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"The Pig In The Python Is About To Be Expelled": A Walk Thru Of China's Hard Landing, And The Upcoming Global Harder Reset
By now everyone knows that the Chinese credit bubble has hit unprecedented proportions. If they don't, we remind them with the following chart of total bank "assets" (read debt) added since the collapse of Lehman: China literally puts the US to shame, where in addition to everything, the only actual source of incremental credit growth over the same time period has been the Fed as banks have used reserves as margin for risk purchases instead of lending.
Everyone should also know that like a metastatic cancer, the amount of non-performing, bad loans within the Chinese financial system is growing at an exponential pace.
Finally, what everyone learned over the past month, is that as the two massive, and unresolvable forces, come to a head, the first cracks in the facade are starting to appear as first one then another shadow-banking Trust product failed and had to be bailed out in the last minute.
However, as we showed last week, and then again last night, the default party in China is only just beginning as Trust failures in the coming months are set to accelerate at a breakneck pace.
The $64K question is will the various forms of government be able to intercept and bail these out in time, as they have been doing so far despite their hollow promises of cracking down on moral hazard: after all, everyone certainly knows what happened when Lehman was allowed to meet its destiny without a bailout - to say that the CNY10 trillion Chinese shadow banking industry will not have far more dire consequences if allowed to fall without government support is simply idiotic.
But what could be the catalyst for this outcome which inevitably would unleash the long-overdue Chinese hard landing, and with it, a new global depression?
Ironically, the culprit may be none other than the Fed with the recently instituted taper, and the gradual, at first, then quite rapid unwind of the global carry trade.
Bank of America explains:
QE and the Emerging Markets carry trade
The QE channel has worked through Emerging Markets and China is a key vehicle. By lowering the US government bond yields to a bare minimum, and zero –ish at the short end, a search for yield globally ensued. Emerging market banks and corporates have gone on an international leverage binge, yet another carry trade, the third in 20 years. The first one was driven by European banks, financing East Asian capex – that ended in 1997. The second one was global banks and equity-FDI supporting mainly capex in the BRICs. That ended in 2008. This time, it is increasingly non-equity: commercial banks and more importantly, the bond market – often undercounted in the BoP and external debt statistics that conventional analysis looks at.
Chart 9 shows the rise of EM external loans and bond issuance (both by residence and nationality). Since, end-3Q2008 to end-3Q2013, external borrowing from banks and bonds has risen USD1.9tn. Bank loans have risen by USD855bn and bond issuance in foreign currencies by nationality is up USD1,042bn. In the prior five-year period (i.e. end-3Q2003 – end-3Q2008), forex bond issuance rose only USD432bn. Clearly, the importance of external bond issuance is rising. See Table 5 for details.
In China, since, end-3Q2008 to end-3Q2013, outstanding external borrowing from banks and bonds has gone from USD207bn to USD849n – a net rise of USD655bn. Outstanding bank loans are up from USD161bn to USD609bn – a net rise of USD464bn. Bond issuance in foreign currencies by nationality is up from USD46bn to USD240bn – a net rise of USD191bn. In the prior five-year period (ie, end-3Q2003 – end-3Q2008), forex bond issuance rose only USD28bn in China. Clearly, the importance of external bond issuance is rising in China.
There is more to this story.
As mentioned earlier, for externally-issued bonds, USD1,042bn has been raised by the nationality of the EM borrower since end-3Q 2008, but USD724bn by residence of the borrower – a gap of USD318bn, or 44%. This undercount is USD165bn in China, USD100bn in Brazil, USD62bn in Russia, and USD37bn in India. The carry trade this time around was helped substantially by access to the bond market, especially from overseas affiliates of EM banks and corporations.
There are a lot of moving parts in the balance of payments that finally affect the change in international reserves at any EM central bank – eg, the current account, portfolio equity investment and direct equity investment, and debt flows – both from the bond market and lending from banks. We focus on the link between these debt flows and the international reserves in China. As Table 5 below shows, China’s external debt – from bond issuance and forex borrowing from banks – rose USD655bn during 3Q08-3013.
We posit that this large rise was in part driven by the carry trade offered up by QE – China banks and corporates issued substantial forex-denominated bonds, and borrowed straight loans from international banks. We recognize the caveat that correlation does not imply causation. The USD655bn rise in China debt issuance is highly correlated to the Fed’s balance sheet since late-2008. As Chart 11 shows, the rise in China debt issuance of USD 655bn has (along with FDI and the C/A surplus), boosted international reserves by USD1,773bn since late-2008. Also, as Chart 11 shows, the USD1,773bn rise in China international reserves mirrors the rise of USD2,585bn in the EM monetary base. Lastly, the rise of China’s monetary base of USD2,585bn correlates well with the USD10.9tr rise in China’s broad money expansion.
As the Fed tapers, and the size of its balance sheet stabilizes/contracts, we should expect this sequence to reverse. Confidence is a fragile membrane. Not only does the Fed’s balance sheet matter as a source of funds, but we believe so does the attractiveness of the recipient of the carry trade – and the trust in its collateral. As Gary Gorton puts it...
The output of banks is money, in the form of short-term debt which is used to store value or used as a transaction medium. Such money is backed by a portfolio of bank loans in the case of demand deposits, or by collateral in the form of a specific bond in the case of repo. The backing is designed to make the bank debt as close to riskless as possible — in fact, so close to riskless than nobody wants to really do any due diligence on the money, just transact with it. But the private sector cannot produce riskless debt and so it can happen that the backing collateral is questioned. This typically happens at the peak of the business cycle. If its value is questioned, it loses its “moneyness” so no one wants it, and cash is preferred. But as we know, if everyone wants their cash at the same moment, their demands cannot be satisfied. In this sense, the financial system is insolvent. (interview with the FT)
What makes sense for an individual carry trade - borrow low, invest at higher rates - falls prey to the fallacy of composition, when too many engage in the same carry trade. And eventually question the underlying collateral, now huge, and potentially suspect. China is a case in point. If our colleagues David Cui and Bin Gao are right, the trust sector in China could create rollover risks that reverse a gluttonous carry trade within China, but partly financed overseas. In China's case, this trade was between low global interest rates, low Chinese deposit rates, expectations of perpetual RMB appreciation on the one hand, and higher investment returns promised by Trusts on the other. A part of the debt funds raised overseas, we suspect were put to work in this Trust carry trade. The HK-based banks are big participants in intermediating the China carry trade - as Chart 12 shows, their net lending to China went from 18% of HK GDP in 2007 to 148% in late-2013.
There are always fancy names given to carry trades – financial liberalization of capital accounts, the Bangkok International Banking Facility, currency internationalization, etc. We remain skeptics of these buzzwords.
The potential consequences of Trust defaults and a China carry trade unwind
1. If the EM carry trade diminishes as a consequence of a changed Fed policy and/or less attractive risk-adjusted returns in EMs as collateral quality is questioned, the sources of China’s forex reserve accumulation will need to change. Perhaps to bigger current account surpluses, more equity FDI and portfolio investment through privatization and more open equity markets. If that does not happen, expanding the Chinese monetary base might require PBOC to increase net lending to the financial system and/or monetize fiscal deficits (this last part has not worked so well in EMs).
2. Potential asset deflation is a risk, as the carry trades diminish/unwind. Property prices are at risk – the collateral value for China’s financial systems. This is not a dire projection – it simply seeks to isolate the US QE as a key driver of China’s monetary policy and asset inflation, and highlights the magnitudes involved, and the transmission mechanism. Investors should not imbue stock-price movements and property price inflation in China with too much local flavor – this is mainly a US QE-driven story, in our view.
3. Currently, China’s real effective exchange rate is one of the strongest in the world. Concerns about China’s Trust sector, and its underlying collateral value, sees some of this carry trade unwound, the RMB could be under pressure.
4. Given HK’s role in the China carry trade, HK property prices and its banking system should be watched carefully for signs of stress.
5. UK, US, and Japan banking systems have been active lenders to China since QE. They should be on watch if the Trust rollover risk materializes and creates a growth shock in China. See Chart 15.
6. Safe haven bids for DM government bonds, overseas property and precious metals might emerge from China.
Could the party go on? Yes, if for some reason a significant deterioration in the US labor market, or a deflationary shock from China, or any other surprise that could lead to a cessation of the US tapering could prolong this carry trade. This is not the house base case. We believe it is better to start preparing for a post-QE world. As one of our smartest clients told us: “the main theme in the past five years was QE. If that is coming to an end, investments and themes that worked in the past five years must therefore be questioned.” We agree.
* * *
Yes, Bank of America said all of the above - every brutally honest last word of it.
