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The Biggest Economic Story Going Into 2015 Is Not Oil
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
Isn’t it fun to just watch the market numbers roll by from time to time as you go about your day, see Europe markets up 3%+, Dubai 13%, US over 2% (biggest two-day rally since 2011!), and you just know oil must get hit again? Well, it did. WTI down another 3%+. I tells ya, no Plunge Protection is going save this sucker.
And oil is not even the biggest story today. It’s plenty big enough by itself to bring down large swaths of the economy, but in the background there’s an even bigger tale a-waiting. Not entirely unconnected, but by no means the exact same story either. It’s like them tsunami waves as they come rolling in. It’s exactly like that.
That is, in the wake of the oil tsunami, which is a long way away from having finished washing down our shores, there’s the demise of emerging markets. And I’m not talking Putin, he’ll be fine, as he showed again today in his big press-op. It’s the other, smaller, emerging countries that will blow up in spectacular fashion, and then spread their mayhem around. And make no mistake: to be a contender for bigger story than oil going into 2015, you have to be major league large. This one is.
The US dollar will keep rising more or less in and of itself, simply because the Fed has ‘tapered QE’, and much of what happened in global credit markets, especially in emerging markets, was based on cheap and easily available dollars. There’s now $85 billion less of that each month than before the taper took it away in $10 billion monthly increments. The core is simple.
This is not primarily government debt, it’s corporate debt. But it’s still huge, and it has not just kept emerging economies alive since 2008, it’s given them the aura of growth. Which was temporary, and illusionary, all along. Just like in the rest of the world, Japan, EU, US. And, since countries can’t – or won’t – let their major companies fail, down the line it becomes public debt.
One major difference from the last emerging markets blow-up, in the late 20th century, is size: emerging markets today are half the world economy. And they’re about to be blown to smithereens. Sure, oil will play a part. But mostly it will be the greenback. And you know, we can all imagine what happens when you blow up half the global economy …
Erico Matias Tavares at Sinclair has a first set of details:
There are some signs of trouble in emerging markets. And the money at risk now is bigger than ever. The yield spread between high grade emerging markets and US AAA-rated corporate debt has jumped, almost doubling in less than three weeks to the highest level since mid-2012.
MSCI Emerging Markets Index and Yield Spread between High Grade Emerging Markets and US AAA Corporates: 14 March 2003 – Today. Source: US Federal Reserve.
This means that the best credit names in emerging markets have to pay a bigger premium over their US counterparts to get funding. When this spread spikes up and continues above its 200-day moving average for a sustained period of time, it is typically a bad sign for equity valuations in emerging markets, as shown in the graph above. One swallow does not a summer make, but it is worthwhile keeping an eye on this indicator.
As yields go up the value of these emerging market bonds goes down, resulting in losses for the investors holding them. The surge of the US dollar in recent months could magnify these losses: if the bonds are denominated in local currency they will be worth a lot less to US investors; otherwise, the borrowers will now have to work a lot harder to repay those US dollar debts, increasing their credit risk. Any losses could end up being very significant this time around, as demand for emerging markets bonds has literally exploded in recent years.
Average Annual Gross Debt Issuance ($ billions, percent): 2000 – Today. Source: Dealogic, US Treasury. Note: Data include private placements and publicly-issued bonds. 2014 data are through August 2014 and annualized.
As the graph above shows, the issuance of emerging market corporate debt has risen sharply since the depths of the 2008-09 financial crisis.These volumes are very large indeed, and now account for non-trivial portions of investors’ and pension funds’ portfolios worldwide.
As a result, emerging markets corporations are now leveraged to the hilt, easily exceeding the 2008 highs by almost a multiple to EBITDA. And why not? With foreign investors desperate for yield as a result of all the stimulus and money printing by their central banks, they were only too happy to oblige. And they were not alone. Governments in these countries were also busy doing some borrowing of their own, as their domestic capital markets deepened.
[..] foreign investors have also piled into locally denominated bonds of emerging markets governments. Countries like Peru and Latvia now have over 50% foreign ownership of their bonds. [..] But there are big speculative reasons behind the recent money flows going into these countries – which could reverse very quickly should the tide turn. [..]
If investors end up rushing for the emerging markets exit for whatever reason, with this unprecedented level of exposure they might be bringing home much more than a bruised ego and an empty wallet. For one, European banks are hugely exposed to emerging markets. Any impairment to their books would likely make any new lending even more difficult, at a time when there is already a dearth of non-government credit in Europe.
And if emerging economies falter, where will the growth needed to repair Western government and private balance sheets come from? It used to be said that when the US economy sneezes the rest of the world catches a cold. Now it seems all we need is a hiccup in emerging markets.
That’s what you get when emerging markets are both half the global economy AND they’ve accomplished that level off of ultra-low US Fed interest rates and ultra-high US Fed credit ‘accommodation’. All you have to do when you’re the Fed is to take both away at the same time, and you’re the feudal overlord.
Our favorite friend-to-not-like Ambrose Evans-Pritchard does what he does well: provide numbers:
Fed Calls Time On $5.7 Trillion Of Emerging Market Dollar Debt
The US Federal Reserve has pulled the trigger. Emerging markets must now brace for their ordeal by fire. They have collectively borrowed $5.7 trillion in US dollars, a currency they cannot print and do not control. This hard-currency debt has tripled in a decade, split between $3.1 trillion in bank loans and $2.6 trillion in bonds. It is comparable in scale and ratio-terms to any of the biggest cross-border lending sprees of the past two centuries.
Much of the debt was taken out at real interest rates of 1% on the implicit assumption that the Fed would continue to flood the world with liquidity for years to come. The borrowers are “short dollars”, in trading parlance. They now face the margin call from Hell as the global monetary hegemon pivots. The Fed dashed all lingering hopes for leniency on Wednesday. The pledge to keep uber-stimulus for a “considerable time” has gone, and so has the market’s security blanket, or the Fed Put as it is called. Such tweaks of language have multiplied potency in a world of zero rates.
Officials from the BIS say privately that developing countries may be just as vulnerable to a dollar shock as they were in the Fed tightening cycle of the late 1990s, which culminated in Russia’s default and the East Asia Crisis. The difference this time is that emerging markets have grown to be half the world economy. Their aggregate debt levels have reached a record 175% of GDP, up 30 percentage points since 2009.
