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Guest Post: The Breakdown Draws Near
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Submitted by Chris Martenson
The Breakdown Draws Near
Things are certainly speeding up, and it is my conclusion that we are not more than a year away from the next major financial and economic disruption.
Alas, predictions are tricky, especially about the future (credit: Yogi Berra), but here's why I am convinced that the next big break is drawing near.
In order for the financial system to operate, it needs continual debt expansion and servicing. Both are important. If either is missing, then catastrophe can strike at any time. And by 'catastrophe' I mean big institutions and countries transiting from a state of insolvency into outright bankruptcy.
In a recent article, I noted that the IMF had added up the financing needs of the advanced economies and come to the startling conclusion that the combination of maturing and new debt issuances came to more than a quarter of their combined economies over the next year. A quarter!
I also noted that this was just the sovereign debt, and that state, personal, and corporate debt were additive to the overall amount of financing needed this next year. Adding another dab of color to the picture, the IMF has now added bank refinancing to the tableau, and it's an unhealthy shade of red:
Banks face $3.6 trillion "wall" of maturing debt: IMF
(Reuters) - The world's banks face a $3.6 trillion "wall of maturing debt" in the next two years and must compete with debt-laden governments to secure financing, the IMF warned on Wednesday.
Many European banks need bigger capital cushions to restore market confidence and assure they can borrow, and some weak players will need to be closed, the International Monetary Fund said in its Global Financial Stability Report.
The debt rollover requirements are most acute for Irish and German banks, with as much as half of their outstanding debt coming due over the next two years, the fund said.
"These bank funding needs coincide with higher sovereign refinancing requirements, heightening competition for scarce funding resources," the IMF said.
When both big banks and sovereign entities are simultaneously facing twin walls of maturing debt, it is reasonable to ask exactly who will be doing all the buying of that debt? Especially at the ridiculously low, and negative I might add, interest rates that the central banks have engineered in their quest to bail out the big banks.
Greek T-Bill Sale Fails to Allay Fear
Greece's Public Debt Management Agency paid a high price to sell €1.625 billion of 13-week Treasury bills at an auction Tuesday, amid persistent speculation that the country will have to restructure its debt.
The 4.1% yield paid by Greece, which means it now pays more for 13-week money than the 3.8% Germany currently pays on its 30-year bond, is likely to increase concern over the sustainability of Greece's debt-servicing costs.
Greek debt came under heavy selling pressure Monday after it emerged that the country had proposed extending repayments on its debt, pushing yields to euro-era highs.
Greek two-year bonds now yield more than 19.3%, up from 15.44% at the end of March.
With Greek 2-year bonds now yielding over 19%, the situation is out of control and clearly a catastrophe. When sovereign debt carries a rate of interest higher than nominal GDP growth, all that can ever happen is for the debts to pile up faster and faster, clearly the very last thing that one would like to see if avoiding an outright default is the desired outcome. How does more debt at higher rates help Greece?
It doesn't, and default (termed "restructuring" by the spinsters in charge of everything...it sounds so much nicer) is clearly in the cards. The main question to be resolved is who is going to eat the losses -- the banks and other major holders of the failed debt, or the public? I think we all know the most likely answer to that one.
"Contagion" is the fear here. With Ireland and Portugal already well down the path towards their own defaults, it is Spain that represents a much larger risk because of the scale of the debt involved. Spain is now officially on the bailout watch list, because it has denied needing a bailout, which means it does.
Spain is now at the 'grasping at straws' phase as it pins its hopes on China riding to the rescue:
European officials are hoping that the bailout for Portugal will be the last one, and debt markets have broadly shown both Spain and Italy appear to be succeeding in keeping investors' faith.
Madrid is hoping for support from China for its efforts to recapitalize a struggling banking sector and there were also brighter signs in data showing its banks borrowed less in March from the European Central Bank than at any point in the past three years.
(Source)
If Spain is hoping for a rescue by China, it had better get their cash, and soon. As noted here five weeks ago in "Warning Signs From China," a slump in sales of homes in Beijing in February was certain to be followed by a crash in prices. I just didn't expect things to be this severe only one month later:
Beijing March New House Prices Plunge 26.7% M/M
BEIJING (MNI) - Prices of new homes in China's capital plunged 26.7% month-on-month in March, the Beijing News reported Tuesday, citing data from the city's Housing and Urban-Rural Development Commission.
Average prices of newly-built houses in March fell 10.9% over the same month last year to CNY19,679 per square meter, marking the first year-on-year decline since September 2009.
Home purchases fell 50.9% y/y and 41.5% m/m, the newspaper said, citing an unidentified official from the Housing Commission as saying the falls point to the government's crackdown on speculation in the real estate market.
March Home Transactions in 30 Major Cities Fall 40.5% Y-o-Y
Housing transactions in major Chinese cities monitored by the China Index Research Institute (CIRI) dropped 40.5% year-on-year on average in March, a month when home buying typically enters a seasonal boom period.
Transactions rose month-on-month in 70% of the cities monitored, including five cities where transactions were up by more than 100% on a month earlier, secutimes.com reported on Wednesday, citing statistics from the CIRI. [CM note: month-on-month not useful for transactions as volumes have pronounced seasonality]
Beijing posted a decrease of 48% from a year earlier; cities including Haikou, Chengdu, Tianjin and Hangzhou saw drops in their transaction volumes month-on-month, according to the statistics.
Meanwhile, land sales fell 21% quarter-on-quarter to 4,372 plots in 120 cities in the first quarter of 2011; 1,473 plots were for residential projects, the statistics showed.