The question, however, in addition to "why", is whether the Fed also agrees with BofA's stunningly frank, and quite disturbing conclusion, perhaps finally realizing that aside from the US, the biggest house of cards that would topple once the "flow"-free emperor is exposed in his nudity, is that of the world's largest "growth" (and credit) dynamo of the past two decades - China. Because, as noted above, if Lehman's collapse was bad, a deflationary collapse brought on by Chinese hard landing coupled with a full unwind of the global carry trade, would be disastrous and send the world into a depression the likes of which have never before been seen.
Finally, for those who want the blow by blow, here is BofA's tentative take of what the preliminary steps of the next global great depression will look like:
If we do experience a sizable default, the knee-jerk market reaction will be cash hoarding since it will strike as a big surprise. Thus, we expect the repo rate to rise first, while the long term government bond would get bid due to risk aversion flows.
However, what follows will be quite uncertain, aside from PBoC injecting liquidity and easing monetary policy to help short term rate come down. It has been proven again and again the Chinese government will get involved and be proactive. The bond market reaction will be different depending on the government solution.
Alas, at that point, not even the world's largest bazooka will be enough.
At this point one should conclude that reality - through massive, unprecedented liquidity injections - has been deferred long enough. It is time to let the markets finally return to some semblance of uncentrally-planned normalcy: there is a reason why nature abhors a vacuum. Even if it means the eruption of the very painful grand reset, washing away decades of capital misallocation, lies and ill-gotten wealth, so very overdue.
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Well, think back to 2010 (roughly) when there was a daily progression of graphs showing the MBS python would eventually blow up _____________ (fill in bank name or "the Fed" here).
Bad loans aren't bad as long as TBTF banks or the CB itself owns them. They just disappear into the infinite vortex.
For a little while they will be buried...They act as a Time Bomb.
When they reappear it will be rather..oh...shall we write...destructively spectacular.
It cannot go on ad infinitum...
We are doing this TO CHINA through our taper.
Just how will they respond to this assault? WE are only destroying the fragile economy to attempt to save the US Dollar. Just what do you think that they will do to this attack. (Of course what we are doing is a response to their dumping of US Bonds, en masse, to Belgium in December.)
The Currency War is escalating rather rapidly.
I know that you know this. You are here. You cannot stand what we write. You attempt to argue against it.
Deep down you know. You may not want to accept it. But you know.
Siding with you here...
"We are doing this TO CHINA through our taper."
I think that it's just a consequence of trying to stay alive, not that it's necessarily a high-level intention (or was to begin with).
At some point the Fed will be full and if China's unable to absorb USTs... So, no, I don't think that US "leaders" are excited about this at all: I think that most realize that this is nothing more than a contest to see who can wind down without having their citizens ripping their govts apart at the seams.
Wrapping back around... China set themselves up for a lot of this, they in essense ALLOWED it, in which case I don't see it so much as something that is "being done" by an outside force.
China set themselves up for a lot of this, they in essense ALLOWED it, in which case I don't see it so much as something that is "being done" by an outside force.
Yes. There are always two parties involved in a Fraud.
Both dishonest parties believe that they can out hoodwink the other. Both parties are complicit in the fraud or dishonesty.
Maybe this Down to Earth story will shed some light...
This Criminal was in my home, yesterday, showing me some Costume Jewelry. (Utter trash.)
His story was fascinating. He was ridiculing another Criminal for his style of crime.
Okay. I am all ears. Yeah...Right...
Anyway this Criminal which he was ridiculing told me that there was a "Mark" over at the Neighborhood Bar who wanted Drugs. So this mark handed $50 to the other criminal...a thief...who then absconded with the Mark's money and did not deliver the Drugs.
The next time that the Mark saw the thief he asked what had happened and was given a Bullshit Story.
So the Mark, once again, handed this thief another $50 to buy some Drugs, And once again the thief takes off with the money and does not deliver the Drugs.
Now you'd think that it would end after the second time?
It did not.
It happened a THIRD TIME.
So this Criminal guy, who is telling me the story, told me that he got a little bent at the thief who was walking off with the Mark's cash.
(Of course I am laughing silently at this. As if there is an Unwritten Code of Criminal Ethics out there somewhere...)
The thief uses, AS HIS JUSTIFICATION OF HIS FUCKED UP BEHAVIOR, that the Mark already knows that he is going to rip him off. And if the Mark wants to continue giving him the Cash then he will just continue to steal the cash.
Now that is a mundane look at the Criminal Mind. (Do not be too concerned about me...I am armed to the teeth and I can handle these clowns. There are surprises awaiting nefarious actors all over my place.)
But NOW TO THE POINT...
But just because China allowed it does not mean that it is IN ANY WAY, SHAPE, MANNER, OR FORM, JUSTIFIABLE.
The United States Government is no better than that common thief which I just described.
(And as for that fuckin' bar??? One of my favorite fantasies to ruminate upon is to place a small bomb between the Gas Main and the Building while the bar is loaded with all of those criminals and watching them burn alive while the place burns to the ground. What a bunch of God Damned, Drug Addict, Criminal losers!!!)
Does this mean Chinese mail order brides will be cheaper?
Cheap is so pejorative when applied to women.
Let's stick with "such a bahgain."
The whores here in Thailand are more humble. Maybe that foretells the pin that pricks the buble?
Mail order bribes? How progressive! ...oh..."brides."
"Does this mean Chinese mail order brides will be cheaper?"
FilthyHabits gets right to the crux of the matter.
My answer would be, "Only when denominated in gold." (Or possibly water buffalo.)
Honest to God Tyler(s)......I think information like this is not only a Godsend for people who actually deserve to be able to get out when they need to ahead of time.....( and inversely NOT get in until after the bloodbath )......but to force the hands of the Masters of the Universe.
For when they KNOW that this is now MORE common knowledge ( can't really call it common knowledge as 99% of the sheeple don't get it )....they will do whatever it takes to keep the sham alive. Not that they are not doing it now.....they will just go full retard even MOAR. Which of course will extend the REALLY HARD reset until later......( 2020 give or take )....but will make the colon blow, although messier......necessarily complete. Hopefully to such a degree that it sears into the minds of even the lumpiest of lumpen this shit has to NEVER COME BACK AGAIN......along with the Masters of the Universe.
2020! That's, like, 6 more years!!
Are we talking simple anal leakage or pure explosive diarrhea?
projectile JPM
Yeah....six more years....give or take a couple. That's my back of envelope guess based on a holistic look and interpretation of many factors such as Peak Cheap Energy REALLY rearing it's head from 2020 on out, the Age Wave.....( every industrialized countries' aging and non-productive population ).....total global debt and more importantly the interest that is paid on said debt, cultural chaos and political unrest, particularly in areas with the most stores of natural commodities needed for the high tech, magical lifestyle, China's debt and corruption and the increasing need in the future to spend big military dollars by western nations.....(but mostly us in the U.S.)......to counter that, the worldwide continuation and increase of corruption from the halls of power and finance down to the public, and quite simply the popping of the most massive bubble that mankind has ever and will ever see......namely the bubble that started with the Tech Meltdown in 2000. That was NOT JUST a meltdown of a financial mania driven by the lust of tech companies and the magic they produced (or as we found out....the empty alchemical promises most were spouting ).....but it was when the combination of the beginnings of the Age Wave, Peak Cheap Energy and the weakness of the Global Financial Ponzi began to suck the sea from the shoreline....so to speak.
Now the rest of the Bubble is simply trying to stop the approaching tsunami that the receding sea indicates.....which included the Housing Scam and now includes the Money Printing and Money Laundering Scam....( QEternity, MBS buyback, Treasury buybacks and washings...etc.) along with Student Loans and Obamacare Payout to Big Insurance Scheme, Global Wage (Slave) Arbitrage......not to mention variations of all this in the rest of the industrialized world....particularly China's roads and cities to nowhere and Abenomics in Japan and the schlerosis in Europe.......all of this I beleive can still be floated by the Masters of the Universe until around 2020 give or take.....until Nature....( ie. Age and Cheap Energy ).....not only pops the bubble but flies a 747 right though it. Oh....almost forgot......during this year or soon into 2015......every penny of extra debt this country generates not only DOES NOT generate any new income (GDP) for the U.S. but actually begins to drag the economy backwards......like a black hole.
So.....yes.....anal leakage continues......then perhaps a blockage when the money markets freeze when they realize that the creation of new debt (money) will not only NOT bring the future utopia forward.....(which all debt does.....allow us to time travel and bring forward things we want and / or need to buy now instead of waiting and saving up for )......but the debt that has already been issued will never get repaid.
Then you have a Strombolian type volcanic explosion.
In other words......shit, meet fan.
Oh shit, they're going to need................
ALL THE GOLD!!!
I fail to see how banks could be a problem. Don't count the losses, problem solved. It's not like they will ever be audited and placed into receivership.
Good point.
It'll change only when their "club" becomes so small that the rest of the world is totally disconnected and no longer feeds it.