Most have already picked the low-hanging fruit of catch-up growth, and hit structural buffers. The second assumption was that China would continue to drive a commodity supercycle even after Premier Li Keqiang vowed to overthrow his country’s obsolete, 30-year model of industrial hyper-growth, and wean the economy off $26 trillion of credit leverage before it is too late. [..]
Stress is spreading beyond Russia, Nigeria, Venezuela and other petro-states to the rest of the emerging market nexus, as might be expected since this is a story of evaporating dollar liquidity as well as a US shale supply-glut.
[..[ the Turkish lira has fallen 12% since the end of November. The Borsa Istanbul 100 index is down 20% in dollar terms. Indonesia had to intervene on Wednesday to defend the rupiah. Brazil’s real has fallen to a 10-year low against the dollar, as has the index of emerging market currencies. Sao Paolo’s Bovespa index is down 23% in dollars in 3 weeks.
The slide can be self-feeding. Funds are forced to sell holdings if investors take fright and ask for their money back, shedding the good with the bad. Pimco’s Emerging Market Corporate Bond Fund bled $237m in November, and the pain is unlikely to stop as clients discover that 24% of its portfolio is in Russia.
One might rail against the injustice of indiscriminate selling. Such are the intertwined destinies of countries that have nothing in common. The Fed has already slashed its bond purchases to zero, withdrawing $85bn of net stimulus each month. It is clearly itching to raise rates for the first time in seven years. This is the reason why the dollar index has jumped 12% since May, smashing through its 30-year downtrend line, a “seismic change” in the words of HSBC. [..]
World finance is rotating on its axis, says Stephen Jen, from SLJ Macro Partners. The stronger the US boom, the worse it will be for those countries on the wrong side of the dollar.
“Emerging market currencies could melt down. There have been way too many cumulative capital flows into these markets in the past decade. Nothing they can do will stop potential outflows, as long as the US economy recovers.
Hold it there for a moment. I don’t think it’s the US economy (its recovery is fake), it’s the US dollar.
Will this trend lead to a 1997-1998-like crisis? I am starting to think that this is extremely probable for 2015,” he said.
This time the threat does not come from insolvent states. They have learned the lesson of the late 1990s. Few have dollar debts. But their companies and banks most certainly do, some 70% of GDP in Russia, for example. This amounts to much the same thing in macro-economic terms. Private debt morphs into state debt since governments cannot allow key pillars of their economies to collapse.
These countries have, of course, built $9 trillion of foreign reserves, often the side-effect of holding down their currencies to gain export share. This certainly provides a buffer. Yet the reserves cannot fruitfully be used in a recessionary crisis because sales of foreign bonds automatically entail monetary tightening. [..]
.. these reserves are a mirage. If you deploy them in such circumstances, you choke your own economy unless you can sterilize the effects. [..]
Investors are counting on the European Central Bank to keep the world supplied with largesse as the Fed pulls back. Yet the ECB could not pick up the baton even if it were to launch a blitz of quantitative easing, and there is no conceivable consensus for action on such a commensurate scale.
The world’s financial system is on a dollar standard, not a euro standard. Global loans are in dollars. The US Treasury bond is the benchmarks for global credit markets, not the German Bund. Contracts and derivatives are priced off dollar instruments. Bank of America says the combined monetary stimulus from Europe and Japan can offset only 30% of the lost stimulus from the US.
What more can I say? This is the lead story as we go into 2015 two weeks from today. Oil will help it along, and complicate as well as deepen the whole thing to a huge degree, but the essence is what it is: the punchbowl that has kept world economies in a zombie state of virtual health and growth has been taken away on the premise of US recovery as Janet Yellen has declared it.
It doesn’t even matter whether this is a preconceived plan or not, as some people allege, it still works the same way. The US gets to be in control, for a while, until it realizes, Wile E. shuffle style, that you shouldn’t do unto others what you don’t want to be done unto you. But by then it’ll be too late. Way too late.
As I wrote just a few days ago in We’re Not In Kansas Anymore, there’s a major reset underway. We’re watching, in real time, the end of the fake reality created by the central banks. And it’s not going to be nice or feel nice. It’s going to hurt, and the lower you are on the ladder, the more painful it will be. Be that globally, if you live in poorer countries, or domestically, if you belong to a poorer segment of the population where you are. In both senses, the poorest will be hit hardest.
It’s the new model along which the clowns we allow to run the show, do so. Unless ‘we the people’ take back control, it’s pretty easy to see how this will go down.
* * *
Still not convinced... Barclays notes this is already one of the worst sell-offs in EM credit since the crisis...
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Native American unemployment?http://hedgeaccordingly.com/2014/12/washington-despite-job-growth-native...
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2015 will be the year of world governements hiring debt collectors to relentlessly call Obama for the next payment
http://y2u.be/VI6tBwVjyOY
repeat after me "all is good" cept gold and thats baaad
Get your dry powder ready, there will be blood on the streets before Obama is through.
Here is what the western empire is woried about, the Eurasian land mass unifying through this "New Silk Road" rail concept. The first 1800 mile route from China to Spain is already operational.
Western oceanic power, concentrated in the US navy lately, becomes irrelevant, and western banking might be replaced by Russia, China, Iran, and hey, maybe Turkey and India now, too.
http://www.atimes.com/atimes/China/CHIN-01-171214.html
Newsboy
Excellent point, but for the Western Empire point (I think you mean US Empire, because Spain is part of the Western).
Anyway, this is the most critical point that I want you to consider, that is:
This new China and Russia Empires ‘partnership’ still a money-power (rent-seeking and interest/debt serfdom) but, anti petrodollar. And in favor of their currency; whatever that currency may be.
The problem for the US Empire will be their domestic population as their lifestyle collapses (already happening).
The problem for China and Russia, if they succeed, US Empire won’t go down quietly. Because US just can’t!
"The American way of life isn't negotiable." – Dick Cheney
Yeah, but when Mr Evil said that, he was speaking of the American way of life for the .01%, not for you and me.
I sure agree with all the points just made.