The average price of floor area per square meter in the 120 cities dropped to RMB 1,225, down 15% m-o-m, according to the statistics.
Real estate is easy to track because it always follows the same progression. Sales volumes slow down, and people attribute it to the 'market taking a breather.' Then sales slump, but people say "prices are still firm," trying to console themselves with what good news they can find in the situation. Then sales really drop off, and prices begin to move down. That's where China currently is. What happens next is also easy to 'predict' (not really a prediction because it always happens), and that is mortgage defaults and banking losses, which compound the misery cycle by drying up lending and dumping cheap(er) properties back on the market.
In that report back in March, I also wrote this:
If China enters a full-fledged housing crash, then it will have some very serious problems on its hands.
A collapse in GDP would surely follow, and all the things that China currently imports by the cargo-shipload would certainly slump in concert.
This is another possible risk to the global growth story that deserves our close attention. How this will impact things in the West remains unclear, but we might predict that China would cut way back on its Treasury purchases if it suddenly needed those funds back home to soften the blow of an epic housing bust.
If a more normal ratio for a healthy housing market is in the vicinity of 3x to 4x income, then China's national housing market is overpriced by some 60% and certain major markets are overpriced by 80%.
Which means that the entire banking sector in China is significantly exposed.
(...)
The reason we care if China experiences a housing bust is the turmoil that will result in the global commodity and financial markets as a result. Everything is tuned to a smooth continuation of present trends, and China experiencing a housing bust would be quite disruptive.
If Spain is hoping for a big cash infusion from China and/or Chinese banks, it had better get its hands on that money quick. China is barreling toward its own full-fledged real estate crisis, which will drain its domestic liquidity just as surely as it did for the Western system, and probably even more quickly, given the stunning drop-offs in volumes in prices.
However, I should note that the United States housing market hit its peak (according to the Case-Shiller index) in July of 2006, and it was a year and a month before the first cracks appeared in the financial system, so perhaps there's some time yet for Spain to cling to its hopes.
The larger story here is how a real estate slump in China will impact global growth, which absolutely must continue if the debt charade is to continue.
Who Will Buy All the Bonds?
With Japan now focusing on rebuilding itself, and China seemingly now in the grips of a housing bust that could prove to be one for the record books, given the enormous price-to-income gap that was allowed to develop, it would seem that the financing needs of the West will not be met by the East.
One important way to track how this story is unfolding is via the Treasury International Capital (TIC) report that comes out every month. The most recent one came out on April 15th and was quite robust, with a very large $97.7 billion inflow reported for February (the report lags by a month and a half).
On the surface things look 'okay,' although not especially stellar, given a combined US fiscal and trade deficit that is roughly twice as high as the February inflow. But digging into the report a bit, we find some early warning signs that perhaps all is not quite right:
Net foreign purchases of long-term securities totaled a lower-than-trend $26.9 billion in February, reflecting $32.4 billion of foreign purchases offset by $5.5 billion of domestic purchases of foreign securities. Inflows slowed for both Treasuries and equities with government agency bonds and corporate bonds posting outflows.
When including short-term securities, the February data tell a different story with a very large $97.7 billion inflow. Country data show little change in Chinese holdings of U.S. Treasuries, at $1.15 trillion, and a slight gain for Japanese holdings at $890 billion. It will be interesting to watch for change in Japanese Treasury holdings as rebuilding takes hold.
(Source)
Only $26.9 billion, or 28%, of that $97.7 billion, was in long-term securities, reflecting a trend first outlined for us in our recent podcast interview with Paul Tustain of BullionVault whereby fewer and fewer participants are willing to lend long. Everybody is piling into the short end of things, not trusting the future. The concern here is that when interest rates begin to rise, financing costs will immediately skyrocket, because too much of the debt is piled up on the short end.
Also in the TIC data cited above, we need to reiterate that it is for February, and the Japanese earthquake hit on March 11. The next TIC report will be somewhat more telling, but even then only partially, and so it is the report for April (due to be released on June 15) that we're really going to examine closely. Our prediction is for a rather large dropoff due to Japan's withdrawal of funds.
With the Fed potentially backing away from the quantitative easing (QE) programs in June, the US government will need someone to buy roughly $130 billion of new bonds each month for the next year. So the question is, "Who will buy them all?"
Right now, that is entirely unclear.
Budget Fiasco
Sadly, the budget 'cuts' proposed so far in Washington DC are too miniscule to assist in any credible way, and they practically represent a rounding error, given the numbers involved. The Obama administration has proposed $38 billion in spending reductions. (I hesitate to call them 'cuts' because in many cases they are merely lesser increases than previously proposed).
Congress OKs big budget cuts — bigger fights await
April 14, 2011
WASHINGTON – Congress sent President Barack Obama hard-fought legislation cutting a record $38 billion from federal spending on Thursday, bestowing bipartisan support on the first major compromise between the White House and newly empowered Republicans in Congress.
The Environmental Protection Agency, one of the Republicans' favorite targets, took a $1.6 billion cut. Spending for community health centers was reduced by $600 million, and the Community Development Block Grant program favored by mayors by $950 million more.
The bipartisan drive to cut federal spending reached into every corner of the government's sprawl of domestic programs. Money to renovate the Commerce Department building in Washington was cut by $8 million. The Appalachian Regional Commission, a New Deal-era program, was nicked for another $8 million and the National Park Service by $127 million more.
For the record, these 'cuts' work out to ~$3 billion less in spending each month, or less than the amount the Fed has been pouring into the Treasury market each business day for the past five months.