Again, the statement about all being a matter of "confidence" (in the System) is quite telling. The days of being able to create that sense of "confidence" is rapidly waning,
It's all confidence. Debts/obligations are significantly higher than where they were just a few years ago. We've been told TO OUR FACE that any and every "security risk" insolvency can be papered over... The last 5 years has shown it... Just reinforces the fact that this game continues only cuz PEOPLE BELIEVE.
What's happening worldwide isn't from a breakdown in any particular policy or political economic reaction. What's happening is the breakdown of the labor-wage-consumption model and it's inability to grow at a pace needed to service previous obligations.
Governments are funneling $trillions attempting to subsidize the lack of consumption growth... The vital cog in our economic model needed to justify the model itself, let alone justify the very existence of the controlling institutions themselves.
But it won't matter. It won't matter because the system itself has gone full circle and advanced the very technology that now allows us to actually re-evaluate labor. And unlike fiat and confidence, this can't be faked. The time for them to pull the plug will come through false flag or some other manipulated swan that could effectively transfer blame.
Making a difference will mean more THEN than anything we can do now.
I like smart people. And you's smart! :-)
Yep, ability to service more and more debt with less and less. Geez, it always worked in the past!
I wish that folks would just start hammering on every politician, every "leader" and every "talking-head" about what it will mean when growth is no longer possible. Not like there's anything that they can do about it (which they cannot), just like to make people squirm...
No kidding the debate is always "where can we find growth" and then two idiots exchange their ideas, "politically motivated NOT scientifically motivated" to address the problem by either growing industry in hopes of labor creation/consumption growth or subsidizing the lack of consumption directly. And by declaring our financial institutions as systemically vital unable to destroy real mal-investment, any relief that could of existed for a period of slower growth is impossible. So the pace must be maintained or the consumption subsidized outright. One or both. Period.
And to them it's always temporary... Emphasized. But this isn't possible. Technology is and will continue to erase more labor than the economy will be able to create. Irony is that we, as humans should want this... The entire point of technology is to make our lives easier... Not to maintain the desired effects of some antiquated formula that assumes humans place bricks on mortar. Don't even mention energy consumption rates should growth actually meet needs. Nobody wants to address that shit. To them 200 more plastic water bottles washing up on a deserted island is temporary as well. As if it'll somehow stabilize or some shit LOL.
Keeping this formula alive would require dumb shit like paying people to think into their GOOGLE hat... So google scans it and calls it proprietary in exchange for a subsidy wage. Intellectual property is toast regardless. OR simply going full on Luddite.
None of this can ultimately be ignored and both parties are being exposed as incapable of addressing them. And they CANT properly address them because their very existence requires the model succeed.
The big squirm.
I fail to see how banks could be a problem. Don't count the losses, problem solved. It's not like they will ever be audited and placed into receivership.
I will agree that they will not be audited or placed into receivership. And as for the public at large they have no clue about the gross imbalances that exist. The public will not ever care to know.
Just because YOU fail to see it as a problem does not make it a NON PROBLEM. It is obvious that you are not a banker. (That is good.) Neither am I a Banker.
But PLACING YOURSELF IN A BANKER'S SHOES...
If THEY KNOW then they are not able to TRUST OTHER BANKERS. This SHATTERS THEIR CONFIDENCE in the solvency of their colleagues.
Thus what happens is that a Banker will be far less likely to LOAN or EXTEND CREDIT to another Bank.
This FREEZES THE CREDIT MARKETS and we are back to September, 2008.
Governments, this time around, will not be able to recapitalize them.
Thus the Game ends badly.
Can you see that?
That's the correct answer. it's not the "runs on the Banks" that you see on TV where people are lined up outside the doors in the morning that matter; it's the Bank-on-Bank runs that matter. And basically, that is the most likely mechanism for failure of the "system". By the way, Europe has not re-capitalized it's Banks; it's playing "let's pretend" full time.
thank the gods.
- Ned
lehman?
Corzine, the honorable.
That's why you're hearing rant like "short & sharp wars."
Get your fortune cookies while you can!
You laugh, but if there's an embargo on cashew chicken and soy sauce, I'm gonna be pissed.
(and if I had to eat like a real Chinese, I would be really pissed.)
And here is the EPICENTER of the INSANE ASYLUM: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&ved=0CEMQ...
And here's the "video feed" (disabledvet sytle):
http://vimeo.com/48015450
Chuck Jones really was the best...
True, but Fred Quimby was right up there too.
China is just having fun making its baby oligarchs squirm around and eat eachother. They're fine. They have PLENTY of CASH and GOLD and LABORERS.
And when wars break out they'll be faced with resource shortages.
is this the line for online registration?
With a country like China, and perhaps any country, this debt problem can easily be solved by inculcating a 'healthy' amount of nationalism and engineering a sufficient number of demons-foreign and domestic.
'Proud people of the Great nation of China. We have many unseen adversaries who would wish only to see our society fall to ruin. Using financial wizardry they have attempted to cripple our economy so as to divide this great people. I urge you to stand strong in the face of adversity and together we shall triumph over our enemies."
Something like that...
No resources.
Next...
"When there's food on the table, there are many problems. When there's no food on the table, there is one problem." -- Some Chinese WiseGuy
There's a reason why the notion of Fundamentals -Food, Shelter & Water- has tended to be quite stable. If you're hungry and you're going to die of starvation a whole lot of shit is meaningless, "shit" like laws etc...
If printing will delay, then, print. There isn't a financial problem in the world that printing can't delay.
Good luck printing oil. Who run Barter town?
Spin the wheel o' wind! Spin spin spin!
There is a BIG reason why Cheney and company went hard after the ME.
As Forbes (don't recall which one) said back in the early 70s, it was best if the US consumed everyone else's oil before consuming its own. It's a fun one to contemplate (strategy makes sense, but from a capitalist standpoint it's a bit anti-capitalist [more nationalistic]).
The Pig in the Python was gorging itself on UST notes before being swallowed and when it is expelled it is going to have a severe attack of explosive green diarrhea. Unfortunately its ass will be facing east and all that half-digested shit is going to spray straight across the Pacific. You think Fukushima was bad - wait till that pig blows.
US has a track record of renigging. If there's a signficant move then the govt will delcare a national emergency and cancel whatever debts owed to "antagonistic" foreign entities.
If China looks to ask for too much it'll either get a lot of worse-grade shit OR it gets nothing.
Remember: the anti-China propaganda has been running for a wihle now, ready to trigger the mindless mass to support whatever action the US govt requires (in order to do the bidding of its oligarchs).
This will be the last round of musical chairs. After any next big move there won't be any more music or, chairs.
That's raysist!
Hah, I smirked at the same typo when I read it.
OK, already! Gawd, one typo and all heck breaks loose! :-)
On a more serious note, I'm glad anytime I make anyone smile (usually I'm fine if it's just me). Of course, as long as I don't get injured in the process :-)
Just be glad that you did not type it in some corporate office memo or email, or you would probably have been sent to mandatory sensitivity training, if not immediately dismissed and/or charged with a "hate crime".
(I have yet to ever see any evidence of a "love crime", but I digress).
Re; US has a track record of renigging.
Left Detroit back in '81.
Renigging at that time was a term used to desribe the shift change at the ford plant.
"Re-nigging"
Obama's second term?
Excellent, so the Fed's economic fog machine, operating at full speed, has managed to blind the market's perception of the future discounted value of capital on a global, and not just domestic basis. We live in very interesting times.
It has the luxury of being tied directly to the world's sole reserve currency. Magic powers...
Bad systems fail. This is all you really need to know.
Inflation is our most important export. No one wants to believe in the problem; as it would not be good for them if the obvious result materialized; so they don';t believe in it or take any rational actions. And there you go.
Please trade your resources for our trinkets. Amazing how long we've been getting away with it... (yes, I know that the real history has it that the receivers of the trinkets didn't actually reside in Manhattan [had no "authority" to "sell" it], but for purposes of this posting let's just pretend...)
So that's bullish right?
Probably; I seem to remember the Zimbabwe Stock Market went up %30,000 or so.
yeah, ok, we'll see what happens when the lights come on and we see who really has the gold - and who doesn't.
The US has resources (under a "National Emergency" they are likely able to be highly rationed).
Sure, China will hold gold, but with whom will it exchange it? Keep in mind that resources, especially related to energy, is something that China is not well endowed with; as such I'd expect China to be doing trade with countries that have oil and coal. Those trade partners are going to have to scurry to manage that gold (or whatever currency is used in trade), which puts them either to trading back with China for goods and or Chinese bonds(?). Think petro-dollar.
Without the US I'm just not seeing that China has enough market out there for others to absorb gold or Yuan OR both. The looming suppliers -Iran and Saudi Arabia- are both on the verge of internal blow ups (and I'm sure that the US will prime those bombs to go off in order to cripple China's relationship with them [to keep them from pushing out the US and NATO from the ME).
It's a LOT more complex than who has the biggest stash of gold.
You bastards are going to annex Canada? I know it.