By "western empire" I do mean that which seemingly is ruled by the US, and includes NATO states, such as Spain, but they are tributary-states, really. I believe that the actual rule, behind the scenes, is basically by a global elite criminal cartel, which has several membership categories. I'm not in it, but I pay attention to all the signs and rumors, and see the same indications, such as who was involved in 9/11, and who profited, as do other folks here at ZH.
This may end very badly, but it sure does need to end.
you can suck my dick, Dick :)
Still is only one rail line. Yeah it is important but what I didn't see what was the carry capacity of the line, what do they plan on shipping, and what/if any commodities are they shipping. Ditto on how quickly they are planning to ramp up with these trips. Lack of those kind of details made a bit hesistant it think it was really big news and more of a PR-related story.
Oceans travel through the straight of Malacca around Singapore and through the Indian Ocean is still going to be the overwhelmingly bulk of trade.
Southeast Species Routes. Where about half of the world’s population lives on less than $5 dollars a day, if that; and heavily Islamic.
If Russia oil and gas can be diverted from Europe and Great Britain to China, yes I can see India Ocean and South China Sea trade holding, maybe expanding.
If United Arab Emirates and Iran oil and natural gas, after all, both nations share the last largest natural gas under the Persian Gulf, flows East, instead the Mediterranean/Europe, yes, I can see ocean travel holding in Southeast Asia.
See, many ‘If’s’ there, because, if East and Russia grows, Europe, Britain, and North America lifestyles and economic system failure will be even worse.
Who will get excluded?
I prefer gold to FRNs. However, REPEAT after me: "All is good", we can eat gold. Have no fear"!. Shit...I can not burn this gold. I wish I had FRNs to burn to get warm and to wipe my ass.
I would give all my gold and silver for friends, a farm, and a fuckload of guns and ammo.
im on a 6 house chicken farm with 200 hundred head of cattle(the new gold) in a town of 200 people with one road acess in rural Arkansas and heavily armed. with enough gold you can buy my freindship, jin
Hope you can reload fast.
http://youtu.be/BXjr_O52EmY
Proves staying it top physical shape and being able to escape danger is still at the top of the list (guns or no guns).
Gold is the fish. Friends and the farm are knowing how to fish.
Give a man a fish, feed him for a day. Teach him how to fish, feed him for the rest of his life. Gold has its uses. If the current system breaks, hunger ... hunger. These are no hunger games. This is no game.
Hopefully, I can find a good Poker game. This site has really turned into nothing but anti-propaganda propaganda.
Fuck you all piss-ass Gold is better than FRNs--I will fucking live forver people. Good thing you will all grow old and die. You are as bad as your fathers and father's father. Your gold will last longer than you will!!
You all bitch about the powers which rule you-- yet, you are all ruled your own devices. If you had power, you would probably do the same thing to the rest of everyone else.
This site offers nothing but a sliver of retrospect and insite to a brief history of time. Time passes. SO will you.
FUCK YOU.
"Give a man a fish and he will eat for a day Teach a man to fish and he will sit in a boat and drink beer all day because some bankers decided to naked paper short the derivative fish market making it an unprofitable endeavor & grease all the politicians into passing legislation which absolves them from any financial wrongdoing, thereby forcing the man to hand back over the original fish by way of taxation.
Meanwhile ~ the beer he is now drinking [instead of fishing] is [temporarily] given to him free to distract him from his misery & to make him think that the authorities actually have his back. He purchases [the beer] with an EBT card but has no real say in the matter that the price keeps rising cause he's getting it for free. This goes on up until the point that the aforementioned 'naked paper short' ponzi scheme goes tits up & a world war is started, which, by way of [unanticipated] collateral damage], he ends up being victimized and he & his boat [which had a few gold coins hidden in the bulkhead, are sent to the bottom of the lake, or sea
He manages to swim to shore & save his own life, but his 'boating accident' story becomes a 'cautionary tale' on ZH & finds there are many others who shared the same anecdotal fate"
Teach a man with Alzheimer's to fish and he'll eat for a day.
Teach a man to fish & some Asian will use that as a model to write code for a cool new 'fishing game' APP, which, will only become available on the next generation iPhone, which his teenage daughter must MUST have, where he'll have to fork over yet more money for.
Meanwhile, he'll never have any meaningful conversation with his little darling cause she's always too busy taking 'selfies', texting her BFF's, & playing the fishing game app, all the while not knowing what a fish actually is because she prefers pink slime 20 pc Chicken McNuggets [which she pays for with her phone until it gets hacked by some North Koreans and naked pictures of her get posted all over the internet, which, ironically, she doesn't really mind because now she can say she's just like Rhianna & Lady Gaga].
Give a man a fire, he'll be warm for a day. Set a man on fire and he'll be warm for the rest of his life.
Set a man on fire & you'll be able to pan fry your fish. #WINNING
Given we have either completely destroyed or severly degraded almost every coastal fishery (talking stuff up to off 5 miles of the shore) and that most river sheds aren't much better in terms of native species levels, I would say depending upon learning how to fish won't do jack $hit to help someone to live.
Day trips off the East Coast where they go 2-3 miles max off the coast are complete waste of time for the most part. Either catch what were junk fish like ling even 20 years, stuff too small to keep, or stuff you have to throw back. Unless you can go out 20-30 miles and fish for big fish, it isn't worth the diesel to go anymore from ME to NC.
McBizaro
How correct you are. I used be in commercial fishing in the early mid eighties fishing the Delaware bay and making a pretty good living gill netting weakfish, Shad , blues ect. Except for a few crabs the Delaware is a complete dead zone now.
I have a retired family member (used to work for Dupont) who up until '07-'08 ran charters exclusively out of Lewes, DE starting in the late 80s. Cost of diesel in '07 and then the economy collapse along with age was enough for him. Passed away in early '10 and I really thought that selling his boat what really did him in since he gained a lot of weight and seemed to lose interest in things.
He ran stuff mostly stuff out to the Baltimore Canyon on day/night trips and big fishing. I did that ever summer growing up with my grandfather other relatives and can still cut a squid or bait fish into chum on pretty rough rolling seas real quick.
You have to go out really deep (talking more like 40-50 miles out) and have dumb luck now. Even when I did that in later years and it was nowhere near as good as when I was a kid in the late 80s. Even the larger Russian/Japanese/Chinese and factory trawler you used to see out there are long in internatinoal maritime limits from the Delaware/Chesapekeae are long gone too because the volumes have collapsed so badly.