The fact that a major write-up on the budget finds it meaningful to tell us about specific $8 million cuts (that's million with an "m") tells us that we are not yet at the serious stage in these conversations. After all, $8 million is only 0.0005% of the 2011 deficit, and even the entire $38 billion is just 2.3% of the deficit and slightly under 1% of the total 2011 budget.
How much is $38 billion?
- Less than 2 weeks of new debt accumulation (on average)
- About 2 weeks of Fed thin-air money printing, a.k.a. QE II
In other words, it's a drop in the ocean.
It is this lack of seriousness that is driving the dollar down and oil, gold, silver, and other commodities up. It is the reason we will be watching the TIC report for clues that foreign buyers and holders of dollars are getting nervous about storing their wealth with a country that is increasingly seen as unable or unwilling to live within its means. It explains why the IMF has been finger-wagging so much of late.
Somehow the US federal government managed to increase its expenditures by 30% from 2008 to 2011, but is now struggling to reduce the total amount by just 1%.
That, my friends, is an out-of-control process, and the 1% in 'cuts' is simply not a credible response to a very large problem.
Conclusion
There are two entirely, completely, utterly different narratives at play here. One of them is that the economy is recovering, policies are working, and the vaunted consumer is either back in the game or close to it. The other is that the world is saturated with debt, there's no realistic or practical model of growth that could promise its repayment, and the level of austerity required to balance the books is so far beyond the political will of the Western powers that it borders on fantasy to ponder that outcome.
If we believe the first story, we play the game and continue to store all of our wealth in fiat money. If we believe the second, we take our money out of the system and place it into 'hard' assets like gold and silver because the most likely event is a massive financial-currency-debt crisis.
The IMF, the World Bank, the BIS, and numerous other institutions with access to $2 calculators have finally arrived at the conclusion that there's still 'too much debt' and that it cannot all be paid back. And they are now alert to the idea that the predicament only has two outcomes: either the living standards of over-indebted countries will be allowed to fall, or the global fiat regime will suffer a catastrophic failure.
China is unlikely to ride to the rescue of the West, although it may have some time yet to help out a few of the smaller and mid-sized players, such as Spain.
In Part II of this report, How This Will Play Out, we explore in detail the likely triggers for a financial breakdown, what market signals to watch for, and what individuals can do to defend themselves against such a collapse. The risks are now higher than at any time since I began analyzing this predicament. I invite you to plan accordingly.
Click here to access Part II (free executive summary; paid enrollment required to access).
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Agreed.
This is a Cute lil video..
http://goo.gl/XIWhy Debt Spending in America! $100 Million a Day! with NO! New Spending, Takes 300+ years to pay off the National Debt!
$14 Trillion Deficit http://goo.gl/FnxBZ PLUS! $15 Trillion in Loans to Rich Fuckers and Gaddafi! http://goo.gl/EXzal / http://goo.gl/d0DLP
$29 Trillion Dollars...
http://goo.gl/LiaTC United States has Off-Balance Sheet, Unrecorded Debt of 500% of GDP (Forbes)
Undermining the Majority of Americans is Bad for America! Everyone but Big Government and Huge Corporations think so! http://goo.gl/O4zzn
Why the rich are getting much, much richer, while regular people are at best treading water http://goo.gl/O4zzn
Goldman Sachs “Anatomy of a Financial Collapse” Report from the Senate http://goo.gl/LChRZ
“Matt Taibbi” Explains How Wall Street Works http://goo.gl/HC2U8 and how Wall Street Wives Grabbed $220 Million in TALF Funds!
Fraud, Collusion and Racketeering: Big Banks at Their Best http://goo.gl/RmzCC (Forbes Magazine)
If the United States Attorney General does Not make a Case Against Big Banks (That Sticks) it is because he wants a Job from them later. http://goo.gl/QJkk5
So what does all this mean?
No! Spending Cuts Needed! We Need Corp's To Pay Taxes! http://goo.gl/PuoLH / $39M Lobby PAY NO TAXES! http://goo.gl/c2s7q
9 Things The Rich Don't Want You To Know About Taxes! http://goo.gl/p5p5E
http://goo.gl/zacwI 12 Corporations who Spent $1 Billion to Bribe the Lobby Whores into a 0% Tax Bracket thru Loopholes!
The 10 Biggest Tax Cheater in the United States of America! Wonder why we can Not Afford anything? Stop Wondering Why! http://goo.gl/PuoLH
http://goo.gl/9X4Va Send U.S. Jobs Off Shore & get a Tax Break! for Sending those Jobs Off Shore! (USA Today)
http://goo.gl/KAtOI 10 Congressional Leaders who undermine the Constitution for the Rich!
These indexes are designed to provide real-time information on major inflation trends http://goo.gl/xz7XB M.I.T. “The Billion Prices Project”
Corporations Own the Lobby!
The Lobby Owns the Government!
Law Enforcement works for the Duly Elected Lobby Whores!
We the People = Screwed!
No Taxes for the Rich... Austerity Measures for the already Poor and Newly Middle Class Poor.. and then! Create New Debt for the Town's and City's ALL Across America..
http://goo.gl/HO8Xb JP Morgan says 100’s Town’s & City’s will go Bankrupt at which point JP Morgan or like will sell them off piece by piece.
Then JP / Goldman / which ever AAA Rated Brand Name Bank with a 0% FED Window to draw down from.. will foreclose on the Town's and City's and thusly Privatize all of America.. "We the People" have been shit out!
You want Austerity for the Poor and 0 Taxes for the Rich? You want a Corporate / Privatized America which in short order turns into a Police State...