For all practical purposes they already have.
From both an economic and military perspective Canada and the USA are Fortress North America. (However, that is rotting out from the bottom.)
With the ten year anniversary coming up in May 2011, they had to play the dump-the-frozen-terrorist-in-the-sea OBL card sometime, right? O's polls & economy were poor in US and Harper's election campaign message all spring was 'the fragile recovery' (IOW change is bad, be very afraid) yet Layton was becoming a serious threat. Looking 5 years ahead, best to have Harper majority for expedience, right?
What's the downside to playing the OBL card, which had to be played SOMETIME, SOON, the night before the Canadian election? What's the psychlogical effect on Canadians when they woke up the next morning? It's all good, steady as she goes, vote Harper. WOW, that was easy! JACKpot ; )
/TFHAT off
But Canada has long been referred to as "the 51st state" lol
If it was not for Québec being a distinct culture, Canada would be much more like "the 51st state!" English speaking Canada is very much like the USA. Indeed, something like 90% of the Canadian population is within 100 miles of the USA border. Most Canadians grew up watching just as much American TV as Canadian TV, and Canadian anglophone TV is just as stupid as American TV. However, the mass media in francophone Québec are slightly less stupid, and more like European TV than American TV.
90% of Canada's population live in the warmest parts of Canada, which happen to be those parts closest to the US. Believe me, its the climate, not the proximity to the US, that is important in this regard.
Expounding a bit:
90% of Canada's population live in the warmest parts of Canada, which happen to be those parts closest to the COLDEST PARTS OF THE US.
Which explains why they are always so thin-skinned, humorless and grumpy.
Shussssssssssss, Roberto, shussssssssh, they aren;t suppose to know that!
Not sure that Canada has all that much, even though I pick it as one of the top surviving countries (assuming it doesn't get totally taken over by over-exploitative USofA). Timber? Sure, but I'm not seeing a return of the residential housing boom anytime soon. Tar sands? Snicker... (locate my comment with the Forbes statement) Water? well, if they don't pollute the hell out of what they have with all their tar sands operations. Perhaps other minerals, though this too would be an issue of whether there would really be sufficient end-user/consumer demand (the direction appears to only worsen).
The US has all the resources that Canada. And in the energy department it has as much (if not more). THE issue is always consumption, and, well, that's kind of starting to be "adjusted."
I'm afraid that Canada's big export days are drawing to a close. There is, I suppose, always hockey...
Gwynne Dyer military historian suggests in his book 'Climate Wars' that the US climate refugees migrate north and places on both sides of the border grow. Finally a 'skirmish' on the Canadian side sparks the invasion and it's all over in a week. Assume it does get taken over somewhere around 2040.
Sounds possible.
Things change. And things change again...
My wife has relatives and friends up in Canada. I'm kind of hedged in this department.
Climate change is changing to global cooling.
More Canadians will move south.
It's not all static.
If the sea currents stop pulling off all that warm water from around the equator it's going to get REALLY hot torward the equator.
Please note: "south" is northern-hemispheric thinking- talking like this in the southern hemisphere they'd think you were ignorant. Best to use "pole" or "equator," as these terms are universal (and, well, lots of folks are talking about moving to some foreign country like down in South America- consider this a handy, educational tip)
Yeah. Direction gets really weird when one is located at the poles.
If you are located at the South Pole then the only direction is North. No matter what direction you are looking you are looking North. The entire Horizon is to the North.
You cannot look East, West, or South at the South Pole.
Spatial Curvature does some weird things concerning Dimensions and the definitions thereof.
going to? NAFTA, bitchez
"The females will the largest teeth and hair will crave to have semi-austistic Libertarians"
At last, after many months, Ponti is excited.
The ignored stat: 100 trillion rmb of deposits sitting in the major banks, not invested in anything, just cash.
Reserves to cover losses, like (what will be with) all those ghost cities...
Honestly not all that many "ghost cities", underutilized perhaps, but not ghost. There are some ghost developments which suffer from the over-investment syndrome.
OIS works like this: An empty, unfinished apartment/home is worth more than a finished one. Reason being that you can dump 1m RMB into making it all pretty, but it adds zero value, as most people will want to tear it all out and redo it their own way. This means that if it's already decorated, there's not only the decorating cost, but the cost to rip it all apart. Hence, lower value than bare concrete. If there is an expectation that a development is going to go up in value, the investor leaves it empty and hopes that few others do the same. As if it's entirely empty, then valuation is just book, but not reality. No one wants to live in an entirely empty development.... well, most don't, some enjoy the quiet, but it's just weird. Those ghost developments, they are all bought and paid for, typically in cash, as cash=discounts and Chinese understand the notion of interest. They have many reasons for existing by the way. It could be a vacation home, it could be a strategic home to gain access to certain schools or secure residency in certain areas, it could be intended for parents retirement, it could be intended as their own retirement, it could be intended for their own kids to ensure they have housing settled, it could be done to gain access to the housing fund payments that are taken out of their salary. There are LOTS of reasons to buy property, obviously with the big one being that "there's a very good chance it'll go up in value" and even if it goes down, it's still a hard asset, it'll never be worth "0". It also enables access to lines of credit if needed.
Example: A normal middle-class family who are close friends with us. They own an apartment near us for normal living. A small 30m apartment in the city to secure a top school for their kid. A somewhat larger apartment out in the sticks for parents and family. And they are looking into a townhouse out in the burbs now as a vacation/investment home. It's really not all that uncommon to see. Migrant workers, most rent, but the smarter ones buy in the sticks and just deal with the longer commutes. Worst case, they have property in the city that can be rented out. Best case, the area is developed and they earn more from the sale than they made working and fuck off back home to snap up a large home and effectively retire.
Why does all that cash sitting there matter? Because unlike some countries, China's not all that financialized. The stock market can crash and no one really cares, because it doesn't matter. Pensions don't get crushed, businesses don't go belly up. What's been happening with all that cash recently is opposite of the shadow banking. Large funds are being created which invest in the bad debts and pay out on a daily basis, it's helping to clean up some of the mess while utilizing that dead money. For banks, yea, losing that cash hurts and pushes up rates, but it also forces them to not be as loose. There will be a slowdown to some degree from it all, however dis ain't the US or the west. The banks comply with government planning and regulations, as they are effectively owned by the government. The big 4 are also making money hand over fist and any shortfalls can be assumed by the government. A lot of the debt is local government debt, borrowed from the banks, which came from central bank money. It's pretty easy to just wipe that off. Furthermore, all that cash that got tossed around, it didn't go to waste to bail out the financial sector, which is just pissing in the wind. Hard assets, real investments, things that actually exist. This is where it went. Sure, there's some excess capacity, but that's not a bad thing. The lesson of Beijing was observed and studied. Rapid unchecked and unplanned growth struggling to keep up with demand, resulting in a mess that is very difficult to fix. The solution? Build on anticipated demand and get a large chunk of it done in advance. Excess supply reduces prices, which attracts people, which grows the economy as a large chunk of those people are not being sucked out of other cities, but instead are coming off the farms and small villages.
Refreshing down-to-earth comment after reading the article that went completely over my head. I appreciated your comment recently on the climate change issue too. Thanks! +1
OIS might serve them well in the next decade or so as energy costs really start to squeeze.
China is building up a hyper-NON-sustainable country. It's now addicted to growth and it will, as will all, choke on it.
In the 1800s it was opium. Today it's "technology" (promoted by Madison Avenue/Edward Bernays).
Um, no, China has no super powers and has no ability to avoid the fate of resource exhaustion: "controlled" growth is growth, and this is a finite planet.
And once upon a time
you had to be rich to fly, they still built airports
you had to be rich to own a car, they still built roads
you had to be rich to have electricity, they still built the infrastructure.
The lesson from Beijing is seen best with the Beijing-Tongzhou expressway. That will virtually never be finished, why? Because they started too late. By the time they got around to it, development expanded, jacking up land prices, meaning compensation required is epic. The moral is therefore: you build shit while you still can, do it at once, do it while it's still cheap. Beijing subway development is insanely expensive, as it has to take into account all the building foundations and god knows what else that has gone up over the years, not to mention the compensation for owners in the way of stations... which has to take into account the fact that their neighbors are going to be seeing massive increases in value being on top of a station and all. The longer it takes to finish, the more it costs and China's got the people and resources to make it happen. Planning for the future so you're not fucked by it later. And of course infinite growth is impossible on a finite planet. However, to end up the winner and thus get to make up the new rules, you just have to keep it going longer than the competition... not forever.
Simple and to the point! Great!
The problem with most Westerners commenting on China and its economy is from their viewpoint of it as a destination for their investment. Given China's huge current account surpluses, China doesn't need external investment inflows. As such, China may become a less attractive investment destination for Western investors, but that doesn't mean any hardship for those living in China.
"The moral is therefore: you build shit while you still can, do it at once, do it while it's still cheap."