My grandfather used to go down to the Jersey Shore (relatives tht owned a huge farm in Hammonton) and they used to catch so much in the 50s/60s they had no idea what do with it and would used some of the fish purely for fertilizer. They would also salt alot of it being Sicilian or freeze it and have fish all winter long.
Ah yes, that last catch in november before you pulled your anchor nets up for the winter. We called it winter dinner.
Also flagged as spam.
Be gone foul creature.
Putin confirms that seeks further restructure and autonomy for Russian economy
http://failedevolution.blogspot.gr/2014/12/putin-confirms-that-seeks-fur...
Where the hell is Beeks?
Maybe "them" Tsunami waves washed him away? Who writes this stuff?
The biggest economic story of 2014 was the Fed claiming that QE has ended, and stocks soared and commodities fell as a result of their claim.
Yellen has it all figured out. Nothing can go wrong. Just make sure all your money is in the Dow, megabanks, and the US dollar, and you'll be fine. She's got your back.
That what Brutus said.
Et tu?
Et tu?
kai su teknon
Who has taken the Fed's place? Who is buying the UST paper? Where are those dollars coming from?
Who keeps buying the worthless paper gold they keep selling off in mass dumps to drive the gold prices down?
While there is no indication of where they're going, the excess reserves at held at the Fed have been dropping since about the beginning of October:
http://research.stlouisfed.org/fred2/graph/?id=EXCSRESNW,
The banks have a lot of dry powder to manipulate shit with.
If almost nobody bought paper gold, the paper gold price would collapse.
It's a circle jerk.
Pick a central bank, any central bank...
Japan. Sell Yen, buy UST's.
Print Yen, buy USD, buy USTs. I know they are doing that but I don't think the numbers cover the supply as China and Russia and others are buying less. Is the mysterious buyer through Belgium still at it as well?
Jim Rickards managed to sum the whole shitstorm up in one tweet from last week, quite brilliant in its simplivity
Math class: $9T EM debt+$5.4T energy debt=$14.4T. A 20% mark-down (due to oil price, strong USD)=$2.9T losses=2x Subprime in '07.
not to mention leverage used to buy that debt
or that subprime auto loan delinquincies already turning sour at double digit rate
Ugly as a sledgehammer on the skull.
A 40% markdown = 4x housing crisis..
There fixed it for yah...
When the World owes more on fiat Debt instruments than it can pay, it becomes a Fed problem.
They can and should simply repudiate said fiat Debt and switch to the non-stop system.
The one that doesn't settle via SWIFT, but via RIFT.
Check mate, Fed. Good luck dealing with the US riots, i.e. 2nd Revolution.
I doubt Russia will pull an Ireland and bail out the dollar debts of it's companies and banks.
They can allow pillars of their economy to go "bankrupt" by which I mean they will default on their debts, exit the WTO and nationalize all their assets the next day ...
so.... iow.... the dollar will be king not by its own merits, but because the rest of the world (50% of world economy) is in far worse dire starits .... and therefore, making the fed and its cronnies as powerful as ever....
bottom line..... as far as the eye can see.... status quo in interest rates, USD continuing to be reserve currency, and continuing growth of corruption from those who hold power.... as stated earlier.... want change ? (real one) revolution is the only way... power is not given up easily, regardless of who votes for whom.... as for "going down" well... easier said than done
not agreeing.... just observing
I suggest that for the "other 50%" of the world economy the first step is to consciously default on all dollar and euro denominated debt payable to the US and Eu countries. Start building a non-Rothschild-Soros-controlled alternative economy.
US Recession
starting no later than Q1 2015
Agree, and I think you mean a recession that is really a depression which we never left, but which is so bad that all the fudged bullshit statistics in the world and MSM propaganda dribbling can't Spackle the gaping rift between lies and reality.
mmmm fudge
Go Packers!!
Well the the US Gov needs to get their finger out of their ass and make a big war asap. Oh wait.
Well then the US Gov needs to get their dicks out of our asses and make a big war asap.. Oww. ow ow..
There fixed it for yah.. ;)
no big war. Just lots of smoldering conflicts which provide the political class with cover and the US military industrial complex with obscene profits.
Q3 2015
Ferguson on crack.
Wasn't it the crash and the resulting carnage in employment and food costs that sparked the Spring revolutions?
Same bankster playbook just 5-6 years down the Central Bank/Corporatocracy road to perdition.
The road goes on forever and the party never ends... untill you go over the cliff...
https://www.youtube.com/watch?feature=player_detailpage&v=4z88U915uq8#t=4
It’s the new model along which the clowns we allow to run the show, do so. Unless ‘we the people’ take back control, it’s pretty easy to see how this will go down.
The only line in this whole read that matters and why it's so dark and laughable at the same time with the notion that Americans have both that level of intellect, honor and decency to even care about anyone other than themselves.
Russia and China take it away!
Until the North Koreans hack all the US reality shows
(starting with the Kardashians)
THEN, you will see the sheeples pour into the streets.
Cuss my country all you want but LEAVE SETH ROGAN ALONE! <xcuseme>
QE will fix it all. More QE!
Questionable Ending???
Quick Energy???
I think credit will calm down when they see how resolute the central banks are in their determination to avoid reality.
Al You're extremely smart. If I were a hedge fund , or levered money manager, I'd take heed with your simple but succinct comment.
Wake UP Al! I agree with you. This isn't the fucking Matrix YET!
Not anymore. Oil is the signal, look how fast they took it down. And what a coincidence, right at the same time QE ended and rate hikes announced.
The FED is not scared or disorganized, as some believe. They're in full control and will bring down the whole house of cards like they did in 2008. Bernanke sat telling fhe media the bankng sector is fine while he was planning to let Lehman default.
Yellen sat telling the media the economy is so good they're going to raise rates, even as oil dropped in half. Not a word about that or the implications. She'll continue to play dumb until the global economy collapses, then say it was unforeseeable, just like before.
"The FED is not scared or disorganized, as some believe. They're in full control and will bring down the whole house of cards like they did in 2008."
