a lockout and prohibited by law. Federal authorities quickly began investigating this supposed collusions, and one businessperson was arrested and charged. The precariousness of the workers in the industry — who are often owner-operators that bear the cost of fuel, tolls, repairs, and heavily financed vehicles — helped make that possible.

Outside pressure groups leveraged the popularity of the strike — a survey conducted by the Datafolha Institute last Tuesday showed that 87 percent of Brazilians supported the truckers, and 56 percent believed that the strike should continue — to try to call attention to unrelated interests. The image of a mass of useful, desperate people with reasonable demands and relatable complaints was too good to pass up. The most visible of these outside interests was the seemingly growing minority of Brazilians who long for the return of the military regime, which have tried to hitch a ride on the popular support for the strike. Those pushing a military coup had the support of some truckers, but how much of the movement would back a putsch remains unclear.

https://theintercept.imgix.net/wp-uploads/sites/1/2018/06/brazil-truckers-strike-military-intervention-1527886272.jpg?auto=compress%2Cformat&q=90&w=1024&h=683Members of the Brazilian Military Police and São Paulo’s traffic police stand beside a truck with its windscreen reading “military intervention” during an operation to clear blocked “Rodoanel Mrio Covas” Road, on May 26, 2018, in the city of São Bernardo do Campo, some 15 miles from São Paulo, Brazil, on the sixth day of a truckers’ strike protesting rising fuel costs. Photo: Miguel Schincariol/AFP/Getty Images

After a week, the truckers lost control of the situation. The strike had ballooned into a full-blown political crisis.

The militarists were quick to seize onto the chaos. A contingent of merchants, businesspeople, professionals, and middle-class people — long fed up with corruption, high taxes, ineffective governance, and rampant crime — saw in the tumult a golden opportunity to take to the streets and demand the army to seize power. That the army had subjected the country to a 20-yearlong military dictatorship — during which it tortured and killed hundreds of people and censored any news about its own rampant corruption — seemed a barely perceptible background fact.

While the militarists flung themselves headlong into the crisis to make their fine-tuned propaganda points, national politicians seemed to do the opposite. Normally garrulous types who seek attention at almost any cost, Brazilian politicians fell mute — flitting in any direction that would allow them to avoid taking a firm position. Without clearly defined enemies to attack, members of Congress bravely absconded from Brasília, some within the first days of the strike, fearing that a shortage of jet fuel would isolate the city and force them to take public positions at the insistence of journalists.

Former President Luiz Inácio Lula da Silva — who leads the polls for the upcoming presidential election despite being in prison on a controversial conviction for corruption — has long been known as an astute political observer. Yet he declared himself “perplexed” by the strike, according to politicians who visited him in his prison cell in Curitiba. Jair Bolsonaro, the reactionary Army Reserve captain who polls second, behind Lula, initially called for the people to take to the streets, inciting protesters and declaring his support for the stoppage. Days later, frightened, he radically changed his position and said that it was “time to end” the revolt.

The anemic state of Lula’s Workers’ Party was the same as that of other candidates of the Brazilian left, who also failed to capitalize on the protest. The Workers’ Party, which historically had the ability to speak to the masses, hardly garnered any notice. With no ties to the truckers, the party seemed to be speaking to itself on social networks. The same was true of other candidates who have tried to pass themselves off as moderates but are, in fact, representatives of conservatism, such as Geraldo Alckmin, the establishment’s main contender for the presidency.

The politicians’ temerity has recent precedent: protests against bus fare hikes in June 2013. State and local governments were slow to react to discontent and a protest movement popped up, led by small groups initially focused on public transportation fares. The movement quickly blossomed into gigantic popular demonstrations that, when the government realized they could not be contained, were met with police violence. In the wake of 2013, new extremist movements emerged and haven’t left the streets since. These groups, like the Free Brazil Movement, were instrumental in bringing down Rousseff.

https://theintercept.imgix.net/wp-uploads/sites/1/2018/06/brazil-truckers-strike-gasoline-1527885947.jpg?auto=compress%2Cformat&q=90&w=1024&h=683Days after concessions from the federal government brought a partial end to the strike, drivers await the arrival of fuel to supply motorcycles and cars during the truckers’ strike on May 29, 2018 in São Paulo, Brazil. Queues to fuel vehicles stretched for kilometers as tanker trucks trickled into the major cities. Photo: Victor Moriyama/Getty Images

Last Sunday, during the country’s highest-rated television show, Fantástico, Temer announced a series of measures to appease the protesters. Among them, he pledged to lower the price of diesel and repeal the international price policy he had created — without saying who was going to cover the multibillion-dollar losses for Petrobras. Truckers began to start up their rigs again. But many were unable to get off the road, hindered by violent groups who had, by then, taken over many of the roadblocks. Temer called on the military and the police to disperse the holdouts.

Last week, even after their demands were met by the government, some truckers were still blocking highways. Worse yet, those who wanted to go home were not allowed to leave. One trucker who tried to cross the picket line was stoned to death.

Journalists covering tensions in various parts of the country brought grim reports. The escalating violence had been promoted by groups that the government is calling “infiltrated militias.” These militia members, authorities say, are not truck drivers and are threatening the dissidents. However, the television program Profissão Repórter showed that many of them are, in fact, truck drivers. Those who manage to get out of the demonstrations say that the pickets have become havens of banditry and violence.

So even if vegetables are back in the supermarkets and the gas stations have been replenished, the strike continues, more or less. The government says the strike has ended, but trucker WhatsApp groups are abuzz trying to build support for a new stoppage this week.

It’s still not clear what is keeping the violent protesters on the streets and if they are acting alone or at the behest of more powerful interests. The social and economic impact remains a mystery. Will we remember this moment as the flashpoint that provoked an enormous change or just a temporary panic? What is clear, however, is that the truckers’ strike has shed light on several Brazilian realities: the palpable and almost universal rancor toward the government; the fragility of the supply chain and democratic system; the ineffectiveness of the entire political class; the fraud of the supposed economic recovery Temer tries to hock every change he gets; and the fear and despair that permeates a society that, panicked, even clamors for a return to the tragedy of a military government.

Brazil’s elections will take place in October. Until then, it will be a long and winding road, semi-trucks or not.

Source: by Leandro Demori & Piero Locatelli | The Intercept

The Fruits of Graft – Great Depressions Then and Now

Wayne Jett, author of “Fruits of Graft”, interviewed by Sarah Westall in an eight part (video) series to discuss in depth the amazing history of events and actions leading up to the Great Depression. They also discuss the activities and actions taken during the Great Depression that caused increased misery for millions of Americans. This is an epic historical view of the Great Depression you have not heard before; that also serves to explain what is really driving most current events we are living through today.

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Classical Capital

Video Series Links

Part 1

Part 2

Part 3


Part 4


Part 5


Part 6

The Elitist Manifesto

The Red Symphony

Progress And Poverty by Henry George

A Look Inside The Secret Swiss Bunker Where The Ultra Rich Hide Their Bitcoins

Somewhere in the mountains near Switzerland’s Lake Lucerne lies a hidden underground vault containing a vast fortune.

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Lake Lucerne, Switzerland

It’s no ordinary vault, according to Quartz. Built inside a decommissioned Swiss military bunker dug into a granite mountain, it’s precise location is a closely guarded secret, and access is limited by myriad security precautions.

But instead of gold bars, the bunker contains hard drives on which customers’ bitcoins are being kept in what’s call “cold storage” – i.e. the owners’ private keys are protected by an air-gapped hard drive. The vault is one of many operated by Xapo, an early bitcoin company known for its cold storage wallet products and a debit card that pays for transactions in digital currencies.

The company won’t disclose how much bitcoin is stored in the vault, but one employee who spoke with Quartz said he sometimes takes customers with millions of dollars in bitcoin on tours of the vaults where their fortune is stored. Xapo was founded by Argentinian entrepreneur and current CEO Wences Casares, whom Quartz describes as “patient zero” of bitcoin among Silicon Valley’s elite. Cesares reportedly gave Bill Gates and Reed Hoffman their first bitcoins.

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As Quartz explains, the bitcoin vault doesn’t store actual bitcoin units. Instead, what’s being stored are the owners’ private cryptographic keys that allow the owner to access and transfer his or her bitcoins by matching the key with a public key that’s used to identify the coin on the blockchain. Gaining unauthorized access to someone’s private keys is akin to making off with a gold bar.

The inexorable rise in bitcoin’s valuation has been marred by notable hacking incidents like the collapse of Mt. Gox, which ushered in the longest bear market in bitcoin’s history. Security fears appear to have subsided as bitcoin’s price has soared to all-time highs, but incidents like the collapse of the DAO have inspired investors with substantial bitcoin wealth to look into protecting it.

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To store the coins, Xapos contracts Deltalis, the company that technically operates the 10,000-square-foot data-center that now inhabits the decommissioned bunker.

Server racks for banks, and any client who needs secure data processing, fill a cavity dug over 320 meters deep in the granite mountain. The Swiss military built the facility in 1947, and it served as the army’s secret headquarters during the Cold War, Agence-France Presse has reported. Inside, walls covered with detailed maps and ancient radio electronics serve as vestiges of its military past.

To enter Xapo’s private vault in the Deltalis data center, visitors must endure an exhausting series of security procedures.

Streiff leads us to a concrete facade jutting out of the mountainside, the bunker’s entrance. We step through about a foot of concrete and enter the lobby. I sign in as I would at any office building, except I also have to present my fingerprints and be photographed. After that I step through a “man-trap”—a phone booth-sized cylinder made of bullet-proof glass that shuts me in until an operator opens the door on the opposite side.

Once through the man-trap, we touch our ID cards and pass through a set of steel revolving doors, then walk down a 100-meter long passageway through the granite. At the end of the passageway are two red steel doors that I’m told can survive a nuclear blast. Streiff invites me to try to close one—my 90 kg (198 pound) frame can’t budge it. “They’re closed every night,” he tells me, showing me how to hang off the handle and use his body’s momentum to gradually swing it shut.

Streiff and Kon are taking me to see Xapo’s “private suite,” an ultra-secure, customized, portion of the data center. We pass through a second man-trap and then end up in front of a nondescript white door. “This is further than anyone outside Xapo has been,” Streiff tells me, as he unlocks it. Inside is a space about the size of a walk-in closet containing a cooling unit, and yet another door. But that’s as far as they’ll let me go, and I’m not allowed to take photographs.

Security is similarly tight inside the vault. Nobody is allowed the enter the “cold room” where the bitcoins are stored on air-gapped hard drives. To protect against an electromagnetic pulse attack, the cold room is equipped with a Faraday cage, a type of barrier meant to block electromagnetic fields.

Beyond that door, I rely on what Carlos Rienzi, Xapo’s head of security, tells me later, when I’m back in London. Rienzi chose the vault for Xapo, and he designed the private suite and its security protocols. His “threat model,” as computer security jargon goes, is to protect against attacks from “well-funded terrorist groups or hackers.”

There are two more portals inside the suite: the first leads to an operators’ room, and the second to a “cold room.” The cold room is encircled with steel slabs to form a Faraday cage: a barrier that protects against a possible electromagnetic pulse (EMP) attack that could wipe out the data—and thus the keys to the bitcoin—stored in the room. For digital assets like bitcoin, thick walls and a secret location are not enough. A shield against invisible modes of attack like an EMP bomb must be provided for.

No one, not even the operator, enters the cold room. Its door is sealed with tape—like a crime scene—to ensure it’s not tampered with. The cold room contains hardware, which is never connected to the internet, used to sign bitcoin transactions. Signing a transaction can be performed offline. The operator accesses that hardware using “special cabling,” sending encrypted data to the hardware for signing. Finally, before a transaction can be approved, two more sign-offs, in two other vaults located on separate continents, must be performed.

I ask Rienzi if he feels pretty confident about the security measures he has in place in Switzerland. “We are under attack 24/7,” he tells me, referring to the terrorists and hackers he designed the vault to guard against. “This is not a race. It is a chess game. You have to think about the opponent’s next movement. You can never relax.”

Of course, all the security measures in the world can’t protect investors from a sudden plunge in the bitcoin price. However, the digital currency’s indomitable – for now – performance has silenced at least one of its most prominent critics. Then said, unlike precious metal specie, one carefully targeted EMP would be all it takes to sever the ownership chain for a long, long time.

Still, with the digital currency recently reaching yet another record high, despite relentless jawboning and rhetoric by everyone from Jamie Dimon to central bankers to China, we can only imagine the business of protecting bitcoin fortunes is set to boom.

Source: ZeroHedge

Teachers Demand Extra $3,200 From Each Kentucky Household To Fund Busted Pension Ponzi For 2 Years

We have written frequently over the past couple of weeks about the disastrous public pension funds in Kentucky that are anywhere from $42 – $84 billion underfunded, depending on which discount rate you feel inclined to use. As we’ve argued before, these pensions, like the ones in Illinois and other states, are so hopelessly underfunded that they haven’t a prayer of ever again being made whole.

That said, logic and math have never before stopped pissed off teachers and/or clueless legislators from throwing good money after bad in an effort to ‘kick the can down the road’ on their pension crises. As such, it should come as no surprise at all that the Lexington Herald Leader reported today that Kentucky’s 365,000 teachers and other public employees are now demanding that taxpayers contribute a staggering $5.4 billion to their insolvent ponzi schemes over the next two years alone. To put that number in perspective, $5.4 billion is roughly $3,200 for each household in the state of Kentucky and 25% of the state’s entire budget over a two-year period. 

Kentucky’s General Assembly will need to find an estimated $5.4 billion to fund the pension systems for state workers and school teachers in the next two-year state budget, officials told the Public Pension Oversight Board on Monday.

That amount would be a hefty funding increase and a painful squeeze for a state General Fund that — at about $20 billion over two years — also is expected to pay for education, prisons, social services and other state programs.

“We realize this challenge is in front of us. That’s obviously part of the need for us to address pension reform,” said state Sen. Joe Bowen, R-Owensboro, co-chairman of the oversight board.

“In the short-term, yeah, we’re obligated to find this money,” Bowen said. “And everybody is committed to do that. We have revealed this great challenge. We have embraced this great challenge, as opposed to previous members of the legislature, perhaps.”

In presentations on Monday, the pension oversight board was told that total employer contributions for KRS in Fiscal Years 2019 and 2020 would be an estimated $2.47 billion each year, up from $1.52 billion in the current fiscal year. Nearly $995 million of that would be owed by local governments. The remaining $1.48 billion is what the state would owe.

The Teachers’ Retirement System estimated that it would need a total of $1.22 billion in Fiscal Year 2019 and $1.22 billion in Fiscal Year 2020. That would include not only an additional $1 billion to pay down the system’s unfunded liabilities but also $139 million to continue paying the debt service on a pension bond that won’t be paid off until the year 2024.

Of course, the $5.4 billion will do absolutely nothing to avoid an inevitable failure of Kentucky’s pension system but what the hell…

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As we’ve said before, the problem is that the aggregate underfunded liability of pensions in states like Kentucky have become so incredibly large that massive increases in annual contributions, courtesy of taxpayers, can’t possibly offset liability growth and annual payouts.  All the while, the funding for these ever increasing annual contributions comes out of budgets for things like public schools even though the incremental funding has no shot of fixing a system that is hopelessly “too big to bail.”

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So what can Kentucky do to solve their pension crisis?  Well, as it turns out they hired a pension consultant, PFM Group, in May of last year to answer that exact question.  Unfortunately, we suspect that PFM’s conclusions, which include freezing current pension plans, slashing benefit payments for current retirees and converting future employees to a 401(k), are somewhat less than palatable for both pensioners and elected officials who depend upon votes from public employee unions in order to keep their jobs…it’s a nice little circular ref that ensures that taxpayers will always lose in the fight to fix America’s broken pension system.

Be that as it may, here is a recap of PFM’s suggestions to Kentucky’s Public Pension Oversight Board courtesy of the Lexington Herald Leader:

An independent consultant recommended sweeping changes Monday to the pension systems that cover most of Kentucky’s public workers, creating the possibility that lawmakers will cut payments to existing retirees and force most current and future hires into 401(k)-style retirement plans.

If the legislature accepts the recommendations, it would effectively end the promise of a pension check for most of Kentucky’s future state and local government workers and freeze the pension benefits of most current state and local workers. All of those workers would then be shifted to a 401(k)-style investment plan that offers defined employer contributions rather than a defined retirement benefit.

PFM also recommended increasing the retirement age to 65 for most workers.

The 401 (k)-style plans would require a mandatory employee contribution of 3 percent of their salary and a guaranteed employer contribution of 2 percent of their salary. The state also would provide a 50 percent match on the next 6 percent of income contributed by the employee, bringing the state’s maximum contribution to 5 percent. The maximum total contribution from the employer and the employee would be 14 percent.

For those already retired, the consultant recommended taking away all cost of living benefits that state and local government retirees received between 1996 and 2012, a move that could significantly reduce the monthly checks that many retirees receive. For example, a government worker who retired in 2001 or before could see their benefit rolled back by 25 percent or more, PFM calculated.

The consultant also recommended eliminating the use of unused sick days and compensatory leave to increase pension benefits.

Meanwhile, PFM warned that the typical “kick the can down the road approach” would not work in Kentucky and that current retiree benefits would have to be cut.

“This is the time to act,” said Michael Nadol of PFM. “This is not the time to craft a solution that kicks the can down the road.”

“All of the unfunded liability that the commonwealth now faces is associated with folks that are already on board or already retired,” he said. “Modifying benefits for future hires only helps you stop the hole from getting deeper, it doesn’t help you climb up and out on to more solid footing going forward.”

Of course, no amount of math and logic will ever be sufficient to convince a bunch of retired public employees that they have been sold a lie that will inevitably fail now or fail later (take your pick) if drastic measures aren’t taken in the very near future. 

Source: ZeroHedge

 

Trump Wants To Add More Water To The Swamp

If you’re wondering what’s dragging the dollar down to 32-month lows, perhaps you should add this to the calculus…

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Politico reports that President Donald Trump suggested to congressional leaders on Wednesday morning that votes to raise the debt ceiling could be done away with altogether, according to three people familiar with the conversation.

In a meeting with GOP and Democratic leaders, in which Trump sided with the Democrats on a fiscal deal to raise the debt ceiling, the president said he believes the votes are unproductive, those people said.

With Congress set to lift the debt ceiling into December as part of the deal, Trump floated the idea that the next time Congress votes to raise the debt ceiling, it could be the last.

He said conversations should happen over the next three months, according to people in the room.

President Trump has now added his thoughts, telling reporters “we have great respect for the sanctity of the debt ceiling,” as he meets with Emir of Kuwait. “There are a lot of good reasons” to get rid of debt ceiling altogether, Trump says, adding that he discussed it with congressional leaders yesterday, and adding that “there will never be a problem” on the debt ceiling.

The Dems, are of course, delighted by Trump’s shocking U-turn:

Schumer said such a move could not be accomplished now, but indicated he would talk to his caucus about considering structural changes to the debt limit in December, a conversation Trump supported.

House Minority Leader Nancy Pelosi (D-Calif.) also appeared interested in the deal but was noncommittal. The debt ceiling is a key leverage point for members of the minority, particularly because it can be filibustered in the Senate and require 60 votes.

As WaPo confirms, President Trump and Senate Minority Leader Chuck Schumer have agreed to pursue a deal that would permanently remove the requirement that Congress repeatedly raise the debt ceiling, three people familiar with the decision said.

Trump and Schumer discussed the idea Wednesday during an Oval Office meeting. Schumer, Trump, and House Minority Leader Nancy Pelosi (D.–Calif.) agreed to work together over the next several months to see if they can finalize a plan, which would need to be approved by Congress.

One of the people familiar described it as a “gentlemen’s agreement.”

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We suspect Reps won’t be so happy…

Freedom Caucus legislators, angry about Wednesday’s deal, promised a spirited fight in December over the debt ceiling.

Conservatives are unhappy that the White House and congressional leaders have agreed to raise the debt ceiling without spending cuts.

However, Orrin Hatch – Republican Senator for Utah and Chair of Senate Finance Committee – says he wants to abolish debt ceiling votes.

Translated: Trump suggests that there should be no constraint at all, not even the fiscally conservative pretense of the debt ceiling law, over how much debt the government can pile on the backs of future generations of Americans. If Obama can add $10 trillion, we are sure Trump can do “better.”

Source: ZeroHedge

A Major Shift From West To East Is Occurring As The Dollar Dies. Are You Prepared?

Americans need to shake off their FUD (fear, uncertainty and doubt) and start taking real steps to protect their wealth before the $USD is no longer the world’s dominant reserve currency. This involves converting USD denominated paper assets into physical Gold, Silver and a little Cryptocurrency to preserve your purchasing power … before the multi-polar world of tomorrow arrives.  

A big part of life on the other side of this event will involve dealing with wide spread shortages (including food) that accompany the high cost of imported goods that follow a credit and currency collapse, until America’s domestic manufacturing base can be brought back up. Think decades, not months or years to fully recover. This means you should be accumulating resources necessary to more easily stretch through this period while they are relatively cheap and plentiful in today’s dollars. Otherwise, you might find yourself living like the 99% are in Venezuela today.  

Enjoy the show …

 

The Elites Are Privately Warning About a Crash

Many everyday citizens assume powerful global financial elites operate behind closed doors in secret conclaves, like the scene of a Spectre board meeting in the recent James Bond film.

Actually, the opposite is true. Most of what the power elite does is hidden in plain sight in speeches, seminars, webcasts and technical papers. These are readily available from institutional websites and media channels.

It’s true that private meetings occur on the sidelines of Davos, the IMF annual meeting and G-20 summits of the kind just concluded. But the results of even those secret meetings are typically announced or leaked or can be reasonably inferred based on subsequent policy coordination.

What the elites rely on is not secrecy but lack of proficiency by the media.

The elites communicate in an intentionally boring style with lots of technical jargon and publish in channels non-experts have never heard of and are unlikely to find. In effect, the elites are communicating with each other in their own language and hoping that no one else notices.

Still, there are some exceptions. Mohamed A. El-Erian is a bona fide member of the global power elite (a former deputy director of the IMF and president of the Harvard Management Co.). Yet he writes in a fairly accessible style on the popular Bloomberg website. When El-Erian talks, we should all listen.