You build shit and you have SHIT.
You're thinking is based on the past, the same old "grow-or-die" mentality that's gotten us trapped in this merry-go-round.
"The longer it takes to finish, the more it costs and China's got the people and resources to make it happen."
Right, say it enough times and that makes is so. Bullshit. China does NOT have the resources, not the ones that will be needed to revive all that unsustainable SHIT. WTF do you think that they're stepping into the minefield that is Africa? (you DO know why AFRICOM came to be?)
"However, to end up the winner and thus get to make up the new rules, you just have to keep it going longer than the competition... not forever."
There is no "end." There is no "winner." If it's about survival then it comes down to environment. I seriously doubt that China's environment is going to be able to support a "winner."
"Planning for the future so you're not fucked by it later."
China jumped all over the totally unsustainable automobile-centric (and techo-centric) meme. "Planning" can also be BAD planning. And I also think that most here recognize the failures of "central planning."
China is not doing anything others are not doing or attempting their best at. Yes, it is a finite planet and resources will be exhausted sooner than later. However, China has an opportunity to reverse course that the West didn't take. When the USSR collapsed from resource exhaustion, the West claimed a victory for "capitalism" and accelerated its resource consumption. When the West collapses (it will before the emerging markets), the emerging markets have no ideology to claim victory for. They will simply have to acknowledge that it is not possible to grow for ever and take action to reach a sustainable level of consumption. It is not going to be easy, but it is not going to be impossible either given that unlike in the West, there is no sense of being entitled to an ever increasing prosperity, even if people are addicted to growth. However, for the leadership to make a successful case for it, say in China, the people must first witness a total economic collapse in the West, which is not far away anyway.
If you step back and actually look at how things are "adjusting" you'd see that the US is being de-tuned and that China is being ramped up. I'd venture that the US is in a far better position to manage the trending down-turn than is China. Again, if everyone goes isolationist the US (Canada and Russia) has the ability to limp the existing shitty systems for some time; and, I don't think that it would come to anyone's surprise if things collapsed; China, on the other hand, has been amply pumped up to NOT see things as heading toward a downturn (well, the leaders are starting to try and broach this, but the overall numbers are still heating up quite a bit)
Again, just listen to the political tones being generated. In the US (and Europe) it's a constant issuance of caution, despite what is popping up on the Wall Street slot machine's screen. In China it's the underlying theme of growing their way out of the countryside, the attraction of all that glitters.
"When the West collapses (it will before the emerging markets)"
"Emerging Markets" are rocking like a drunken sailor now. Fromhttp://www.marketwatch.com/story/china-and-emerging-markets-may-be-due-f...
We can talk a lot about "collapse," but let's be clear: Economic collapse is different than civilizational collapse. Civlizational collapses are more likely to occur due to resource shortages. So, I might give others that China's economy (keep in mind that "economies" are nothing but virtual constructs, and are therefore subject to all sorts of distortions) might out-last that of the US (or West), but that's not the same as their civilization outlasting that of the US's (or West's): and though the "identity" of China has existed for thousands of years its civilizations have not, they've gone through numerous ones- to forget this and to assume that this current civilization is the same as the past dynasties is just plain wrong.
Don't say that too loud or Tyler might bring back the CAPTCHA.
Oh my. My teeth hurt.
These are not the defaults you are looking for. We have no defaults. Our accounting is accredited, rest assured. Which lying bankster said this?
Let'r all go bust and get the reset over with.In the meantime watch the "Global Precious Metal Roundtable - 12/02/14 . And keep buying gold & silver bullion in your savings strategies.
http://www.youtube.com/watch?v=N7qrmlCRkhI
Greece,Portugal & Spain have been under economic collapse for 3-4 years.. still surviving
Japan has been under 20 years of depression.. still surviving
The british empire has collapsed since world war 2.. still going strong..
I guess nothing bad will happen in this fantasy world.
We all know how this ends, Bulls make money, Bears make money, Pigs and Pythons get fucking slaughtered...
I've got a feeling that everyone will be invited to this party.
A China currency problem is a problem for China. A dollar problem is a worldwide issue. Every dollar held in reserve will/ could go to zero and every currency unit those dollars backed will have to find something else to defend it (hint...gold).
A yuan problem is a problem for everyone holding yuans. There are trillions of yuans floating around the electro-currency market, but it is a small slice of the pie; the dollar and euro make up the majority. The Yen per capita is highly inflated, but once again, it is a much smaller share - one similar to the pound.
Yet they all inflate alongside each other, probably at a 15% per year clip. That is until one currency, or many currencies, go rougue, and as in the art of game theory, anything can happen.
Most countries use US$ to pay for imports, not "back" their domestic currency with. If the US$ is no longer acceptable in the global trade for payment, their existing US$ holdings will become worthless, but their domestic currency will continue to buy things in the domestic market. Even in that case countries with a balanced trade or trade surplus will fare no better or worse than when their external trade was conducted in US$. The only ones to suffer will be those currently running a trade deficit and covering that deficit through a preferential access to the US$ (like being a destination of interest for Western capital). Those countries may have to impose capital controls, if they are not already in place, to manage the quantum of reserves (whatever that unit may be, gold or another fiat currency) needed for external trade payments.
Most countries use US$ to pay for imports, not "back" their domestic currency with.
I am sorry but you are mistaken. Foreign Central Banks hold US Dollars in Reserve. They form a substantial Fraction of Bank Assets. A Bank's assets are supposed to be valued at Mark to Market and thus contributes to the "SOLVENCY" of the Bank.
If US Dollars were to become valueless then the Banks which hold the substantial Portion of those $12 Trillion will become INSOLVENT. This will ignite a COLLAPSE of the Financial Institutions WORLDWIDE. The scale of FINANCIAL DESTRUCTION will be unprecedented.
(Keep Tapering Yellen)
Denninger has predicted a collapse this year. He claims that the FED cannot stop Tapering even if they wanted to.
https://www.youtube.com/watch?v=wWbYWawYem4
Many others have also forecast a 2014 Collapse...for different reasons. Peter Schiff says that they will cease the taper.
Who do you believe? I do not know.
But collapse is the outcome whether they taper or not. That is the gist of the story either way it is presented. We are trapped between a Rock and a Hard Place. There is no escape from the consequences of our policies.
Ugg think it bad idea to promise to pay with things you not own (like other people's monies). But Ugg surprised: Chart 15 say U.S. banks only have $80 billion exposure to China kaboom? That not seem like very much to Ugg. Big number, yes. But only if 100% default? Just few months ago, Printer Yellen print that much every month. $80 billion make Jamie Dimon loins hurt bad.
Maybe Big Pain come from total kaboom? Hundreds of billions of $$ in China default, spread out over many banks, all over world? Many bankers cry, lose job? Big sad?
Ugg smile!
Ugg, I like your style!
It's about US trade. Consider all the US corporations that are ONLY maintaining profits by selling in China.
There's what's in the books and then there's the affects on the future.
No one gets out of this without massive blood loss.
Jack Lew says, and I quote, "China has the capacity to manage their shadow banking sector."
Thanks for the confirmation, Jack.
If you like your default, you can keep your default.
Eenie meanie, minie mo ...
Pick a disaster, here we go!
Here is another summary of how god damn crazy and complicated the banksters' international economic systems have become, with one chart about the situation in China:
http://www.doomsteaddiner.net/blog/2014/02/17/debtonomics-currency-crisis/
Debtonomics: Currency Crisis
"... Observations and remedies ...
— Adopt a scientific unit measurement for money following Le Système International d’Unités, or ‘SI’. Just as there are universally recognized kilograms, moles and amperes, there would be a standard for money that directly relates to the other standards. Prior to the use of abstract reserve funds, foreign exchange ‘money’ was metal — gold or silver — measured by weight rather than worth, and thus universal in all countries."
Hah!
The LAST thing that the banksters would want is to
adopt a scientific unit measurement for money.
A universally accepted measurement of money would in effect create a single global currency thereby nullifying any governments sovereignty. Kind of like what we have now with global reserve currency status.
We already have one. It is called the Joule.
Is it really a currency crisis or is it a growth crisis?
I lean toward the later, in which any "fix" to currencies still fails to resolve the core problem. Our economic system is predicated on perpetual growth, it's highly flawed; and, well, bad systems fail. And in this case I'm not seeing a currency fix fixing the underlying bad system.
An analogy might be that currencies (or singular if that plugs in here better) are the wheels/tires on the car. Clearly, flat tires of BAD tires are going to make it really difficult to get that car down the road. So, fix those tires/wheels with something great. All better? Um... the car's steering is locked, and it's pointed down the only existing road and that road ends at the edge of a cliff.
The "road" is perpetual growth on a finite planet. The vehicle, as long as it's using that road, is not the thing that presents us with the greatest peril.
Having an "honest" currency might result in kicking the clowns out of the car (and to their deaths), but we're still rolling along...