I think that regardless of what is "undertaken" the road that we're on has always been one that leads us over the cliff (refer to issues with "perpetual growth on a finite planet" to better understand why this is driving force). If one assumes this as fact, which I do, then the FED can really only alter the timing.
The System has built-in demands for returns, and w/o growth returns are non-existent (at the macro level) and the System fails. Replacing ANY "system," if it's based on growth, just means rewinding the script, whose ending will not differ from that which we will see and that which history has always shown us to face.
It's a landing operation. Fuel/energy is a necessary item for this operation. At first it was a matter of levering via financial trickery. Now it's down to a direct take-down. Again, as we're talking finite resources, it doesn't change the outcome, it merely changes the time-frame. So, ask yourselves this: If time is all you have then would you not endeavor to gain as much of it as you can? The FED (and the banks) does NOT control the outcome, but, they HAVE bought us (most of us here) more time. The mistake in measuring what the FED has done is that everyone is focusing on virtual/meaningless numbers and missing out the time component.
UK oil production down 11% in q3 relative to q3 2013.
Now back to 1977 levels man.
UK energy trends publication December 19 2014.........
There is no "shale glut" either. The USA is now a "swing producer" ala Saudi Arabia in the 1970's.
To get dollars countries will have to in source production into the USA much as Japan and China have done and Germany did in the 19th and 20th centuries. The rest will be "inflated away" as countries just keep printing and printing. I would be very wary of outright monopolies here.
" The US dollar will keep rising more or less "
If the dollar continues to gain strength, anything America seeks to sell abroad is going to be expensive. Since our trade balance seems always to be bad, this will make it worse.
Also, the Russian Federation has around 680 billion Green Backs in Foreign Exchange reserves, and is still paid in dollars for much of it's oil.
This makes Russia Dollar rich in the shorter term of the next few years. They also hold large gold reserves and also mine lots of gold. Gold can help in any case when your currency is attacked by the speculators. It's a weapon that can be trotted out for defense.
But lets consider the rising dollar and the rubel attack. Rubel down, dollar up / Russia" dollar and gold rich" / when the rubel is priced right, these "expensive dollars" begin to snap up hundreds upon hundreds of billions of rubels and bring them back home to fuel Russia's domestic rebuilding of agriculture and industry, both badly needed. This is a net positive move by Russia. No, I know it does not SOLVE all Russia's problems, so don't try that one on me. I am saying it is a Net Positive, and is something Obama the Neoconservative Lunatic did not think of when he tried to bring the rubel down. If you seek to take down a nations currency, it is not all that simple when that nation has a debt to GDP of 16%, has a balanced budget, still exports energy on a large scale, has great gold and FX reserves, and a non-leveraged private sector. The Russian people are NOT debt slaves, most do not even have mortgages or student loans.
My advice to Putin, when the rubel is in the sweet spot, buy back a few hundred billion of them for a starter and then let the dust settle, if it settles where you want it, buy another couple hundred billion back. Sell a little gold and buy back a few more hundred billion. This is a positive for Russia, and you should always take advantage of a crisis in areas where you can.
Now, this still leaves Russia in a tight spot, but if an oil price crash finally forces Russia to develop domestic expansion of industry, manufacturing for consumers and agricultural investment, than they are laying a soild foundation to come out the other end in a better position. Russia runs on rubels, like America runs on dollars, rubels at home are investment capital. USE IT!
Reserves are nearer 400Bio. The problem is the size of the welfare state. 50% live off handouts in russia and that means signinficant cash burn at this level of crude.
I was with you until the idiocy about Obama trying to bring the ruble down.
Why are you attributing human traits to a puppet? The man decides NOTHING (as per the JFK Magic-Bullet Doctrine).
My advice to Putin would be to build a factory inside the USA and start hiring.
He'll never do that of course...hence the collapse in the ruble AND the RSX.
Jack,
The first thing to burn in a war is paper assets.
The only thing of real value in wartime is gold.Putin knows that, and will never sell any,
especially to buy paper.
The Chinese will just prepay for gas at a discouted price with UST's,and/or gold.
Russia knows they are at war, just waiting on the killing.
History rythmes, and we are in a repeat of the Phoney War, of WWII.
The only thing the USSAaaaa exports is war and regime change..
Not true. You omitted...
Fiat Debt instruments, get-rich-quick biz franchises, gold, PC culture, video games, and Hollywood movies.
But I get your sentiment.
Yeah, but you say that like that's a bad thing! :-)
Good points about Russia, but that is really a subject for a different thread entirely.
*THIS* thread is about the whipping that the emerging market commodity debt holders are going to experience in 2015, not about Russia (who as you point out might be in OK shape). Seems the market is figuring out that these bonds will go bidless and that nice fat yield will turn into major stinging capital losses (if a buyer *can* be found) or maybe (??) defaults will start sprouting like mushrooms on the slopes (of hope) following a forest fire.
Yes and in case you haven't noticed : 2015 is the Year of the Sheep.
So Raul, you're saying if I loan you money at a low interest rate and then I refuse to loan you a whole lot more at the same rate that makes me the bad guy. That is what makes you a fool and why I quit reading your articles on other sites.
Pretty much the mature economies' (Japan, Eurozone, UK, USA) 1%rs just printed up some of their currencies and loaned it to the emerging market nations' 1%rs. The crooked & inept emerging nation 1%rs used the borrowed money to fuel lavish lifestyles: government buildings, imported luxury cars, planes & airports, personal cash stashes in Swiss banks, etc.; all the trappings of successful world-class economies.
Now the easy money spigot is in peril, and the world's Working Joes will be hurt the worst. The 1%rs on both sides of the crooked trades have their personal loot stashed away somewhere safe.
Think Imelda Marcos and her fucking collection of shoes. The 1%rs of this world are corrupt stupid assholes no matter where you look. Apparently it's human nature.
If the world's easy money spigot runs dry, expect the emerging market nations to experience their own "Arab Springs". The results won't be pretty for anyone who's outside of The Club.
Or they pull an Iceland.
Or they pull an Iceland.
Or they...
This article was clear as mud, I mean oil.
Indeed. Does not the collapsing oil price actually reduce the global demand for dollars, working to somewhat offset the author's claims?
Indeed it does ole chap.
