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Chart Of The Day: US Decouples From The Rest Of The World... And From The US Itself
The global economy is like a jetliner that needs all of its engines operational to take off and steer clear of clouds and storms. Unfortunately, as Nouriel Roubini tells The Guardian, only one of its four engines is functioning properly: the Anglosphere (the United States and its close cousin, the United Kingdom). As Roubini continues, the question is whether and for how long the global economy can remain aloft on a single engine. Weakness in the rest of the world implies a stronger dollar, which will invariably weaken US growth. The deeper the slowdown in other countries and the higher the dollar rises, the less the US will be able to decouple from the funk everywhere else, even if domestic demand seems robust. But it's not just the rest of the world that is decoupling from US growth... as the following uncomfortable chart shows, so is a crucial pillar of monetary policy transmission, consumer wealth perception, and economic stability - the US housing market itself.
The decoupling... globally (China, Europe, and Japan all seeing GDP estinmates slashed)
For the moment, at least, Barclays notes it appears that the momentum of the U.S. and the rest of the world will continue to move in different directions.
The end of QE could create risks for credit, but the divergence in growth suggests that those risks are likely to be experienced more keenly outside of the U.S.
But as Roubini concludes, serious challenges lie ahead,
Private and public debts in advanced economies are still high and rising – and are potentially unsustainable, especially in the eurozone and Japan. Rising inequality is redistributing income to those with a high propensity to save (the rich and corporations), and is exacerbated by capital-intensive, labor-saving technological innovation.
This combination of high debt and rising inequality may be the source of the secular stagnation that is making structural reforms more politically difficult to implement. If anything, the rise of nationalistic, populist, and nativist parties in Europe, North America, and Asia is leading to a backlash against free trade and labour migration, which could further weaken global growth.
Rather than boosting credit to the real economy, unconventional monetary policies have mostly lifted the wealth of the very rich – the main beneficiaries of asset reflation. But now reflation may be creating asset-price bubbles, and the hope that macro-prudential policies will prevent them from bursting is so far just that – a leap of faith.
Fortunately, rising geopolitical risks – a Middle East on fire, the Russia-Ukraine conflict, Hong Kong’s turmoil, and China’s territorial disputes with its neighbors – together with geo-economic threats from, say, Ebola and global climate change, have not yet led to financial contagion. Nonetheless, they are slowing down capital spending and consumption, given the option value of waiting during uncertain times.
So the global economy is flying on a single engine, the pilots must navigate menacing storm clouds, and fights are breaking out among the passengers. If only there were emergency crews on the ground.
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Which leaves us with The Chart of the Day...
But now the decoupling from reality is happening domestically! (real Fixed Private Residential Investment dropped 1.1% YoY... GDP didn't)
Completely destroying the 'US is strong' meme...and, as The Global Macro Investors' Raoul Paul pointedly remarks, this is starting to smell as if a shit-storm is brewing...
The meme of US economic strength and decoupling from the world has consequences...
At some point very soon the dollar is going to break out and EVERYTHING you know is going to change. Everything you’ve understood to be normal and stable in your investment portfolio is going to be as risky as hell. All of your core assumptions are going to be tested and thrown out as false assumptions. Yield trades, once the safe haven, are going to kill you. Anything that has any carry element or any exposure to currency moves will create huge losses.
Why am I so damned alarmist? Well because as ever, we’ve seen it all before.
The reason it is going to happen rapidly and maybe in a disorderly fashion is because if the dollar moves much higher, we will begin to see an unwind or THE unwind of the biggest carry trade in history. This is the flip side to all that QE. This is the flip side to the China miracle too. Multiple trillions of dollars are going to need to be bought or extinguished in this unwind, and that is going to create complete chaos.
...
Sadly, there is no such thing as free money in the real world. There is always a price to be paid. Self-reinforcing virtual circles eventually become the spiral of doom.
I think we find ourselves at the tipping point of the spiral of doom.
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Wealth extraction.
So will gold will act like a stuck pig until the dollar bubble bursts?
Whats it matter? If gold is $10,000 USD and $1,000 BRICS fiat, wouldnt that make BRICS FIAT more valuable/stronger? Isnt the idea of gold to secure your fortune in the strongest FIAT market? Why would I trade an OZ of AU in USD if the fiat is crap? I would rather trade it for the strongest currency basket in the market. Or am I wrong in this observation?
I only stack silver. Not much gold. Just wondering here.
I believe ALL fiats are going to return to their intrinsic value, including the dollar, within five years, if not within three.
Zero?
The move by the Fed to end QE3 was very well planned. It could not have occurred at a better time. Japan and the EU have been sacrificed for the "greater good". The dollar will rally as foreigners flood into USD. Russia's ruble will have a hard time as Western sanctions continue. The U.S. has now gotten the greenlight for it's wars in Ukraine and Syria. International law is dead. China is watching as it's international influence is waning. The US will do whatever it can to manipulate gold and silver and get in the way of the BRICS bank. Midterm elections are showing a heavily divided election in key red states. Republicans poised to gain Senate and could begin sending arms to Ukraine almost immediately after the elctions. Immigration policy debate will be brought back into focus to distract the sheeple. Talk about predictable.
What carry trade is the author referring to? certainly not the yen carry trade, as this should get better with a depreciating yen, not worse.
that was my question too. I see the recent moves in Japan as the QE torch being passed. More free money for the markets, Unless the Yen goes down so fast that Japan is ruined we could see this play out for months.
The chart indicates that the US GDP Est is rising.....not falling.....
Is there actually even one sane person on this site that honestly believes the Federal Reserve is going to keep its hands out of the cookie jar? They're printing like there's no tomorrow... They're keeping three quarters of America on their payroll 24/7...
True but, with the BRIC's buying gold(and the Swiss vote), they need to crash the world markets (unTaper, hint at raising rates) in order to herd money into the reserve currency. In their world, it's better to throw a few million Americans out of work than lose the power to steal from the rest of the world. They can keep doing this until that money refuses to be herded back into the reserve currency corral. Then Weimar times.