In a recent article he raises serious doubts about the sustainability of the bull market in stocks because of reduced liquidity resulting from simultaneous policy tightening by the Fed, European Central Bank (ECB) and the Bank of England.

He says stocks rose on a sea of liquidity and they may crash when that liquidity is removed. This is a warning to other elites, but it’s also a warning to you.

But it’s not just El-Erian who’s sounding the alarm…

You’ve heard the expression “the big money.” This is a reference to the largest and most plugged-in investors on Earth. Some are mega-rich individuals and some are large banks and institutional investors with a dense network of contacts and inside information.

At the top of the food chain when it comes to big money are the sovereign wealth funds. These are funds sponsored by mostly wealthy nations to invest a country’s reserves from trade or natural resources in stocks, bonds, private equity and hedge funds.

As a result, sovereign wealth fund managers have the best information networks of any investors. The chief investment officer of a sovereign wealth fund can pick up the phone and speak to the CEO of any major corporation, private equity fund or hedge fund in the world.

Among sovereign wealth funds, the Government of Singapore Investment Corp. (GIC) is one of the largest, with over $354 billion in assets. So what does the head of GIC say about markets today?

Lim Chow Kiat, CEO of GIC, warns that “valuations are stretched, policy uncertainty is high” and investors are being too complacent.

GIC allocates 40% of its assets to cash or highly liquid bonds and only 27% of its assets to developed economy equities.

Meanwhile, the typical American small retail investor probably has 60% or more of her 401(k) in developed economy equities, mostly U.S.

But it may be time for everyday investors to listen to the big money. They are the ones who see financial crashes coming first.

The bottom line is, a financial crisis is certainly coming. In my latest book “The Road to Ruin,” I use 2018 as a target date primarily because the two prior systemic crises, 1998 and 2008, were 10 years apart. I extended the timeline 10 years into the future from the 2008 crisis to maintain the 10-year tempo, and this is how I arrived at 2018.

Yet I make the point in the book that the exact date is unimportant. What is most important is that the crisis is coming and the time to prepare is now. It could happen in 2018, 2019, or it could happen tomorrow. The conditions for collapse are all in place.

It’s simply a matter of the right catalyst and array of factors in the critical state. Likely triggers could include a major bank failure, a failure to deliver physical gold, a war, a natural disaster, a cyber–financial attack and many other events.

The trigger itself does not really matter. The exact timing does not matter. What matters is that the crisis is inevitable and coming sooner rather than later in my view. That’s why investors need to prepare ahead of time.

The new crisis will be of unprecedented scale. This is because the system itself is of unprecedented scale and interconnectedness. Capital markets and economies are complex systems. Collapse in complex systems is an exponential function of systemic scale.

In complex dynamic systems that reach the critical state, the most catastrophic event that can occur is an exponential function of scale.

This means that if you double the system, you do not double the risk; you increase it by a factor of five or 10.

Since we have vastly increased the scale of the financial system since 2008, with larger banks, greater concentration of banking assets in fewer institutions, larger derivatives positions, and over $70 trillion of new debt, we should expect the next crisis to be much worse than the last.

For these reasons the next crisis will be of unprecedented scale and damage.

The only clean balance sheet and source of liquidity left in the world will be the International Monetary Fund, which can make an emergency issuance of Special Drawing Rights, which you can think of as world money.

Countries around the world are acquiring gold at an accelerated rate in order to diversify their reserve positions. This trend, combined with the huge reserves held by the U.S., Eurozone and the IMF amount to a shadow gold standard.

On the level of the individual investor, losers will fall into two groups when the next crisis strikes…

The first are those who hold wealth in digital form, such as stocks, bonds, money-market funds and bank accounts. This type of wealth is the easiest to freeze in a panic. You will not be able to access this wealth, except perhaps in very small amounts for gas and groceries, in the next panic. The solution is to have hard assets outside the digital system such as gold, silver, fine art, land and private equity where you rely on written contracts and not digital records.

The second group are those who rely on fixed-income returns such as life insurance, annuities, retirement accounts, social security and bank interest. These income streams are likely to lose value, since governments will have to resort to inflation to deal with the overwhelming mountain of debt collapsing upon them.

The solution to this is to allocate 10% of your investable assets to physical gold or silver. That will be your insurance when the time comes.

Meanwhile, demand for secure vaulting space in major financial centers like London and Frankfurt is soaring. There are plenty of bank safe deposit boxes in those cities, but investors are insisting on non-bank vaults because investors understand that the banks cannot be trusted in a panic. As a result, proprietors of non-bank vaults can’t build them fast enough.

This is one indicator that reveals three important facts. The first is that investors feel a panic may be near and the time to act is now. The second is that investors don’t trust banks. And the third is that investors are buying gold to protect themselves since that’s the main tangible that people put in their private vaults. Don’t wait until the panic hits to secure your gold and make arrangements for safe storage.

The time to act is now.

Source: Daily Reckoning

This Might Have Been The Biggest Theft In History

 

… and how the biggest heist ever (central banking) might be facing the beginning of the end.

The following is a highly educational discussion with Bill Holter and Lynette Zang about Janet Yellen, monetary policy, principles of finance, a declining dollar, the future of pensions, precious metal hedges, and TONS of charts and data!

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The Broken States of the Union

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At the end of the day, a broken state is a broken you.

For the first time in US history a handful of US states is teetering on the edge of bankruptcy. Illinois is about to be downgraded to junk bond status, which will turn its financial problems catastrophic overnight. Illinois cannot possibly pay its accumulated debt, its unpaid medicaid expenses and its future retirement obligations, so bankruptcy almost certainly will be its only way out.

Main, Connecticut, Kentucky and California are also caught in chronic budget deadlocks that may lead to bankruptcy as a solution for dodging their entitlement obligations. Bear in mind they’re called “entitlements” because it’s money promised to you that you already put in the work to earn. It’s your retirement. Illinois, for example, has over $200 billion in pension obligations that will never be paid … or that can only be paid at a greatly diminished level worked out in some form of effective bankruptcy.

That’s a problem that is only solved by turning it into a worse problem for others. Illinois will end its problems by making certain that for the next quarter century, a good portion of the now retiring baby-boom population is dirt poor and must be carried by the younger population as dead wait (if not exterminated) because the retirement they planned in order to responsibly carry themselves through their final years isn’t there.

Instead of the state not being able to pay its bills, bankruptcy means that hundreds of thousands of retirees won’t be paying theirs, which means the people they owe money to will be going broke, and so the problem trickles down. State bankruptcy merely shifts the burden so that legislators don’t have to deal with it but you do. And it’s inevitable because the alternative is that you pay for it through much higher taxes. The state is you.

The Federal government won’t be solving the state budget problems either because it plans on dumping heavier medicaid expenses back on all states as it repeals Obamacare to help solve its own budget problems amid its own deadlock. Like the states, its own Social Security funds are going broke, so it faces its own massive entitlement problems. And, if it bails out one failing state, it will be expected to bail out all others that face such problems.

With Illinois effectively reaching bankruptcy and a likely catastrophic credit downgrade this summer, the problem finally starts coming to a head where everyone is forced to see how decades of government debt accumulation end, and that end looks something like this in real terms:

Illinois, as the bellwether example, has already stopped paying the contractors who fix roads and other infrastructure. That means the contractors will now stop fixing the roads and won’t be paying their employees, and broken roads don’t get corn and beef to market. Illinois has stopped paying doctors. That means the doctors will stop fixing people. Illinois has refused to pay its lottery winners (even though it took the money from all the suckered ticket buyers). That means there will no more lottery to raise state money because there will be no more ticket buyers. That means the state’s budget problems just got worse, so Illinois soon won’t be paying state employees or pensioners.

It sucks when your entire state goes broke. You see, you can keep kidding yourself — as our entire nation has for the decades that I’ve been complaining about this — that you’re going to take care of everyone on welfare with endless debt spending or that you’re going to maintain huge military power to control the world with debt spending; but eventually you pile up state or federal debts so high that you wind up not paying anyone, including the welfare recipients or the soldiers in your military.

Like the US government, the State of Illinois has been operating without a real budget for more than two years, operating dysfunctionally during that time by court-ordered stop-gap measures because the legislature is deadlocked as politicians refuse to accept reality; so, Illinois has now reached the same financial status as Puerto Rico.

Illinois is grappling with a full-fledged financial crisis and not even the lottery is safe – with Republican Gov. Bruce Rauner warning the state is entering “banana republic” territory…. Reports have suggested the state could be the first to attempt to declare Chapter 9 bankruptcy — but under the law, that’s impossible unless Congress gets involved….. “Illinois is the fiscal model of what not to do,” Rep. Peter Roskam, R-Ill., told Fox News, while not commenting on the bankruptcy question. “This avoidance in behavior toward dealing with our challenges is what leads to the devastating impacts we are seeing today.” (Fox News)

And, for Illinois, the problem is that they cannot kick the can down the road any further because the next credit downgrade will make it impossible for them afford their current debt, which is really already impossible. Creditors will become much fewer and more expensive when Illinois becomes the first state of the union to hit junk-bond status and maybe the first to declare bankruptcy since the Great Depression, when Arkansas found itself “plain flat broke” and became the only state to ever default on its bonds (showing it can happen), effectively declaring its own bankruptcy, even if not sorted out through the federal courts. (Eventually, years later, Arkansas paid their bond holders.) Already, the Illinois ten-year bond yields are at 5.2%; but the world becomes exponentially worse when you hit junk-bond status and entire large institutions become outlawed from financing you.

“We have a very real deadline looming,” Senate Republican Leader Christine Radogno told Fox News. “The alternative to not finding a compromise will be devastating to Illinois.”

With or without bankruptcy, the state is already badly defaulting on its obligations. Bankruptcy is just a more orderly way of deciding who is not going to get paid and by how much. But the not getting paid part? Already here, and nearly a dozen states are falling into this kind of severe condition. The issue with state bankruptcy is that bankruptcy court is federal, putting state budgetary sovereignty under state’s rights under federal determination; but it can be done:

David Skeel, a law professor at the University of Pennsylvania … wrote outright that, “The constitutionality of bankruptcy-for-states is beyond serious dispute.” The key, as he sees it, is that bankruptcy would be entirely voluntary, which should eliminate any concerns about Federal intrusion on state sovereignty. (Zero Hedge)

And it has been done … long ago … and is now here again.

Economic denial is about to square up to economic reality, and reality always wins! Eventually, economic reality forces your hand in a catastrophic solution because of your profligate ways. Eventually, you end up as a truly cashless society. This summer, we get to watch that play out in Illinois to get a sense of what it will look like elsewhere.

At the end of the day, a broken state is a broken you.

The motto of the State of Illinois, Land of Lincoln, who held this great national union together, is “”State Sovereignty, National Union.”

Illinois is all of us.

By David Haggith | The Great Recession

Albertson’s Reveal Supermarket Meltdown as Global Deep-Discounters Promise Price Wars in US Markets

Aldi’s $5 billion bet at a brutal time.

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Aldi Market on Biscayne Boulevard In Miami Florida.

Today, Albertson’s explained in an amended S-4 filing for a debt exchange offering just how tough things have gotten for traditional supermarket chains.

As is so often the case, there is a private equity angle to it. Albertson’s was acquired in a 2005 LBO by a group of PE firms led by Cerberus. In January 2015, it acquired Safeway to eliminate some competition. It then wanted to sell its shares to the public. But in October 2015, as brick-and-mortar retail began to melt down, it scrapped its IPO.

The filing’s most revealing data are same-store sales on a quarterly basis through Q4, 2016, comparing year-over-year sales growth at stores that have been open in the current and prior year. I added the red line to show the trend since Q3 2015:

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The S-4 supplied some reasons for the decline:

Our identical store sales decrease in fiscal 2016 was driven by a decrease of 1.9% in customer traffic partially offset by an increase of 1.5% in average ticket size. During fiscal 2016 our identical store sales were negatively impacted by food price deflation in certain categories, including meat, eggs and dairy, together with pressure to maintain competitive pricing in response.

The two key factors boil down to competition, precisely what the Safeway acquisition was supposed to have eliminated:

  • A “1.9% decline in customer traffic.”
  • “Pressure to maintain competitive pricing in response.”

In other words, starting in Q1 2016, competition pushed previously strong same-store sales growth off the cliff.

Given a series of acquisitions by Albertson’s over the years, total sales rose. The following are sales for the 12-month periods:

  • Through Feb. 2015: $27.2 billion
  • Through Feb. 2016: $58.7 billion (includes Safeway)
  • Through Feb. 2017:  $59.7 billion (includes 29 Haggen Stores and 76 A&P stores)

At the end of 2013, the company had 1,075 stores. It then acquired, divested, opened, and closed numerous stores. By the end of 2015, it had 2,271 stores. And by the end of 2016, it had 2,324 stores.

So in 2016, the net store count increased 2.3% but revenues inched up only 1.7%. Hence the decline in same store sales.

During those three 12-month periods respectively, the company had losses before income taxes of: $1.38 billion, $541 million, and $463.6 billion.

And it had total debt of a breath-taking $12.3 billion as of February 25, 2017, up from $3.7 billion in 2013 before the acquisition of Safeway and the other chains.

It’s not going to get better anytime soon.

On Sunday, Aldi announced it would invest $3.4 billion to expand its base in the US to 2,500 stores by 2022. The privately held discount-grocery chain headquartered in Germany already has over 1,600 stores in the US. It also owns Trader Joe’s, which has an additional 464 grocery stores. In February, Aldi had announced that it would add 400 stores by the end of 2018 and spend $1.6 billion to “remodel and expand” 1,300 of its stores by 2020.

This would bring its newly announced investment in the US to $5 billion. The expansion will make Aldi the third-largest grocery chain operator in the US behind Wal-Mart and Kroger, the company said. And it’s going to compete on price.

“As we continue to expand and grow, our purchasing power continues to increase and allows us to bring products at better prices for consumers,” Scott Patton, Aldi’s head of corporate buying, told Reuters.

Another German grocery store chain, deep-discounter Lidl with 10,000 stores in 27 European countries has plans to open as many as 600 stores in the US, it revealed in May. Its first store will open on June 15. It expects to have 100 stores along the East Coast a year from now. It said it would undercut competitors by up to 50%.

This threat by arch-competitor Lidl stimulated Aldi’s thinking; CEO Jason Hart Hart said in a statement that Aldi’s prices also would be about 50% below those of traditional grocery stores.

Aldi has always focused on in-house brands to obtain the deepest price cuts. The company’s shares aren’t publicly traded, and quarterly earnings reports don’t cause any kind of ruckus.

Kroger, the largest supermarket chain in the US, booked a sales increase of 5% in 2016, but its net income fell 4.5%, and its shares, after a series of earnings disappointments, are down over 25% from the end of 2015, even as the rest of the stock market was booming.

Then there’s Wal-Mart Stores, the second largest grocery seller in the US. It’s experimenting with lower prices in 11 states and is hounding its vendors to undercut their competitors by 15%. According to analysts cited by Reuters, it’s willing to spend $6 billion on these efforts.

Target too has been plowing more aggressively into the grocery market. Online grocery sales are taking sales away from brick-and-mortar locations. Amazon is now more than just dabbling in it. Everybody wants into this $630-billion-a-year market.

Alas, over the past six years, sales at grocery stores are up a total of 14%, not adjusted for inflation, according to the retail trade report by the Commerce Department. Over the same period, the Consumer Price Index for food rose 14%, according to the Bureau of Labor Statistics. So in inflation-adjusted terms, over the past six years, “real” sales have been flat.

The price war will be a godsend for consumers, at least for a while. But what gives?

Shares of Whole Foods Market have fallen 42% since late 2013 as it grapples with the new environment. And there have been 18 bankruptcies among US grocery store chains since 2014, according to Reuters, including Marsh Supermarkets and Central Grocers in May and Fairway Group Holdings, parent of the “iconic” New York chain Fairway Market, a year ago.

This is the environment that over-indebted Albertson’s and its private-equity backers hadn’t planned on finding themselves in. Beyond PE firm Cerberus, the backers include real-estate investors Klaff Realty and Lubert-Adler, REIT Kimco Realty, and shopping center owner Schottenstein Stores.

To unload the company in an IPO on the unsuspecting public and conniving institutional investors managing the unsuspecting public’s money, the backers must have a buoyant and blind stock market because for equity investors, this must be one of the most toxic combinations: a brick-and-mortar supermarket chain in the age of online sales that was bought by a PE firm, loaded up with debt as it became a supermarket roll-up, in a stagnant market that is attracting the biggest deep-discounters from around the world.

By Wolf Richter | Wolf Street

Do Not Invest In Cryptos: Here’s why

Cryptocurrency has arrived like an armada of cockroaches that the bankers cannot control. The bankers can not touch them; they can not take them away from the rest of us. Why do you think Fedcoin is going to be a possible alternative? Because they can’t remove cryptos so they are going to join in and try to contaminate the good ones like Bitcoin. But that is not going to work. As soon as you get a gold backed cryptocurrency, start the countdown, it’s game over.

Bitcoin in particular is serving something as a proxy for currency in a very constructive manner. Once one of these turn into a gold backed crypto, the entire game changes. If Russia and China backed their currencies with gold, do you think that would have an effect on the USD? Hell yea. So when a gold backed crypto is launched or eight of them, one from every continent, do you think that is going to have an effect on the shabby cryptos? Yea, but it will be worse than that. This would have an effect on all paper and FOREX currencies because we are not in the infancy stage of cryptocurrency anymore. We’re in the adolescent stage and it becomes adult hour when gold backing is introduced. That’s when it will be game over for the criminal banksters.

Times have become very dangerous right now for the US dollar’s primary role among the currencies because all the wars have terminally compromised it’s integrity. The dollar isn’t supported by international oil and gas trade so much anymore as it is supported by aggressive military action with war crimes on a global scale and the people are sick of it. This is a very tenuous  situation for a global reserve currency.

Is Bitcoin Standing In For Gold?

https://s15-us2.ixquick.com/cgi-bin/serveimage?url=http%3A%2F%2Ft1.gstatic.com%2Fimages%3Fq%3Dtbn%3AANd9GcRMCd_GXEMKjkXEHr4gy73dZHkGe6R_iRHCqa2N-eAOmfl4129Gfg&sp=44a211d30ef62402d875b5e9aafa3f9e&anticache=277451Via Paul Craig Roberts and Dave Kranzler,

In a series of articles, we have proven to our satisfaction that the prices of gold and silver are manipulated by the bullion banks acting as agents for the Federal Reserve.

The bullion prices are manipulated down in order to protect the value of the US dollar from the extraordinary increase in supply resulting from the Federal Reserve’s quantitative easing (QE) and low interest rate policies.

The Federal Reserve is able to protect the dollar’s exchange value vis-a-via the other reserve currencies—yen, euro, and UK pound—by having those central banks also create money in profusion with QE policies of their own.

The impact of fiat money creation on bullion, however, must be controlled by price suppression. It is possible to suppress the prices of gold and silver, because bullion prices are established not in physical markets but in futures markets in which short-selling does not have to be covered and in which contracts are settled in cash, not in bullion.

Since gold and silver shorts can be naked, future contracts in gold and silver can be printed in profusion, just as the Federal Reserve prints fiat currency in profusion, and dumped into the futures market. In other words, as the bullion futures market is a paper market, it is possible to create enormous quantities of paper gold that can suddenly be dumped in order to drive down prices. Everytime gold starts to move up, enormous quantities of future contracts are suddenly dumped, and the gold price is driven down. The same for silver.

Rigging the bullion price prevents gold and silver from transmitting to the currency market the devaluation of the dollar that the Federal Reserve’s money creation is causing. It is the ability to rig the bullion price that protects the dollar’s value from being destroyed by the Federal Reserve’s printing press.

Recently, the price of a Bitcoin has skyrocketed, rising in a few weeks from $1,000 to $2,200. Two explanations suggest themselves.

One is that the Federal Reserve has decided to rid itself of a competing currency and is driving up the price with purchases while accumulating a large position, which then will be suddenly dumped in order to crash the market and scare away potential users from Bitcoins. Remember, the Fed can create all the money it wishes and, thereby, doesn’t have to worry about losses.

Another explanation is that people concerned about the fiat currencies but frustrated in their attempts to take refuge in bullion have recognized that the supply of Bitcoin is fixed and Bitcoin futures must be covered. It is strictly impossible for any central bank to increase the supply of Bitcoins. Thus Bitcoin is standing in for the suppressed function of gold and silver.

The problem with cryptocurrencies is that whereas Bitcoin cannot increase in supply, other cryptocurrencies can be created. In order to be trusted, each cryptocurrency would have to have a limited supply. However, an endless number of cryptocurrencies could be created that would greatly increase the supply of cryptocurrencies. If entrepreneurs don’t bring about this result, the Federal Reserve itself could organize it.

Therefore, cryptocurrency might be only a temporary refuge from fiat money creation. This would leave gold and silver, whose supply can only gradually be increased via mining, as the only refuge from wealth-destroying fiat money creation.

For as long as the Federal Reserve can protect the dollar by bullion price suppression and money creation by other reserve currency central banks, and as long as the Federal Reserve can keep the influx of new dollars out of the general economy, the Federal Reserve’s policy adds to the wealth of those who are already rich. This is because instead of driving up consumer prices, thus threatening the US dollar’s exchange value with a rising rate of inflation, the Fed’s largess has flowed into the prices of financial assets, such as stocks and bonds. Bond prices are high, because the Fed forced up the price by purchasing bonds. Stock prices are high, because the abundance of money bid prices higher than profits justify. As the US government measures inflation in ways designed to understate it, the consumer price index and producer price index do not send alarm systems into the markets.

Thus, we have a situation in which the Fed’s policy has done nothing for the American population, but has driven up the values of the financial portofilios of the rich. This is the explanation why the rich are becoming more rich while the rest of America becomes poorer.

The Fed has rigged the system for the rich, and the whores in the financial media and among the neoliberal economists have covered it up.

Carmageddon: All 3 Major Auto Markets Contract YoY For The First Time Since January 2009

For the first time since January 2009, sales of cars declined year-over-year in all three of the world’s largest auto markets of Western Europe (-6.8%), China (-1.8%) and the United States (-3.7%).  Combined, these three markets account for roughly 70% of the world’s auto sales (chart per Bloomberg).