For sure, Seer, being able to discover and develop more natural resources, by strip-mining the whole planet Earth, was what underpinned the abilities to continue to create more accounting units out of nothing, as debts. When exponential growth of finding and exploiting more resources reaches real limits, then the overshoot of the creation of credits out of nothing collapses. China was forced to assimilate and copy the Western technologies, both as industrialization and financialization. However, they have therefore merely done what we were doing in a bigger and faster way, which means that they could overshoot and collapse into chaos even more spectacularly that we have in the past.
Most of the countries in the world are already basket cases, where the ratio of resources to people is so extremely unbalanced and untenable that their ability to fly the flag of creating more credits out of nothing, to keep their economic merry-go-rounds going, seems too preposterous to continue. (As you mentioned in an earlier comment above, Seer,) some countries, such as Canada, have still a more favourable relative ratio of resources to population, and therefore, Canada is one of the few countries in the world that are still only in the condition of debt slavery, rather than have entered into the condition of debt insanity, which is the condition that most of the world's countries have rushed into, because the financial or symbolic aspects of the exponential growth overshooting is the leading edge of all of the rest of those kinds of phenomena.
THEORETICALLY, units of money that were measured in standardized units, that could be more objectively measured, MIGHT enable a society to develop human and industrial ecologies which could be integrated with the natural ecologies, in a globalized way. HOWEVER, THE CURRENT SYSTEMS ARE ACTUALLY MEASUREMENTS BACKED BY MURDERS, OR FORCE BACKED FRAUDS, WITH THE EMPHASIS ON THE DECEITFUL MURDER SYSTEMS, AND THE FRAUDULENT MONETARY SYSTEMS. From a sublime perspective, that really makes lots of sense, when looking at human civilization as an energy system. However, that history of civilization being dominated by the people who were the best at being dishonest, and backing that up with violence, makes coming to terms with the real limits to a finite planet many, many more orders of magnitude more difficult and dangerous than we can currently comprehend.
THEORETICALLY, we could develop better human and industrial ecologies, which were integrated with the natural ecologies, and operated in similar ways that the natural ecologies were able to, for long, long periods of time. However, to do that would require spinning through many different levels of those problems, where the lies are different at every level. BUT, better evolutionary ecologies necessarily have their death control systems as central to everything else. It is obvious, if one just looks at it, that human history made warfare and weapons its first priority, and for good reasons. Upon that basis was made a financial system whereby frauds were backed by force, and therefore, those frauds became the basis for success, like deceitful wars were the basis for success previously. All of those trends made an abstract sense, on different levels. Clearly, the way that nature dealt with limits to an environment, given a certain level of life (technology) was to develop an ecology which balanced things out through a sustainable diversity, with interlocking feedbacks, which enabled the best overall level of life, for the longest time, given those conditions. We did develop a human ecology, but one which operated through murder systems based on the maximum possible deceits about itself, while those were formally opposed by those who asserted that no such conscious murder systems should exist at all.
Human civilization, since industrialization, based on discovering how to harness inanimate energy resources, exploded into exponential growth. Civilization became a rapidly growing thing, which thereby changed its own conditions, by high-grading its resource base to hell. Paradoxically, we have pushed exponential growth through to the point of overshoot, which can then cause collapse into chaos, or final failure, from too much success. The ACTUAL combined money/murder systems are directing the development of civilization to occur through implementations of the social pyramid systems, of force backed frauds, opposed by controlled groups of those who spout the same basic bullshit stories as those they pretend to oppose.
THEORETICALLY, we could develop better evolutionary ecologies, to cope with those real limits, by learning to develop an adaptable diversity, which could continue within those limits, like natural ecologies all over the world developed to do. HOWEVER, THE BIGGEST OBSTACLE IS THE CURRENT SYSTEMS WHICH ARE FUNDAMENTALLY FRAUDULENT FINANCIAL ACCOUNTING SYSTEMS, WHICH ARE THE LEADING EDGE OF THE INSANITY OF EXPONENTIAL GROWTH OF DEBTS, WHICH USED TO BE ABLE TO BE SUSTAINED BY EXPONENTIAL DISCOVERY AND DEVELOPMENT OF THE PLANET, BUT WHICH IS NOW REACHING THE REAL LIMITS TO BE ABLE TO CONTINUE TO STRIP-MINE THE PLANET IN THAT WAY ANY MORE!
The supreme paradox that human civilization faces is that the only genuine resolutions to those problems are better ecologies, which must have better death controls at their core. None of the abundance of possible creative alternatives can be integrated into systems without alternative death controls systems being the keystone or lynch pin to that process. HOWEVER, the crucial point to human history is that our REAL human ecology was operated through murder systems whose success was based on the maximum possible deceits, which then enabled accounting systems to be based upon the maximum possible frauds. Typically, the entrenched establishment operates that way, through combined money/murder systems, which that establishment deny exist as social facts. Meanwhile, the controlled opposition reveals some of those real facts, about how the money/murder systems actually operate, but then, that controlled opposition promotes "solutions" based on the ideal that no such systems should exist. Therefore, as we rush into the real limits to growth on a finite planet, the two main responses are to deny that those exist, or to deny that they should exist.
What I recommend is that we should try to catalyze the transformations towards better human, industrial and natural ecologies. Of course, I would LIKE there to be more consistent units of measurement, or money, which could be directly related to other measurable units of energy and matter. That would make it more theoretically possible for our human accounting systems to engineer integrations of industrial and natural ecologies. However, all of that returns to the core dilemma, that the human murder systems, operating through the maximum deceits, are the foundation of the human monetary systems operating through the maximum possible frauds. Furthermore, those systems are promoted by liars, and opposed by liars, who deny that those systems exist, or deny that those systems should exist.
Running into the real limits of being able to continue to strip-mine a finite planet ought to drive better evolutionary ecologies to develop to cope with that. However, that is almost infinitely more difficult and dangerous due to the degree to which our entire civilization is dominated by professional liars and immaculate hypocrites, as well as opposed by those who are also professional liars and immaculate hypocrites. How could we develop better money/murder systems, to enable better ecologies, when the actual systems are operated by people who deny the facts about how those systems operate, while those people tend to be opposed by other people who reveal some of those facts, but then assert bullshit "solutions" based on the impossible ideals that no such systems at all should exist?
I do not have any good practical ideas about how to resolve that, where the establishment lies about itself, while the reactionary revolutionaries oppose that establishment by following analysis of the problems with bullshit "solutions" based on impossible ideals, which could never exist in the real world. That is why I come to the conclusion that our runaway debt slavery systems, which have generated debt insanity numbers, match the underlying exhaustion of the availability of natural resources to exploit, and that happens in ways where almost everyone steadfastly refuses to admit those facts, or refuses to admit what those facts mean.
Therefore, as this Zero Hedge article stated: "a deflationary collapse brought on by Chinese hard landing coupled with a full unwind of the global carry trade, would be disastrous and send the world into a depression the likes of which have never before been seen." Furthermore, as many other Zero Hedge articles have pointed out, such dismal depressions in history were usually followed by wars, and a "depression the likes of which have never before been seen" could cause a war "the likes of which have never before been seen."
The path we are currently on is for the debt slavery systems to generate debt insanity numbers, which will then result in death insanities. Since we are apparently not collectively capable of getting out of the spiral of debt slavery, driving debt insanities, we also appear incapable of getting out of the spiral of that driving towards death insanities. However, it is inside of that context that I propose we need intellectual scientific revolutions, which can be applied to politics, and especially militarism, so that we could develop better integrated combined money/murder systems, which would enable overall integrated human, industrial and natural ecologies to adapt to the live within the limits of a finite planet.
(Hah! However, of course I would be the first one to admit that is an irrational hope for series of political miracles, given that the real world is run by liars and hypocrites, opposed by even more liars and hypocrites, which both tend to deliberately ignore the basic facts, or ignore what those basic facts mean.)
I'm only here to help you with wrting blocks :-)
As always, it's an honor to be here with you.
I agree Radical Marijuana. This isn't bullshit, it's the radical truth. I disagree however in that there is a third possibility you do not mention. Either we stumble along like drunks into the wars of death insanities, we have the "intellectual scientific revolutions", or we become totally lost in a mass extinction event that will end some 90% of all life on this planet probably in about as little time as the United States of America has existed. These truths are hard to grasp and I find them overwhelming too. Moreover, it is quite conceivable that we could have the wars followed by the mass extinction. THE epic fail.
I choose the middle option while it's still on the table. Paris 2015 is a good place to decide because everyone will be there and the option will be tabled. The basic facts and what they mean are about to punch us in the face.
Indeed, MEAN BUSINESS, that "third option" is growing in plausibility, and as it does, then everything else, such as a credit crash in China triggering a global depression are reduced to being trivial issues, only important for the next few years, while after a few more decades nothing that our civilization does will matter much any more (other than some fragments of it perhaps surviving somehow?)