Perhaps banks are borrowing from the Fed at 0.25% and buying Chinese and Brazilian bonds paying 7%. As the dollar gets stronger and those currencies collapse, the banks will also collapse.
This plan falls apart if there is not enough physical gold to allow the ridiculous gold derivative market to continue. If we accept the amount of gold in the Western banks (that can/will be mobilized for the effort) to be the GLD inventory then it is approaching half gone...and who knows how much of that is actually available....some may be already promised.
There is no physical GLD, SLV, PPLT or PALL... Never was...
...just another doom article. The 1970s in USA was much more dire. As in the "Back to the Land" Movement where everyone actually did put a Victory Garden in place. Nothing is going to happen in any dramatic fashion. Sorry, no doom end-of-the-world Porn today!~
Fuck the global economy. don't need it don't want it. when I got out of high school in 1960; you couldn't import anything from communist China; it was illegal. nobody had a Japanese car, but everybody had a job. Roubini is a product of the present group think. How do you translate "Globalization" into /English ? It means send all your money to China and then die. Where did we get free trade with China?; and Japan, for that matter. from our politicians. In the case of Japan, for semi-rational reasons. In the case of China for one reason and one reason only; so the corporate capitalists could manufacture with slave labor and sell into the dollar market. the result is your job is now in China; and your money. Free trade was going to be good for everybody. Remember that one? you couldn't turn around without hearing this; or seeing it on a fucking billboard. It was the classic Hitler program; if you tell a big lie and repeat it often enough it becomes the truth. There's a secret at the base of the modern high level lifestyle; which no one understands any longer; manufacturing. Manufacturing is where the value added comes from; it's the magic that allows the parasite element of the country to be fed and housed; the .gov employees; the public union "workers" with their un-measured productivity hovering around zero. When the manufacturing goes; the clock starts winding down because no one is doing the re-winding any longer; then the question is just when does the nation become a broken down has been with a drastically lowered life style that continues towards economic collapse. There is nothing that is good for everybody. NOthing. We used to export shoes to China. was that good for the chinese economy; of course not. was it good for our citizens who had union jobs manufacturing shoes? Absolutely. Now we're treated to the spectacle of that criminal Hilary Clinton telling us that the government will create jobs; not business. If the industrial economy is running strongly you can afford a few parasites like Hilary who have imaginary "jobs" and live in dream worlds, as long as they don't get to put any of there dreams into practice. The rest of the problem? human over-reproduction. over-population. immigration. If you only have productive jobs for 90% of the population; one possibility is that you need to export 10% of the population back to the baby factories they came from. And, of course; .gov .gov and .gov always ready and eager to gorw, because there's such a supply of people who don't really want to do anything; they just want to get paid for having a job title.
That great sucking sound is now heard round the world... and it is emanating from Wall Street and D.C.
From CB's around the globe...
It's either wealth comes from Manufacturing or from Raping and Pillaging. Someone has gone for the Rape and Pillage option though I see.
Great post. You see it clearly; most ZHers understand; but the people in the dreamland don't, and won't, and are bound to look for additional and increasingly unethical band-aid ways to perpetuate their comfort at the expense of the real economy and every productive individual who still strives naively to eke out a living in it.
One thing that infuriates me about Roubini and others like him is their incredibly naive or intellectually dishonest presumption that official GDP is reported accurately. They lie about the jobs numbers and inflation and everything else; why wouldn't they lie about GDP? The official figure is ANOTHER LIE. Official data about the economy is like official data about global warming: you have to account for a certain amount of skewing and hockeysticking intended to benefit certain groups and their bullshit narratives. John Williams and others estimate official GDP is a lie to the shocking tune of something like 5-6%. Yes, you read that right, the real economy (evidenced by observations on Main Street, for anybody who actually lives on Main Street) is shrinking DRASTICALLY.
So let's just get past the stupid metaphor that the U.S. economy is still an engine of growth, shall we? Because it isn't and has not been so since at least 2008. There is no recovery; there was never a recovery; and there is never going to be a recovery until systemic reforms are introduced, and that ain't gonna happen as long as lying, self-interested psychopaths are in charge. A stable system requires some reasonable honesty for a foundation. That has been taken away.
"Secular stagnation [is] making structural reforms more politically difficult to implement." <-- Garbage! NOURIEL, YOU'RE MISTAKING CAUSES FOR SYMPTOMS. IT IS HANDICAPPING YOUR ANALYSIS.
Foundation being Glass-Steagall and fiat currency backed by gold. Two points of contention in the structure of micro/macroprudential policy that are no longer being utilized by the central planners driving the handcart
into Hell. A race to the bottom was Greenspan's intention after he removed Glass-Steagall. What other result mathematically could one achieve by removing Glass-Steagall? Greenspan knew the end game mathematically
when he opted for the deregulation. This perspective is supposedly outlined
in his doctoral thesis and empiricism yields the result of his poorly thought out intervention into market activity. In brief, Greenspan planned this outcome from the get go and Robert Rubin and Larry Summers, Tim Geithner, et cetera have had to follow suit ever since. Greenspan 'the mastermind' is really Greenspan 'the mindless imbecile'
and that's precisely why he made sure his detractors could never access
his academic work. Greenspan built a fiction that would ultimately transfer all the wealth in the world to the richest shareholders in the oligopoly. He started his campaign decades ago and the fruits of his so-called 'genius' are now evidenced for all in the World to witness en masse. No human being on the face of planet Earth has done more to screw you out of life than , Mr. Alan Greenspan. One could liken Greenspan to be a modern day devil in disguise IMHO. Greenspan makes Satan seem like a lightweight when one examines the record.