Yes, but on the other hand there's a lot of credit destruction going on. Not in defense of the Fed, but you have to hand it to "them," they STILL hold the cards, and when they no longer do so I'm certain that there won't be any "winners," as the entire global game will be over (with everyone being interdependent truly is a MAD, MAD [http://en.wikipedia.org/wiki/Mutual_assured_destruction] world).
biggest story will be China doubling gold price in March
Why are they waiting until March??
That's when the bombing window for Iran opens .. were going to war this year even if we have to stab ourselves with a dirty nuke to get there..
Have you been living under a rock?
March Madness - duh!
Biggest economic story in the world is about deglobalization, IMHO. All foreign companies will leave offshore and keep shrinking offshore operations and large business deals will be scuppered. Like the German company BASF lost a deal with Russian giant Gazprom today.
BASF, Gazprom scrap asset swap deal
Even Russian billionaire businessmen are responding to President Putin & bringing assets back home. This will help Russia insulate from any foreign crisis or collapse of a foreign bank, when they have the lowest foreign debt & have the highest gold & capital as a percentage of their Central Bank's holdings. This will also remove the risk of sanctions or freezing of assets by US/EU/UK while strengthening their economy. In fact, the loss will be felt by EU/UK who will lose Russian business.
#deglobalization at its best.
Russia's richest man responds to Putin's call to bring assets home
I saw this all forming years ago. Even here on ZH I was mentioning the "Bring back our jobs" mantra/campaign as a cover for this, and that it was really going to be about roping taxpayers for costs with relocating companies before/when they get kicked out from abroad (mostly figuring that it was going to be US companies operating in China).
Imports of electricity (mainly from stagnant nuclear France) at record 21st century highs at 7% of total. LNG imports up 125 % relative to Q3 2013. The UK and Japan are the primary customers for Qatar LNG – if Japan goes into recession that means the UK can buy more of the stuff. Given the precarious nature of the UK’s import reliance its in the national interest to promote European and global depression using their banking gunboats as their primary tool.
Dork, hello! Cameron is banking on UK fracking to make the UK gas rich. What is your take? Is the gas really there to match Cameron's dreams, or is it like Poland and Hungary, where once the wells were drilled, nothing much was down there?
Also, North Sea oil invested huge sums over the last three years to expand drilling, do you know if this is leverage? In short, is North Sea oil heavily in debt via loans and bonds, making it vulnerable to the downturn? I heard an Aberdeen Oil expert claim North Sea oil was going to take a hit of around 5% and get by just fine. I think he was bullshitting all along. How vulnerable is the oil play up in the North Sea? Norway is suffering, is the UK in that boat?
UK energy policy is its banks and only its banks.
Half of its steam coal imports come from Russia.
London wants it cheaper.......
Create a depression in France and use surplus nuclear energy......
Christ they even want Icelandic hydro via cable.
The UK is nothing but a black hole and the eurozone is its event horizon.
http://ecx.images-amazon.com/images/I/916j5Q-eD8L._SL1500_.jpg
London has got to be the most overpriced place to be. Love the transportation system and the museums but man, it is one crazy high roller town. Every 2nd car is either a Mercedes or BMW. Lots of Audis and the occasional Rolls and Bentleys of course. Who can afford to live there? Latest I hear is that the RE system is going through some softening... maybe time to buy? London RE has got to be among the safest investments on the planet. Some rich oriental royal just bought himself a 30,000 square foot block of houses in Kensington for 200 million and converted into an 8 bedroom house? Crazy!
With the costs of credit being extremely artificially cheap, I can't imagine that any entity failed to capitalize on it (pun intended). Otherwise, your cost of doing business becomes higher than your leveraged competitors.
Central banking, blowing up the entire productive capacity of the world, one bubble at a time.
There is so many under paid woman who are going to gloss off this crisis by running anal beads in your behind.
Jasmine ObamaCar will give you a blow job so the car auditor wouldn't show up. Free fuckbuddies dudes! You won't need to wear a condom, because I have STD and looking for new ObamaCar insurance,
/LOL
"down the line it becomes public debt.'
This really is the great economic shift of the 21st century. Private losses, corporate losses, speculator's market losses, these all now become PUBLIC DEBT via bailouts and central bank policies! A massive new concept in market economics, no?
Who would have thought globalization and dollar hegemony would usher in the century of Public responsibility for all market and corporat losses? Seems that this concept escaped the University Economics Professors! New century, New World Order. In fact, the meaning of the NWO is just this, the elite 1% have shifted all gains to them and all losses to Public Citizens, via government debt! Clever indeed! Epic! And WE peoples never got to vote on it, did we?
That is the most concise summary that I have seen to date.
I will only add that NWO also means shifting the USSA consumption crown to China and Chinese manufacturing expansion to the new 3rd world EM market country of the USSA with the added bonus that foreign debt will be redeemed in land / resources of said 3rd world nation.
Blessings and a big huaya-tu-ya!
Same same for ALL the good hearts expressing the higher informative light/knowledge here.
Checkmate: Is Russia Selling Oil For Gold?:
http://www.silverdoctors.com/checkmate-is-russia-selling-oil-for-gold/
.
The crown may be passed, but it's going to be pretty crusty and stomped upon. It's a game of hot potato. The spuds are getting hotter and our hands are getting less calloused: and for sure the spuds won't be going in to our mouths.
Thanks for your help. I was T boned by Michelle Obama uninsured driving crowd.
Meh, the biggest story going into 2015 can be several other stories also. Say, maybe a govt sponsored event or moar to change everything into a upside down state of chaos and disaster to save the dinosaur paradigm of oil dependence?
Hummmm....
One can ask, why is the price of oil going down? Ask the rothchilian hydra. Might is could be for the reason that the bric countries are going to the new gold-backed currency system on the first of the new year? Is it because they know the demand for oil has slid to record lows and continues on this never ending down slope?
More so, is it because all this horse-hocky-ring-around-the-rosie BS they are trying and all the fake market manipulations are NOT going to save ANY of the worthless paper currencies? Will the new gold backed Yaun and Russian Rubble BE the new world reserve currency after the first of the year? You bet it will be, and THIS is what Sir Putin knows.