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And while auto OEMs spent the first part of 2017 ignoring the growing signs of trouble facing their industry, some are finally starting to admit that all is not well in auto land.  As we noted a couple of days ago (see “How Is This Not A Recession? Ford To Slash 10% Of Global Workforce“), Ford just announced plans to cut about 10% of its global workforce.  Meanwhile Nissan Motor is forecasting a surprise drop in profit this year and Toyota Motor expects an 18% decline as well. 

  • Off-lease supply: This has already more than doubled since 2012 and is set to rise another 25% over the next 2 years.
  • Extended credit terms: Auto loans are at record lengths and lease assumptions (residuals, money factor) are at record levels of accommodation.
  • Rising rates: Starting from record low levels in auto loans.
  • Overdependency on auto ABS: The outstanding balance of auto securitizations has surpassed last cycle’s peak.
  • Record high deep subprime participation: 32% of subprime auto ABS deals were deep subprime (weighted average FICO < 550) in 2016 vs. 5% in 2010.
  • Record high units of new car inventory: 2016YE unit inventory levels were near 10% higher than 2015YE, and are continuing to trend higher in 2017.
  • OEM price competition: Car manufacturers have capacitized to a 19mm or 20mm SAAR. At this point in the cycle we start seeing more money ‘on the hood’ to move the metal. As new car prices fall, used prices look relatively more expensive, which necessitates a decline in used prices to equilibrate the supply/demand imbalance.
  • Increased ADAS penetration: We expect auto firms to achieve nearly 100% active safety penetration by 2020, creating an unprecedented safety gap between new and used vehicles, accelerating obsolescence of the used stock. Rising insurance premiums on older cars could accelerate this shift.
  • Trouble in the car rental market: Due to a number of secular shifts, including how consumers access transportation options (e.g. ride sharing), car rental firms are facing stagnant growth, weak pricing and over-fleeted conditions. As these cars hit the auction, the impact on prices could be significant.

And here are the stats…

Off-lease volumes have already doubled since 2012 and are only expected to get worse…meanwhile, lending standards have gradually gotten worse and worse…

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But lenders are starting to get worried and are tightening lending standards for the first time since the great recession.  (Note: Shows net percentage of respondents reporting tightening standards on consumer loans for new and used autos. Negative numbers indicate loosening standards.)

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Meanwhile, none of the warnings about a flood of used car volumes about to hit the market has impacted new car volumes being pumped out by the OEMs and pushed on to dealer lots.

All of which results in this fairly brutal outlook for used car prices and, by extension, the auto market generally.

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Source: ZeroHedge

 

US Could Run Out of Money in October or November

It is called the “X date,” which is the day the federal government runs so low on funds that the Treasury cannot pay all its bills. Over the past several years, squabbling in Congress has brought the government close to this point before.

According to a study published March 2 by a major think tank, the X date will occur sometime at the start of the fourth quarter:

The Bipartisan Policy Center today updated its debt limit projections, which now show that absent congressional action, the Treasury Department will no longer be able to pay all of its bills in full and on time at some point in October or November this year. This is the updated range for what BPC calls the debt limit “X Date.”

On March 16, the amount of the federal debt limit goes to $20 trillion, which is when the current suspension of the debt ceiling expires. The Treasury has a set of “extraordinary measures,” by which it can buy itself a few months, that kick in then. These are:

 (1) suspending sales of State and Local Government Series Treasury securities; (2) determining that a “debt issuance suspension period” exists, which permits the redemption of existing, and the suspension of new, investments of the Civil Service Retirement and Disability Fund and the Postal Service Retirees Health Benefit Fund; (3) suspending reinvestment of the Government Securities Investment Fund and (4) suspending reinvestment of the Exchange Stabilization Fund. These measures are described in more detail below.

The rules do not buy much time. According to the provision, “These measures are limited and therefore can postpone only briefly the need for an increase in the statutory debt limit.” At that point, the federal government goes into default. The threat that it cannot pay its obligations, which include debt issued by the United States, becomes a reality. The Treasury’s comment on the event is that it could cause “catastrophic economic consequences.”

The Bipartisan Policy Center stated its reason for the October/November time frame:

One particular danger point is the large payments owed to government trust funds that typically fall on the first business day of the new fiscal year – October 2 in 2017.

Problems with the debt ceiling in the past have triggered events that could cost the government dearly. In June 2011, when it appeared the Treasury was close being out of money, Moody’s warned the government’s top-tier Aaa rating was at risk. In August of that year, S&P actually downgraded U.S. debt by one notch. Under circumstances that make U.S. debt even more risky, that increased risk makes it more likely the Treasury may have to pay higher rates for money. Those higher rates cause an increase in government spending, and that adds to pressure on the size of the deficit. Gridlock on the subject of the debt ceiling caused similar anxiety in 2013.

Congress has several months to address the question. But, in a period of great political turmoil and polarization about the president’s new budget, the threat of a debt problem is real.

By Douglas McIntyre | 24/7 Wall Street

They’re Pocketing Trillions From Government Black Budgets

USA.gov has allocated trillions of dollars in black budget spending on private corporations who get to keep the profits and assets for free while tax payers get stuck with all the liabilities.

Only way to stop it is if majority of us organize and push back at the local level.

… yet you are never going to get your liberty back. Like your fathers before you… you are the proverbial frog in the boiling pot. And the evisceration of your liberties, that your fathers enjoyed, and their fathers enjoyed, that have been, like the frog in the boiling pot, slowly stripped away from you, generation, by generation, are gone, forever.

If your only hope, is that Trump, like all the presidents before him, is the last chance at a reconciliation of rational politics, you have already lost. If your only hope, is that there will be a future frenzy of a war between neighbors, you have already lost.

You don’t even know what elections are anymore. Elections are nothing more than an instrument of hope, while the State, and its machine, grows around you. Just like it did for your father, and his father, and his father. And millions have become accustomed to their condition, just like their fathers, just like the frog in boiling water. I am old enough to have seen this. I have lived through it. I don’t enjoy the liberties of my father before me. My father did not enjoy the liberties of his father.

You know what this is? It’s self deluding entertainment on your part. It is hope that your government will see it… and shit its pants. It is an ignored warning. You are Pepe The Frog meme full of sound and fury, signifying nothing, happily and hopefully, bathing in your boiling pot. And that is where you will stay. And you will die there, with the only hope that your children will… do something. And your children will do the same, just like their fathers before them.

There is no “patriot” movement. There is no “III Percent” movement. There is no “liberty” movement. Sure, there may be “little pockets of paratroopers” scattered here and there, but they are not the “movement”, much less “on the move”.  Just… waiting. Just… waiting, for that which may never come, that you have convinced yourself will come. And you wait, and wait, and wait… all the while, the government marches on… on the move. Enslaving one mind at a time. Slowly creating the New Man, just like they created the New Man in you, and your fathers before you. Oh, you might not like it, but you accept it, bitching and moaning, making meme’s to “scare the shit” out of TP’sTB, just to fool yourselves, while millions are oblivious to it.

AntiFa is a distraction… as your government marches on… on the move. As it slithers like a snake, past you, and AntiFa. Just like democrats and republicans are a distraction, as they argue over how best to enslave you, marching on… on the move… building a NWO. And you think Trump is going to Drain The Swamp, and rid America of its NWO Utopia Agenda, marching on… on the move. Look! Over there! Trump fired Comey! Draining The Swamp! Marching on… moving on. But you are entertained. As the snake slithers on… on the move.

Cry hope! And let slip the dogs of liberty! In our children, and their children, and their children! Like us, and our fathers, and their fathers before them! Pass on the Torch of our Liberty to our children! And HOPE!

Because Trump is our last Great Hope… as the snake slithers on past your hope, slithering on… on the slither.

Oh, there will be war. But not the kind you hoped for. This war will be called … by consent, or conquest. And you… your children, will be to busy surviving… rather than liberty’ing. As the snake slithers on… on the slither… winking at you… whispering… Liberty, Liberty, Liberty…

A Chinese Factory Slave Explains Why Manufacturing Jobs Are NEVER Coming Back To America

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While we all loved President Trump’s campaign pledge to bring jobs back to America, there are powerful economic forces at work that suggest the shift to cheap labor is pretty much irreversible. Yes, Trump has spoken with the leaders of some of America’s biggest companies and he’s been successful at getting those chief executives to commit to creating or keeping a few thousands jobs here and there, but when you consider that the competing foreign labor force primarily responsible for manufacturing America’s consumer goods numbers in the hundreds of millions of people, the notion that we’re somehow going to see explosive manufacturing growth over the next four or eight years is nothing more than a pipe dream.

But don’t take it from us. A Chinese factory worker explains exactly why we have absolutely no way to compete with the near slave-like conditions found in foreign factories:

Zeng walked CNBC through his decision to spend six weeks in a factory working 12 hours shifts Monday through Saturday, mostly during the night, and what he discovered along the way.

“They just gave me the address of the factory and I just went. I just showed up. When I was there I saw people holding luggage waiting in a long line, so I just stood in the line,” Zeng told CNBC in an interview.

“When it was my turn they asked for my ID, asked to see my hand and asked me to recite the English alphabet. I got in after that. It took less than 30 seconds. You don’t have to apply or have any skills.

“The first thing I can think of from a labor perspective is that the wages are unacceptable for American workers. So, in the factories, I was getting paid about 3100 yuan, or $450, per month. I don’t think American workers can accept those kind of wages based on living conditions and prices here,” Zeng said.

“Even if they relocate factories to the U.S. they’d replace workers with robots,” Zeng said. He said Pegatron already uses robots to apply cameras to iPhones, and to drop batteries into the devices. Robots, Zeng said, are more precise than human workers, and precision is particularly important for those two components.

If President Trump wants iPhones manufactured in the U.S., Apple will need to front the cost to pay the much higher wages required in the U.S., which means that consumers will have to be willing to pay more. Either that, or it will have to rely a lot more on machines, which won’t create jobs, and might end up taking them.

Source: Yahoo News

For those who are having trouble visualizing the cumulative effect of what Zeng describes, this chart pretty much sums it up and shows how much manufacturing jobs as a percentage of America’s total workforce have declined since the 1960’s:

http://i1.wp.com/shtfplan.com/wp-content/uploads/2017/05/manufacturing1.jpg?resize=550%2C293

At first glance you may be thinking that we have no where else to go but up.

The problem, of course, is that if you do try to shift jobs back to America, and even if you triple the wages from what factory workers are making in China, those taking a monthly paycheck and benefits from the government already make more money for doing nothing than they would assembling mobile phone components for 12 hours a day.

One recipient of welfare summed it up succinctly in the following shocking interview:

While workers out there are preaching morality at people like me living on welfare, can you really blame us?

I get to sit home… I get to go visit my friends all day… I even get to smoke weed…

Me and people that I know that are illegal immigrants that don’t contribute to society, we still gonna get paid.

Our check’s gonna come in the mail every month… and it’s gonna be on time… and we get subsidized housing… we even get presents delivered for our kids on Christmas… Why should I work?

Ya’ll get the benefit of saying “oh, look at me, I’m a better person,” but when ya’ll sit at home behind ya’lls I’m a better person… we the ones gettin’ paid!

So can you really blame us?

There’s always hope, we suppose, that the millennial generation, currently demanding free college and living in their parents’ basements, will rocket America into its next great manufacturing boom.

But we’re not going to hold our breaths.

Source: ZeroHedge

Economic Reality: Bottom 50% Of Americans Don’t Matter

The Fed likes to brag about their “We saved the world” recovery.

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However, the unfortunate truth of the matter is a record Half of American Families Live Paycheck to Paycheck.

Does it Matter? Let’s investigate.

Unprepared for Nearly Anything

  • 50% are woefully unprepared for a financial emergency.
  • Nearly 1 in 5 (19%) Americans have nothing set aside to cover an unexpected emergency.
  • Nearly 1 in 3 (31%) Americans don’t have at least $500 set aside to cover an unexpected emergency expense, according to a survey released Tuesday by HomeServe USA, a home repair service.
  • A separate survey released Monday by insurance company MetLife found that 49% of employees are “concerned, anxious or fearful about their current financial well-being.”

Deleveraging? Where?

https://mishgea.files.wordpress.com/2017/04/trillion-in-debt.png?w=529&h=337

A Fed study shows U.S. Households Will Soon Have as Much Debt as They had in 2008.

The Federal Reserve announced Friday that the U.S. has $1 trillion in credit-card debt. Consumers hit that number in the fourth quarter of 2016, but eased on revolving credit during January 2017. The Fed announcement showed revolving consumer credit hit more than $1 trillion once again in February 2017.

“Credit card debt is rising quickly, but delinquencies are still really low,” said Matt Schulz, a senior industry analyst at the credit cards site CreditCards.com. “Many Americans are doing a good job of controlling their debts, but eventually with big debts and rising interest rates, it’s likely that something will have to give.”

Paycheck to Paycheck “Good Job”

Excuse me for asking but if half the nation lives paycheck to paycheck, is that really indicative of doing a good job at managing debt.

And as for “low delinquencies”, I remind you of my April 26 article Subprime Credit Card Losses Bite Capital One: Income Down 20%, Charge-Offs Up 30%.

Nonetheless, I remind you of an important perception.

We Saved the World

Two Reasons Not to Worry

  1. The stock market and housing are still going strong. We heard the same thing in 2007 but it’s different this time.
  2. The bottom 50% of the economy simply do not matter.

The real crux of the matter is point number two.

The Fed does not give a damn about the bottom half of the economy even though it spouts continual lies about “income inequality.

The Bottom 50% Do Not Matter

As long as the Fed can keep stocks and home prices elevated, there is no concern about the food-stamp, rent-subsidized, Medicaid-supplement, disability-income, Obamacare-subsidized 50% of Americans struggling paycheck-to-paycheck.

That money rolls in guaranteed, month after month!

That 50% cannot afford a house is irrelevant as long as suckers keep paying $500,000 to two-bedroom shacks in LA.

The game is to keep asset prices up so that the top 50% keep spending. The bottom 50% are taken care of by government (taxpayer) subsidies noted above.

Here’s the real deal: Fed Expects a Second Quarter Rebound, Higher Equity Prices.

Repeat Performance

The Fed needs to keep asset prices elevated even though it’s pretty clear concerns are mounting over bubbles.

Can the Fed save the world again?

Previously, the bottom third did not matter. Then the bottom 40% did not matter. Now the bottom 50% do not matter.

That statement is a bit over the top. By how much I don’t know. But the trend is clear, as is the fly in the ointment.

Brexit was the first warning shot. Trump was the second.

As soon as the bottom 65% don’t matter, those 65% may vote to take matters into their own hands.

Source: ZeroHedge

National Bankruptcies Nearly Doubled in March

The number of bankruptcy filings nationally rose significantly in March, according to the March 2017 Bankruptcy Trends report by Epiq Systems

Filings in March were up 40 percent from February’s. In raw numbers, that’s a jump from a little more than 58,000 total filings to 81,590 filings. Compared directly to March of 2016, filings were also up last month. A year ago, there were 78,372 filings in March.

However, year-to-date cumulative totals remained absolutely flat. Year-to-date, there have been just shy of 193,000 filings, a flat 0 percent difference from this point a year ago, Epiq reported.

March’s totals reverse a five-year trend of total national filings for the month. Since 2011, when filings in March peaked at more than 146,000, each passing March since has seen the month’s total filings drop, until this year. However, the uptick does mirror February, which saw more filings than January after a sharp drop in filings in December.

According to Epiq’s AACER data, filings per capita, nationally, averaged 2.51 per 10,000 people in March. That’s up from 2.19 filings per 10,000 in February. Sixty-two percent of filings were 7 Ratio bankruptcies, which comprised 59 percent of filings in February.

As they have been for months, Alabama and Tennessee were again ranked first and second in the number of filings per 10,000. So far in 2017, Alabama has filed 6,966 bankruptcies, which is 5.9 filings per 10,000. That’s a 0.43 percent increase compared to last year. Tennessee filed 5.74 bankruptcies per 10,000, up just barely from the 5.23-per-capita totals from a year ago.

Though the total number of filings in Montana and Wyoming cumulative through March were comparatively few, 273 and 225, respectively, the percentage increases from February in each state were enormous. Montana saw a 168 percent rise in bankruptcy filings in March, while Wyoming saw a 157 percent spike. Maine, with 289 cumulative filings this year, saw a 112 percent rise in filings in March.

Those numbers are somewhat deceiving, however, as year-to-date filings compared to this point in 2016 for Montana and Maine were actually down, 23 percent and 7 percent, respectively. Wyoming’s filings to-date compared to last year are up 8 percent. Ironically, Maine’s drop was the largest of its kind compared to a year ago.

North Dakota again saw a percentage increase in filings compared to this time a year ago. The state reported 27 percent more filings in March than in February, which itself saw 85 percent more filings in January. Conversely, South Dakota saw a 19 percent drop over the same timeframe. Alaska saw the largest overall percentage increase compared to last year, with 51 percent.

Businesses filed 3,658 filings over 23 filing days in March. That compares to 2,797 filings in 19 filing days in February, and equates to 159 filings per day in March, compared to 150 per day in February. March’s business filings were also up from last year, when businesses filed 147 bankruptcies per day over 23 days in March.

Source: DS News

Latest On US Auto Sales

https://i1.wp.com/www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170328_auto.jpg

Most of you reading this are probably aware the U.S. auto market is a train wreck waiting to happen, but a recent report by Moody’s really puts the industry’s insane lending practices into perspective.

Reuters reports:

As U.S. auto sales have peaked, competition to finance car loans is set to intensify and drive increased credit risk for auto lenders, Moody’s Investors Service said in a report released on Monday.

“The combination of plateauing auto sales, growing negative equity from consumers and lenders’ willingness to offer flexible loan terms is a significant credit risk for lenders,” Jason Grohotolski, a senior credit officer at Moody’s and one of the report’s authors, told Reuters.

Motor vehicle sales have boomed in the years since the Great Recession. U.S. sales of new cars and trucks hit a record annual high of 17.55 million units in 2016.

Industry consultants J.D. Power and LMC Automotive on Friday reiterated their forecast for a 0.2 percent increase in sales in 2017 to 17.6 million vehicles.

But Moody’s says it expects U.S. new vehicle sales to decline slightly to 17.4 million units in 2017.

In the first nine months of 2016, around 32 percent of U.S. vehicle trade-ins carried outstanding loans larger than the worth of the cars, a record high, according to the specialized auto website Edmunds, as cited by Moody’s.

Wow.

Typically, car dealers tack on an amount equal to the negative equity to a loan for the consumers’ next vehicle. To keep the monthly payments stable, the new credit is for a greater length of time.

Over the course of multiple trade-ins, negative equity accumulates. Moody’s calls this the “trade-in treadmill,” the result of which is “increasing lender risk, with larger and larger loss-severity exposure.”

To ease consumers’ monthly payments, auto manufacturers could subsidize lenders or increase incentives to reduce purchase prices, though either action would reduce their profits, the report said.

Bad loans and reckless behavior generally seems to be already baked into the cake, so the real question is when will it all truly enter the market and create major problems? The cycle is already long in the tooth and a year of negative sales growth could turn out to be a tipping point.

Source: ZeroHedge

Rothschild Makes Dismal Admissions To His Investors

https://s15-us2.ixquick.com/cgi-bin/serveimage?url=https%3A%2F%2Fseeker401.files.wordpress.com%2F2016%2F06%2F4071279737_c3002005034100.jpg%3Fw%3D497&sp=2558d78c8358f592f3b11a0799f03e75RIT Capital Partners fund issued its 2016 year-end report in late February. While the company was pleased to report a net profit of 12.1 percent and total shareholder returns hold at 14.2 percent, the company, and its chairman Lord Jacob Rothschild, seem preoccupied with risks associated with political and economic instability.

Rothschild announced that while the funds’ assets are at an all-time high, the announcement comes, “Against a background of daunting uncertainty and political turmoil.” Going further, he stated a more ominous warning. “At this time of upheaval and uncertainty, our investment portfolio will continue to be well diversified,” he wrote comforting his shareholders their fund’s portfolio would be as protected as possible from any coming downturns in the market.

However comforting the report may be for individual investors, Rothschild’s final comments loom large over the mostly positive economic report. He wrote, “There could well be a period ahead of us when the avoidance of risk is as high a priority as the pursuit of gain.” The investment banker’s chosen word of “period” seems to indicate a coming downturn in profitability, even though for the past five years the fund has realized a profit of more than 1 billion Euros.

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According to the report, Rothschild and his very powerful family have a vested interest in preserving their assets. “RIT Capital Partners plc is an investment company listed on the London Stock Exchange. Its net assets have grown from £280 million on listing in 1988 to over £2.7 billion today. RIT is chaired by Lord Rothschild, whose family interests retain a significant holding,” the issue reveals. If the fund, whose value is at an

If the fund, whose value is at an all-time high, suddenly declines, falling with it will be a large portion of wealth the Rothschild family enjoys. Although, any such declines would hardly come as a surprise to the Rothschild family who reportedly controls much of the world’s wealth and has a hand in nearly all of the world’s banking institutions, including the Federal Reserve, as some have stated.

The chairman’s statement continues with what some might say is an ominous and uncertain view of the future. “Since the last World War, we have enjoyed some 70 years of patiently crafted international cooperation, which is now threatened,” an apparent reference to Brexit and the UK’s referendum to withdraw from the European Union.

“Against this deeply worrying geo-political situation,” he wrote seeming to highlight the potential of WWIII if the Syrian conflict continues, “one can point to a number of positive investment factors.” Echoing many statements made by the current U.S. president, Lord Rothschild stated he was hopeful corporations would receive a break in government imposed revenue. He said, “in the US, the proposed tax reduction for companies and individuals,” was a favorable policy change for his fund’s portfolio.

Resounding President Trump’s call for deregulation, Rothschild also was reportedly pleased with the “reforms of an over-regulated system.” Likewise, in step with Trump’s call to exponentially increase spending on America’s failing transportation infrastructure, Lord Rothschild is pleased. However, Trump’s call for, “increases in fiscal and infrastructure expenditure…come at a time late in the business cycle, when the labor market is close to full employment,” meaning there’s no forecast of immediate returns on infrastructure spending projected in the future.