Greenspan. I wonder who his network includes: Kissenger, Rockefellers, Koch Brothers, Brezinski, some of those foundations set up long ago, Ford Foundation, Carnegie Foundation, Mellon Family, JP Morgan Family, Warburg,
en. Aldrich and A.P. Andrews (Assistant Secretary of the United States Treasury Department), Paul Warburg (a naturalized German representing Kuhn, Loeb & Co.), Frank A. Vanderlip (president of the National City Bank of New York), Henry P. Davison (senior partner of J. P. Morgan Company), Charles D. Norton (president of the Morgan-dominated First National Bank of New York), and Benjamin Strong (representing J. P. Morgan),
If the GDP number was only 6% overestimated we would be in great shape and we might have reason to hope for a recovery. Last year the number was increased by adding intellectual property...about half a trillion. Every year the number is off by the 'wrongness' of the deflator.
In the past however heuristics and gimics (LIKE ADDING THE IMPUTED RENT OF THOSE WHO ACTUALLY PAY MORTGAGES) and a few other tricks have made this number a completely arbitrary and a political figure. The 3rd quarter number is now put out in time for the elections (whoop whoop Obama is doing great!!). Remember in 92 when it came out AFTER Bush senior lost? It showed an improving economy but too late to save him.
The GDP is an American fairy tale.
The worst part for me is the rise of the nationalistic parties in europe and the USA that want to slow lown labour migration; which will be bad for global trade. People like roubini think of global statistics because they think the bigger the numbers are the more they, the parasites, and in his case, the parasites apologist, can skim. Do you think Americans need more "labour migration".? It's possible to get everybody in the world as fucked up as they are in China, or Pakistan, and 98% of the population in china is very fucked up indeed; but it's not possible to create this high standard of living for "everyone". Is it selfish and self-serving to want to function as a high level high productivity manufacturing nation? Yep. It sure is. Too bad about that. What exactly are the gloabalists selling? A dream. An impossiblity. An absurdity. A disaster. You're right about the phoney GDP, of course; as I've been telling people for years there will be no growth; forget about it. transfer of capital from the US to China; yeah, that can be done; growth, at this point in history; nope. Can;'t be done.
one major litmus test for a discussion with someone in economics is the ask them what they think about gdp.
the answer will determine the tone and demeanor you should take in dealing with someone who either has learned why gdp is deceptive bullshit , or someone who believes in it as true, or 'true enough' or 'reflexively true' so long as everyone believes in it.
then there are people who don't know what to do think about gdp, or pretty much anything in economics. that's not a discussion, that's a lecture/education session.
Bill and Hillary already down-voted you.
You've got something wrong, man: the only "parasite" in the US is financial markets. Wall Street is. And they've been sucking world's blood for decades while leaveing their host (US) alive. Now they are eating the US also. Sorrry to awake you.
I'm not sure you got. Think of all the jobs in the USA that add "no value" to the Economy.
- Tax Accountants
- Financial Accountants
- Tax Lawyers, Financial Lawyers, Off-shoring Lawyers, Lobbyists
- Tax Shelter Experts
- Independent Auditing Accounting firms
- Current Financial Organization Ratings Agencies
- US Derivative Salesmen/Financial Managers
- Bookkeepers that support the above
Now think what it would be like with a Flat Income Tax with maybe only 5 Tax Credits, Flat Corporate Income Tax... Then Rigid Rules for Incorporation limiting Shell Companies to maybe 1 per corporation, outlawing various tax avoiding schemes, standardized financial instruments, outlawing off balance sheet transactions that "Game" the system, Simplify Banking by breaking apart banks and down sizing them to investment, commercial, savings & loans, etc.
But I don't have to experience to really include all the foundations and 501 organizations.
I probably miss a lot of Useless activity. But why can't we create our own credit... why do we need banks? Why does the federal government pay interest on debt?
phew, that's some list of "professionals" feeding off the status quo:
the majority demographic currently providing those "services" on behalf of the system will let out a collective howl that will be heard 'round the world.
can't wait.
long pause...
Nah
"Multiple trillions of dollars are going to need to be bought or extinguished in this unwind, and that is going to create complete chaos."
I'm gonna love watching the "Great Unwind" that's coming.
OW, my balls
America feel free to borrow Jutting's Bank of America Out of Office Message
<boom> headshot! Bitchezs!
"Probably the most significant reason for which the Western sanctions against Russia will eventually turn against the West itself, or more accurately, against the Western economic elites, is that they forced Russia and China to accelerate their plans to build their own geopolitical and economic frame."
http://failedevolution.blogspot.gr/2014/08/a-perfect-timing-for-argentin...
dunno
that process has been well underway for years. China especially really does not need to do much business in dollars at all.
If the gold derivatives market fails (due to lack of physical) then gold will shoot higher and all these countries with 'dollar debt' problems will just part with a bit of gold and pay them off and get on with business. A dollar collapse would accomplish the same thing.
The idea of acruing debt in a purely transactional currency that is controlled by one country is getting old and the rest of the world is about to deal with the problem.
Excellent, NMB. More and more, the dominant theme on the domestic AND international stage is CONQUEST.
Repeating link, for convenience:
A perfect timing for Argentina to resist against the money market tyranny (Greek blog entry, 27-Aug)
Indeed. Things change very fast.
Doesn't have to be. There is 1 and only 1 semi stable path out of this mess. Revalue financial assets in real asset terms. Take gold parabolic. Reliquify the system through gold. Else, the dollar strength will lead to cascading collapse and massive domestic instability.
But the Debt of the world as its priced right now out values all of planet Earths combined resources. I could understand these numbers if there was a mining colony on the edge of the asteroid belt mining elements needed for things we have yet to invent. But seriously. Its the 21st century and the debt is attached to McMansions, plastic Jesus', strip malls, fast food joints and fairy tale retirement plans that will never materialize; because all the digital money printing went to inflating the stock market so the HFT ass hats over at the SEC could pad their fat asses with more pretend wealth!
Is this assesment wrong?
There's no bound on the value of gold. In fact, it is the only asset on CB balance sheets that can reliquify the system. Sovereign (including US) defaults can only be managed by gold going parabolic.
I understand this, but dosent that mean its going parabolic in a failing economic zone? So if American currency collapses and it goes to $10,000 an ounce and the price of gold collapses when traded in BRICS denomination, wouldnt that make the BRICS denomination far more "valuable"? So, in reality, wouldnt you always want the price of gold to be low? Since its used as a barometer to financial health?