If you want to live in that kind of Place? Instead of trying to turn America into that Kind of Place? Why dont you get the fuck out and go live in Central / South America and leave America Free!
People are stupid but they are Not! this Fucking Stupid!
Secret Hold On Whistleblower Protection Narrowed Down To Two Senators http://goo.gl/INklc
UBS Whistle Blower in Jail for helping the IRS with over 2,000 Tax Dodgers! http://usat.ly/9vZDNg'Austrian tax evasion whistleblower' dies in Swiss jail http://bit.ly/dhoand
Swiss tax whistleblower to give WikiLeaks new data & in Jail for it http://reut.rs/fDHHJ7No Bankers in Jail, No Tax Dodgers in Jail and Wall Street is Leveraged MORE than before! Tell the Truth? Go To Jail!
FOIA Litigation for Accountable Government https://www.eff.org/issues/foiahttp://www.washingtonpost.com/wp-dyn/content/article/2010/07/28/AR2010072806141.html The FBI wants No Warrants from Judges! A Police State?
"Unfortunately, the PATRIOT Act did not include sufficient checks to protect innocent Americans” Senator R. Durbin (IL) http://bit.ly/guAj0C
2 POLICE FATALLY SHOOT UNARMED MAN - Laying Face Down and Shot in The Back http://www.youtube.com/watch?v=IAHjhtYZpX0
http://goo.gl/qOdLX Citi Bank 2005 Plutonomy Report, Corporate Take Over of the Government thru Lobby Dollars
Louis T. McFadden's Speech In the House of Representatives http://www.afn.org/~govern/mcfadden_speech_1932.html
Bill Moyers at the Howard Zinn Lecture http://www.bu.edu/buniverse/view/?v=20ZaW9PO
Bill Moyers Honoring a Dead Patriot and discussing Plutocracy for 2 hours is NOT! a waste of anyones time I Fucking Promise YOU! if you know everything and Liberal's or Anti-Corporate Slave Masters is Not Your thing.. Power to you and your Nazi fucking friends! until I find you.
As I would not be a slave, so I would not be a master. This expresses my idea of democracy. ~Abraham Lincoln
There is over 12+ Trillion dollars in Americans savings plans, all shapes, and varieties.
If we think that the Hill is not going to SEIZE these before it's over, we are sadly mistaken.
Clampdown! bitchez
Kick over the wall 'cause governments to fall
How can you refuse it?
Let fury have the hour, anger can be power
Do you know that you can use it?
The voices in your head are calling
Stop wasting your time, there's nothing coming
Only a fool would would think someone could save you
http://www.youtube.com/watch?v=x7HwwA2x3Qs
When they kick out your front door
How you gonna come?
With your hands on your head
Or on the trigger of your gun
When the law break in
How you gonna go?
Shot down on the pavement
Or waiting in death row
You can crush us
You can bruise us
But you'll have to answer to
Oh, Guns of Brixton
http://www.youtube.com/watch?v=hiQoq-wqZxg
great tune. alot of their stuff was way ahead of its time (London Calling)
White riot,
I want a riot
White riot
a riot all my own.
Word.
Police and thieves in the streets Oh yeah! Scaring the nation with their guns and ammunition Police and thieves in the street Oh yeah! Fighting the nation with their guns and ammunition From Genesis to Revelation The next generation will be hear me From Genesis to Revelation The next generation will be hear me And all the crowd comes in day by day No one stop it in anyway And all the peacemaker turn war officer Hear what I say
RIP Joe.
London calling to the faraway towns
Now that war is declared-and battle come down
London calling to the underworld
Come out of the cupboard, all you boys and girls
London calling, now don't look at us
All that phoney Beatlemania has bitten the dust
London calling, see we ain't got no swing
'Cept for the ring of that truncheon thing
The ice age is coming, the sun is zooming in
Engines stop running and the wheat is growing thin
A nuclear error, but I have no fear
London is drowning-and I live by the river
http://www.youtube.com/watch?v=FiVvA9YQpiI
Blythe's orgasm's are less and less intense today; just a little clitoral stimulation. After attempting to blow silver, she and her deviant friends are concentrating on keeping gold under 1500; let's see how that works.
Prediction: last ditch effort on Friday re silver; gold at 1600 before July 4.
The conclusion reached is incomplete. Doomsdayers like to make it either or. As we have witnessed over the last two years, there are many creative ways to manipulate things; ie the fed ponzi/QE program etc. There can be derivatives assigned as puts against bond holders taking haircuts. These haircuts are coming. So will higher taxes? No question here. I hate it just like everyone as the government truly is a sucky group of incompetence for sure. So, Haircuts for bondholders, hedges against the haircuts and higher taxes will all work to push the ponzi fiat program much further out.
Remember; "Its the journey thats the thing"
Hmmm - pay more taxes?? or feed the kids (food) and warm the house??? . . .and if I don't pay $80 bucks to fill the tank I can't get to work, and its all moot. Pretty sure taxes will be last of the list.
Still wonder what those who have prepped have forgotten? Too many variables. Just imagine watching serious shit going down on the television in a major U.S. city - like watching Vietnam war on t.v. but here, right here.
sandbags?
"Things are certainly speeding up, and it is my conclusion that we are not more than a year away from the next major financial and economic disruption."
That means DOW rallies at least another 30% this year.
This tree has already been chainsawed through its core.
It's already begun to tilt.
All it's going to take is one good push that is not expected or planned, and that should do it.
The history of the world is full of surprises.