The banking and financial baron also seemed to lament that “wage increases up by some 4% over the last few months” a factor which affects the bottom line for every company. He also stated across the fund’s portfolio will also be affected by rising interest rates. “Valuations are at the high end of their historical range, inflation is returning and in these circumstances, it is likely that interest rates in the US will rise meaningfully,” he said. And coming from the man whose familial connections and financial partners control the Federal Reserve, he should know.

By Jack Burns | The Free Thought Project

Ready For A Bout Of Stagflation, After The Next Depression, Like We’ve Never Seen Before

Money manager Michael Pento says don’t believe the Fed when it says “the economy is doing well.” It’s not. Pento explains, “As long as the stock market continues to go up, the Fed is going to continue to slowly raise interest rates. So, when the inevitable collapse occurs, and that’s what the Fed does, the Fed is in the business of lowering interest rates, creating asset bubbles, which pile up the level of debt, then raising rates and collapsing the economy. That’s their mantra. That’s their MO (modus operandi) and it has happened over and over again. The occurrences are going to be much more dire as we go through time. So, the Fed is trying to get bullets in the chamber. The Fed is going to raise rates slowly. The yield curve is going to invert. . . . We are going to have another catastrophe in the stock market and in the bond market and in the real estate market and in the global economy.”

With the latest GDP number now coming in at less than 1%, Pento says the Fed will be forced to reverse course soon when the economy tanks again. Pento contends, “They will have no choice, this is what they are going to do. They are going to do everything they can to rebuild the asset bubble, but it’s going to take a lot more than lowering interest rates and a little bit of QE. They’re going to have to have helicopter money, and I think that’s going to happen right after we enter this next depression. I don’t use hyperbole here either. I say depression because I look at the data. The data tells me the great recession that was headed towards a depression started in 2007 and ended in 2009. They were talking about not getting money out of the ATMs and massive bank defaults. That was going to make the Great depression in the 1930’s look like a Sunday picnic. That was caused by a Fed Funds rate at 1% for one year and a housing bubble. You look at the bubbles we have today, the national debt in 2008 was $10 trillion. It’s now $20 trillion. . . . You have the entire globe that has massively and exponentially raised its level of debt . . . and the level of asset bubbles. . . . Most of the metrics are at all-time record highs. The GDP has been artificially boosted by 100 months of 1% or lower Fed Funds rate. I think a depression is absolutely unavoidable. What did they fix? Absolutely nothing. They just made the economy exponentially more artificial and more dependent on free money.”

Pento predicted the bond market would ultimately collapse in his 2013 book titled “The Coming Bond Market Collapse.” He says the collapse has started and will get worse quickly. Pento is watching Europe and says, “When the European Central Bank (ECB) announces they are going to take the $60 billion a month of easing and take it to zero, you are going to see a bond market revolt. The free market, whatever is left of it, is going to aggressively start shorting bonds. You will see yields spike in Europe, which is going to drag up bond yields across the globe. That’s when this thing will all unravel and unravel very, very quickly.”

In closing, Pento predicts, “The stock market is a bubble. It’s going to fall at least 50% for starters and before The Fed gets to helicopter money. You better be ready.”

By Greg Hunter | USA Watch Dog

Elite Are Prepped And Ready For The Economic Crisis

The following is an interesting overview, via X22Report.com, of our current economic situation and the behavior of the elites going into the next stage of the collapse process.

https://i1.wp.com/www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/09/20170314_world.jpg

As Alt-Market’s Brandon Smith notes, take special note of the information on the abrupt decline in bank issued loans (debt); is it not rather coincidental that as the Federal Reserve presses forward with the interest rate hiking process that credit issuance suddenly freezes up?

This is what I have been warning about since last year, and now we are watching it unfold


Lawyer Joke:

One afternoon a lawyer was riding in his limousine when he saw two men along the roadside eating grass.

Disturbed, he ordered his driver to stop and he got out to investigate.

He asked one man, “Why are you eating grass ?”

“We don’t have any money for food,” the poor man replied. “We have to eat grass.”
“Well, then, you can come with me to my house and I’ll feed you,” the lawyer said.
“But sir, I have a wife and two children with me. They are over there eating grass under that tree”

“Bring them along,” the lawyer replied.

Turning to the second poor man he stated, “You may come with us, also.”
The other man, in a pitiful voice, then said, “But sir, I also have a wife and six children with me!”

“Bring them all as well,” the lawyer answered.

They all entered the car, which was no easy task, even for a car as large as the limousine. Once under way, one of the poor fellows turned to the lawyer and said,

“Sir, you are too kind. Thank you for taking all of us with you.”

The lawyer replied, “Glad to do it.

You’ll really love my place.

The grass is almost a foot high.”

Did you really think there was a heart-warming lawyer story?
Look at Congress — over 300 LAWYERS

Trump vs. $20T Debt Ceiling – Coming March 15th

Former Reagan Administration White House Budget Director David Stockman:  “I think what people are missing is this date, March 15th 2017.  That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015.  That holiday expires.  The debt ceiling will freeze in at $20 trillion.  It will then be law.  It will be a hard stop.  The Treasury will have roughly $200 billion in cash.  We are burning cash at a $75 billion a month rate.  By summer, they will be out of cash.  Then we will be in the mother of all debt ceiling crises.  Everything will grind to a halt.  I think we will have a government shutdown.  There will not be Obama Care repeal and replace.  There will be no tax cut.  There will be no infrastructure stimulus.  There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

Stockman also predicts very positive price moves for gold and silver as a result of the coming budget calamity.

https://theconservativetreehouse.files.wordpress.com/2012/01/baby-newt.jpg?w=960&h=680

https://reclaimourrepublic.files.wordpress.com/2015/09/trump-gop.png?w=640

Despite The Recent Rise, Trend In Rates Remain Lower

Yield Bottom Is Still Ahead Of Us

Donald Trump’s victory sparked a tremendous sell-off in the Treasury market from an expectation of fiscal stimulus, but more broadly, from an expectation that a unified-party government can enact business-friendly policies (protectionism, deregulation, tax cuts) which will be inflationary and economically positive. It doesn’t take too much digging to show that the reality is different. The deluge of commentaries suggesting ‘big-reflation’ are short-sighted. Just as before last Tuesday we thought the 10yr UST yield would get below 1%, we still think this now.

https://i2.wp.com/www.kesslercompanies.com/sites/default/files/media/images/10yrlong.png

Business Cycle

No matter the President, this economic expansion is seven and a half years old (since 6/2009), and is pushing against a difficult history. It is already the 4th longest expansion in the US back to the 1700’s. As Larry Summers has pointed after 5 years of recovery, you add roughly 20% of a recession’s probability each year thereafter. Using this, there is around a 60% chance of recession now.

History also doesn’t bode well for new Republican administrations. Certainly, the circumstances were varied, but of the five new Republican administrations replacing Democrats in the 19th and 20th centuries, four of them (Eisenhower, Nixon, Reagan, and George W. Bush) faced new recessions in their first year. The fifth, Warren Harding, started his administration within a recession.

Fiscal Stimulus 

Fiscal stimulus through infrastructure projects and tax cuts is now expected, but the Federal Reserve has been begging for more fiscal help since the financial crisis and it has been politically infeasible. The desire has not created the act. A unified-party government doesn’t make it any easier when that unified party is Republican; the party of fiscal conservatism. Many newer House of Representatives members have been elected almost wholly on platforms to reduce the Federal debt. Congress has gone to the wire several times with resistance to new budgets and debt ceilings. After all, the United States still carries a AA debt rating from S&P as a memento from this. Getting a bill through congress with a direct intention to increase debt will not be easy. As we often say, the political will to do fiscal stimulus only comes about after a big enough decrease in the stock market to get policy makers scared.

Also, fiscal stimulus doesn’t seem to generate inflation, probably because it is only used as a mitigation against recessions. After the U.S. 2009 Fiscal stimulus bill, the YoY CPI fell from 1.7% to 1% two years later. Japan has now injected 26 doses (link is external) of fiscal stimulus into its economy since 1990 and the country has a 0.0% YoY core CPI, and a 10yr Government bond at 0.0%.

Rate Sensitive World Economy

A hallmark of this economic recovery has been its reliance on debt to fuel it. The more debt outstanding, the more interest rates influence the economy’s performance. Not only does the Trump administration need low rates to try to sell fiscal stimulus to the nation, but the private sector needs it to survive. The household, business, and public sectors are all heavily reliant on the price of credit. So far, interest rates rising by 0.5% in the last two months is a drag on growth.

https://i2.wp.com/www.kesslercompanies.com/sites/default/files/media/images/debt.png

Global Mooring

Global policies favoring low rates continue to be extended, and there isn’t any economic reason to abandon them. Just about every developed economy (US, Central Europe, Japan, UK, Scandinavia) has policies in place to encourage interest rates to be lower. To the extent that the rest of the world has lower rates than in the US, this continues to exert a downward force on Treasury yields.

https://i2.wp.com/www.kesslercompanies.com/sites/default/files/media/images/germus.png

Demographics

As Japan knows and we are just getting into, aging demographics is an unmovable force against consumption, solved only with time. The percent of the population 65 and over in the United States is in the midst of its steepest climb. As older people spend less, paired with slowing immigration from the new administration, consumer demand slackens and puts downward pressure on prices.

https://i2.wp.com/www.kesslercompanies.com/sites/default/files/media/images/oldpop.png

Conclusion

We haven’t seen such a rush to judgement of boundless higher rates that we can remember. Its noise-level is correlated with its desire, not its likelihood. While we cannot call the absolute top of this movement in interest rates, it is limited by these enduring factors and thus, we think it is close to an end. In a sentence, not only will the Trump-administration policies not be enacted as imagined, but even if they were, they won’t have the net-positive effect that is hoped for.  We think that a 3.0% 30yr UST is a rare opportunity buy.

Source: California Mortgage Broker

Only Two Sets Of Solutions As The Status Quo Crumbles

We are about to start a painful learning process about what is “impossible” and what is inevitable.

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Two charts illustrate Why Our Status Quo Failed and Is Beyond Reform: this chart of the S-Curve of financialization, leverage, debt, central planning, regulatory capture and globalization–that is, the engines of modern “growth”–depicts the inevitable stagnation and decline of these dynamics as overcapacity, debt saturation and diminishing returns take hold.

This chart illustrates the status quo’s insistence on doing more of what has failed spectacularly: since all this worked in the boost phase, the central planning Cargo Cult’s “leadership” is convinced it will all work magically again, if only we do more of it.

Alas, this is magical thinking. One might as well paint radio dials on rocks and expect the rock to magically turn into a functioning radio.

The chart of the Seneca Cliff illustrates how the S-curve of “growth” can continue expanding even as the foundation weakens. As the foundations of real growth weaken– productivity, collateral, social mobility, etc.–the system become increasingly fragile and brittle. But this fragility is masked by the appearance of stability until a crisis cracks it wide open.

Normalcy crumbles into instability, and people and systems accustomed to stable supply chains and political stability struggle to maintain their grip on income streams and resources as abundance slips into scarcity and dependence on central planning becomes a liability of learned helplessness.

The S-curve:

https://i1.wp.com/www.oftwominds.com/photos2016/S-curve7-16.gif

Seneca Cliff:

https://i2.wp.com/www.oftwominds.com/photos2016/Seneca-Cliff3.png

There are two sets of solutions as stability and financialized “growth” slide into instability and long term contraction.

1. Acquire skills that will be increasingly scarce and a network of collaborators, customers and suppliers who value/make use of these skills.

2. Create a new mode of production that doesn’t rely on central banks, states and global finance to function: in effect, a decentralized, localized networked system that exists in parallel with the centralized hierarchies of the current mode of production which is centralized, industrialized, globalized, financialized, neofeudal, neoliberal, neocolonial, and dependent on ever-expanding leverage, debt, central planning, regulatory capture and fossil fuel consumption.

I describe the first set of solutions in my book Get a Job, Build a Real Career and Defy a Bewildering Economy.

The second set of solutions are the subject of my book A Radically Beneficial World: Automation, Technology & Creating Jobs for All.

Ultimately, these two sets of solutions are two facets of the only solution: a more sustainable, just, efficient, decentralized, transparent and opportunity-for-all mode of production.

Naysayers love to claim that these solutions can’t possibly work for the usual array of reasons, which boil down to 1) my identity is dependent on poking holes in others’ solutions or 2) my status and livelihood are dependent on the status quo continuing exactly as it is now or 3) an un-examined faith that the current mode of production is the only possible mode of production.

Note to naysayers: the “solution” that can’t possibly work is the continuation of the status quo. There are only two pathways as the status quo arrangement destabilizes, decays and decoheres: 1) a doomed nostalgia for “solutions” that are no longer attainable (for example, Cargo Cults of “endless growth”) or 2) an alternative set of solutions that are sustainable because they are localized, networked, democratized, opt-in and self-funded.

We are about to start a painful learning process about what is “impossible” and what is inevitable. Once it becomes self-evident that the current mode of production is not sustainable, we’ll have no choice but to try more sustainable modes of production that are not just more efficient but that offer greater stability, opportunity and social mobility.

https://i1.wp.com/www.oftwominds.com/photos2016/abbey-quote.jpg

By Charles Hugh Smith | Of Two Minds

Kmart Closing 64 More Stores, Laying Off Thousands

“Liquidation sales start September 22. Stores closed by mid-December”.

Kmart is closing 64 stores across 28 states.

Sears Holdings, which owns Sears and Kmart, informed Kmart employees of the closures on Friday, according to several local news reports and multiple employees who spoke with Business Insider.

The stores that are closing will begin liquidation sales on September 22 and close by mid-December, employees said.

Sears did not respond to Business Insider’s request for comment.

Separately on Friday, Seritage Growth Properties, a real-estate investment trust that owns 235 Sears and Kmart stores, revealed in a filing that Sears had decided to terminate leases on 17 stores, meaning it would close those stores.

According to RBC Capital Markets analysts, all 17 closures are Kmart stores and they will close by January.

The new wave of closures follows Sears’ decision to shut down nearly 80 stores — most of which were Kmart stores — in July. Moody’s analysts warned last week that Kmart doesn’t have enough cash or access to cash to stay in business. Kmart has about 870 stores today, down from about 1,300 in 2012.

Here’s a full list of stores that will close in December, according to employees:

  • Kmart #3044: Lawton, OK
  • Kmart #3180: Merrillville, IN
  • Kmart #3241: Springfield, IL
  • Kmart #3320: Houma, LA
  • Kmart #3328: New Lenox, IL
  • Kmart #3355: Panama City, FL
  • Kmart #3359: Gardendale, AL
  • Kmart #3521: Binghamton, NY
  • Kmart #3556: Elkhart, IN
  • Kmart #3594: Chicago, IL
  • Kmart #3644: Nashville, TN
  • Kmart #3695: Sierra Vista, AZ
  • Kmart #3706: Wytheville, VA
  • Kmart #3754: Martinsville, VA
  • Kmart #3814: Kearney, NE
  • Kmart #4066: Jackson, MI
  • Kmart #4095: Joliet, IL
  • Kmart #4135: Augusta, GA
  • Kmart #4162: Salt Lake City, UT
  • Kmart #4175: Canton, OH
  • Kmart #4176: Cheektowaga, NY
  • Kmart #4439: Yakima, WA
  • Kmart #4700: Fenton, MI
  • Kmart #4717: Oak Ridge, TN
  • Kmart #4739: Clarksville, TN
  • Kmart #4772: Burnham, PA
  • Kmart #4781: Macomb, IL
  • Kmart #4837: Riverton, WY
  • Kmart #4845: Manistee, MI
  • Kmart #4851: Byron Center, MI
  • Kmart #4910: Mentor, OH
  • Kmart #4917: Thornton, CO
  • Kmart #4961: Burlington, NC
  • Kmart #4970: Memphis, TN
  • Kmart #4972: Lubbock, TX
  • Kmart #4984: Tinley Park, IL
  • Kmart #7024: Scottsbluff, NE
  • Kmart #7061: New Iberia, LA
  • Kmart #7077: Harlingen, TX
  • Kmart #7174: Pikeville, KY
  • Kmart #7205: Grand Rapids, MI
  • Kmart #7216: Moorhead, MN
  • Kmart #7306: Sioux Falls, SD
  • Kmart #7356: Jonesboro, AR
  • Kmart #7412: West Valley City, UT
  • Kmart #7478: Waipahu, HI
  • Kmart #7551: Indio, CA
  • Kmart #7560: Craig, CO
  • Kmart #7587: Fontana, CA
  • Kmart #7625: Los Angeles, CA
  • Kmart #7642: Natchez, MS
  • Kmart #7718: Hixson, TN
  • Kmart #7733: Alpena, MI
  • Kmart #7755: Deming, NM
  • Kmart #7775: Lafayette, IN
  • Kmart #7795: Abilene, TX
  • Kmart #9129: Mount Airy, NC
  • Kmart #9146: Great Barrington, MA
  • Kmart #9397: West Saint Paul, MN
  • Kmart #9571: Cullman, AL
  • Kmart #9586: Sault Saint Marie, MI
  • Kmart #9623: Springdale, AR
  • Kmart #9728: Smyrna, TN
  • Kmart #9751: Cody, WY

Also Read: Moody’s: Sears’ and Kmart’s shutdown is imminent

By Hayley Peterson | Business Insider

How Elon Musk Used A Broken Marketplace To Play Us All

Government subsidized technology is developed and Musk cashed in. Then cashed out. Then left stock holders holding the bag. It’s like the Simpsons monorail episode…

https://i1.wp.com/www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/09/01/20160905_tsla_0.jpg

In light of Tesla’s earnings miss and Musk’s admission of the firm’s cash crunch just a month after Tesla announced it would bail out its weaker cousin, Solar City,  We ask you: how can a visionary such as he not see 30 days down the road? 

Here is a repost from our observations just 3 weeks ago on the likelihood of fraud at Tesla and Musk’s other companies. 

Summary

Businesses cannot stand on their own feet without some form of Government aid. Whether that be in QE form or direct subsidies, the marketplace is no longer a “Free Market”. Tesla and its dependents are an example of what is wrong with our capital market system.

Elon Musk is using the Government as a backstop for his businesses. He is depending on easy money to support companies that would otherwise fail from  debt. In short, the business structure of Tesla, SolarCity and SpaceX is a microcosm of the problem with our current capital markets.

– By Soren K. with contributions by Doug and Dinsdale Piranha and the CFO of a prominent hedge fund that has no position in the stock.

The Business of Crony Capitalism

https://i2.wp.com/www.marketslant.com/sites/default/files/inline/images/IMG_6845.JPG

Overview

Elon Musk has controlling stakes in 3 companies: Tesla, SolarCity, and SpaceX. Tesla and SolarCity are publicly traded. SpaceX is not publicly traded. This document’s focus will be soley on the financial interdependencies of the companies. There are also incestuous business practices, and nepotism within the leadership of each company Musk controls.

We hope to illustrate simply and clearly the immense risk the  US government has taken with your money by giving it to a man who is essentially telling them what they want to hear while picking their pockets doing it.

Background

Tesla borrowed Venture Capital (VC) money from Elon Musk at VC rates. It borrowed VC money from taxpayers at non-VC rates

Tesla needed $500MM to get started in 2008. The US Government lent $465MM to Tesla at 3% interest under its push for Green Energy. Elon Musk lent the company $38MM at10% interest plus stock options. Here are the profits on those loans:

  • Elon Musk’s $38MM generates profit of $1.4BB, or 3,600% ROR- a VC payout
  • Taxpayers’ $465MM- generates profits of $12MM or 2.6%ROR- not a VC Payout

Taxpayers took VC risk without VC returns. The table is set for Elon to arbitrage the Government’s largesse much more. All in, the US Government committed about $4.9BB to finance Tesla’s operations

Musk Gets More Government Money

Using Government loans, Elon Musk creates 2 more companies; SolarCity and SpaceX. He now controls three government sponsored clean energy companies financed by taxpayer money.

The Companies

Tesla- makes electrical cars, develops technology for same. Loses money hoping for future profits

  • Loans money to SolarCity via its own stock
  • Borrowed  $465MM from Gov’t  at 3% and $38MM from Elon Musk at 10% plus stock options
  • Does not make money

SolarCity- makes and leases solar panels to homeowners. Loses money hoping for a back-end profit

  • Borrows money from Tesla
  • Borrows Money from SpaceX
  • Does not make money

SpaceX- will provide future service related to satellite launches. It makes money via prepaying customers

  • Loans money to SolarCity at approx. 10%
  • Borrows Money from  Government at approx. 4%
  • Makes money

Elon Musk now has 2 companies that do not make money. He has 1 that makes money from prepayments for services yet to be given.  All are financed by the US taxpayer at ridiculously below market rates. The table is now set for financing using inflated currency (sound familiar?) in the form of Tesla stock to get real cash in Mr. Musk’s pockets.

The SolarCity Problem

Despite gov’t subsidies SolarCity still needs money to operate. SpaceX, while not profitable, has cash on hand form prepayments and Gov’t subsidies. Tesla, also not profitable, has no cash, but has highly (over)valued stock it can use as currency or loans for cash. Elon Musk owns major stakes in all 3 companies.

  1. SolarCity borrows  $165MM from SpaceX at market rates of about 4.4%
  2. SpaceX uses govt loans (2.0%?) to lend $165MM SolarCity
  3. SolarCity borrows another $90MM from SpaceX to avoid defaulting on first SpaceX loan

Yet SolarCity is still in trouble. It needs cash. Government subsidies are on hold. Its stock price is sinking and  it is in danger of defaulting on existing loans. Enter Tesla and Elon Musk

Tesla and Musk Bail Out SolarCity

Elon Musk and Tesla loan stock to SolarCity. SolarCity margins that stock for cash so they can make their loan payments to SpaceX.

  • Elon Musk used money loaned to him at 2.6% to generate 3,600% from Tesla stock sales
  • SolarCity was failing. If It failed, it likely would take SpaceX with it.
  • Elon Musk and Tesla used his govt sponsored inflated currency (Tesla stock) to prop up a failing SolarCity.

Not Enough

But that was not enough money. Tesla then makes a bid outright to buy all of SolarCity at above market valuations using Tesla stock. This essentially ensures a payout to himself and his partners at SolarCity while eliminating the SpaceX debt. Now it all depends on the price of Tesla stock. And Tesla has been punished by the market since the announcement.