That's the mistake that everyone, most especially the G3 Central banks, are making. ALL FINANCIAL ASSETS are the bubble. Relative devaluation of currencies CANNOT solve the problem. Only revaluing real/productive assets in financial asset terms can. China cannot get out of its own way (best way for China to increase stability and transition economy is to let RMB appreciate big time since food and energy are close to 40% of household budgets and are traded in USD terms).
The self reinforcing effects are dominating. If gold were to skyrocket, currencies would realign to fundamentals. It would be painful for a few years in the US because we have to rebuild our domestic productive capacity and consume less, but we'll be great over the longer haul... US and Canada could/should be the most self sufficient economic zone in the world. We can make it happen. Have everyone you know convert bubble stocks (AMZN, NFLX, etc) to physical gold. The trillions of bubble stocks would take gold truly parabolic and break the vicious cycle we are in.
Yes, all financial assets are in a bubble of some magnitude. However, you and Trulz do realize that TPTB are not going to "allow" what many of us would like to see--return to gold as money. They will never let it happen.
TPTB(Central Bankers. governments, et al) will continue to print on to the bitter end.
Eventually DOD will end the TBTF ponzi and let gold go parabolic. Much easier to handle .01% than 99.99%. Plus, we are actually in great shape relative to the world because we can be self sufficient (with more domestic production which would reestablish internal balance).
It sounds nice, but you're talking about a century's worth of capital investment. The best thing for America now is to shut down the bad big banks and derivatives complex and rebuild from scratch using sound money, with support in agriculture and manufacturing from offshore. The best thing for Canada is to loosen apron strings with the USA and expand trade with more credible and solvent partners (in essence, same as the USA). Canada is eventually going to become North America's most powerful economy. America is doomed to a long depression and will not recover until the industrial base is rebuilt, and it's only realistic to expect that in a handful of regional centers. Knowing what we know about energy supply and demand fundamentals going forward, American will never be rebuilt in its entirety. "Global warming" and other "climate change" rhetoric aside, Young Americans should think about where they would like to live if the cost of living rises to multiples of current levels. A logical starting point would be the places where civilizations traditionally begin: seaports and waterways. And with disease and famine, you do NOT want to be near a war zone or heavily populated area.
Psychopaths in charge mean they will always do the wrong thing. I've seen it first hand: destroyers only know how to destroy. The foreign adventurism and control freakdom needs to stop. Empire is a magnet for psychopaths. They itch to tell other people how to live. It is inconceivable to them that other people might have different ideas of equal merit.
I digress. This is the sort of discussion that needs to take place in a workshop over a matter of days or weeks, not in a handful of ZH posts. And it won't make any difference anyway, because the masses will actively resist doing the right thing, because it's HARD. That's what makes all of this merely academic. The population of America is some 330 million, whereas forward-thinking websites are frequented by maybe a few thousand. Most Americans would happily watch millions of people in other parts of the world be murdered than have their credit cards taken away or be forced to get out of their chairs.
Futurist might be what you call people that are forward thinking. I also heard that Canada per capita is worth more than the USA. They have less debt, fewer people, and tons of mining, oil industry.
Americans don't think enough how to compare their country with other countries. Too many issues are black and white for them to actually intellectualize or consider other paradigms. Health Care, War, Terrorism, Debt, national Debt, national Budget, ... US People can't place themselves in history or today's world in many terms like health, wealth, education, manufacturing, GDP...
"I also heard that Canada per capita is worth more than the USA. They have less debt, fewer people, and tons of mining, oil industry."
Donald Trump, when going through his bankruptcy, pointed at a homeless man begging for change. Trump noted that guy was worth about $900M more than him...
.
perfectly stated. as is this:
taught from birth to feel "exceptional" and deserving of all they can get their hands on, few will know what hit them when the balancing act of reality makes itself known. . .
It will be very fast. The majority will be flabbergasted: "How could this happen?" It's going to be worse than any depression we have ever seen. And none of it is necessary! It could all have been avoided! But nobody objected back when the psychopaths first began their manipulations.
Yes; that seems unarguable to me. ALL financial assets are the bubble. That's why my life savings are in Silver bullion; since 1998 this time around. Inflation if it gets going is uncontrollable and self-terminating. Like a Forest Fire; it runs out of fuel. But a Deflationary Crash is in the cards sometime in the near future; within the lifetime of almost everyone on this blog; and because the root of this deflationary crash will be the "financial Instruments"; there will be a rush into metals. Un-certainty and fear cause people to take the most conservative option which is PM's. It may be true that cash is king in a deflationary crash, but there will be little cash available and great uncertainty and fear. As soon as .gov makes any major sudden change in financial arrangements of any kind; it will remind people that the present currencies are creatures of government decree; at the moment it's not necessary to think about this; but it will be easy to cause a stampede into metals in the face of really serious problem with the world wide system of instruments. I can't help but regard the PM's as the horse with four healthy legs and hooves in a horse race where the other starters all have amputations or big wounds on one or more feet.
Gold's value stays fairly constant. That you may have to trade $75,000 US-Zimbabwe bux to buy one oz. is the barometer of the insane levels of money creation via credit and monetization of debt that have taken place.
Trillions of dollars have to return to the vapor from which they sprang if the dollar as a monetary term is to have any meaning similar to it's historical predecessor.
Devaluation. Big time. Of everything.
How many oz. of gold will someone be willing to trade a house for? Real true valuation and price discovery. Every transaction is a 'gold fix' determined by trade, not a bankster club.
Only a note redeemable 100% in gold should be considered money (a barrel of oil is too heavy). Real bills of trade can do the heavy commercial lifting which are self extinguishing liens on goods forwarded but credit would only be extended from 100% savings.
No more magic paper.
Real money keeps everyone honest. Large capital holders will still have all the advantage. They always do, but without a Central Bank to borrow from, both they and the govt. would have to pay the true cost of credit.
Imagine a govt. that had to ask for your permission and money to go to war or to give away to some special interest group?
There would be a damn sight less of both.