And remember the story of the three little pigs- they could build their house of straw, sticks or bricks.
And I assure you, no longer is the Federal Government of the USA built with bricks.
Lots of straw it is now, sheople.
What kind of collaspe are you talking about? Because the G20 controls the financial markets - therefore any flash crash or other is a reaction from the people on the floor who control the bid/ask spreads. I beleive we are in the midst of the crash already. tens of millions of people and families (women, children, grandparents) pushed into poverty in less than 3 years. Millions of foreclosures sitting vacant because the banks rather hold onto the property then show a loss in a sale. Prices of food and gas with triple digit increases in 3 years time. The fed printing money and buying bad bets of financial institutions. No the collaspe is already here for middle American. Anything that happens in the PAPER Casino is just BS and an excuse for the top 1% to fleece the world some more. Lets be serious here.
The market operators ie banksters are driving the USD index down and pumping up everything else. This process will continue till there are no long positions left in the USD index and no short positions in any of the commodities, stock or currencies other than the USD.
The operators are then likely to take the long position on the dollar and short position on everything else. They would then use their money power to move the markets in the direction which would get them the maximum profit while screwing all other traders / hedge funds / investors.
The stock, commodity and currency exchanges have been reduced to gambling dens whereby the more powerful traders with deep pockets move the markets to maximize their own profits at the expense of the remaining not so powerful players. The big boys have enormous money power to move the markets in the direction which results in maximum profits for themselves. They effectively use the media to lure the other players in the market to a position where they would incur maximum loss.
The markets will fall only when the banksters have eliminated all the short positions and only they themselves have positioned themselves to profit when the market falls
OR
When an unexpected world event catches the banksters with their pants down and the softwares they use to rig the markets go berserk beyond their control.
http://www.marketoracle.co.uk/Article24581.html
One thing I fail to understand is that why most analysts are recommending the purchase of Gold as a safe investment? The problem today is that the price of Gold is not derived by it's physical demand or supply but more by the speculative positions standing long or short on the commodity exchange like any other traded commodity, stock or currency.
The basic mechanism of price discovery (based on demand and supply for actual use) of anything traded on an exchange has been terminally infected by speculators having access to unlimited funds and super fast computers for trading leading to volatile price swings. This has been made worse by the launch of ETFs for anything and everything under the sun by the financial community.
The price of everything including Gold is likely to suffer when the speculators unwind their positions due to some event that they have not anticipated or foreseen.
http://www.marketoracle.co.uk/Article24581.html
Bingo!
And put their wealth where? Geithner's t-bills?
LMFAO!
'Price' in dollars? See thats where you should have taken the fork in the road.
ETFs are just another form of paper.
How is this? How many ounces of gold are there out there as compared to dollars. Divide and figure true price. The price using this calc shows that the true value of gold is much higher. If those dollars ever get 'consumed' in the great debt vortex then the price of gold will go down because there will be fewer dollars. However, the dollar you will get back when you sell your gold at for fewer dollars will buy what it used to buy before all the printing started.
The problem today is that the price of Gold is not derived by it's physical demand
Uh,you sure you want to bank on that?.
The price is based on demand, and physical deliveries, and people dumping US fiat, and purchasing insurance.
Not only the US, which is a small part, but the rest of the world as well, it's being eaten like filet mignon, just as silver is.
If the truth were known, I would wager most here on this site US members especially, are sitting on at least 25-50% of total net worth in Gold & Silver,phys, and best miners stocks.
If your not, your making a sad mistake you will regret later.
Pac Rim,Russia, India, ME countries, and China esp is sucking up the PM reserves as fast as they can,and let no fool try and tell you they are not dumping Treasuries, and shedding dollars.
They Are.
Ah yes Ferguson. An experiment is all this was. Humans in their arrogance, naivety and psychological flaws are assuming this upward trajectory in everything can continue through the continual storms.
It's no coincidence that the crises are becoming more regular and more dramatic than ever.
I doubt Keynes intended his ideas to be used by the entire developed world... at the same time... while they were balls to the wall in an overleveraged, overextended, beastly machine that the economy now is.
The fallout will be brutal.
Dear Tyler,
As we are sure you have many qualities and the fact that it might be just us, we get the feeling that your article carries a not so positive undertone.
Therefore we decided that you may consider your application to become a CNBC reporter not a valid one that meets our requirements.
Greetings,
The CNBC BOOBS Crew
Our government is preparing for the crash. Check this out, the government wants to print 129,000 detainee handbooks.
http://www.youtube.com/watch?v=dfqf-x0uVck&feature=player_embedded#at=57
http://www.youtube.com/watch?v=A5zXU1bQ3tQ
we have reached the point of financial anarchy in many developed countries principally caused by unsustainable total debt loads and regulatory capture. Global financial oligarchies have become masters at sustaining an immoral if not criminal debt load to sustain their revenues. Our markets are being utterly manipulated to the detriment of the people (conservative savers) and the long term health of the country.
Behind this scene are a set of financial instruments resembling neutron super bombs. The current interest rate derivative load in (just) the US is > $150T. If rates rise significantly (to the historic mean) in a short period (a year), the results can be,,,,,,,.
We are sitting atop a 1000 exa ton financial warhead that must be serviced by the ever shrinking, tax paying, middle class if the financial system is to survive.
In the context of the way we (boomers) were raised, there is no normal anymore. Not anywhere. The US can not be "fixed" as economic growth is too weak, government/private debt too large, and global competition for increasingly scarce resources too intense. We are in the eye of the storm, it is moving slowly, and it is strengthening every day.