Gives one cause to pause and wonder, will these evil bankster things allow that to happen? Hummm....we must all be DOING all we can do to stave off the beast and the coming false flag events that will be the last ditch efforts to save the rothschillian bankster system of evil money-god manipulations. Something wicked comes in January, or February. Start looking at the dates they love to terrorize so much on, like Feb 2, and the 22nd. Prepare for a power outage and take down of the Internet using any excuse, false flag event, or paid stooge terrorism. Remember, EVERY SINGLE TERROR EVENT OR NEGATIVE DISASTROUS EVENT HAPPENS BECAUSE THE BANKSTERS SPONSORED AND PAID FOR IT TO HAPPEN. NOTHING. ALL HORRIBLE EVENTS ARE GOVT SPONSORED AND CONTRIVED FOR THE GAINS OF THE GLOBALIST SHAT THAT OWNS THE MONEY-GOD.
Everybody on board needs to KNOW, the roithschilds control all the eastern oil(saudi puppets) and the rockofelers control ALL the western oil. Stop whacking at the branches and wasting your vital life force on the finger pointing at any of the glove puppets that cater to these beasts. If any one wants to bitch about the controlled and corrupted world systems, go straight to the top and whack at the horrid hydra heads of these two forks of the snakes tongue.
Here for edumacational purposes is the list of banks these evil things control. Ask, who kow-toes to the money god on a regular basis for survival? Who kisses the beasts arse ritually every day.
http://humansarefree.com/2013/11/complete-list-of-banks-ownedcontrolled.html
Extra credit. What are margin calls?
http://investmentwatchblog.com/emerging-markets-unraveling-is-the-us-going-for-broke-or-just-stupid/
Charts and more charts. Mr. Yellen can take these charts twist them six ways and show you how this is good. Centrally planned economies are just better. It has been proven over and over again throughout time.
Fedgov out of the subprime auto loan biz -
WASHINGTON – The U.S. Department of the Treasury today announced that it agreed to sell all of its remaining 54.9 million shares of Ally Financial Inc. (Ally) common stock, exiting the last major Troubled Asset Relief Program (TARP) investment and winding down the Auto Industry Financing Program. The shares were sold at $23.25 per share, recovering $1.3 billion to taxpayers
http://www.treasury.gov/press-center/press-releases/Pages/jl9727.aspx
This should fix everything.
Manziel comes out of the closet.
Somebody call Robert Triffin................STAT
Bob's dead can we have his assistant call you back? He's out of the office right now trying to find what is left of American industry.
What a great time to be an American!
Our Fed can buy American stocks, driving up the Russell 2000, while the rest of the world sweats being able to make the next payment on their loan. They sould all just surrender to our exceptionalism and proclaim our genius to all their people.
If we are lucky the Fed will even throw the US citizens a bone from time to time.
I wonder if they'll ever figure this out and if they do if they'll ever do anything about it.
No. All empirical evidence suggests that the Top 5% are superior in every way except in muscle power or willingness to bleed for others.
Does this mean that EM hookers will charge only $10 for a blow job?
The modus operandi of the persons who control economic happenings is to create a bubble by converting the native economy into a "military Keynesianism", with democratic and capitalistic overtones. This central planning with resource allocations and controlled expansion of critical industries is allowed to grow until the developing country of emerging market has sufficient capital to begin purchasing off shore assets. This Is a sign that the currency is too plentiful and the traders begin to discount the currency against the dollar.
Some crisis is created or allowed to flourish until such time as the country is ripe for “change”.
This crushes the markets and real estate values, causes deflation and the central bank must flood the nation with paper money to void recession
More money equates to more devaluation, which leads to indebtedness which must be addressed by the IMF. (this is the short version)
The very first thing the IMF mandates is that the central bank be made independent. (AKA secret) Only power that remains hidden endures.
Then of course the nation is plundered as only foreign money is allowed to invest, purchase, speculate or rescue embattled industries, especially those supporting the infrastructure of the nation initially.
The question is, will this ever be allowed to play out in the USA or will we always financialize our own calamities or will foreign currency be permitted to buy up the USA?
Will the emerging market syndrome come home to roost!
I'm going to assume that it's already happened in the US, given JPM writes a rent check to China every month.
Excellent point.
"... the central bank be made independent. (AKA secret) Only power that remains hidden endures. ..."
Yes! Those were crucial components to the ways that the international bankers (through IMF, etc.,) operate as the best organized gangsters. Those banksters were the hidden power that has endured, BUT, ONLY WITHIN THE CONTEXT OF HUMAN SOCIETY.
OUTSIDE of that context, human beings are collectively preparing to commit suicide, due to the degree that everything they were doing was being controlled by systems of enforced frauds, driving society as a whole to become psychotic.
An envelope stuffed with cash can have amazing results on small emerging economies (for the recipient of the cash, for the country not so much).
It’s called greasing the wheels of industry. Unless done by unapproved sources at which time it becomes bribery.
U.S. leadership under the direction of the financial industry are preparing the coops now.
Humans are no different than any other animal, in that without sufficient predators we consume our environment to the point of eventual detriment. THAT is the Program, and it's not something that a secret cabal made up (it's in our DNA).
WHY do these twits insist on a business model that demands they keep borrowing US dollars????
Kreditanstalt it's denial.
It's not easy to get out of the MATRIX; and, creating a new MATRIX is a bit complex. I think that the reality that there is no "solution" is setting in.
What are free floating currencies? no? What is the dirty float? no? Did I at least win the TV?
Debt at 175% of GDP is nothing compared to the US at >300%
QE never ended - the baton was passed to the Belgian buyer and now to Japan and who knows where else. USD are expensive and yields are next to nothing--what will that do to actual market demand for USTs in a contracting world economy?
I agree and would also like to add I believe it's important to view this as one large system.
In other words, financially speaking, if Japan blows up, everything blows up....and so on.
In the large system view, branch Japan is buying UST's now with printed money. It doesn't matter so much who is printing and buying, as long as someone is, in what amounts to competitive devaluation vs each other which SHOULD net out to all devaluing against gold....which is why gold has to be controlled.
If this view is correct, it means in effect QE has become mandatory to support the ponzi operation because it is in effect the source of new money, and that it will both never work and can never end as we begin to see liquidity trap features emerging.
It would also explain why banks and instutions want their physical gold, because unless you actually have it, the no counterparty risk feature of gold is null and void.