The question of what is used for money and what numbers are attached to it is not very interesting. Undoubtedly a lot of peoples plans and schemes will fail when the present absurd financial "system" fails; but "fixing" the financial system will not solve any fundamental problem. What was wrong with Zimbabwe? Was it too big a number on their currency? is there a magic number that goes on currency that's "just right". No. What was wrong with Zimbabwe was zero productivity; and the usual 100% corrupt central .gov making it impossible for anything useful to get done. Examine the example of Russia for some insight into actual economics as opposed to dysfunctional theories. they had a very serious problem; and I'm being tongue in cheek when I say that. The country, if the USSR was a country, I think we could call it that; disintegrated. Very problem you could list existed there, more or less at the same time. Collapse of production, carpet baggers, the notorious criminal oligarchs; the currency became almost worthless; crime and private armies in the form of 'security services" ruled the streets. more people got shot going for a walk in Moscow for no particular reason than they do in Detroit. Yet the core of this "country" has re-invented itself and taken back a lot of its national properties and is able to function now. This is because productivity was encouraged by the protection of private property by the rule of law, the taking back of the state's resources from the Oligarchs, and a change to private enterprise; which motivates people to try to produce something. they didn't need a magic currency; they didn't need Gold coins; they needed a government that was determined to produce a going concern out of the country and had some idea how to go about it. Mexico sells oil; it's state oil company is called Pemex. But it had to steal it's oil back from Rockefeller. The Mexican Revolutionary .gov put all his employees on a train, that was guarded for their safety, and exported them back to Texas. He screamed bloody murder and wanted the US Armed forces to go take "his" oil back; but FDR wasn't interested. It's more important to have a government that has real-world, functional ideas as to what should be going on, than it is to have any particular currency. In our case we've been too successful for too long; and it has appeared that we can afford any kind of mad day dreamers and goofballs making policy for the nation; but ultimately, we can't. And certainly we can't afford criminals like Bill Clinton, and the Congress that voted in the most favored nation trade status for China; that's a sort of National Suicide. Since then we've seen an entertaining line-up of ignorant screwballs, more or less criminally inclined, acting as policy makers. Of course the basic idea that Nixon was sold by his economic adviser; that it wasn't necessary to have gold as a control over government indebtedness; which is probably all it's good for; but that's enough, if it's necessary to actually pay your bills and the public knows about it; because your Gold is leaving the country, the politicians will have most of their "magic" removed; is false and ultimately destructive. Not by it's nature; but by the nature of politicians. Lyndon Johnson famously said of his "new society", or whatever he called it, his massive Federal Welfare program, "I'll have them Niggers voting Democratic for 10,000 years". When this is what you've got for a policy maker; for a governor on your machinery of state; you''re going to have bad problems. Then we got successively more huge debts from each president, strangely enough; Ronald Reagan actually wanted to reduce the size and influence of the Fed. Government; but as you'll read in David Stockman's book, "the triumph of Politics"; it was impossible to do. All the congress creatures were interested in the pork and no one was interested in the national interest. He left office with a huge increase in Federal Debt. And apparently, shortly after that; sometime around the Bush dynasty begininings, our foreign policy was taken over completely and perfectly by the lunatics in the CIA and their world domination fantasy. Un-fortunately foreign military adventures are non-productive and extremely expensive. If you can say one thing for certain about the Roman Empire it is that it was a war making state. The original model for all the two bit imitators since then who want to steal everyone else's resources and manpower; through military force. So, my thesis is that yes the present financial system will implode, I have no idea when; but no fundamental problem will be, or can be solved, by any new or improved currency, or monetary system. You've simply got to have relatively honest central government that understands that its purpose is the welfare of the nation; and not the personal enrichment of some crooked congressmen or president. I would imagine that Vladimir Putin was considerably sobered by the developments he saw around him; and decided that as soon as he skimmed off some pelf from a couple of oligarchs that the principal business needed to be making a functional state. As long as we have wingnuts who believe that we have infinite resources and magic powers, and don't need to bother about the ability of people to start and run businesses or manufacture anything; but can just continue to increase the size and intrusiveness of government without practical limit; nothing is going to get 'fixed". gold or no gold.
Good Post. Obviously you got me digging into a few things in my own post in reply to you above.
Auditing, Inspections, Accounting, Standardized Accounting, Standardized Financial Instruments.
- Solves problems with Secret Agencies
- Solves problems with gift giving to .gov officials
- Solves problems with Financial Conflict of Interest
- Prevents Fraud, discourages fraud
- Encourages honest politicians, judges, health care, management, executives
- Discourages War
- Discourages proliferation of .gov secrets, secret agencies
- And they already exist as systems, the history is already there and well developed
I have to dig into David Stockman a little more.
hmm,
with respect, I believe they exist as support systems to those who mean to plunder "the system" and are easily, often bribed /corrupted.
as "history" has proven thus far.
control. control over others. riches/wealth. they attract particular parasites, and corrupt most within the periphery. amrka being a perfect, current example, but certainly "history" is full of many others.
The working jet engine that is US-UK is a fucking cartoon. Its running on the grease from french-fry deep fryers.
Basic cybernetics of open looped as opposed to closed looped systems yields the third law of thermodynamics which is a bitch called Entropy,
motherfuckers. Information Theory has been around much longer than the neocons or the 'Banksters' leading to the conclusion that everyone and his brother knows that the 1% are a closed looped system with nowhere to hide when Entropy comes a knocking at the door of Wall Street once again.
Hopefully, this next crash will do the trick and lead to the arrest and indictments of the 1% classless kleptocrats in Investment Banking throughout the world. Mass arrests are going to eventually take place
when the entire system goes down. And we are talking when and not 'if'
the system goes down.
But all it takes to sustain it for another 1, 3, 5, 20 years is confidence. Since they can manipulate everything now (GDP numbers, stock prices, gold prices, news items) they can peg confidence levels anywhere they want. Sure, sure, eight guys on the internet can disagree, or even 80 million...but the herd keeps running just where they want it to.