Prepare.
Still at economic defcon 3.
War children, is just a shot away
"Looovve. Sister. It's just a KISS away, kiss away, KISS AWAY!"
But no, "the card is death" everytime. "Death" it is then "since it's always someone else's."
CM still doesn't understand that Glass-Steagall and wiping out the fraud, is much more appropriate (especially for the people) than budget cuts upon which people need, or at this point [due to the bullshit monetary system run amok] dependent on.
But by all means, cut big defense, wars, and bailouts...at this point that does make up a huge portion of spending. This should satisfy the 'cutters' and they need not know it wasn't the most crucial part of the exercise....in pure 'oh grandpa' fashion.
Why CM still believes that 'cutting' will accomplish anything is beyond me. He still suffers from the propaganda he learned in years gone by. Newsflash Chris, cutting all social spending to 0 will still result in the same endgame. (and no there is no middle spot where you can avoid it by say cutting 25 percent, or 50 percent...you'll just be fucking over people to support the faud.) Which at some point why would anyone morally or ethically say it's ok to sacrifice any common man for this ponzi?
Wake up CM, you still have your head in the sand about some things, which detract from the more salient parts he expresses. You owe it to your readers since they value your viewpoint so much. Don't take them down a path of sophistry, where if we just made the cuts, somehow it would make a difference. Cutting won't make a difference. Plus, beyond this point, you should realize that whatever is cut, will be seen by the banksters as more leeway to steal. Cut 500 bill, we can steal an extra 500 bill.
"Predictions are tricky, especially about the future".
Sorry about this, but the above quote is wrongly attributed to Yogi Berra. The saying is really a Danish saying: "Det er svært at spå, især om fremtiden", probably from Markus Ronner, 1918.
http://chaosbook.blogspot.com/2010/06/lundskovdk-citater.html
The Mayan calendar stops at December 21st, 2012. We are right on schedule! Damn they're good.
I concur, pretty impressive. 2012: 100th anniversary of the RMS Titanic, ties in quite nicely. 2013: 100th anniversary of the Federal Reserve Act....might be right on time too..
Hey dumb ass white mofo's that fuked my Injun Ancestors to death 100's of years, you mofos gunna pay the piper on December fukin 20th 2011. Ha ha all the fukin gold and your ass gonna be grass anyway....
Whaa..? Cpt. Jack Sparrow..... RU drinking Captain Morgan? Because you sound like you don't know jack....
now we know where the rum's gone..
but..but.. state unemployment dropped today......
All this talk of 'bring it on!' and guns. Are you guys really serious, or just spouting macho BS? Odds on, you'd be dead, just like millions of others.
Be careful what you wish for. Be VERY careful.
especially since your data in now available courtesy of ZH.
so we should just sit around in a drum circle and wait for our fate, like so many raindrops, to fall?
no thank you. I played by all the damn rules and payed my fair share of taxes and more. I didn't wish for my 401k to evaporate. i didn't wish for parasites to infect the upper and lower tracts of society and wreck the whole fucking thing. But if it comes to pass, and all bets are off, I expect the whole crew will act up.
and I'm sure as hell not going to miss out on that.
.
http://eroticattic.com/?p=955
IMHO, the comparison of Chinese Real Estate market to Real Estate market of any developed country should be done very carefully. At least, when it comes to residential Real Estate. To the best of my knowledge, residential properties in China are primarily bought with cash, and there is no Real Estate tax. Given that, Chinese Real Estate market should not follow the same path as Real Estate market of a developed country.
My nomination for the ZeroHedge theme song (from 1966):
http://www.youtube.com/watch?v=TiVFfOOm_GI
***********************************
You know we gotta sit around at home
And watch this thing begin
But I bet there won't be many left
To see it really end
'Cause the fire in the street
Ain't like the fire in my heart
And in the eyes of all these people
Don't you know that this could start
On any street in any town
In any state if any clown
Decides that now's the time to fight
For some ideal he thinks is right
And if a million more agree
There ain't no great society
As it applies to you and me
Our country isn't free
And the law refuses to see
If all that you can ever be
Is just a lousy janitor
Unless your uncle owns a store
You know that five in every four
Just one amount and nothin' more
Don't watch the rats go across the floor
And make up songs about being poor
Blow your harmonica, son!
*******************************
Junking Zappa is just plain wrong.
Another ZH sponsored doomer just BFT like the bears say....
As a fan of indie heavy Metal music, touring bands these days are really struggling.
If you think being on tour for 9 months a year is a great lifestyle, just try it and see how you like being cooped up in a sweaty tour bus with a bunch of guys/gals you gradually come to hate, living out of cheap hotels, eating crappy food, and never seeing your girlfriend /wife/ kids. (I toured with a few bands as a merch girl, I got to see first hand just how much these artists not only to struggle day-to-day, but also to eek out a living)
Most bands are entitled to 12% (industry standard) of album sales, say around $1 per CD, as part of their standard royalties. But before a band receives any of this, they must use this 12% royalty payment to PAY BACK their affiliated label's expenses incurred to finance the band's promotions and recording costs. A record label is like a bank issuing a loan to a band, in that all studio costs, music video costs, TOURING expenses, every single dollar given to the band by the label MUST be paid back from that 12% of royalties paid out. For most metal bands nowadays, an album costs $20,000+ to record (indie average), $10,000 for just 1 music video, $1000-5000 for radio promotion, and lets not forget any plane tickets, instrument, misc costs involved. Touring itself is quite dynamic depending on size of the band, but a typical tour bus is close to $1000 a day and a small 3-4 man crew will easily double or triple that. A 6 week tour easily could cost 50,000 and probably more now with gas. Larger bands generally make 2000 a night but still are losing money.