Finally there is the loaned stock by Elon Musk to SolarCity. If Tesla drops enough for amargin call, it is all over in our opinion. what we have not covered includes the valuation offerred to buy SolarCity. Public shareholders of Tesla should be incensed atthe price being paid for SolarCity. Meanwhile, much of SolarCity’s stock is still in the hands of Musk and family members.

If Tesla stock drops enough, it could take out potentially all 3 companies. Essentialy Musk is at the center of an American Keiretsu.

Conclusion

The interdependent relationships between the 3 government subsidized companies Elon Musk owns or has a controlling stake in are an abuse ofgovernment largesse towards Green Energy. Taxpayer money is being used at market risk without market returns to prop up 3 unprofitable companies. While we do not debate the technology Tesla has developed, we question the leverage with which these companies are able to operate under. If something were to go wrong, we feel an eventual Solyndra Greenmail situation would occur. Tesla would be TBTF to the Government and have to pay. We feel Elon Musk knows this and is will play that card if need be.

Not Discussed: Business practices, Neoptism, valuations used for buyouts and other in depth proofs of what we are merely glossing over for now.

In a Graph

Here is a simple flowchart of the cash-flow situation between the 3 companies and the Goverment. None of these companies make money. Only SpaceX has positive cash flow from prepaid “orders”. The “currency” that supports it all is the Tesla’s stock Price

https://i0.wp.com/www.marketslant.com/sites/default/files/inline/images/tesla.png

Source: ZeroHedge

Learn Why It’s Time To Prepare For The Clinton Hyper Inflationary Collapse (video)

“There’s Going To Be A Massive Run On Firearms… Bigger Than Anything We’ve Ever Seen Before If A Hillary Win Becomes Imminent”

https://i1.wp.com/a.disquscdn.com/uploads/mediaembed/images/3448/2504/original.jpg

 

Scenes From The Venezuela Apocalypse: “Countless Wounded” After 5,000 Loot Supermarket Looking For Food

Over the last several years we have documented with clockwork regularity Venezuela’s collapse into failed state status, which was cemented several weeks ago when news hit that “Venezuela had officially run out of money to print new money.”  At that point the best one could do was merely to step back and watch as local society and civilization turned on itself, unleashing what would ultimately turn into Venezuela’s own, sad apocalypse.

Last night we showed what Caracas, looks like this week:

As we wrote then these are simply hungry Venezuelans protesting that their children are dying from lack of food and medicine and that they do not have enough water or electricity. As AgainstCronyCapitalism added, this is a country with more oil than Saudi Arabia, and the government has stolen all the money and now they bottleneck peaceful protesters and threaten them with bombs (or haul them to prison and torture them).

As pure desperation has set in, crime has becomes inevitable. A man accused of mugging people in the streets of Caracas was surrounded by a mob of onlookers, beaten and set on fire, who published a pixeled-out but still graphic video of the man burning as mob justice is now the supreme arbiter of who lives and who dies:

“Roberto Fuentes Bernal, 42, was reportedly caught trying to mug passersby in the Venezuelan capital, and before police arrived at the scene, the crowd took the law into their own hands.” The video can be seen here.

Now, in the latest shocking development, Venezuela saw a new wave of looting this week that resulted in at least two deaths, countless wounded, and millions of dollars in losses and damages.

According to Panampost, on Wednesday morning, a crowd sacked the Maracay Wholesale Market in the central region of Venezuela.  According to the testimonies of merchants, the endless food lines that Venezuelans have been enduring to do groceries could not be organized that day.

As time went by, desperate Venezuelans grew anxious over not being able to buy food. Then they started jumping over the gates and stormed the supermarket.

“They took milk, pasta, flour, oil, and milk powder. There were 5,000 people” one witness told Venezuela outlet El Estímulo.

People from across the entire state came to the supermarket because there were rumors that some products not found anywhere else would be sold there.

As a result of the massive crowd, the authorities were unable to preserve the peace. “There were 250 people for each National Guard officer… lots of people and few soldiers. At least one officer was beat up because he tried to stop the crowd,” another source told El Estímulo.

Other food dispensaries run by the government were also looted by the people.

Far from the promised socialist paradise, as the massive group of people moved, an entrance gate collapsed under the weight of the crowd, leaving several wounded.

The image below shows a human stampede over rice.

Over the last two weeks, several provinces have hosted scenes of looting in pharmacies, shopping malls, supermarkets, and food delivery trucks. In several markets, shouts of “we are hungry!” echoed. On April 27, the Venezuelan Chamber of Food (Cavidea) reported that the country’s food producers only had 15 days left of inventory.

PanamPost adds that lootings are becoming an increasingly common occurrence in Venezuela, as the country’s food shortage resulted in yet another reported incident of violence in a supermarket — this time in the Luvebras Automarket located in the La Florida Province of Caracas.

Venezuelans lost control this week when offered small portions

Videos posted to social media showed desperate people falling over each other trying to get bags of rice. One user claimed the looting occurred because it is difficult to get cereal, and so people “broke down the doors and damaged infrastructure.”

In the central province of Carabobo, residents ransacked a corn warehouse located in the coastal city of Puerto Cabello. They reportedly broke down the gate because workers were giving away small portions.

“There’s no rice, no pasta, no flour,” resident Glerimar Yohan told La Costa, “only hunger.”

* * *

Social Collapse Is Inevitable

With the economy dead, the only thing remaining is to watch as society implodes. To that end, Oscar Meza, Director of the Documentation Center for Social Analysis (Cendas-FVM), said that measurements of scarcity and inflation in May are going to be the worst to date. “We are officially declaring May as the month that [widespread] hunger began in Venezuela,” he told Web Noticias Venezuela. … “As for March, there was an increase in yearly prices due to inflation — a 582.9 percent increase for food, while the level of scarcity of basic products remains at 41.37 percent.”


“We are officially declaring May as the month that hunger began
in Venezuela,” says an NGO that measures inflation and scarcity

Meza said the trigger for the crisis is the shortage of bread and other foods derived from wheat.

“Prices are so high that you can’t buy anything, so people don’t buy bread, they don’t buy flour. You get porridge, you see the price of chicken go up and families struggle … lunch is around 1,500 bolivars… People used to take food from home to work, but now you can’t anymore because you don’t have food at home.”

The is why, Español Ramón Muchacho, Mayor of Chacao in Caracas, said the streets of the capital of Venezuela are filled with people killing animals for food. “Muchacho reported that in Venezuela, it is a “painful reality” that people “hunt cats, dogs and pigeons” to ease their hunger.”

Subsquently, Muchacho warned that Caribbean islands and Colombia may suffer an influx of refugees from Venezuela if food shortages continue in the country.

“As hunger deepens, we could see more Venezuelans fleeing by land or sea to an island,” Muchacho said.

And that is how all socialist utopias always end.

* * *

Meanwhile, as civil war appears inevitable, as previously reported there are factions vying to oust Maduro, although we are confident the dictator will hang on for dear life (literally) and force his population to endure more of this socialist nightmare. One can only hope that these shocking scenes remain relegated to the streets of offshore socialist paradises, although Americans should always prepare for the worst in case they eventually manage to make their way into the country.

Source: ZeroHedge


Is A Venezuela Coup Imminent? An Interview With A National Guardsman

Following several very disturbing stories about the start of Venezuela’s social apocalypse, in the first case chronicling “Streets Filled With People Killing Animals For Food” and then last night documenting “Countless Wounded” After 5,000 Loot Supermarket Looking For Food, we concluded that “as civil war appears inevitable, as there are factions vying to oust Maduro, although we are confident the dictator will hang on for dear life (literally) and force his population to endure more of this socialist nightmare.”

Today, now that speculation about a coup and/or civil war is becoming ever louder, we address some of these concerns courtesy of a must-read interview with a member of Bolivarian National Guard, the country’s national guardsmen, conducted by PanAm Post, which provides a critical blueprint of the next very tragic steps in Venezuela, which unfortunately now appear certainly to conclude with a national coup.

From PanAm Post:

Venezuela Is on the Brink of Social Collapse” National Guardsman

Food Shortages Cause Daily Looting, Energy Crisis Worsens as National State of Emergency Approaches

At the moment, the armed forces’ position vis-à-vis the government is not clear. Some speculate that the Bolivarian National Guard is divided. Others claim that the regime exerts full control over the Bolivarian National Guard’s members. The only certainty is that uncertainty abounds.

The PanAm Post had the opportunity to interview a Bolivarian National Guard member of middle rank, who asked to remain anonymous since his views could expose him to danger.

Why has the state launched an offensive against criminal groups?

The situation was getting out of hand for political reasons. The state has no means to control criminal groups. The country’s jails are in chaos. The streets themselves are in chaos. The state’s security personnel are unarmed.

The Maduro regime created the Organization for the Protection and Liberation for the People (OLP) to fight organized crime. Has that organization committed illegal acts as well?

From a legal standpoint, yes. Now from the point of view of the general population, no, because they tolerate harsh methods against the criminal bands.

But do they only kill criminals?

In the majority of cases.

Is the OLP really carrying out its operations strictly to end gang violence?

That is their main purpose. But there is also a political element. The OLP’s creation was a desperate measure. The government had given liberty to the gangs to do what they please. They armed them and now they are attacking them.

Is the OLP at war with gangs and with government officials at the same time?

Yes, because they can’t control them. They have become too powerful. They are armed and they teach military strategy. These criminals used to fight against each other. Now they have a truce between them and they fight the military and other security forces. They say, “as long as we kill them, we’ll survive.”

Does the state benefit by arming gangs? What is the regime trying to achieve?

Their goal is to have armed groups on their side in case of political turmoil. That is the final goal. Disarmament laws only affect innocent people. Criminal have many more weapons than we do at the National Guard. They also have much more power. We can’t control that now. Any solution will come too late.

The economic crisis and the public health crisis are becoming uncontrollable. The security forces are competent, but the government had to realize that the criminals were killing us all before they acted against them.

How corrupt is is the National Guard?

There is corruption in the National Guard, and there always has been. The difference is that, before, the system was more efficient. The National Guard decayed when it became political. Since we started to vote and to take part in the country’s political life, there has been no peace in the ranks.

Now there is pressure on us because we have to follow the constitution, but we also have to be loyal to our higher officers even when their orders don’t correspond to the laws. If their orders contradict the laws, you can’t follow them. So there is a rift between the security forces and the other institutions.

The government has an apparatus for persecution and espionage, so you can’t make negative statements about functionaries. The security services themselves are plagued by informants. You have to watch your every word.

All of those military upheavals denouncing the government, those attempts to overthrow the government — are they real?

No, the majority are false. There won’t be any coup attempts in Venezuela.

Why not?

Right now, all elements of the armed forces are under control. A coup-d’état takes place when you reach a breaking point and someone in the higher echelons of the armed forces decides that it’s time to act against the government. Right now in Venezuela, there are political divisions within the armed forces. There is neither the necessary unity nor the necessary organization for a coup to take place. Besides, officers fear the government’s informants. Everyone is on guard.

What will result from the current discontent?

The army and the National Guard are waiting. I can assure you that we are quite unhappy. But there is an entire structure above us, so it’s not easy to act. We receive criticism from all sides. Wherever I go, I come face to face with civilians’ displeasure and complaints. I also think the opposition has failed to take advantage of its opportunities to topple the government.

How so?

For example, when they won the parliamentary elections last December, the atmosphere was tense. The entire leadership knew what would happen. So did we. Former Speaker of the House Diosdado Cabello was willing to take the armed forces to the street against the opposition, but Padrino López, the Minister of Defense, didn’t allow him to do so.

What happened exactly on December 6?

The stories are true. That day there was a strong discussion between Padrino López and Cabello. López told Cabello that, if he ordered the troops to take the streets, he was going to have the army kill him.

But did Padrino López only do it to save his own skin?

Of course. He would have been responsible if the army started to massacre people. López was not going to allow that to happen. So that day the army was ordered to guard the opposition.

On whose side does Padrino López find himself? That day, a rumor got out that he was defending Chávez’s revolution.

Padrino López is intelligent, and I don’t doubt that he’s a chavista. But all branches of the armed forces are dissatisfied with the current situation. Imagine if one day they let Diosdado Cabello commit a massacre. If something like that occurs, the army will support President Maduro.

And what has the Bolivarian National Guard done during the recent demonstrations? Why has the army remained silent?

Those are two different situations. Like I said, government intelligence is an obstacle to action. The risk of not obeying orders is very large, but there is a lot of discontent and resentment due to the measures carried out by the Bolivarian National Guard and other officials.

If discontent is so widespread, why is there no talk of a coup?

That’s already been discussed. The coup d’état, we hope, will not be repeated. We remember what happened in 2002 with Chávez and we don’t want something similar to happen in the future.

We are rather waiting for things to get truly out of hand. And that will happen in the following months. The situation is extremely unstable and the status quo can’t last. We are witnessing daily looting at supermarkets, and people are protesting.

The crisis at Guri Dam (Venezuela’s most important hydroelectric power station) will get worse. Everything will get worse and there will be an implosion.

At that moment, the country’s future will be determined. I don’t believe there’s much time left.

Are you sure that something drastic will happen soon?

Without a doubt. The Bolivarian National Guard has already discussed the matter.

The situation in Venezuela has never been as bad as it is now. The breaking point is near, but still not at hand. My recommendation is for people to prepare, to look for food and then to store it. Obviously, when the implosion occurs , it won’t last long. I believe it will last something like 10 days, but they will be difficult days.

There will be a state of emergency, and that will bring the crisis to an end.

What will happen with the recall referendum that the opposition is trying to unleash against President Maduro?

That’s not a serious option. The regime has demonstrated that it can violate the constitution without second thoughts. They are going to accept the referendum, but only if they know they can win with any method available. The situation will only come to a head when hunger and the lack of electricity force people to take direct action.

So are the Armed Forces ready for a social catastrophe to take place?

We are really willing to intervene if the country undergoes a social catastrophe. It’s as if we have water in a pot and it begins to boil very slowly. There will be a moment when, if the gas is not turned off, the water begins to overflow and disaster ensues.

Source: ZeroHedge

From Over-Population To De-Population: A Total Game Changer

Simultaneous Elderly Overpopulation, Youth Depopulation & The Impact on Economic Growth:

https://s15-us2.ixquick.com/cgi-bin/serveimage?url=http%3A%2F%2Fslodive.com%2Fwp-content%2Fuploads%2F2011%2F12%2Fold-people%2Fsmoker.jpg&sp=b8b1e80d256910b413e162d758d1192b

Strangely, the world is suffering from two seemingly opposite trends…overpopulation and depopulation in concert.  The overpopulation is due to the increased longevity of elderly lifespans vs. depopulation of young populations due to collapsing birthrates.  The depopulation is among most under 25yr old populations (except Africa) and among many under 45yr old populations.

So, the old are living decades longer than a generation ago but their adult children are having far fewer children.  The economics of this is a complete game changer and is unlike any time previously in the history of mankind.  None of the models ever accounted for a shrinking young population absent income, savings, or job opportunity vs. massive growth in the old with a vast majority reliant on government programs in their generally underfunded retirements (apart from a minority of retirees who are wildly “overfunded”).  There are literally hundreds of reasons for the longer lifespans and lower birthrates…but that’s for another day.  This is simply a look at what is and what is likely to be absent a goal-seeked happy ending.

In a short yet economically valid manner, every person is a unit of consumption.  The greater the number of people and the greater the purchasing power, the greater the growth in consumption.  So, if one wanted to gauge economic growth, (growth in consumption driving economic growth), multiply the annual change in population by purchasing power (wages, savings) per capita.  Regarding wage growth, I hold wages flat as from a consumption standpoint, wage growth is basically offset by inflation.  Of course, there is another lever beyond this which central banks are feverishly torqueing; substituting the lower interest rates of ZIRP and NIRP to boost consumption from a flagging base of population growth.  (There is one more boost to consumption, huge increases in social transfer payments primarily among the advanced economies…but while noted, these are a story for another day.)

THE DETAILS:

The chart below is total annual population growth broken down by OECD nations (33 wealthiest nations…representing 1.3 billion people, OECD members), BRIICS (Brazil, Russia, India, Indonesia, China, S. Africa…representing 3.4 billion people), and the RoW (Rest of the World…representing about 3 billion people).  Takeaways – 1) total annual population growth peaked in 1988 and has been decelerating since falling 13% & now down 12m/yr from peak.  2) Growth has been shifting away from the BRIICS to the RoW.

1 

Below, global annual total population change vs. under 45 annual population change broken down by OECD, BRIICS, and the Rest of World What should be clear…1) under 45 population growth has fallen by nearly 60% & is down 44m/yr from peak growth.  2) All under 45 population growth (net) is among the poorer nations of the Rest of the World.  Growth has shifted from rich to middle to poor nations and from young to old.  Those with little income, savings, and/or access to credit can’t consume much.  Elderly on fixed incomes, declining vitality, and credit averse won’t consume much.  Clearly, the impact of the slowing and shifting population growth on slowing growth of consumption should be easily understood.

2

Global annual population growth by GDP per capita.  OECD nations given an average of $40k per capita, BRIICS $15k per capita, and the RoW $8k per capita (below).  Annual growth in consumption peaked in 1989 and has been falling since…of course this is unadjusted for the big impact that credit has to increase real consumption.

3

Global annual under 45 population growth by GDP per capita further broken down by growth among OECD, BRIICS, & RoW (below).  The deceleration of global GDP per capita is entirely among the under 45 OECD and BRIICS which have nearly entirely ceased.  The only under 45 growth in consumption is among the decelerating RoW.

4

Below, 0-64yr/old annual global population growth vs. 0-64yr/old population growth among combined OECD, China, Brazil, and Russia vs global debt growth.  The surge in debt since 1988 coinciding with the collapse of growth among the wealth OECD and aspiring BRIICS (growth has fallen from 30m/yr to 3m/yr (90% decline) and growth among the RoW has entirely stalled since ’88 at +55m/yr.  The central bank response to take interest rates to ZIRP (and now NIRP) has been an attempt to maintain consumption growth against declining population growth.  Only central bankers know what they’ll do as under 65yr/old populations begin outright shrinking nearly everywhere but Africa?!?

5

A look at annual global populations; young vs. old (below).  The 0-5yr/old population has stalled but nowhere near so for the 75+yr/old population.  In 1950 there were ten “babes” for every 75+yr/old…by 2050, the two groups are estimated to be 1:1 but this estimate is likely to be far too optimistic if economic conditions continue deteriorating.

6

US 20-59yr/old annual population growth vs. the Federal Reserves FFR (%) and US total debt (below).  Federal Reserve actions have been and remain a simple (ultimately unwinnable) fight vs. the decelerating growth among the core US population since the early 1980’s.  The great recession of 2008-’09 shouldn’t be a shocker given the sharp 20-59yr/old population growth deceleration culminating in ’07.

7

Below, Japan’s 20-59yr/old annual population growth vs. BOJ interest rate and Japanese federal debt.  Japan’s annual core population turned negative in ’00 and interest rates hit ZIRP and debt creation took off.  Japan’s plan to monetize likely well in excess of 100% and maybe ultimately 1,000% or 10,000% of GDP is a curious solution which may lead to an eventual hiccup which leaves Japanese society in absolute chaos (2nd chart below).  But if it were only Japan that had this plan…but alas, it is the same for all major central banks presently or eventually facing depopulation.  (Debt in chart below is denominated in Yen, not dollars).

8

9

Below, Germany’s 20-59yr/old annual population change vs. debt to GDP.  Germany’s 20-59yr/old population turned negative in ’94 but the implementation of the Euro and Euro wide market (with the Maastrich treaty in 1992 and implementation Euro area wide in 1999) quintupled Germany’s available export base under a now common currency (2nd chart below).  The impact was a stay of execution for Germany but a grinding, terminal cancer for the remainder of the Euro area.

11

12

Below, China’s annual 20-59yr/old population change, Bank of China interest rates, and China total debt growth.  Annual Chinese core population growth has collapsed since ’08 by 90% and will turn negative in 2018 and remain increasingly negative for decades thereafter.  The insane Chinese debt ramp to offset the declining population growth has no possible means to resolve in any manner but catastrophe. 

***Noteworthy, despite China’s recent elimination of it’s “one child policy”, it should be noted that China’s birthrates are higher than Japan, S. Korea, Taiwan, and many EU nations…none of whom have any policies restricting births and most with policies to encourage higher fertility.  The elimination of the “one child” policy in China is unlikely to have significant impact…family finances and struggling economies are far more likely to determine family formation in China and world-over.***

13

CONCLUSION

An economic and financial system premised on perpetual growth was bound to run into trouble (what do you do when you have taken a wrong turn?…apparently just keep going!).  The inevitable deceleration of population growth was the trigger that turned central bankers into pushers offering ever cheaper credit.  The lower rates drove unsustainable rates of consumption absent even further rate cuts and likewise drove overcapacity which likewise needed even lower rates.  But negative rates of NIRP are simply no longer under the heading of capitalism (a market that doesn’t value capital likely isn’t capitalism?!?).  When we’ve clearly changed “ism’s”…we’ve crossed the Rubicon.

What happens as population growth turns to population decline is honestly and literally a complete and total game changer.  A flat to declining number of buyers and consumers opposite ramping elderly sellers plus their unfunded liabilities is a problem with no happy resolutions.  Currencies (what will constitute “money”), “free-markets”, and perhaps the basis of civilization hang in the balance of the transition from high population growth to potential outright depopulation.

I believe this is the correct lens through which to view and understand why growth is perpetually weakening, why commodity overcapacity and slowing demand will only accelerate, why the Treasury market continues to see “buying” despite the near total absence of buyers (Treasury Mystery), why equities are a “buy” (but for all the wrong reasons), and why precious metal valuations are so extremely suspect in the face of a monetary onslaught. 

by Chris Hamilton | ZeroHedge

Intel Fires A Massive 12,000 Workers, 11% Of Its Entire Workforce

There were some rumors reported late last week that the world’s biggest chip maker was about to fire a major portion of its workforce. Moments ago the company confirmed these rumors, when it reported that it was firing a whopping 11% of its entire workforce, laying off a massive 12,000 workers.