Data can be used to overturn confidence. People working two part time jobs who want full time work with good compensation are hard to avoid.
But unconfidence in the economy might be as much of a problem as confidence in a poor economy. For instance Politicians take Crisis and use them for "Change"... like privatizing social security or terminating MEDICARE... Announcing a Police State, Announcing Collapse of the US Dollar and going to Electronic Money.
Weekly and hourly earnings data from the Current Population Survey
Series Id: LEU0252881600
Series title: (unadj)- Constant (1982-84) dollar adjusted to CPI-U- Median usual weekly earnings, Employed full time, Wage and salary workers
Year Qtr1 Qtr2 Qtr3 Qtr4 Annual
1979 339 334 325 328 332
1980 324 314 315 317 318
1981 317 311 304 314 312
2012 337 335 329 336 335
2013 334 333 330 337 333
2014 339 328 332
Constant Dollars, Weekly Earning same in 1979 as 2014.
Confidence is not the key determinant. Expectation is the key determinant
and probability is the metric. Bear Stearns @ 11:00am March 10th 2008
was all about the probability of expectations when expectations suddenly changed due to overleveraged banks and their ability to withstand short and distort strategy. Nothing factual started the Bear Stears bear raid except the underlying numbers on leverage and subprime home loans.
The hunch proved correct, the strategy worked, and the Bear Stearns bear raid was successful. Six months later the same strategy downed Lehman Bros. and the Gorrila of Wall Street. Expectations destroyed Bear Stearns, Lehman Bros., and the USA economy, in one split second of trading March 10th 2008. The problem with Wall Street is the fact that they do not understand simple 'expectations' on trading, or in business. The entire field of Economics in the Western world is living in the dark ages with no ability to see the light on the 2008 crash. I, for one, could fix Wall Street myself in less than one year. Americans have had six years and they can't even get that expectations destroyed Wall Street.
Just for the record - entropy is described in the 2nd Law of Thermodynamics. As it turns out, thermodynamics has a Zeroeth Law (equilibrium); 1st Law (conservation of energy); 2nd Law (entropy) and 3rd Law (constancy of entropy near absolute zero).
Thanks for the correction, TheSecondLaw. I'll re-read the three laws again given my mistake. It's been a few years.
Speaking of closed systems, one can figure out who has been stealing from others (hint option market makers from everyone else) by looking at weighted average fund performance relative to benchmarks and S&P. 90% underperform over 36+ months. That's the TBTF abuse of QE flow tax...
Ebola to the rescue
only one of its four engines is functioning properly: the Anglosphere (the United States and its close cousin, the United Kingdom).
Hmmm wonder if this has anything to do with the US and UK being the largest exporters of FRAUD.
Actually the US and the UK are not doing any better M'Fers.
Real U.S. GDP has been falling since 2008; misstatement of the inflation rate disguises that fact. The Fed has printed $4 trillion in fresh new dollars. How does the dollar manage to rise against those facts?
Found the current bubble: Money going to Politicians. Started November 2002. The Bipartisan Campaign Reform Act of 2002 (BCRA, McCain–Feingold Act, Pub.L. 107–155, 116 Stat. 81, enacted March 27, 2002, H.R. 2356) is a United States federal law that amended the Federal Election Campaign Act of 1971, which regulates the financing of political campaigns.
"The meme of US economic strength and decoupling from the world has consequences..."
- US Politicians have been decoupled since 2002, and have been riding the Bubble, Big Political Contributions.
- You can join the Bubble, but hell that means you go to the "Dark Side"
- US Manufacturing Top was 1979, they have been Decapitalizing since that time
- AVG Weekly US Wages in constant dollars is the same today as in 1979
- Rent Seeking is included in US GDP, which in my mind is when someone resells something without adding any value to the USA, financial transactions
Excellent. Note that Clinton signed the most favored nation trading status treaty in 1980, This is the big picture; you have summarized it nicely. Crooked politicians and death of manufacture. When a Capitalist Economy, (the only kind there is, actually), Decapitalizes, the result is drastically lowered standards of living. the percentage of this inevitable basic effect from this basic cause that is inflation, taxation, regulation, socialism, is relatively unimportant; although virtually all political discourse revolves around these variables. It has already become impossible to consider stopping the Chinese Ships. Everyone "knows" that free trade is vital; for everyone ! (this is complete bullshit).
Thanks
Governor of Arkansas for five terms, serving from 1979 to 1981 and from 1983 to 1992. He was also the state's Attorney General from 1977 to 1979.
- World Trade Organization in 1994. The World Trade Organization requires members to grant one another "most favoured nation" status. A "most favoured nation" clause is also included in the majority of the numerous bilateral investment treaties concluded between capital exporting and capital importing countries after the Second World War.
- In the 1990s, continued "most favoured nation" status for the People's Republic of China by the United States created controversy because of its sales of sensitive military technology.
- In 1998, in the United States, "most favoured nation status" has been renamed "permanent normal trade relations" (NTR)
- MFN/NTR status for China, a non-market economy, which had been originally suspended in 1951, was restored in 1980 and was continued in effect through subsequent annual Presidential extensions.
Jimmy Carter January 20, 1977 – January 20, 1981
Well, I fucked that up nicely. that's what I get for depending on dim memory traces; instead of doing my homework.
Naw you just mixed up Jimmy for Bill.
Hey another angle is how Bankers Play hardball with Credit to keep people and countries like Argentina down. See IMF Story below someone posted how China and Russia are gaining influence.
Banks get to create money out of thin air, so why are they such assholes.
- Imagine building an Alcohol Still Business, getting 5 years to perfect the processes and get into distribution network before having to repay the Business Loan and no Taxes till you are profitable.
- If we want to build manufacturing, let's look at banking terms, why do banks have to be so tight with money, and then they get to gamble on Wall Street or in London?