If one considers these 2 sites
and multiplies them together,
http://guymcpherson.com/
and
http://www.geoengineeringwatch.org/
one gets these two overall impressions:
First, the climate can be an angry beast that human beings are poking with a stick, and second, the people poking that beast with a stick are criminally insane.
The problem with the ruling classes' attitudes towards climate change was that everything they promoted publicly had a hidden agenda, which has resulted in backfiring and discrediting the real concerns, like the boy crying wolf, on a global scale. Meanwhile, those ruling classes have not stopped doing every evil thing possible to advance whatever their insane short-term interests were.
At the same time, the overall basic natural feedbacks were constantly threatening to be provoked to go pass the point of homeostasis restoring feedbacks, to become runaway feedbacks, instead. For instance, the release of methane in the cold oceans and frozen tundras becoming a runaway, self-amplifying phenomenon.
Since the human world is actually dominated by the most dishonest and violent people, who have their own criminally insane agenda, which has made them become the pyramidion people, that can direct all of the lower level compartmentalized people to do what they are told and paid to do, and since nothing is practically possible in the short-term to resist the runaway systems of human lies, backed by human violence, because no evidence or logic can actually change what happens in a world controlled by lies backed by violence, where the main ways that more truth gets exploited is to simply become better at being dishonest, and backing that up with violence, but NOT to change the primarily purposes due to facing more of that radical truth, the sum total outcome is as those two Web sites indicate, when multiplied together.
The world is quite possibly on the path towards provoking extremely serious climate change, which could reach a critical threshold of self-amplifications within decades, while, at the same time, United Nations groups like the IPCC http://ipcc.ch/ are bankster puppets, whose ulterior agendas dominate what they say, and what they propose should be done. Yet, at the same time, covert, crazy, weather modification measures, as a kind of weather warfare, are being seriously experimented with and deployed.
Of course, the mass media act like those things do not exist, and therefore, the vast majority of people act like those things do not exist. However, in fact, both of those things DO EXIST, and are getting worse, faster. Meanwhile most of us live our little lives, the best we can. There are no practical political means to resist the ruling classes from continuing to do what they do, and no practical ways to prevent the masses of zombie sheeple from continuing to be the way that they are now. Therefore, as a whole, the human species continues to act in criminally insane ways, poking the angry beast of the climate harder and harder with more sticks.
Hence, the REAL possibilities of human beings driving mass extinction events to boomerang back onto them make other problems inside the little tempest in a tea pot of political economy become relatively insignificant in comparison. If real climate change DOES become a runaway, that destroys civilization as we know it, that civilization will continue to respond through the ways that it are controlled by lies, backed by violence, and thus in ways that only become increasingly insane.
From a practical point of view, I no longer believe that there are any possible ways for human beings to respond more sanely to their problems. We already live inside of a world which is almost totally dominated by systems of legalized lies, backed by legalized violence, controlled by professional liars and immaculate hypocrites, in which doing anything more scientifically sane with respect to any of our problems is practically impossible. Everyone is doing the best that they can, in order to get along within those established systems, while those systems as a whole appear to be preparing to commit collective suicide, if not almost omnicide.
If one examines those two Web sites linked above, and concludes that they both have substantial scientific merit, then there are NO possible solutions to our problems without some improbable series of political miracles. Humans evolved as bad weather animals, which are now producing their own bad weather. However, the way that human civilization actually works as a social pyramid system means that it functions as the combination of evil rulers, and idiots ruled over, with no means within that context of doing anything overall more sane, within the context of a better scientific understanding of our situation as a whole.
The ruling classes have pumped up a biased view of climate change, and bogus solutions based on those biased views. Meanwhile, those ruling classes have actually been covertly doing things that are way worse than anything that their mouth pieces public admit are the problems. Throughout all of that, the vast majority of people being ruled over continue living in the fantasy land constructed by the mass media around them. In that overall context, no more radical scientific truths have any way to actually change human behavior ... until doing that became too little, too late, and too trivial to matter.
P.S.
Of course, that is the same view as I now have to the various neoprohibitionist regimes that are supposed to be "legalizing marijuana." Those are also too little, too late, and too trivial to matter, because those trends are NOT based on more Hemp Truth, but based on compromises with the same old Huge Lies. Hemp Truth is merely the single simplest symbol of the ways that after Huge Lies are able to dominate society so much for so long, the whole society gets to be too sick and insane to recover from that. Multiply that situation by many orders of magnitude, and then one has the pattern of the combined money/murder systems, which are built on lies, backed by violence, in which there are no genuinely better resolutions possible, because the whole thing has become too sick and too insane to ever recover.
We have been operating our civilization with an evil deliberate ignorance towards the natural environment, as an expression of the ways that some people were able to act with evil deliberate ignorance towards other people. The most dishonest and violent people are able to dominate what human civilization does, in each short-term increment. Nothing outside of those successive short-term increments can actually make enough difference in what civilization continues to actually do. The ruling classes continue to engage in covert weather warfare, despite the utter insanity of doing that, while the overall trends of human activities threaten to tip natural systems over the brink, into runaway positive feedbacks.
However, after learning all of that, one ends up stuck back in the present moment, and trying to maybe enjoy what little life one has (while those operating within the established systems may well attempt to accumulate better actionable intelligence, to take better advantage of operating within the established human systems) ... YET THOSE OVERALL HUMAN SYSTEMS THEMSELVES ARE DUE TO THE RUNAWAY TRIUMPH OF LIES, BACKED BY VIOLENCE, DRIVING THE ENTIRE CIVILIZATION AS A WHOLE TO BECOME CRIMINALLY INSANE, AND MADLY SELF-DESTRUCTIVE (WHILE THE VAST MAJORITY OF PEOPLE MANAGE TO CONTINUE BEING BLISSFULLY UNAWARE THAT THEIR CHILDREN MAY HAVE NO FUTURE.)
Sorry to say, but I didn't have enough time to give to your post that it most assuredly deserves :-( Just wanted to pluck at one thing...
"The problem with the ruling classes' attitudes towards climate change was that everything they promoted publicly had a hidden agenda, which has resulted in backfiring and discrediting the real concerns, like the boy crying wolf, on a global scale"
I'm of the mind that lots is predicated on inheritence. The "ruling class" is pretty much brought up to be locked into the very systems that all are locked into.
The scale at which we have gotten to is so huge as to be nearly impossible to change. And for sure, ANY significant changes are going to have some nasty repercussions, if only short in duration they'll be permanent for many (or, many who used to be alive). I'm pretty sure that some of the biggies will be adversely affected, and as such they put up all sorts of blocks (perhaps even blackmail)
Again, I'm tempering things. What I say/speak varies little with what you say/write (and, there's no way in hell I could ever write as well as you!). I have known people with "power" and not all of them knowingly practice evil, and not all of them go about doing things with the total belief that they're necessarily better- many such folks just feel like it's their responsibility; it is, the road to hell paved with good intentions (while others are paving it with bad intentions).
Like the British Pound Sterling ?
Sir Isaac Newton in the later part of his life was master of the British Mint,
in charge of quality control and enforcement of monetary standards, gold and silver,
authorized to execute by hanging any coin counterfeiters and coin debasers.
The problem with the shit show continuing is that it looks like the world economy is starting to take a big fat dump.
That would be okay as long as it flushes, the problem is they wont let it flush. They just keep piling paper on it trying to cover it up.
there will be a reset alright. First the money, then the people who made this fucking mess.
I wont be happy until the works of them are shipped off to antarctica, though they would probabally fuck that up to.
If gold and silver explodes higher what exactly is the next move?
Buy land (you can't defend + pay taxes)
Buy business (and get regulated and pay all the fucking fee's and 500/hr minimum wage)
Buy Bitcoin (fuck that)
What exactly do you do with this new wealth?
Use it to speed up gravity as you jump off a cliff? (your username suggests you might want to consider going out in a blaze of glory)
Go join the rats on their offshore hideaways?
NOTE: You ruled out your "choices" based on a static scenario (that things will continue as they have). This is poor thinking.
Great question, the value of "something" is not an issue to take lightly. Value is not a constant and can be derived from several factors such as supply and demand or utility value, things can spoil or become obsolete making where you invest very important. Value is not as constant as many people think or always destined to rise. the article below looks into the concpt of value and what something is worth,
http://brucewilds.blogspot.com/2012/11/what-is-something-worth.html
Isnt it clear?
You buy one of those exxpensive RV's, ride pimp it out and add a-team half inch steel plating armor to the exterior.
I thought that was obvious...
Don't forget to fill the inside of the doors and sides of the RV with concrete. It cuts down on gas mileage a little, but make it really easy to take out road blocks.
Really enjoyed the article.
Nice.
As soon as the political fat-cats in DC fill their pockets with enough dirty $$$ then the end will come.
they will never get enough!