Generally speaking, a metal band will need to sell 75,000-100,000 albums before breaking even, that is before they START seeing any take home profit from album sales. Then lets not forget you split that profit amongst the 5 guys in a band. Oh, and don't forget you're 6th member, MANAGEMENT, who will often take 20% of ALL revenues the band makes (merch included).
A mid-level metal band, when all is said and done, probably enjoys a meager $30,000 a year per person after all expenses are paid and all merch is sold, and thats being generous, it could be much less (and yes I'm factoring in mechanical/composer royalties). Don't forget they are a TOP SELLING metal band nowadays too. Lesser knowns make peanuts, or literally nothing at all.
Metal musicians really are bums, they don't just look like it for show. That or they have other means of generating profit (some have studios, small small few have w/legit endorsements and not "artist deals" from brands). Many metal musicians live either in 1 bedroom apartments with 6 people, or live with their parents into their 30's to accomodate the musician lifestyle.
And its only getting harder too. Believe it or not, Cotton is a very important commodity to touring bands, as T-Shirt merch sales are mostly responsible for taking care of day-to-day living expenses (fuel, food, etc). With the insane ramping in the price of cotton, bands can no longer offer t-shirts under $30 dollars, making it just about impossible for the younger fans to support their favorite artists by wearing their attire.
I remember back in 2008 when several bands I loved for many years broke up due to the cost of gasoline alone! Now I am seeing this replaying it self all over again.
It takes an example like this to really appreciate just how destructive the FED's inflationary monetary policy destroys the livelihoods of good, honest, hardworking people very much dependent upon stable prices and predictability.
Benocide must go. He really is facilitating economic destruction world-wide
Interesting insight. My first concert was Metallica (Master of Puppets) 1986.
sweet, would love to have seen them in the 1980s (born in 1990).
Out of the Big Four, Slayer is probably my favorite though..
It doesn't get more American than this right here:
http://www.youtube.com/watch?v=-GJpcorGEps
Since you are such a young lady I am really interested in who you think the big 4 are?!
And speaking of Slayer while certainly not "new" this is my alltime favorite of theirs.
PAYBACK
You need to take a closer look at me
Cause I was born to be the thorn in your side
No matter what you think you're gonna see
You never wanted this barrage of fucking pride
You don't want none of me
You've got a fucking catheter in your brain
Pissing your common sense away
When you draw first blood you can't stop this fight
For my own peace of mind - I'm going to
Tear your fucking eyes out
Rip your fucking flesh off
Beat you till you're just a fucking lifeless carcass
Fuck you and your progress
Watch me fucking regress
You were made to take the fall - now you're nothing
Payback's a bitch motherfucker
You only live to be a parasite
Your life must suck when nothing's going your way
Everything melts away before your eyes
You're just a punk that doesn't have the sense to get away
Get the fuck away
You've got a fucking catheter in your brain
Pissing your common sense away
When you draw first blood you can't stop this fight
For my own peace of mind - I'm going to
Tear your fucking eyes out
Rip your fucking flesh off
Beat you till you're just a fucking lifeless carcass
Fuck you and your progress
Watch me fucking regress
You were made to take the fall - now you're nothing
Payback's a bitch motherfucker
I will never become your fucking scapegoat
I don't know how it feels to come up short
I only want vengeance
To come shining down on me
I don't want you to die
Before I get the chance to kill you myself
You've got a fucking catheter in your brain
Pissing your common sense away
This is for the mindfuck
This is for the hell of it
This is for me- I'm going to
Tear your fucking eyes out
Rip your fucking flesh off
Beat you till you're just a fucking lifeless carcass
Fuck you and your progress
Watch me fucking regress
You were made to take the fall - now you're nothing
Tear your fucking eyes out
Rip your fucking flesh off
Beat you till you're just a fucking lifeless carcass
Fuck you and your progress
Watch me fucking regress
You were made to take the fall - now you're nothing
Now you're nothing
I'm an Iron Maiden man myself.
BIG 4
I saw them in '86 too. Imagine that. Went to see the opening act actually--"The Southern Death Cult." The lead singer was so drunk he almost "rocked himself" off the stage. Was gonna leave that DC arena pissed OFF and then....lotto fun!
The world really has changed. There used to be a major fringe benefit for band members called groupies...
she said she felt sorry for them. Me? I've been on the road for years now. Got a bunk bead for my back seat....bizness up front, party in the back!
BS , ........ Timmah will save us.
Well I'm definately having fun this week.
so u.s. debt outlook downgraded, treasuries up, and world central banks continue to state they will invest in the u.s. http://www.cnbc.com/id/42656254
maybe the rest of the world is outside the matrix and Zhers are stuck inside....pure madness!
Here's an interview with swiss based author Myret Zaki (The End Of The Dollar). She talks about America, Europe and the Swiss franc.
In German: The dollar will die, long live the euro
http://www.swissinfo.ch/ger/Wirtschaft/Finanzsektor_im_Umbruch/News,_Res...!.html?cid=30010024
Meanwhile, the top German market analyst said "We are approaching the end".
The Fed is #ucked. They can't raise interest rates with over 50% of all government paper due within 3 years. The interest expense alone on rolling over this debt will go hyperbolic.
On another note, Geithner this morning on CNBC sounded like the school geek trying to convince the student body that he would make a good school president. He wasn't as arrogant as he usually today.
Can everyone please keep it down around here while I play the slots.