- Who says Bankers have to rule the world, make the rules, and provide Credit, Run our Credit history, set interest rates for Tuition Loans
- We know TBTF Banks are supporting the Giant Corporations in every way possible... and working against new manufacturing in the USA
- NAFTA, CAFTA-DR, WTO, other treaties, Free Trade, NTR all support the biggest bankers
- Public Banking might be an answer
- Auditing might be an answer, get NSA & CIA to Audit Big bankers and push them out of the System, also push out our politicians & Lobbyist
Yes, I believe free trade is BS also.
China can use slaves, they have to worker rights, they don't have to pay full wages worked, no overtime, no weekend pay, no holiday pay, no Obama Care... US Workers can not audit work practices around the world.
No system exists to audit work practices.
Besides our manufacturing base needs to be restored to build a healthy economy. We need 25-30 Million good paying full time jobs with good compensation.
The problem isn't free trade, it's fair trade.
China devalues it's currency to make it's imports cheap relative to the rest of the world.
It's the equivalent to a local furniture maker competing in a market where the prison in the next county has a furniture shop with 500 prisoners making a dollar a day.
He shuts the shop and sells insurance and rent seeks a commission.
That's the US. Too many insurance salesmen in a country that's getting too poor to buy insurance.
dupe
Real estate requires cash flows and this real income growth in the 99% to support asset prices. Only gold can reliquify the system. Only gold. Sell float scams and buy physical gold.
Gee do you think that maybe the chart is using the propaganda that masquerades as "economic statistics" these days?
Actually, think about this:
1. The fed prints trillions and props up the markets
2. Problem is there's to many dollars in the system now.
3. The larket crashes and a lot of all that money is destroyed in the crash
4. Now what will the fed do? It will be offcially broke... So... They'll wipe out the debr of the US, the US is offfcially without debt and there will be turmoil but...
5. US army. That means, nobody will dare to doubt the US and it will make a point.
6. What's that point? Russia? China?
People really forget that the government or the fed don't operate in the best interest of the people.
It's the people who need to operate in the best interest of the country.
People expect help when there's a storm but the state never promised that.
People expect food from the state and the only reason they do so is to keep the peace... Untill...
People all need wakeup calls to reality. And not the "evil" reality, I mean the real reality where it will be clear that it has always been like this in history.
Only difference with now and than is that every citizen has turned into a spoiled brat.
Sudden Debt
My Grandma left Belgium with my dad and aunts in knickers and diapers in search of grandpa. She found him in a bar playing cards and the first thing he said to her was "where you been"
I'm trying to figure out if he was a low down dirty card playing drunken booze running Buffulo Head before he left or did he learned it here.
Whadda ya think?
Sudden Debt; I'm not a historian, but Rome seems like the best or only example we have of empire, wussification of citizens, enslaving peons into the army of the empire, total corruption of Rome, and the fall of Rome.
- Rome tried different kinds of money
- Not sure how they handled Debt in Rome
- Slaves in the Army saved lots of money
- Probably there were lots of Slaves in Rome
- Probably good Trade & Food distribution system
- Rich Romans were Land Owners or Traders?
- Maybe the Senate in Rome was like "House of Lords"
- Classes: Peons, Slaves, Citizens, Senate Members
USA is not much different, just no mandatory military service or Draft.
...........yet.
RUH-ROH
do over please
only one of its four engines is functioning properly...
properly? wtf? leaking fuel and burning oil whilst first class eats radioactive caviar. this bitch is going down.
Virgin Galactic only had one engine...and, it went down. So it's a good analogy when you last engine not only stops working but actually blows up and takes out the plane.
At least the F-15, F-18 and F-22 have two engines, ...so they can get by if one engine flames out.
These days the F-35 has one "perfect" engine. See there are so many examples of single-engine bullish risk these days...it is all there in our face.
We need more daily Swirl-o-Grams to make sense of the spiraling vortex on one engine analogy.
BTW this "domestic decoupling" chart...like a divorce...is very unsettling ! I would keep track of DD and Swirlogram from now on, a strong chart pair.
Fixed Private Residential Investment is a great 1 to 2 year leading indicator.
Looks like 1 to 2 years from now GDP is going red.
Question re:
The reason it is going to happen rapidly and maybe in a disorderly fashion is because if the dollar moves much higher, we will begin to see an unwind or THE unwind of the biggest carry trade in history.
Which carry-trade is he refering to?
Yes. It would be helpful if Raoul Paul were to explain the mechanics of a great carry trade unwind, and why the Fed would not be able to offset it.
Roubini parties with these fucking klepto's, in fact I take everything I read from these clowns with a grain of salt
Housing bust 2.0 straight ahead...
The "jet engines" analogy doesn't quite work when you think jet engines don't usually isolate other jet engines. It's more likely you LOST your other jet engines, guys, and they went to attach to ANOTHER, MORE MENTALLY HEALTH PLANE. So, be a man and face your crash now. You've sought for it, meticulously.
Stacking gold is not the 100% safety or preservation strategy that goldbugs think. It could wind up being just the opposite... their ruination. Clearly seeing the trends of government today should be enough of warning (centralized government along the spectrum of Socialism, Marxism, Fascism, complete Authoritarianism). We are in a sovereign debt crisis, local and national governments are and will be collapsing. The desperation is going to be over the top. Do you think they are going to reward you for possessing gold?! A predicament isn't resolved by one solution (gold). It takes many solutions.
It took from 1914 to 1923 (roughly 10 years) for Weimar Germany currency to completely collapse after dropping 30% Gold backing and currency went all fiat. So maybe it will take more or less time here since its a worldwide phenomenon. It seems like a downward spiral when each major country currency "passes the torch"...like Nero.
https://mises.org/daily/6945/When-Money-Dies-Germany-and-Paper-Money-Aft...
An article I wrote a while back details the inflation that hit Germany but shows the worst of the hit came over a much shorter period. It was amazing how quickly inflation took root in Germany during the 1920s, we must consider how fast it could happen now that we live in an age of instant communication.
The German currency was relatively stable at about 60 Marks per US Dollar during the first half of 1921. But the demands in May 1921 for reparations in gold or foreign currency to be paid in annual installments of 2 billion goldmarks plus 26 percent of the value of Germany's exports was crushing. The first payment was paid when due in June 1921. That was the beginning of an increasingly rapid devaluation of the Mark which fell by November 1921 to approx. 330 Marks per US Dollar.