From the report:

Intel Corporation today announced a restructuring initiative to accelerate its evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices. Intel will intensify its focus in high-growth areas where it is positioned for long-term leadership, customer value and growth, while making the company more efficient and profitable. The data center and Internet of Things (IoT) businesses are Intel’s primary growth engines, with memory and field programmable gate arrays (FPGAs) accelerating these opportunities – fueling a virtuous cycle of growth for the company. These growth businesses delivered $2.2 billion in revenue growth last year, and made up 40 percent of revenue and the majority of operating profit, which largely offset the decline in the PC market segment.

The restructuring initiative was outlined in an e-mail from Intel CEO Brian Krzanich to Intel employees.

“Our results over the last year demonstrate a strategy that is working and a solid foundation for growth,” said Krzanich. “The opportunity now is to accelerate this momentum and build on our strengths.

These actions drive long-term change to further establish Intel as the leader for the smart, connected world,” he added. “I am confident that we’ll emerge as a more productive company with broader reach and sharper execution.

These changes will result in the reduction of up to 12,000 positions globally — approximately 11 percent of employees — by mid-2017 through site consolidations worldwide, a combination of voluntary and involuntary departures, and a re-evaluation of programs. The majority of these actions will be communicated to affected employees over the next 60 days with some actions spanning in to 2017. Intel expects the program to deliver $750 million in savings this year and annual run rate savings of $1.4 billion by mid-2017. The company will record a one-time charge of approximately $1.2 billion in the second quarter.

As we asked rhetorically last week when the rumor first broke:

Confused? Don’t be: it’s all part of the new normal recovery, and don’t forget the spin: don’t think of its as 12,000 highly paid engineers and tech workers fired, think of it as 12,000 brand spanking new waiters and bartenders.

It was not immediately clear if INTC was boosting its buyback,but we do know that Intel also boosted its buyback both sequentially and annually, repurchasing $793 million in stock in the first quarter.

We also know Intel’s just announced earnings beat on the bottom line as EPS came in at $0.54, above the $0.49 expected.

How did INTC “beat”? The same way IBM “beat” yesterday: instead of using the same tax rate as a year ago, when it had an effective tax rate of 25.5%, this quarter the tax rate was down 7.1% to just 18.4%.

Had INTC used the historical tax rate, it would have, surprise, missed.

Which is also why the company’s GAAP (not to be confused with its non-GAAP) revenue of $13.7BN missed expectations.

Worse, INTC just cut its outlook, predicting revenue of $13.5 billion, plus or minus $500 million, for the Q2, about $700MM below consensus estimates.

And then INTC also cut virtually every full year forecast:

  • Revenue: up mid-single digits, down from prior outlook of mid- to high-single digits.
  • Non-GAAP gross margin: 62 percent, plus or minus a couple percentage points, down from prior
    outlook of 63 percent, plus or minus a couple percentage points.
  • Non-GAAP R&D plus MG&A spending: approximately $20.6 billion, plus or minus $400 million,
    down from prior outlook of $21.3 billion.
  • Restructuring charges: approximately $1.2 billion. Non-GAAP restructuring charges: zero.
  • Depreciation: approximately $6.3 billion, plus or minus $200 million, down from prior outlook of
    $6.5 billion, plus or minus $200 million.
  • Tax rate: approximately 22 percent, for each of the remaining quarters of the year, down from prior
    outlook of approximately 25 percent.
  • Full-year capital spending: $9.5 billion, plus or minus $500 million, is unchanged from prior
    outlook

The stock, inexplicably, is down despite the company cutting over 10% of its employees.

Source: ZeroHedge

“It’s Pure Chaos Now; There Is No Way Back” – Venezuela Morgues Are Overflowing (video)

When we previewed Venezuela’s upcoming hyperinflation, which in January was predicted to be 720% and as of this moment is likely far higher…


… we said “This Is What The Death Of A Nation Looks Like” and said “there is no good news in any of the above for the long-suffering citizens of this “socialist paradise” which any minute now will be downgraded to its fair value of “socialist hell.

Subsequent news that Venezuela was now openly liquidating its gold reserves while its president, in an amusing twist, announced last week, that henceforth every Friday will be a holiday, (the term there was a slightly different meaning) to cut down on electricity usage (while blaming El Nino for its electricity rationing) merely confirmed that the end if nigh for this once flourishing Latin American nation.

Sadly, while we have been warning for years about Venezuela’s inevitable, economic devastation, we said it was only a matter of time before the chaos spreads to broader society and leads to total collapse.

That may have arrived because as even the FT now admits, after visiting the main Caracas morgue, Venezuela risks a descent into chaos.

But back to the morgue of central Caracas, where FT correspondent Andres Schipani writes that the stench forces everyone to cover their nostrils. “Now things are worse than ever,” says Yuli Sánchez. “They kill people and no one is punished while families have to keep their pain to themselves.

Ms Sánchez’s 14-year-old nephew, Oliver, was shot five times by malandros, or thugs, while riding on the back of a friend’s motorcycle. His uncle, Luis Mejía, remarked that in a fortnight three members of their family had been shot, including two youths who were shot by police.

Sounds a little like Chicago on a Friday… only in Venezuela things are even worse: “an economic, social and political crisis facing Nicolás Maduro, Venezuela’s unpopular president, is being aggravated by a rise in violence which is prompting fears that this oil-rich country risks becoming a failed state.”

Even the morgue employees are asking if they should give up.

“What can we do?” Mr Mejía asks. “Give up.” The morgue employee in charge of handling the corpses notes that a decade ago he received seven or eight bodies every weekend. These days, he says, that number has risen to between 40 and 50: “This is now wilder than the wild west.

Critics say that the Venezuelan government is increasingly unable to provide citizens with water, electricity, health or a functioning economy which can supply basic food staples or indispensable medicines, let alone personal safety.

In other words, total socioeconomic collapse. This is what it looks like:

Last month alone, Venezuelans learned of the summary execution of at least 17 gold miners supposedly by a mining Mafia, the killing of two police officers allegedly by a group of students who drove a bus into a barricade, and a hostage drama inside a prison at the hands of a grenade-wielding criminal gang. On Wednesday, three policemen were killed when an armed gang busted a member out of a lock-up in the capital.

At least 10 were killed in a Caracas shanty town after a confrontation between local thugs armed with assault rifles, while a local mayor was gunned down outside his home in Trujillo state last month. There are widespread reports of lynchings.

All this is creating a broad unease that Mr Maduro is unable to maintain order… There is a lack of basic goods. Analysts warn that the economic crisis risks turning in to a humanitarian one.

Some refuse to acknowledge that a state erected on so much oil wealth can be a failed state:

“Failed state is a nebulous concept often used too lightly. That’s not the case with today’s Venezuela,” says Moisés Naím a Venezuelan distinguished fellow at the Carnegie Endowment for International Peace. “The evidence of state failure is very concrete in the country that sits on top of the world’s largest oil reserves.”

Alas, a failed state is precisely what Venezuela has become: Venezuela is already one of the world’s deadliest countries. The Venezuelan Observatory of Violence, a local think-tank, says the murder rate rose last year to 92 killings per 100,000 residents. The attorney-general cites a lower figure of 58 homicides per 100,000. This is up from 19 per 100,000 in 1998, before Maduro’s predecessor Hugo Chavez took power.

It gets worse, because in addition to a soaring murder rate, the government itself is implicated.

“Venezuelans are facing one of the highest murder rates in the hemisphere and urgently need effective protection from violent crime,” said José Miguel Vivanco HRW’s Americas director. “But in multiple raids throughout the country, the security forces themselves have allegedly committed serious abuses.”

Their findings show that police and military raids in low-income and immigrant communities in Venezuela have led to widespread allegations of abuse, including extrajudicial killings, mass arbitrary detentions, maltreatment of detainees, forced evictions, the destruction of homes, and arbitrary deportations.

And like all other failed governments, Maduro’s administration is quick to deflect blame, instead accusing violence within its borders on Colombian rightwing paramilitaries “engaged in a war against its revolution.” But as David Smilde and Hugo Pérez Hernáiz of the Washington Office on Latin America, a think-tank, recently wrote: “Attributing violence in Venezuela to paramilitary activity has been a common rhetorical move used by the government over the past year, effectively making a citizen security problem into a national security problem.”

For many Venezuelans it no longer matters who is to blame. “It is a state policy of letting anarchy sink in,” says a former policeman outside the gates of a compound in Caracas.

The FT adds that the former police station now houses the Frente 5 de Marzo, one of the political groups that consider themselves the keepers of socialism’s sacred flame. The gates bear the colours of the Venezuelan flag and are marked with bullet holes. The man believes there is something akin to a civil war going on.

Venezuela is pure chaos now. It seems to me there is no way back,” the former policeman says.  He is right.

* * *

And since words can not fully do a failed state justice, here is a video clip from Jeff Berwick showing the reality on the ground in the country where “socialism’s sacred flame” is about to go out for good … WATCH what’s really going on in Caracas !

Bernie Sanders Praising Bread Lines and Food Rationing

source: ZeroHedge

Venezuela: the land of 500% inflation

The Greater Depression: Comparing the 1930s and Today

Comparing the 1930s and Today

You’ve heard the axiom “History repeats itself.” It does, but never in exactly the same way. To apply the lessons of the past, we must understand the differences of the present.

During the American Revolution, the British came prepared to fight a successful war—but against a European army. Their formations, which gave them devastating firepower, and their red coats, which emphasized their numbers, proved the exact opposite of the tactics needed to fight a guerrilla war.

Before World War I, generals still saw the cavalry as the flower of their armies. Of course, the horse soldiers proved worse than useless in the trenches.

Before World War II, in anticipation of a German attack, the French built the “impenetrable” Maginot Line. History repeated itself and the attack came, but not in the way they expected. Their preparations were useless because the Germans didn’t attempt to penetrate it; they simply went around it, and France was defeated.

The generals don’t prepare for the last war out of perversity or stupidity, but rather because past experience is all they have to go by. Most of them simply don’t know how to interpret that experience. They are correct in preparing for another war but wrong in relying upon what worked in the last one.

Investors, unfortunately, seem to make the same mistakes in marshaling their resources as do the generals. If the last 30 years have been prosperous, they base their actions on more prosperity. Talk of a depression isn’t real to them because things are, in fact, so different from the 1930s. To most people, a depression means ’30s-style conditions, and since they don’t see that, they can’t imagine a depression. That’s because they know what the last depression was like, but they don’t know what one is. It’s hard to visualize something you don’t understand.

Some of them who are a bit more clever might see an end to prosperity and the start of a depression but—al­though they’re going to be a lot better off than most—they’re probably looking for this depression to be like the last one.

Although nobody can predict with absolute certainty what this depression will be like, you can be fairly well-assured it won’t be an instant replay of the last one. But just because things will be different doesn’t mean you have to be taken by surprise.

To define the likely differences between this depres­sion and the last one, it’s helpful to compare the situa­tion today to that in the early 1930s. The results aren’t very reassuring.

CORPORATE BANKRUPTCY

1930s

Banks, insurance companies, and big corporations went under on a major scale. Institutions suffered the consequences of past mistakes, and there was no financial safety net to catch them as they fell. Mistakes were liquidated and only the prepared and efficient survived.

Today

The world’s financial institutions are in even worse shape than the last time, but now business ethics have changed and everyone expects the government to “step in.” Laws are already in place that not only allow but require government inter­vention in many instances. This time, mistakes will be compounded, and the strong, productive, and ef­ficient will be forced to subsidize the weak, unproductive, and inefficient. It’s ironic that businesses were bankrupted in the last depression because the prices of their products fell too low; this time, it’ll be because they went too high.

UNEMPLOYMENT

1930s

If a man lost his job, he had to find another one as quickly as possible simply to keep from going hungry. A lot of other men in the same position competed desperately for what work was available, and an employer could hire those same men for much lower wages and expect them to work harder than what was the case before the depression. As a result, the men could get jobs and the employer could stay in business.

Today

The average man first has months of unemployment insurance; after that, he can go on welfare if he can’t find “suitable work.” Instead of taking whatever work is available, especially if it means that a white collar worker has to get his hands dirty, many will go on welfare. This will decrease the production of new wealth and delay the recovery. The worker no longer has to worry about some entrepreneur exploiting (i.e., employing) him at what he considers an unfair wage because the minimum wage laws, among others, precludes that possibility today. As a result, men stay unemployed and employers will go out of business.

WELFARE

1930s

If hard times really put a man down and out, he had little recourse but to rely on his family, friends, or local social and church group. There was quite a bit of opprobrium attached to that, and it was only a last resort. The breadlines set up by various government bodies were largely cosmetic measures to soothe the more terror-prone among the voting populace. People made do because they had to, and that meant radically reducing their standards of living and taking any job available at any wage. There were very, very few people on welfare during the last depression.

Today

It’s hard to say how those who are still working are going to support those who aren’t in this depression. Even in the U.S., 50% of the country is already on some form of welfare. But food stamps, aid to fami­lies with dependent children, Social Security, and local programs are already collapsing in prosperous times. And when the tidal wave hits, they’ll be totally overwhelmed. There aren’t going to be any breadlines because people who would be standing in them are going to be shopping in local supermarkets just like people who earned their money. Perhaps the most dangerous aspect of it is that people in general have come to think that these programs can just magically make wealth appear, and they expect them to be there, while a whole class of people have grown up never learning to survive without them. It’s ironic, yet predictable, that the programs that were supposed to help those who “need” them will serve to devastate those very people.

REGULATIONS

1930s

Most economies have been fairly heavily regulated since the early 1900s, and those regulations caused distortions that added to the severity of the last depression. Rather than allow the economy to liquidate, in the case of the U.S., the Roosevelt regime added many, many more regulations—fixing prices, wages, and the manner of doing business in a static form. It was largely because of these regulations that the depression lingered on until the end of World War II, which “saved” the economy only through its massive reinflation of the currency. Had the government abolished most controls then in existence, instead of creating new ones, the depression would have been less severe and much shorter.

Today

The scores of new agencies set up since the last depression have created far more severe distortions in the ways people relate than those of 80 years ago; the potential adjustment needed is proportionately greater. Unless government restrictions and controls on wages, working conditions, energy consumption, safety, and such are removed, a dramatic economic turnaround during the Greater Depression will be impossible.

TAXES

1930s

The income tax was new to the U.S. in 1913, and by 1929, although it took a maximum 23.1% bite, that was only at the $1 million level. The average family’s income then was $2,335, and that put average families in the 1/10th of 1 percent bracket. And there was still no Social Security tax, no state income tax, no sales tax, and no estate tax. Furthermore, most people in the country didn’t even pay the income tax because they earned less than the legal minimum or they didn’t bother filing. The government, therefore, had immense untapped sources of revenue to draw upon to fund its schemes to “cure” the depression. Roosevelt was able to raise the average income tax from 1.35% to 16.56% during his tenure—an increase of 1,100%.

Today

Everyone now pays an income tax in addition to all the other taxes. In most Western countries, the total of direct and indirect taxes is over 50%. For that reason, it seems unlikely that direct taxes will go much higher. But inflation is constantly driving everyone into higher brackets and will have the same effect. A person has had to increase his or her income faster than inflation to compensate for taxes. Whatever taxes a man does pay will reduce his standard of living by just that much, and it’s reasonable to expect tax evasion and the underground economy to boom in response. That will cushion the severity of the depression somewhat while it serves to help change the philosophical orientation of society.

PRICES

1930s

Prices dropped radically because billions of dollars of inflationary currency were wiped out through the stock market crash, bond defaults, and bank failures. The government, however, somehow equated the high prices of the inflationary ’20s with prosperity and attempted to prevent a fall in prices by such things as slaughtering livestock, dumping milk in the gutter, and enacting price supports. Since the collapse wiped out money faster than it could be created, the government felt the destruction of real wealth was a more effective way to raise prices. In other words, if you can’t increase the supply of money, decrease the supply of goods.

Nonetheless, the 1930s depression was a deflationary collapse, a time when currency became worth more and prices dropped. This is probably the most confusing thing to most Americans since they assume—as a result of that experience—that “depression” means “deflation.” It’s also perhaps the biggest single difference between this depression and the last one.

Today

Prices could drop, as they did the last time, but the amount of power the government now has over the economy is far greater than what was the case 80 years ago. Instead of letting the economy cleanse itself by allowing the financial markets to collapse, governments will probably bail out insolvent banks, create mortgages wholesale to prop up real estate, and central banks will buy bonds to keep their prices from plummeting. All of these actions mean that the total money supply will grow enormously. Trillions will be created to avoid deflation. If you find men selling apples on street corners, it won’t be for 5 cents apiece, but $5 apiece. But there won’t be a lot of apple sellers because of welfare, nor will there be a lot of apples because of price controls.

Consumer prices will probably skyrocket as a result, and the country will have an inflationary depression. Unlike the 1930s, when people who held dollars were king, by the end of the Greater Depression, people with dollars will be wiped out.

THE SOCIETY

1930s

The world was largely rural or small-town. Communications were slow, but people tended to trust the media. The government exercised considerable moral suasion, and people tended to support it. The business of the country was business, as Calvin Coolidge said, and men who created wealth were esteemed. All told, if you were going to have a depression, it was a rather stable environment for it; despite that, however, there were still plenty of riots, marches, and general disorder.

Today

The country is now urban and suburban, and although communications are rapid, there’s little interpersonal contact. The media are suspect. The government is seen more as an adversary or an imperial ruler than an arbitrator accepted by a consensus of concerned citizens. Businessmen are viewed as unscrupulous predators who take advantage of anyone weak enough to be exploited.

A major financial smashup in today’s atmosphere could do a lot more than wipe out a few naives in the stock market and unemploy some workers, as occurred in the ’30s; some sectors of society are now time bombs. It’s hard to say, for instance, what third- and fourth-generation welfare recipients are going to do when the going gets really tough.

THE WAY PEOPLE WORK

1930s

Relatively slow transportation and communication localized economic conditions. The U.S. itself was somewhat insulated from the rest of the world, and parts of the U.S. were fairly self-contained. Workers were mostly involved in basic agriculture and industry, creating widgets and other tangible items. There wasn’t a great deal of specialization, and that made it easier for someone to move laterally from one occupation into the next, without extensive retraining, since people were more able to produce the basics of life on their own. Most women never joined the workforce, and the wife in a marriage acted as a “backup” system should the husband lose his job.

Today

The whole world is interdependent, and a war in the Middle East or a revolution in Africa can have a direct and immediate effect on a barber in Chicago or Krakow. Since the whole economy is centrally controlled from Washington, a mistake there can be a national disaster. People generally aren’t in a position to roll with the punches as more than half the people in the country belong to what is known as the “service economy.” That means, in most cases, they’re better equipped to shuffle papers than make widgets. Even “necessary” services are often terminated when times get hard. Specialization is part of what an advanced industrial economy is all about, but if the economic order changes radically, it can prove a liability.

THE FINANCIAL MARKETS

1930s

The last depression is identified with the collapse of the stock market, which lost over 90% of its value from 1929 to 1933. A secure bond was the best possible investment as interest rates dropped radically. Commodities plummeted, reducing millions of farmers to near subsistence levels. Since most real estate was owned outright and taxes were low, a drop in price didn’t make a lot of difference unless you had to sell. Land prices plummeted, but since people bought it to use, not unload to a greater fool, they didn’t usually have to sell.

Today

This time, stocks—and especially commodities—are likely to explode on the upside as people panic into them to get out of depreciating dollars in general and bonds in particular. Real estate will be—next to bonds—the most devastated single area of the economy because no one will lend money long term. And real estate is built on the mortgage market, which will vanish.

Everybody who invests in this depression thinking that it will turn out like the last one will be very unhappy with the results. Being aware of the differences between the last depression and this one makes it a lot easier to position yourself to minimize losses and maximize profits.

So much for the differences. The crucial, obvious, and most important similarity, however, is that most people’s standard of living will fall dramatically.

The Greater Depression has started. Most people don’t know it because they can neither confront the thought nor understand the differences between this one and the last.

As a climax approaches, many of the things that you’ve built your life around in the past are going to change and change radically. The ability to adjust to new conditions is the sign of a psychologically healthy person.

Look for the opportunity side of the crisis. The Chinese symbol for “crisis” is a combination of two other symbols—one for danger and one for opportunity.

The dangers that society will face in the years ahead are regrettable, but there’s no point in allowing anxiety, frustration, or apathy to overcome you. Face the future with courage, curiosity, and optimism rather than fear. You can be a winner, and if you plan carefully, you will be. The great period of change will give you a chance to regain control of your destiny. And that in itself is the single most important thing in life. This depression can give you that opportunity; it’s one of the many ways the Greater Depression can be a very good thing for both you as an individual and society as a whole.

Criminal Bankers Control US Government

Dr. Roberts: “Even if Trump were to be permitted to be President, and I don’t think he will be permitted, I think they will do the same thing they did with Ron Paul. They just won’t recognize his delegates.  The Neoconservatives are already organizing a way to block Trump when he wins the nomination from being given the nomination. . . .There is an oligarchy.  The oligarchy protects itself and hides behind the elections, but it controls the candidates.  This time, it hasn’t been able to control the candidates because the American people are finally catching on that neither political party represents them.”

Dr. Paul Craig Roberts On Serious Economic Deterioration In America Today

Job Cuts Surged 218% In January

https://i0.wp.com/static2.businessinsider.com/image/56b3464c6e97c62e008b4bde-5115-3837/ap_398573460542.jpgLayoff announcements surged 218% from December to January, led by the retail and energy sectors.

The latest monthly report from the staffing firm Challenger, Gray and Christmas on planned job showed that US employers in January reported 75,114 planned job cuts, up 42% year-on-year.

Retailers moved the needle on this data point the most, particularly Walmart, which announced plans to close 269 stores across America.

So really, that’s the catch behind the big jump from December.

Planned job cuts by Macy’s that would affect nearly 5,000 employees also pushed up the total, according to the release.

The staffing firm also said energy-sector layoffs were making a comeback.

John A. Challenger, CEO of Challenger, Gray and Christmas, said: “The pace of downsizing in the energy sector ebbed in the second half of 2015, but the latest activity, which included more cuts from Halliburton and Schlumberger, is evidence the industry is far from concluding its cost-cutting initiatives.”