As long as gold & silver prices are based on the dollar...is the gold really worth that much?
Is there any requirement that gold and silver be priced in dollars?
The dollar is priced in how much gold or silver it can buy.
You would think the Chinese leader would want a little chaos to eliminate his enemies...just sayin'.
Let's just face it, China kept the party going for longer than it should have.
It felt good for Chinese factories and workers and fantastic for Western borrowers of Chinese surpluses which drove the consumer madness.
But as everybody knows all parties come to an end and the longer they take to end, the greater the hangover in the end.
The only question is whether we will witness some real leadership from all the big players in coming to a realistic and sustainable solution or whether we will see some savage tit for tat moves by both sides.
Of course there is a third possibility.......the elite from all corners of the world will agree to coocoon themselves behind their fortresses while the rest of us devour each other.
Gotta go with Option 3 on that one Pete.
Elites in their Nuclear Bunkers underneath the Denver airport.
http://thedailyeater.com/dev/2010/09/seed-bank-norway.html/norway-enviro...
If you research who funded it.
Speaking of pigs:
World risks era of slow growth, high unemployment: OECDhttp://finance.yahoo.com/news/world-risks-era-slow-growth-023404123.html...
Throwbacks to Easter Island... Maybe we can use THEIR children in the Soylent Green? After all, growth is more important than anything else.
Anyway, the panic is becoming quite apparent. These folks ride on top of others via "growth."
This might be the big UGH in that article:
At what point does the word "forecast" start to lose its meaning?
Fucking make the number really impressive, how about 1 MILLION percent? That'll goose the markets into orbit!
ALL of these fuckers need to be tied to chairs and forced to explain how we can have perpetual growth on a finite planet.
Nice grab. Here's one from it:
"It warned that sweeping reforms were urgently needed to boost productivity and lower barriers to trade if the world was to avoid a new era of slow growth and stubbornly high unemployment."
LOL
So when those "sweeping reforms" that fix everything never materialize, they can say we warned ya.
In other words... Expect more subsidy.
"In other words... Expect more subsidy."
Yup.
And, they'll claim that it's necessary for all of us in order to meet their objectives (which was always to screw us). And, we'll fucking let them do it again and again, because... puppy dogs, "good jobs," and growth, we cannot be against Those things (otherwise we're terrorists).
WOW! The OECD finally gets around to reading Zerohedge to discover what we've known for some time: there is no growth.
As I have said a number of times over 5-6 years, genuine GDP growth probably stalled in most western countries about a generation ago.
In its place we've seen the political slimeballs and their cohorts in govt stats agencies manipulate the way in which GDP is calculated to the point where it's virtually meaningless, produce meaningless CPI figures, meaningless employment numbers and just about meaningless everything else. All intended to deceive the populations into thinking that there is still growth when there isn't.
But rising levels of debt have taken the place of genuine growth to fund our lifestyles.
As we know, the rubber hit the road in 2007-8 when levels of debt became unsustainable and unrepayable. Aided and abetted by rising costs of energy, excessive sovereign spending and banks run by criminal fraudsters.
The ruling elites have created a giant Matrix of Lies.
There is no economic growth; however there is population growth; the great un-mentionable. the comfination produces as a natural result the various monetary problems we like to obsess about. It's necessary to understand and remember the actual problem. No economic growth. Continued population growth.
Population growth is supposed to generate economic growth.
Why do the elites promote immigration?
More third world slaves and more economic growth,
while the elites destroy the nations.
And there are idiots on this site (I used to call them out but I've lost track as there are so many of them now) that will read into your comments the need for a 'thinning of the herd' (which nature does with every other living thing on this fucking planet except us special humans and our special chosen animal friends).
Those idiots who don't recognize the population overshoot based on CHEAP oil, those idiots will read comments like yours and suggest that you off yourself first.
At any rate, the human population overshoot will eventually correct itself one way or another.
WWIII will solve that problem.
you cant fix stupid.
https://www.youtube.com/watch?v=UQPsNviBTgo
and you certainly can't fix batshit crazy.
and christian evangelicals/zios, orthodox jews, and salafist muslims are all itching for ww3.
The only "prophecies" from religious texts that are every fulfilled are of the self fulfilling kind.
Smaker appears to be in favor of forced population reduction. This is a pernicious pov. May I suggest that he be the first to volunteer.
Whoooaaa. I have no idea why you say that. I certainly never mentioned forced population reduction. That's your phrase, not mine.
Well yes, but in actuality zero growth is a problem in itself since it implies a flat line on the rising prosperity chart that we have all been promised by our political elites. Population growth exacerbates that problem since the wealth that exists has to be spread about more thinly.
smacker, it's been a long road to getting this point across to people, hasn't it? Thanks for plugging away at the source of the discontent.
Sadly I feel that all the manipulations have been more about trying to keep contract law from imploding and less about screwing people. Just thinking that the web is so intwined that there's nothing that anyone can do about it other than walk away. I'm guessing that it's becoming a fight to backpedal into one's sovereignty without too much blood loss. When everyone's hooked to the just-in-time system it's a bit tricky to keep it running while you swap out the grease (and don't really have any proven new grease): as hot as it runs I'm not thinking that this trick is possible to be pulled off. Yeah, the "ruling elite" might offer themselves up, but we're still out of grease...
Sometimes there aren't any solutions. (and I don't really believe in "solutions" because the very word suggests permanence, and nothing is permanent as long as the clock keeps ticking)
Quite so. The trajectory set by our political elites a few decades ago to keep themselves in power and privilege - and followed religiously by MSM and its army of economic scribblers (who gave up holding the political class to account long ago) - was to create a progressively complex matrix of lies to fool electorates into believing that GDP growth and fossil fuel energy supplies are all unlimited. All we had to do is keep voting for them and everything will continue as it has done for decades.
Enter: as genuine growth faltered, they encouraged a huge rise in debt to keep the party going for a little longer.
We now find this whole ponzi scheme was a huge lie and it's unravelling. The planet actually has finite resources, global population continues to rise and the actual amount of wealth is therefore limited.
What we now see happening are the top elites grabbing as much as they can before the whole ponzi house of cards collapses and societies descend into police state anarchies as people further down the pile read the writing on the wall and look for ways to protect their own positions.
The political elites will take ever more draconian measures to keep themselves in power. This includes forced wealth appropriation. We already see this happening.
[NOTE: Linkage with China, so not off topic.]
And here's the start of the fall for Australia:
China Iron Ore Makes Insight Aussie Bear; Deutsche Bank Sees 60shttp://www.bloomberg.com/news/2014-02-20/china-s-iron-ore-stockpiles-to-...
And, of course, the fools down under will blame taxation or some such. Never that there's just not enough demand. Come on you Aussie, pull together, work for free and shit so you can export ever-greater amounts to China so that Chain can stockpile it... and when you've exhausted all your resources pat yourselves on the back for doing such a great job! (for the oligarchs, who made their money on the transactions [borne on the backs of your children]).
"What exactly do you do with this new wealth?"
Same as always, the default, hookers and blow.
Jim Rogers is making sure that hookers learn Madarin...
Countries around the world are taking on more debt without any fruitful attempts to curb their expenditures. This has resulted in a much more fragile and artificially held up financial system which is on a much shaky ground than it was in 2008. In 2008 companies failed due to excessive leverage and debt and now countries are likely to default because they took on the same bad debt on themselves.
The problems of excessive debt and leverage cannot be solved by taking on more debt and leverage. The ponzi scheme can only go on till you have someone willing to lend you money to pay the previous lender. The game stops when your cost of borrowing becomes exceptionally high or there is a shortage of lenders willing to lend.
http://www.marketoracle.co.uk/Article40231.html
I agree it is impossible to spend your way out of debt. The post below looks in to the concept of a fantasy world of ever more debt and more liqidity.
http://brucewilds.blogspot.com/2012/06/fantasy-world-of-debt-and-more-li...
"You can't spend your way out of debt"
True but soundbytes like these are irrelevant in our system... Just noise to rally a base that doesn't understand how the financial system works. It was never designed to be debt free. It can't be. The system REQUIRES credit expansion.
It's a political slogan used to expose another party for allocating credit "inappropriately."
On top of that the sleepers have been conditioned to believe that "GETTING AHEAD" means a 30yr mortgage on property worth roughly half the inflated price of said property. We have forgotten that getting ahead meant being debt free without a car payment or mortgage because we paid the mortgage off and had the savings to purchase a car outright. BTW cars are grossly inflated on base price not to mention what you finally pay with the interest, your insurance would also go down if you didn't have to protect the loan balance for the banksters. Perpetual DEBT = EVIL
Inflation is a Ponzi scheme that has worked for a long time.
"getting ahead" = "carrot and horse"
Problem is that folks are led to believe that when you "get ahead" you somehow stay there. Yeah, thanks for helping keep TPTB "ahead."