During the first half of 1922, the Mark stabilized at about 320 Marks per Dollar because of international reparations conferences, including one organized by U.S. investment banker J. P. Morgan. After these meetings produced no workable solution, the inflation shifted to hyperinflation and the Mark fell to 8000 Marks per Dollar by December 1922. The cost of living index increased more than 15 times in just six months. More on exactly what happened and why it should concern all of us in the article below.
http://brucewilds.blogspot.com/2013/01/surprising-facts-about-inflation.html
The bright side of all of this is that we screwed everybody else by getting real goods by trading worthless paper we printed in the basement.
Boy.
I hope they don't plan on doing the same thing we did and buy our stuff with that shit.
That could be a problem.
Tyson's could become Fuk Yu Tu Chicken Farms and send all them chickens to China.
We get the artificial chicken flavored ramen noodles.
China sends Americans toxic pet food for Old Yeller, Lassie, and Felix the Cat. They send you melamine laced Bay Infant Formula for your kids and they subscribe to BRICS whilst shorting the USA on healthy food for your pets and family. The slaves know how to treat their oppressors just as the oppressors know that the slaves are actually out to nail them to a wall as soon as the opportunity strikes. Actually, China surpassed the USA as being the World's largest economy now. China is about to become the reserve currency and render the USA to the slag heap of history where it undoubtedly belongs after careful assessment of possible, and probable
futures.
Roubini is a celebrity.
<”…Is there actually even one sane person on this site that honestly believes the Federal Reserve is going to keep its hands out of the cookie jar? They're printing like there's no tomorrow... They're keeping three quarters of America on their payroll 24/7...”>
Nail on the head! If the Fed pulls out, we collapse overnight. This economy is roughly 75% consumer and 25% government. The oligarchs have got to keep the sheeple borrowing and spending. The little people cannot become frugal and quit buying crap they don’t need and can’t afford…”Buy, buy, buy!” This means more no-qual loans and easy credit. Uncle Sam has got to keep massive deficit spending on entitlements and wars, going for the same reason. Any ‘austerity’, and it is over forever.
If the Fed Bank fails to intervene, there is no bottom. The Dow will plunge on lousy earnings and no more buybacks. The masses will grow angry, and the oligarchs will get ready to flee the country with their gold. Without the Fed, Silicon Valley would implode first and everything else would follow. I believe it will happen even with the Fed. The bursting of the second tech bubble will devastate property values, etc. Fear will take over. The fools who paid $2mil for a POS house in Palo Alto, will see they can’t even get half of that and they will walk away in droves. The banks will fail and demand bailouts. Wash, rinse, repeat. The Fed has to try to delay this scenario for as long as possible.
Two economists on a plane, one of the engines fails. The Captain gets on the intercom and tells the passengers not to worry because they still have 3 engines and will arrive at destination in 3 hours instead of 2 1/2. Some minutes later another engine fails and the Capatin speaks over the intercom to reassure passengers stating that all was ok because they have 2 engines left and would be arriving at destination in 3 1/2 hours. When a third engine fails, the Captain announces everything is still fine because they have one engine left and would be arriving at destination in 4 hours instead of the original 2 1/2. At this point one of the ecomonists turns to the other and says I hope that last engine doesn't fail too, otherwise we'll be here all night.
It's shit like Roubini whose actively gone along with the charade for years then jumps ship when the Ponzi he's helped to prop up is about to blow up. For sure he'll get the 'elite' msm thumbs up as a Visionary. CUNT
Recently released minutes from the last Federal Reserve meeting confirmed growing concern about the pressure a stronger dollar is putting on other currencies around the world. Bottom-line is other currencies are under assault because both economies are weak and countries are buried in debt they can never repay at real market interest rates. When investors become unwilling to buy the bonds of heavily indebted nations causing the bond bubble to burst the values of currencies in those countries will tumble.
While there are not many Bond Vigilantes there are a slew of Currency Vigilantes and they are ready to make their presence known. Recent weakness in the value of the Yen, Pound, and Euro must not go unnoticed. The Currency Vigilantes are acutely aware of when a currency is overvalued or ready to be re-pegged and pounce on the weak currency to tear it apart. The article below questions just how stable the currency markets really are and it may be a signal that currency trading is about to get very wild. Please note, this may also be sending a signal that the whole system is unstable and the stock market is about to drop like a stone.
Many people are looking for a "dis-inflationary crash" and it is possible or we may see money shift from bubble to bubble. I have pondered the possibility that what we are and have been going through is the "major deflationary period" before the storm. When we stand on the abyss central bankers will be forced to print so much worthless paper the money will act as a cushion to our fall but not change the reality. Before you discount this possibility that we will move directly into the final stage of hyperinflation consider that hyperinflation paves an easier transition to a replacement currency and a reset of the system.
http://brucewilds.blogspot.com/2014/10/fed-concerned-that-stong-dollar.h...
Good shit man as usual spot on buy silver and massage your scotum man.
Peace out
Gotta bounce!!
the "anglosphere", ha! that is funny. more like the hebrewsphere. where da 13th tribe at nouri-el???
"the post viking anglo pirate shpere"
LONG LIVE THE TEUTONIC KNIGHTS !!!
THE EUROZONE IS THE NEW GERMANY !!!
BLOW THE DOME SO WE CAN ALL GO HOME !!!
i like the way nouri-el gives financial commentary, first he eats copeus amounts of peyote buttons, trips his brains out, practices cabala, and then gives his two cents
priceless
and well written
i like the way nouri-el gives financial commentary, first he eats copeus amounts of peyote buttons, trips his brains out, practices cabala, and then gives his two cents
priceless
and well written
"only one of its four engines is functioning properly: the Anglosphere"
I think what's actually happening is the banking mafia in London and New York are slowly bleeding the entire world dry but because they are physically based in USUK some of the blood drips onto the regions around the banking mafia's nests making USUK's overall numbers look better than they are.