By Akin Oyedele for Business Insider

Devastating Metastasizing Global Depression On its Way

Join Greg Hunter as he goes One-on-One with Michael Pento of Pento Portfolio Strategies.

Financial expert and money manager Michael Pento is forecasting a global depression, and Pento contends, It’s happening. It’s happening now. There are going to be global sovereign defaults, and those defaults are going to take the form of defaults through monetization and inflation. That is where we are headed.”

CELENTE REVEALS WHAT YOU’RE NOT BEING TOLD ABOUT THE 2016 FINANCIAL CRISIS

“Nothing Is Moving,” Baltic Dry Crashes As Insiders Warn “Commerce Has Come To A Halt”

The continued collapse of The Baltic Dry Index remains ignored by most – besides we still have Netflix, right? But, as Dollar Vigilante’s Jeff Berwick details, it appears the worldwide ‘real’ economy has ground to a halt!!

Last week, I received news from a contact who is friends with one of the biggest billionaire shipping families in the world.  He told me they had no ships at sea right now, because operating them meant running at a loss.

This weekend, reports are circulating saying much the same thing: The North Atlantic has little or no cargo ships traveling in its waters. Instead, they are anchored. Un-moving. Empty.

You can see one such report here.  According to it,

Commerce between Europe and North America has literally come to a halt. For the first time in known history, not one cargo ship is in-transit in the North Atlantic between Europe and North America. All of them (hundreds) are either anchored offshore or in-port. NOTHING is moving.

This has never happened before. It is a horrific economic sign; proof that commerce is literally stopped.

We checked VesselFinder.com and it appears to show no ships in transit anywhere in the world.  We aren’t experts on shipping, however, so if you have a better site or source to track this apparent phenomenon, please let us know.

We also checked MarineTraffic.com, and it seemed to show the same thing.  Not a ship in transit…

If true, this would be catastrophic for world trade. Even if it’s not true, shipping is still nearly dead in the water according to other indices.  The Baltic Dry Index, an assessment of the price of moving major raw materials by sea, was already at record all-time lows a month ago… and in the last month it has dropped even more, especially in the last week. Today BDIY hit 415…

Factories aren’t buying and retailers aren’t stocking.  The ratio of inventory to sales in the US is an indicator of this. The last time that ratio was this high was during the “great recession” in 2008.

Hey, Ms. Yellen, what recovery? The economy is taking on water at a rapid rate.

The storm has been building for some time, actually. Not so long ago, there was a spate of reports that the world’s automobile manufacturers were in trouble because cars were not selling and shipments were backing up around the world.

ZeroHedge reported on it this way:

In the past several years, one of the topics covered in detail on these pages has been the surge in such gimmicks designed to disguise lack of demand and end customer sales, used extensively by US automotive manufacturers, better known as “channel stuffing”, of which General Motors is particularly guilty and whose inventory at dealer lots just hit a new record high.  

Here is a photo of unsold cars in the United Kingdom from that article.

The world’s economy seems in serious trouble. You can’t print your way to prosperity. All you are doing is hollowing out your economy. Draining it. And sooner or later it’s empty and you have to start over after a good deal of crisis and chaos.

It’s no coincidence that China is struggling desperately to contain a stock implosion.  Reportedly, banks have been told they are forbidden to buy US dollars and numerous Chinese billionaires have gone missing.  And the markets have just opened on Monday and are again deeply in the red.

Here at The Dollar Vigilante we’ve specialized in explaining the reality of the global faux-economy and why it’s important that you not believe mainstream media lies.

In the meantime, keep your eye on this shipping story!  If it is true and worldwide shipping is disastrously foundering, it’ll only be a matter of days before grocery store shelves will reflect that with increasingly bare shelves.

Are people upset now? Just wait. Interruptions in goods and services, most critically food, almost happened in 2008 during the Great Financial Crisis.  For three days worldwide shipping was stranded due to shipping companies not knowing whether or not the receiver’s bank credit was good.

That crisis was staved off due to a massive amount of money printing.  It was a temporary stay of execution, like bailing out the Titanic with coffee cups, however, and one that may reach much larger proportions in 2016.

Sailors watch the weather to see if it is safe to set sail.  Investors should be watching the economic climate with the same intensity.

We are already sailing through very stormy waters.

By Jeff Berwick

Geoengineering Is The Primary Cause Of Global Climate Change, Not CO2

Nonstop Chemical Geoengineering Has Pushed the Planet into Climate Chaos

chemtrails22015 Set to be the Hottest on Record Because of the Intensified Chemtrail Operations Nationwide

Warmest December in memory was deliberately manufactured
to coincide with the historic U.N. Climate Conference in Paris  

State of the Nation

The world was warned by a military pilot member of Operation Indigo Skyfold.  “Blue Jay 1”, as he is known, revealed to the world community of nations that starting in January of 2015 the skies of the planet would see a considerable increase in the amount and intensity of chemtrail operations.

“All pilots on leave are required to report to their CO by Dec 15th for special training operations, to qualify for Indigo Phase 2 flights, expected to be initiated by January 21, 2015.”
(Source: OPERATION INDIGO SKYFOLD: The Most Secret Covert Black Operation In World History)

As indicated from the volumes of anecdotal evidence posted on the Internet, there is no question that the pilot whistle blower (Blue Jay 1) was absolutely right in his prediction.  The fact that 2015 has now gone on record as the hottest year in recorded history is also a testament to the overriding influence that chemical geoengineering has on planet Earth’s climate.  Particularly when chemical geoengineering is used in tandem with highly advanced HAARP technologies, out-of-season weather events and unseasonal climate calamities can be fabricated quite quickly and impressively.


The current global regime of chemical engineering has been intensified
considerably over the past 3 years since 2012.  Since January of 2015,
chemtrail operations have been conducted with extraordinary zeal.
Geoengineering the skies across the USA — 24/7 — has profoundly
altered the local weather patterns and normal climate trends nationwide.
2015 has seen a substantial uptick in chemtrailing operations everywhere,
as the sun rays are blocked and mold counts have increased dramatically.
The most significant consequence of this constant chemcloud cover and
acceleration of the hydrological cycle is the exacerbation of climate change.
The deliberate implementation of this worldwide climate engineering
agenda via coal ash-containing chemtrail aerosols* has greatly contributed
to every facet of Global Climate Change.


*U.S. Government Spraying Tons Of Toxic Coal Fly Ash Into Atmosphere Via Chemtrails

Certainly the folks in New York City are surprised to be gallivanting around in shorts and tees during the holiday season, as are those who live in the nation’s capital.  What is particularly curious is that no one (with societal standing) throughout these bastions of intelligentsia and political power, respectively, has made the obvious correlation between the exceedingly high temps and the practically permanent state of chemclouded skies.

chemtrails-criss-crossHow is that so?  Don’t politicians and lobbyists, research scientists and academics ever look up at the sky?

If they did, they might see something like the preceding photo.

New World Order = One World Government = CO2 ‘Management’ Regime

There is actually a very good reason why no one ever from the establishment — political or scientific — ever talks about chemtrails or chemclouds in public.  They are strictly forbidden from even mentioning such a super-secret program that undergirds the New World Order (NWO) agenda to create a One World Government.  Hence, there is never any official word issued from government or weather reporting agencies despite their high level of awareness regarding the chemtrail aerosols sprayed overhead (as in directly over their heads).  Until now!

CRACKED! Top Climate Scientist Admits to Ongoing Geoengineering

Now that the geoengineers have sufficiently ramped up their spraying programs to create continuous cloud cover over vast swaths of the United States, Canada and beyond, they have conditioned the populace to believe that this is the new normal.  You know, it’s also called climate change.  Or Global Climate Change (GCC) when they want you to believe that this is an overarching planetary climate pattern directly caused by human activity, specifically anthropogenic CO2 generation.

Well, GGC certainly is caused by humanity, except most of any climate change is being purposefully geoengineered by the geoengineers.  They (NWO globalist cabal) have conveniently forgotten to mention that because of their fixation on CO2 production, and its calculated control.  Only by fastidiously controlling carbon inputs and outputs can a “Global Carbon Control Matrix” be put into place.  Because it is CO2 which must be strictly controlled in their New World Order, they already have designed a full-blown Global CO2 ‘Management’ Regime.

One World Government Initially Emerging As Global CO2 ‘Management’ Regime

MMS

There are many reasons why they intend to bring this misguided scheme to full fruition. It has nothing to doing with being good stewards of Mother Earth and everything to do with maintaining absolute dominion over every cubic inch of the biosphere.[1]  Some are even convinced that they are intent on destroying the biosphere.  Kind of like they have waged endless wars as a means of promoting disaster capitalism.

In this way they will use the profound and pervasive environmental destruction as an explanation for creating a whole new global economy based on carbon trades.  Carbon emission trading has already become the new biz with its carbon credits and carbon taxes and everything in between.  Carbon cap-and-trade schemes also run the gamut as do other corporate approaches to offset GHG reductions.  Of course, all of these carbon tricks of the trade are merely a pretext to super-regulate every aspect of the biosphere … staring with CO2.

What follows is a quote from the historic REPORT FROM IRON MOUNTAIN which spells out their intentions with Agenda 21 and the Agenda 2030.

“GROSS POLLUTION of the environment can eventually replace the possibility of mass extinction by nuclear weapons as the principle threat to the survival of the species.”

The REPORT FROM IRON MOUNTAIN (RFIM) is distinguished for many reasons; however, the key takeaway is that the NWO cabal that commissioned it has since implemented its recommendations.  The 2030 Agenda for Sustainable Development falls under the purview of the U.N. and is a perfect manifestation of the plan to foist a One World Government (OWG) onto the world community of nations.

This has been happening incrementally over several decades just as the same ruling cabal foisted the European Union on much of that continent.  Such an overarching worldwide plan can only be executed by a new global superstructure or One World Government.  In this fashion the administration of geoengineering programs will take place at a supranational level so that citizens and nation-states no longer have a say about any facet of their weather or general environment.

In fact the TPP (Trans-Pacific Partnership) and TPIP (Transatlantic Trade and Investment Partnership) are two integral initiatives which have significantly advanced the outright globalization of all land, water bodies and courses, and other natural resources.  Although neither agreement appears to provide such powers, they are only the first step at stripping sovereign nations like the USA of their constitutional rights and liberties.  Slowly but surely the goals of the RFIM are being fulfilled in ways that are both startling and totalitarian.

climatechange49_01-1

Chemical Geoengineering and Climate Change

What they have also forgotten to share with the human race is a crucial little factoid.  That fact concerns water vapor, which is by far the most plentiful of all the greenhouse gases (GHG).  The GHG, of course, are those which have been identified as the main contributors to climate change.  They chose CO2 for obvious reasons but then curiously ignore water vapor altogether.  Here is the list of the top 4 GHG from Wikipedia in descending order of amount and contribution:

Screen Shot 2015-12-26 at 4.05.24 PM

Now consider the following excerpt about water vapor.

Water Vapor
Water vapor tops the list of greenhouse gases in the atmosphere. The earth continuously produces water vapor, which evaporates and then goes up to the atmosphere. Clouds, fog, and haze are all part of water vapor, with steam being the main fossil fuel combustion byproduct. Steam from water comprises up to 70 percent of the total greenhouse effect.
(Source: Top 5 List of Greenhouse Gases)

What is truly critical to understand is that water vapor is the number 1 greenhouse gas.  In terms of total volume and total effect which directly impact the current global climate trends, water vapor far exceeds CO2.  More importantly the actual percentage of manmade CO2, also known as anthropogenic carbon, is a fraction of what is produced by the biosphere exclusive of the human race.

This discussion ought to seriously alarm any person who is involved in the raging global warming debate.  The reason: because if there really is a scientifically established trend of rising of temperatures globally, it is due to the massive increase in water vapor which is being generated from chemical geoengineering programs via chemtrail aerosols.  This particular source of the GHG water vapor is by far the greatest. It is also the easiest to control.  All they need to do is shut down all geoengineering programs until a new baseline can be determined across the whole range of GCC contributions factors.

Nonstop Chemical Geoengineering Has Become The New Normal

The globalists who are behind this unrivaled ruse have spent billions trying to convince humanity that their (each individual’s) carbon footprint is to blame for the climate chaos. No one denies that much more CO2 is generated by an industrial civilization. However, compared to the ongoing and incessant chemtrail operations conducted around the globe, the real anthropogenic culprit would be geoengineering, not industrial operations and/or energy consumption.  Although both industry and geoengineering are responsible for spewing enormous amounts of coal fly ash into the atmosphere.

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Simply put, the rain events worldwide and global cloud cover have entered a whole new league ever since chemtrailing and chembombing have become such a common sky-polluting practices. The geoengineers have pushed the edge of the envelope with their atmospheric manipulation in ways that are now having a tremendous influence on worldwide weather patterns. The longer term climatological impacts are likewise being seen and felt as never before.

Because “chemical geoengineering has become the new normal” there can only be one disastrous result.  The world community of nations has been experiencing those weather calamities for many years now.  Each country has a tale of weather woe to report no matter where they are located.  Drought now routinely alternates with deluge, as do catastrophic wind storms whip up with greater frequency.  Each season — in both the Northern and Southern Hemispheres — now brings freak weather events and unpredictable climate chaos so often that they are also the “new normal”.

Because the geoengineers are so determined to control the world’s climate, they have essentially been conducting a massive experiment with the entire biosphere.  Now that the delicate balance within Earth’s atmosphere has been upset for so many years, it is impossible to know what the climate would be like without all the artificial weather modification.  The now pervasive programs of ongoing chemtrail spraying are now so intense and unrelenting that 2016 promises to bring much more of the same climate chaos.

Hottest Year On Record Proves The Geoengineers Can Produce Global Climate Change

At the end of the day one firm conclusion will be drawn from the current geoengineering paradigm.  That any and all dramatic changes, which have been observed regarding global weather patterns, are directly attributed to the out-of-control chemical geoengineering regime that now overlays much of the planet.  That 2015 is shaping up to be the hottest year on record stands as a testament to this.

Although many refuse to admit that relentless geoengineering can in fact increase temperatures both regional and globally, this past fall and the current winter have proven the now obvious.  This deliberate manipulation of public opinion around global warming has only served to allow the geoengineers to maintain their fundamentally flawed paradigm.  In so doing they have been empowered to conduct an extremely dangerous experiment in which all of humanity now sits as does the now famous frog in his/her pot of soon-to-be-boiling hot water.

Many go so far as to deny that the glaciers have been melting at record rates all over the world. Just because they have disappeared because of geoengineering techniques doesn’t mean that it’s not happening. Soon the ambient ocean temps will be so out of whack that coastlines everywhere will be forever altered.  Since many residents of the world live near the shorelines, this development alone will continue to proceed with overwhelming effect.  Just like New York City was buffeted by Superstorm Sandy and Manila is blasted by one typhoon after another, other major megalopolises are likewise exposed to the ravages of geoengineered climate change.

0_1126e1_d2024143_orig

Planet Earth is being systematically geoengineered into a slow-motion extinction level event.

Everyone has heard by now that if you tell a BIG enough lie enough times it will eventually become accepted as the gospel truth.

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
— Joseph Goebbels: On the “Big Lie”

The two biggest lies that humankind is now facing on a daily basis are as follows:

• That CO2 generation from human activity is the primary cause of global climate change

• That organized chemical geoengineering programs do not exist and that all chemtrails are really contrails

Both of these highly consequential notions are being repeatedly misrepresented by governments and the mainstream media (MSM) alike.  Likewise the entire Military-Industrial Complex and related Fortune 1000 companies completely support this covert global endeavor of weather modification and climate engineering.  In fact the U.S. military has taken the lead role first in the execution of Operation Cloverleaf[2], and later on in the implementation of Operation Indigo Skyfold.  Both highly vetted Air Force and Navy pilots are primary personnel who fly the specially retrofitted airliner which emit the coal-ash based chemtrail aerosols.

Each of them is supported by every organ of government and provided with a prodigious amount of resources to maintain these outright lies.  The entire corporate sector has been likewise enlisted to maintain the unending coverup of both the blue skies and the conspiratorial plot–chemical geoengineering.  They have both been indefatigably assisted by the MSM at every turn in this ongoing Con of the Millennium!

The real problem with the ever-worsening planetary predicament is that eventually the biosphere will exceed critical points of no return.  Crucial breakpoints have already been observed which have caused ecosystems to collapse.  Isn’t that what continuous drought and regular deluge will do?  The once great state of California is a perfect example of what the other 49 states can expect.

Relentless Chemtrail Spraying and HAARP-manufactured weather events radically alter California’s climate

Because the true effects of geoengineering are so insidious and under-the-radar, the entire planet is literally being set up for a slow-motion ELE (extinction level event).  Only because an apocalyptic event has not yet occurred on the scale of the Great Flood or the “Sinking of Atlantis” do many blow off such speculation as the stuff of a fertile imagination overly influenced by Apocalypse consciousness.  However, the signs and omens now abound everywhere.  Harbingers of an environmental Armageddon show up uninvited everywhere and anywhere, especially by way of meteorological devastation.

All anyone has to do is look at their local weather, or tune into the national weather events. An even better barometer reading will come from a quick scan of the regional or global news reports concerning major weather events.  They now occur with such frequency that they cannot be ignored. As a matter of fact, if the historical weather records were carefully reviewed, the following conclusion would become clear.  That the number of deaths and amount of damage from weather-related events has seen a steady and often precipitous rise, especially since the implementation of the perpetual and purposeful geoengineering programs.

chm3-1

Conclusion

There is only one reason why the planetary civilization finds itself at the edge of the climatological precipice.  That reason:  Most of the people of the world are clueless about what is occurring right above their heads.  Many are willfully ignorant of the chemtrails; others are simply unaware and uninformed.  The continual government disinformation campaign has been so effective that many don’t even know what to think.  Then there is the small but vocal minority of truth-seekers who know exactly what is going on.

Hence, the only way forward is through a deliberate campaign of education and edification. The education piece clearly delineates the facts about geoengineering; the edification part explains the necessity of mobilizing around the urgent need to terminate the chemtrails post-haste.  When most people come to understand that the hazardous waste product from coal-fired power plants — coal fly ash — is the main ingredient in chemtrails, they will join this movement—yesterday!

Peer-Reviewed, Court-Admissible, Scientific Research Paper Published Exposing Geoengineering and Coal Fly Ash

Truly, if ever there was a plot to commit genocide against the whole human race, the present system of ever-intensifying chemical geoengineering programs is it.  Therefore, the people must be made aware and motivated to respond accordingly.  After all, no one likes toxic chemicals  being sprayed on them all day long for years on end.  Nor does anyone like the blue skies being unceasingly polluted, particularly when the pollution becomes so dense the sun rays are forever blocked.

Who, pray tell, wants their sunny days stolen from them week after week … only to be replaced with days of toxic chemtrail drizzle?

State of the Nation
December 27, 2015

Author’s Note

The REPORT FROM IRON MOUNTAIN (RFIM) should not be underestimated for it clearly outlines the future of the New World Order.  Both U.N. Agenda 21 and Agenda 2030 are manifestations of the basic game plan recommended by the RFIM.  Therefore, this is a very good place for many to start.  The following link provides an important essay which breaks down the whole NWO strategy to corral the human race into a pen of fear and apprehension about the future viability of the biosphere.

Report from Iron Mountain: How War Will Be Replaced By Environmental Destruction To Traumatize Humanity

Editor’s Note

Many people are now aware of the major scams being run daily by the global elites on the inhabitants of this planet.  Who, for instance, is not aware of the international crime syndicate known as the Federal Reserve and the global Central Banking System?  However, of all the cons and shams there is none greater in scope and complexity than manufactured Global Climate Change via chemical geoengineering and HAARP.

That they even attempted, much less continue to perpetrate, such a preposterous scheme only betrays their level of sheer desperation.  They do know that, when a critical mass of residents get wind of their ploy for total planetary control, they will be frogmarched out of their plush offices and posh estates and into the same pot of hot water they have been ever so slowly heating up.  There they will be left in a stewpot of their own making, never to take over the kitchen again.

Web

Special Note

Hey people, it really is time to LOOK UP.  Link up.  Stand up.  Speak up.  Get up.  Talk it up.  And a lot LOT more.

We all possess a fundamental right to not be chemically assaulted by anyone, or any entity under the sun. Likewise, we all have the right not to have our home and property chemically trespassed by anyone, or any entity under the sun.

Therefore, we all have a fundamental right not to be sprayed by the chemical geoengineering programs currently in operation throughout the USA. Does anyone have the right to walk onto your property and indiscriminately spray toxic chemicals wherever they wish? We think not. Should they do so, repeatedly, they might end up in an institution for the criminally insane!

Is there any business, organization or governmental entity that possesses the inherent power to conduct itself in this same manner? We don’t think so, lest they be responsible for chemical assault or trespass. Furthermore, we would challenge anyone in in the U.S. Federal Government, to cite a single instance where anyone, or any entity, possesses the legitimate (does not transgress inviolable rights), statutory power to engage in such intrusive and outright harmful behavior.

After all, chemical assault is chemical assault no matter who is spraying the toxic chemicals … or how secretly they conduct the chemical trespass.
(Source: Taking A Stand Against The Unrelenting Chemtrail Assault …)

It is truly inconceivable that such a destructive and harmful government program is running 24/7 right over our heads and hardly anyone notices.

Because so few have taken notice, We the People are now forced into a geoengineered corner.  And there’s only one way out of that corner.

Think of our collective predicament as the American colonists did.  They knew that there was only one way out of the nascent British Empire.  With each year came a different form of oppression in the form of so many dictatorial “Acts” issued by the Crown.  As follows:

1733 – Molasses Act
1764 – Sugar Act
1764 – Currency Act
1765 – Stamp Act
1765 – Quartering Act
1766 – Declaratory Act
1767 – Townshend Revenue Act
1773 – Tea Act
1774 – Intolerable or Coercive Acts

What’s the point?  The American people are now dictated to by another despotic tyranny. Now we have the patently unlawful and covertly executed Geoengineering Act administered by the U.S. Federal Government.  This is just one of many other unwanted  national initiatives that have been imposed on the citizenry such as GMO foods, fluoridated water, mandatory childhood vaccinations, circumcision without consent, as well as a whole slew of taxes and fees which have kept many in the state of perpetual poverty.