I almost had 3 PIIGS in a row.
The Corruptocrats may be counting on QE3 to put off the big collapse until the Clueless One has been re-elected. But the chaos has a time table all its own. I expect the chickens will be perched on the chicken house roof before the primaries start. They may want to bring it all down so they can save us from capitalism with a brilliant socialist utopia, but too many been der done dat. Hell, we could go really radical and go for a free market, honest money and equal justice under the law. Crony capitalists won't like it either. One can dream.
Congratulations Turd. By the way, those SNL skits that contain you're avatar are outstanding. Burt Reynolds and Sean Connery are just too funny.
not to mention the 700 trillion in deviratives out there floating around. let us not forget about that. add these possible debts to these balance sheet debts accumulated and now we see that the emperor has no clothes...
http://seekingalpha.com/article/131597-derivatives-a-700-trillion-bubble...
HPD, The whole deriratives scam scares the shit out of me. When i need grounding, I slap a Morgan silver dollar on a table, the ring hangs in the air for seconds, very real and tangible. The real fucking deal.
You bastard.
I only just scrubbed that concept from my memory in order to sleep at night.
Now I have to start all over again.
I still believe the Fed will back off of QE, then use the resulting shock to the markets to justify QE3.
Rinse, repeat....
The economy needs more credit to function, and they can't rely on politicians to do this for them.
Another useless article and comments galore on someone pontificating about something they have no idea on how it will be resolved. everyone is a politician nowadays....all words and no action.
Kettle, meet pot.
It looks more and more like the CB cartels is just putting the sovereigns and the little people on the hook clearing the decks for the new world order and the new currency.
They'll have to cause a lot of hardship to get people to go along with their program(s) but nothing is beneath them.
I think there will be a NWO but not "the NWO":
http://africa.ibtimes.com/articles/127505/20110328/china-s-stance-in-libyan-issue-and-impacts-on-oil-supplies.htm
Not sure how it will play out though.
once upon a time........
PRESS RELEASE – BOSTON APRIL 20
National Guard units seeking to confiscate a cache of recently banned assault weapons were ambushed on April 19th by elements of a para-military extremist faction. Military and law enforcement sources estimate that 72 were killed and more than 200 injured before government forces were compelled to withdraw.
Speaking after the clash, Massachusetts Governor Thomas Gage declared that the extremist faction, which was made up of local citizens, has links to the radical right-wing tax protest movement which began in December two years ago. This radical group is also known as “Tea Party”, leaders of which Gage alleged were behind yesterday’s events. Gage also blamed the extremists for recent incidents of vandalism directed against Internal Revenue offices. The Governor and other governmental leaders, described the group’s organizers as “criminals”. The Governor early this morning issued an executive order authorizing the summary arrest of any individual who has interfered with the government’s efforts to secure law and order.
The military raid on the extremist arsenal followed a wide-spread refusal by the local citizenry to turn over recently outlawed assault weapons. Gage had issued a ban on military style assault weapons and ammunition earlier in the month. This decision followed a meeting earlier this month between government and military leaders at which the Governor authorized the forcible confiscation of illegal arms. One government official, speaking on conditions of anonymity last night, pointed out that “none of these people would have been killed had the extremists obeyed the laws and turned over their weapons voluntarily.”
In recent weeks, raids by Government troops had earlier succeeded in confiscating a number of large supplies of outlawed weapons and ammunition stored in other locations elsewhere in Massachusetts. However, troops attempting to seize arms and ammunition in Lexington and Concord met with resistance from heavily armed extremists who had been tipped off regarding the government’s plans.
During the early morning’s tense standoff in Lexington’s town park, National Guard Colonel Francis Smith, commander of the government operation, ordered the armed group to surrender and return to their homes. The impasse was broken by a single shot, which was reportedly fired by one of the right-wing extremists. Eight civilians were killed in the ensuing exchange. Ironically, the local citizenry blamed government forces rather than the extremists for the civilian deaths. The government forces then moved on to nearby Concord where further attacks were made on them. Before order could be restored, numerous armed citizens from surrounding areas had descended upon the guard units. Colonel Smith, finding his forces overmatched by the armed mob, ordered a retreat during which the government troops continued to be fired upon by the extremists clear back to the safety of Boston.
Governor Gage has called upon all loyal citizens to support the state/national joint task force in its efforts to restore law and order. The Governor also demanded the surrender and arrest of those responsible for planning and leading the attack against the government troops. Among those wanted are Samuel Adams, Paul Revere and John Hancock, who have been identified as “ringleaders” of the extremist faction, remain at large at this time.
April 20, 1775
Bears getting destroyed after hours.
And many guys scoffed at the idea that another intermediate low was in place the last few days.
...and this is surprising how, again?
I dont think crashing housing prices are necessarily bad for the economy, overpriced housing tends to be empty and creates a huge drag on the economy as everybody divertd everything they make towards house payments, when housing is affordale the economy tends to flourish, when prices crash people move in & buy stuff and have disposable income investment.
The technology of printing press will come to rescue.
any chance this guy might start off the next one,
First, the good news: ???
"With the Fed potentially backing away from the quantitative easing (QE) programs in June, the US government will need someone to buy roughly $130 billion of new bonds each month for the next year. So the question is, "Who will buy them all?"
Right now, that is entirely unclear."
Are you freaking kidding me?
The entire and only purpose of QE1/2/3/4/? is to buy the unbought U.S. "Treasuries."
Read "Currency Wars for Dummies":
http://www.rense.com/Currency%20Wars%20For%20Dummies.pdf