None of these compare to the fouling of our air.  What could possibly come close to the poisoning of the ambient air that we breathe with so many highly toxic contaminants?!

Sources

[1] NWO Cabal Pursues Total Dominion Over The Earth’s Weather And Natural Resources

[2] OPERATION CLOVERLEAF: The Most Dangerous Weapons Testing Program In World History 

References

Biosphere Approaching Critical Points Of No Return

Was the California drought geoengineered to pass future ‘climate change’ legislation?

Recommended Reading

CHEMTRAILS: A Planetary Catastrophe Created by Geoengineering

CHEMTRAIL SYNDROME: A Global Pandemic Of Epic Proportions

CHEMTRAILS : The Biggest Coverup of All Time

Originally written by SOTN and published at: http://stateofthenation2012.com/?p=27876

Central Banks Have Pushed The Middle Class Into Neo-feudal Serfdom

The injustice of central-bank enforced neo-feudalism cannot be suppressed like interest rates.

In traditional feudal systems, serfs were the landless peasantry who worked the land of their feudal lords in exchange for protection. In our present-day neo-feudal system, serfdom has a different definition: present-day serfs own little or no productive capital and have few opportunities to ever acquire any.

The Marxist term wage-slaves describes those who, lacking capital, have only their labor to sell. This describes the vast majority of people in both capitalist and socialist systems, but what makes the present system neo-feudal is the central banks: by extending essentially unlimited credit at near-zero interest rates to financiers and corporations, the central banks have given the top .01% the ability to outbid mere savers for income-producing assets (i.e. productive assets).

Just as the feudal-era serf had no choice but to enslave himself and his family to the manor-house lord, the modern-day serf must indenture himself to banks to “own” a car or home or “buy” a college education.

The X22 Report and I discuss this and related topics in the podcast Central Bankers Are Creating A World Where We Are All Serfs (38:10).

As I outlined in The Flaws in Basic Income for Everyone, all the guaranteed basic income schemes being proposed as solutions to automation are merely institutionalized serfdom as they sentence the unemployed to the marginalized political status (equivalent to powerless serfs) of state dependents while stripping them of purposeful work and the opportunity to acquire the means of production and productive capital.

Guaranteed basic income is thus the perfection of neo-feudal serfdom.

The central banks are the critical enforcers of this neo-feudal system. Without access to unlimited credit at near-zero rates, financiers and corporations would not be able to outbid savers for productive assets.

Here’s an example that illustrates how central banks have created a neofeudal system. In an economy not suffering from extremes of central-bank financial repression, home mortgages in recent decades were around 7.5%. This rate of interest (coupled with strict lending standards) was high enough to make credit-fueled bubbles difficult to inflate, so homes cost $100,000.

Those who had saved $50,000 had an advantage over financiers who were borrowing the full $100,000. The base operating costs of buying the home as a rental (investment) property was roughly $4,000 more annually for the financiers than for the savers: the savers’ $50,000 mortgage cost around $4,000 a year (not including property taxes and other expenses of ownership) while the financiers’ mortgage was around $8,000 annually.

This difference was large enough to make the property unprofitable for the financiers to buy and rent out, and large enough to make it a risky bet to buy the home and hope appreciation exceeded the annual expenses.

If the home rented for (say) $1,200 per month, the financiers’ higher mortgage expenses put them at a disadvantage to the saver/owner, who had a significantly lower monthly expense.

Contrast this with the world of today, where financiers can borrow essentially unlimited sums at rates far below what savers can get. As a direct result of ultra-low rates for banks, corporations and financiers, even high-earning wage-slaves cannot outbid the financiers for productive (i.e. income-producing) assets.

If a person is unable to earn enough to save, and is unable to compete with financiers and corporations for productive assets, that person is a modern-day serf, a debt-serf indentured to banks and stripped of opportunities to own the sort of assets the Financial Nobility use to accumulate ever-greater wealth and income.

The injustice of this central-bank enforced neo-feudalism cannot be suppressed like interest rates.

Central Bankers Are Creating A World Where We Are All Serfs (38:10) (X22 Report podcast).

Baltic Dry Index Crashes To New Record Low As China Demand For Raw Materials Collapses

Despite a brief dead-cat-bounce late November, which CNBC Mad Money host, Jim Cramer heralded as evidence of stabilization in China, the world’s best known freight index has collapsed to new all-time record lows this morning. Amid a persistent glut of ships and ongoing concerns about Chinese steel imports, The Baltic Dry has tumbled to 471 – the lowest level in at least 30 years.

Worst. Ever.

As Bloomberg adds, China, which makes about half the world’s steel, is on track for the biggest drop in output for more than two decades, according to data compiled by Bloomberg Intelligence…

Owners are reeling as China’s combined seaborne imports of iron ore and coal — commodities that helped fuel a manufacturing boom — record the first annual declines in at least a decade. While demand next year may be a little better, slower-than-anticipated growth in 2015 has led to almost perpetual disappointment for rates, after analysts’ predictions at the end of 2014 for a rebound proved wrong.

“It doesn’t help that Chinese steel production is about to see the most dramatic decline to the lowest in 20 years,” said Herman Hildan, a shipping-equity analyst at Clarksons Platou Securities in Oslo. “Demand growth is collapsing.”

*  *  *

Sounds like a perfect time to hike rates and exaggerate the deflationary tsunami and monetary outflows from the world’s potentially growing economies.

Source: Zero Hedge

End of the Bubble Finance Era Has Begun

We are nearing a crucial inflection point in the worldwide bubble finance cycle that has been underway for more than two decades. To wit, the world’s central banks have finally run out of dry powder. They will be unable to stop the credit implosion which must inexorably follow the false boom.

We will get to the Fed’s upcoming once in a lifetime shift to raising rates below, but first it is crucial to sketch the global macroeconomic context.

In a word, we are now entering an epic deflation. Its leading edge is manifested in the renewed carnage in the commodity pits.

This week the Bloomberg commodity index, which encompasses everything from crude oil to soybeans, copper, nickel, cotton and livestock, plunged below 80 for the first time since 1999. It is now down nearly 70% from its all-time high on the eve of the financial crisis, and 55% from its 2011 recovery high.

BloombergCommodityIndex

Wall Street bulls and Keynesian apologists for the Fed want you to believe that there isn’t much to see here. They claim it’s just a temporary oil glut and some CapEx over-exuberance in the metals and mining industry.

But their assurances that in a year or so current excess supplies of copper, crude, iron ore and other commodities will be absorbed by an expanding global economy couldn’t be farther from the truth. In fact, this error is at the heart of my investment viewpoint.

We believe the global economy is vastly bloated with debt-based spending that can’t be sustained. And that this distortion is compounded on the supply side by an incredible surplus of excess production capacity. As well as wasteful malinvestments that were enabled by dirt cheap central bank credit.

Consequently, the world economy is actually going to shrink for the first time since the 1930s. That’s because the plunging price of commodities is only a prelude to what will amount to a worldwide CapEx depression — the kind of thing that has not happened since the 1930s.

There has been so much over-investment in energy, mining, materials processing, manufacturing and warehousing that nothing new will be built for years to come. The boom of the last two decades essentially stole output from many years into the future.

So there will be a severe curtailment in the production of mining and construction equipment, oilfield drilling rigs, heavy trucks and rail cars, bulk carriers and containerships, materials handling machinery and warehouse rigging, machine tools and chemical processing equipment and much, much more.

The crucial point, however, is that sharp curtailment of the capital goods industries has far more destructive implications for the macro-economy than a reduction in consumer appliance sales or restaurant and bar tabs.

Service operations have virtually no working inventories and the supply chains for durable consumer goods such as dishwashers and cars typically have perhaps 50 to 100 days of stocks on hand. So when excessive inventory investments accumulate, the destocking and resulting supply chain curtailments are relatively short-lived.

But when it comes to capital goods the relevant inventory measure is capacity in place. That’s where the bubble finance policies of the Fed and other central banks have done so much damage.

Prolonged periods of below market capital costs induce business customers to drastically over-estimate investment returns. And therefore to eventually accumulate years and years worth of excess capacity.

This is very different than your grandfather’s consumer goods recessions of the 1950s and 1960s. Those typically involved moderate production cutbacks and several quarters of inventory destocking. But this time the capital goods adjustment will take years, perhaps more than a decade.

Here’s Why

When iron ore mines are drastically overbuilt, for example, new orders for Caterpillars’ (CAT) big yellow mining machines can drop to nearly zero. That’s why CAT is already in the longest string of dealer sales declines — 35 straight months and running — in its 100 year history.

Caterpillar

That’s also why the coming global recession will be so prolonged and stubborn. When cheap credit generates a boom in long-lived and expensive capital goods, it gives rise to a pipeline of new capacity.

This pipeline is not easy to shut-off and often makes sense to complete — say container ships, steel plants or new field mines — even if pricing and profitability have already headed south. That’s known as the sunk cost problem.

Mining equipment orders are likely to remain deeply depressed for the rest of the decade. And this syndrome will be repeated in most other sectors such as heavy trucks, shipyards, oil drilling equipment etc.

This depression in the capital goods industries, in turn, means the disappearance of thousands of typically high pay, high skill jobs at companies like Caterpillar. The same will happen among their extensive chains of outsourced components, materials and service suppliers. And the cascade of those contractions down the economy’s food chain will further intensify and extend the deflationary dynamic.

The graph below give some hint of the massive downturn which lies ahead on a worldwide basis.

During the last 25 years CapEx spending by the publicly listed companies of the world grew by an incredible 500%. Much of this happened in China and the Emerging Market (EM) economies, and in the transportation and distribution infrastructure that connects them.

GlobalCapex

Yet this massive explosion of investment spending didn’t happen because several billion Asian peasants suddenly decided to save-up a storm of new capital.

Instead, this unprecedented construction and CapEx campaign was financed almost entirely by a massive issuance of printing press credit at virtually zero real interest rates.

That means capital was drastically underpriced and that waste, excess and inefficiency abounded.

At length, the global economy became dangerously unbalanced. And these adverse consequences of the false central bank credit boom, in fact, highlight the investment opportunity ahead.

Healthy capitalist investment based on market prices and savings set aside from current income can go on indefinitely, fueling rising efficiency, output and wealth.

But CapEx based on printing press credit only temporarily enabled the world economy to have its cake and eat it, too. Now it’s payback time.

Needless to say, during the expansion phase of central bank enabled bubble finance, optimism reigns and bulls and speculators insist that “this time is different.”

Yet the laws of sound finance and market economics never change. It often just takes an extended time for all the excesses to work their way through the system and finally reach the blow-off stage.

The graph below summarizes this great deformation.

Over the last two decades, global credit market debt outstanding has soared from $40 trillion to $225 trillion. This represents an incredible $185 trillion debt expansion. That eruption would be simply unimaginable without the help of money printing central banks.

By contrast, global GDP only expanded by $50 billion during the same period, and even that’s an overstatement. Much of that reported gain merely represented the one-time pass-through of fiat credit, not real savings put to work in efficient production.

Consequently, it is likely that the global economy accumulated more than $4 of new debt for every $1 of incremental GDP.

Not only is that self-evidently an unsustainable financial equation, it also means that when credit growth stops, the bottom will drop out of reported GDP. It wasn’t new wealth in the first place, just production stolen from the future.

GlobalDebt

And this gets us to the Fed’s upcoming move to raise interest rates for the first time in 10 years. It will amount to a sea-change that in due course will shatter the entire regime of bubble finance that gave rise to the false credit and CapEx boom depicted above.

As I have often said, the Fed has become addicted to the “Easy Button.” During more than 80% of the 300+ months during the last quarter century it has either cut rates or left them unchanged.

EasyButton

Accordingly, the professional gamblers in today’s Wall Street casino have no real experience of a time when the “Fed is your friend” adage failed to work. They have experienced essentially false one-way markets, knowing that the Greenspan/Bernanke/Yellen “put” under stocks and other risks assets would come to the rescue.

But here’s the thing. After 84 months of zero interest rates — and folks that’s pure lunacy by all historic standards — the Fed has run out of time and excuses.

If it doesn’t begin to normalize rates at last, and as repeatedly promised, its credibility will be shattered. And what it long has been deathly afraid of will happen. That is, the market will plunge into a hissy fit that will shatter confidence in what is essentially a giant credit-based Ponzi.

And the other major central banks of the world are in the same boat. Just last week we saw the ECB stopped short by its powerful Germany contingent that essentially said to Draghi that $1.3 trillion of money printing is enough.

Likewise, the People’s Bank of China (PBOC) has run out of dry powder, too. And that’s of monumental importance.

The epicenter of the global commodity, industrial and CapEx boom was in China. Thanks to the greatest money printing spree by the PBOC in recorded history, outstanding public and private debt there has exploded from $500 billion in 1994 to $30 trillion at present.

That’s a 60-fold gain. Is it any wonder that the commodity and CapEx charts shown above went nearly vertical during the peak of the global boom?

But now China is facing the collapse of its credit Ponzi, and capital is fleeing the country at a prodigious pace.

In the last 15 months alone, nearly $1 trillion has high tailed it for London, New York, Australia, Vancouver and other resting places for flight capital.

So the PBOC is being forced to stop its printing presses in order to prevent the Yuan exchange rate from collapsing and the capital outflow from getting totally out of hand.

Even in Japan, the Bank of Japan’s printing press is no longer accelerating. That because notwithstanding trillions of new money conjured from thin air during recent years, Japan is on the verge of its 5th recession in seven years. Even in Japan, bubble finance is losing its credibility.

Regards,

David Stockman for The Daily Reckoning

Schiff Warns: “The Whole Economy Has Imploded … Collapse Is Coming”

https://s16-us2.ixquick.com/cgi-bin/serveimage?url=http%3A%2F%2Fcdn3.freedomoutpost.com%2Fwp-content%2Fuploads%2F2015%2F06%2Feconomic-collapse.jpg&sp=3b7a581e9216ee06e81159dcf33fa4c6Back before 2008 Peter Schiff was harshly criticized and laughed at for his predictions about a coming economic collapse. Among other things Schiff warned that consumer spending had hit a wall, stocks were overpriced and lax credit lending practices would lead to a detonation of the banking system. Rather than heed the warnings, the biggest names in mainstream media tried to discredit him for not toeing the official narrative. Shortly thereafter, of course, Schiff was vindicated and much of the doom he had forecast came to pass.

Today, Schiff continues to argue that the economy is on a downhill trajectory and this time there will be no stopping it. All of the emergency measures implemented by the government following the Crash of 2008 were merely temporary stop-gaps. The light at the end of the tunnel being touted by officials as recovery, Schiff has famously said, is actually an oncoming train. And if the forecast he laid out in his latest interview is as accurate as those he shared in 2007, then the the train is about to derail.

We’re broke. We’re basically living off of debt. We’ve had a huge transformation of the American economy. Look at all the Americans now on food stamps, on disability, on unemployment.

The whole economy has imploded… the bottom hasn’t dropped out yet because we’re able to go deeper into debt. But the collapse is coming.

Fundamentally, America is worse off now than it was pre-crash. With the national debt rising unabated and money being printed out of thin air without reprieve, it is only a matter of time.

Schiff notes that while government statistics claim Americans are saving again and consumers seem to be spending, the average Joe Sixpack actually has a negative net worth. But most people don’t even realize what’s happening:

I read a statistic… The average American has less than a $5000 net worth… it’s pathetic… we’re basically broke… but in fact it’s much less… If you actually took the national debt and broke it down per capita, the average American has a negative net worth because the government has borrowed in his name more than the average American is able to save.

What’s happening is pretty much what we would anticipate. I don’t see from the data any real economic recovery, certainly not in the United States.

We’re spending more money, but it’s not because we’re generating more wealth. We’re generating more debt. We’re using that borrowed money to consume and so temporarily it feels that we’re wealthier because we get to spend all that money… but we have to come to terms with paying the bill.

The bills are going to come due. Right now interest rates are being kept at zero which makes it possible to service the debt even though it’s impossible to repay it… at least we can service it. But once interest rates go up then we can’t even service it let alone repay it.

And then the party is going to come to an end.

The problem, of course, is that no one with any real influence over public perception, like our elected officials or the media, will do anything about it. They’ll continue the party until it comes to an abrupt and irreversible end, and anyone who goes against the official narrative will be branded a lunatic gloom and doomer or extremist.

But vilifying those who are blaring the warning sirens will do nothing to change the end result:

We’re going to have a crisis… There are always going to be people who say ‘well, you’re a stopped clocked… you keep predicting doom and eventually it happens’… but you have to back and listen to why… Why are they saying it?

If you look back at things that I’ve said and the things that Ron Paul has said… This is why it’s happening… it’s not like we’re just saying negative things to be negative and then when something negative happens we can claim credit for it happening.

If you look back at the events it bears out that we’re right… unfortunately our opinions are in the minority… and you have governments that have a vested interest in ignoring these opinions because they don’t want to change because they’re at the root cause of the problem. But they don’t want to acknowledge their role in creating the problem. They don’t want to acknowledge that the problem is more government and that we need less government because that’s not how they stay in power. They promise something for nothing… they promise that government is the solution for your problems, not the cause of your problems.

They’re never going to acknowledge people like Ron Paul for what they’re saying… but they’ll try to discredit you by saying ‘well, you’ve been saying this for years and nothing bad has happened.’

But look around. A lot of bad stuff has happened. We just haven’t had the final and complete collapse. But what good is it when that happens? Now it’s too late to do anything about it.

The reality is that the American economy is on its last leg. Black Friday sales were pitiful, some of the world’s leading companies are warning of recession, and U.S. national debt will soon surpass $20 Trillion.

Just as was the case before the Crash of 2008, all of the signs are there. And just like before, the stock market continues to hover near all-time highs.

If you’ve been paying attention you know what happens next.

Source: Zero Hedge

HUGE ECONOMIC WARNING SIGN FROM THE MIDWEST

We got another dire picture of American manufacturing on Monday.

kate smith swimming pool chicago opera

MNI’s Chicago purchasing manager’s index (PMI), an indicator of business manufacturing and overall business activity in the Midwestern US, plunged from 56.2 to 48.7 in November.

According to Bloomberg, economists had estimated that the business barometer fell to 54 from 56.2 in October.

A reading below 50 indicates contraction.

New orders fell to the lowest level since March, and this decline put the index into contractionary territory for a sixth time this year.

Orders is a leading indicator of things to come, which suggests potential downsizing and layoffs may be due for businesses in the Midwest.

“The significant decline in the Barometer is indicative of the see-saw pattern of demand seen in 2015, with output and orders shifting in and out of contraction,” said Alyce Andres-Frantz, MNI Chicago bureau chief, in a release. “Barring a significant bounce back in December, the decline in November suggests that activity during the final quarter of the year may well decelerate.

The Midwest has not been spared by a broad slowdown in manufacturing this year that economists have attributed to weakening demand for US exports, the stronger dollar, and lower commodity prices.

We care about the Chicago PMI because it is highly correlated with the [nationwide] manufacturing ISM [report on business],” Deutsche Bank’s Joseph LaVorgna and team wrote to clients ahead of the release, with emphasis. “Over the past 10 years, the correlation coefficient between the Chicago PMI and the manufacturing ISM is a robust 0.86, which tells us that both series tend to trend closely together.”

And while recent manufacturing PMIs suggested that the worst may be over for manufacturing, that call may be premature since data like this show its performance is still seesawing.

“That the Barometer was unable to hold on to the gain seen in October is a reflection of the erratic pattern of demand seen throughout 2015,” said MNI chief economist Philip Uglow. “The slowdown in the global economy, the strong dollar and decline in oil prices have all impacted businesses this year to varying degrees.”

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by Akin Oyedele for Business Insider

 

GM to Import Chinese-made Buick Envision to U.S.

General Motors may be setting stage to import more of their China-made vehicles into the U.S.

The Buick Envision is a cross-over SUV made in Shandong in northeastern China.

The Buick Envision is a cross-over SUV made in Shandong in northeastern China. (General Motors)

General Motors Co. plans to start importing Chinese-made Buick Envision SUVs to the U.S., starting in 2016, according to a report in the Wall Street Journal.

It would be the first automaker to import cars made in China to the U.S. About 30,000 cars would be imported next year.

The Envision is made in GM’s plant in Shandong, a joint venture with a Chinese partner that until now has made vehicles for the domestic market.

However, the cross-over segment – a small or mid-sized SUV on a car chassis – is a hot market in the U.S. and the Envision would fulfill that demand.

Global automakers have been slow to ship Chinese vehicles to the U.S. and Europe, despite low-cost manufacturing there, fearing Western buyers would shun them over quality concerns.

However, GM may be setting the stage for other automakers to import Chinese-made vehicles.

China has been GM’s largest market since 2010, accounting for about one-third of global sales.

GM says it notified the United Auto Workers of its intention to import the Envisions in recent contract talks.

However, workers are unlikely to welcome any expansion of the experiment, as the U.S. market could become the dumping ground for cars when Chinese sales slow. 

Adapted from CBC News Posted: Nov 13, 2015 3:13 PM ETLast Updated: Nov 13, 2015 3:13 PM ET

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The Chatillon Car Graveyard in Southern Belgium

Dear Striking Fast-Food Workers: Meet The Machine That Just Put You Out Of A Job

Today, U.S. fast-food workers will strike across 270 cities in a protest for higher wages and union rights that they hope will catch the attention of candidates in 2016 elections, organizers said.

The walkouts will be followed by protests in 500 cities by low-wage workers in such sectors as fast food and home and child care, a statement by organizers of the Fight for $15 campaign said on Monday.

The protests and strikes are aimed at gaining candidates’ support heading into the 2016 election for a minimum wage of $15 an hour and union rights, it said.

The strikes and protests will include workers from McDonald’s, Wendy’s, Burger King , KFC and other restaurants, the statement said.

And while we sympathize with their demands for higher wages, here is the simple reason why they will be very much futile.

Dear Striking Fast-Food Workers: Meet The Machine That Put You Out Of A Job

Dear fast food workers of the US – presenting you nemesis: the Momentum Machines burger maker.

According to a recent BofA reported on how robotics will reshape the world, San Francisco start up Momentum Machines are out to fully automate the production of burgers with the aim of replacing a human fast food worker. The machine can shape burgers from ground meat, grill them to order with the specified amount of char, toast buns, add t