I up-voted because: the view IS correct (ALL is linked to/part of the Growth Ponzi).
They foreclosed on cousin Bishop.
He hanged hisself a year come May.
And Uncle Radcliffe?
The anthrax took most of his cows.
The rest don't milk.
He lost a boy to mumps.
Where's Cora, Cousin Wash?
Couldn't say.
Mrs Hogwallop up and R-U-N-N-O-F-T.
She must have been lookin' for answers.
Possibly. Good riddance, as far as I'm concerned.
I do miss her cooking, though.
- This stew's awful good. - Think so?
I slaughtered this horse last Tuesday.
I'm afraid she's startin' to turn.
Further proof that the biggest debt bubble in history is bursting before our eyes.
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
Pinata parties are fun! :-)
2015. Year when the wheels come off the wagon for good. That would make a heck of a design for a silver coin.
Don't count on it. I have been reading Zero Hedge for years and have thought the same as you after the first number of years. Yet the world keeps on turning and people still surviving. Last I looked the freeways were still travelled.
No matter what happens, there will be commerce. People need vehicles, repairs, food, clothing, shelter and so on. Add to this, medical, communications, electricity and there is a base which is difficult to destroy.
The problem is, many articles here appeal to a certain thinking process, but the world is not always conforming to what we expect. The current cycle of events could keep on for years and the status quo will not change. Ebola was to be a game changer, but that fizzled out real quick. I don't see any game changers on the horizon
cherry picker- the statement "I don't see any game changers on the horizon," is the crux of the Zero Hedge site. If you were to go back in time and tell people an assasination of Archduke Ferdinand would be the catalyst for WWI they would think you were crazy. This site reports events that could be that Archduke moment. The point is we are living in tinder box times and it is frustrating when you are surrounded by people who could care less. It is equally frustrating to have leaders hell bent on destruction to obfuscate the reality they don't know what they are doing. The trajectory may seem to be certain but in my opinion those at the top are just as blind as those below. The game changer isn't even known by them yet. It will be some obscure event that will fall into place at the right time. This site may have been forecasting the fall for sometime but only because they see the conditions lining up. It would be interesting to be privy to conversations before WWI- most likely there were kindred spirits of Zero Hedgers then too. Part of the thrill is calling the Archduke moment and to do so you have to be looking beyond the horizon.
Europe had at least 1000 years of wars before that archduke moment of yours.
I kind of agree with you. Everything Seems to be moving on all along. It is more true if you are working for a salary and get paid every month.
But you fail to understand something else. Who gets rich and who gets poor is changing drastically in the world today.
If many in ASEAN had listened to words of caution before 1998, they could have avoided becoming paupers and fugitives. Hundreds of conglomerates were obliterated. You cannot say such thing is normal or that people gets to just survive.
Nobody writes the full story about what is going on in the real world. So please do not assume everything is always well and fine.
US today is also experiencing the same problem. 49 million on food stamps is just a small statement in News. Have you thought about the Reality behind the statement?
Of course not. Or you will not be writing this.
I appreciate Zero Hedge daring to write so many articles exposing the truth. Simply truth about every indicator of game changing actions.
Let's appreciate it, it is useful to many. If not you.
"US today is also experiencing the same problem. 49 million on food stamps is just a small statement in News. Have you thought about the Reality behind the statement?"
And then it boggles the mind to realize that there are 750 MILLION people living on $0.50/day in India (and India's "wealth" has/had been increasing).
<= Wall Street Banks will start to collapse in a few months due to Emerging Market losses.
<= Wall Street foresaw this ahead of time and will be A-Okay.
I don't understand this part of Ambrose Evans-Pritchard's analysis of emerging market countries' financial predicament:
http://www.zerohedge.com/sites/all/modules/blockquote/images/menu-leaf.g...); background-position: 100% 100%;">These countries have, of course, built $9 trillion of foreign reserves, often the side-effect of holding down their currencies to gain export share. This certainly provides a buffer. Yet the reserves cannot fruitfully be used in a recessionary crisis because sales of foreign bonds automatically entail monetary tightening. [..]
.. these reserves are a mirage. If you deploy them in such circumstances, you choke your own economy unless you can sterilize the effects. [..]
I'd think holding $9T in foreign reserves is their ace-in-the-hole, and a huge problem for mature economies (Japan, US, Eurozone, UK). The emerging market countries that squirreled away foreign reserves during the good times sell some to stay afloat during hard times. What am I missing here?
you are reading from Ambrose Evans-Pritchard, that's your problem
desite the face he puts on, he's just a "controlled opposition" that still preaches for the establishment
"The emerging market countries that squirreled away foreign reserves during the good times sell some to stay afloat during hard times. What am I missing here?"
One(?) word: floodgates.
When the selling starts it's going to be like a lit fuse. If you cannot find a way to apply those reserves quickly then they're likely going to evaporate. The US has defaulted before, it can default again. EM countries not buying up gold are likely going to suffer a LOT of pain. I suspect that behind the scenes those that are liked to the US are being told that they (the EM country) would be best served by NOT doing any of this, lest instabilities like "color revolutions" and "terrorist actions" start popping up.
BULLISH for...
-hiring another butler, masseuse, housemaid, lawnkeeper, masseuse, chauffeur, and masseuse
-exotic woods and stones to redo the kitchen, guest house, and swimming pool area
-having that one-off yacht built in a third world country
-buying that private island
-hiring more workers at the third world factory to produce high-end clothing to sell in Manhattan
"... if you live in poorer countries, or domestically, if you belong to a poorer segment of the population where you are ... In both senses, the poorest will be hit hardest ..." Indeed, social pyramid systems operate like that when conditions get bad: "It doesn’t even matter whether this is a preconceived plan or not, ... it still works the same way."
The BIG PICTURE was that the industrial revolution enabled the strip-mining of the Earth's natural resources, through fundamentally fraudulent financial accounting systems making "money" out of nothing in order to "pay" for doing that. The total human population and activities were based on being able to back up lies with violence, within human societies, which was what created the social pyramid systems.
Those systems run into the real limits of the planet at an exponentially accelerating rate ... The details will matter to individuals, however, the overall patterns in the BIG PICTURE within the foreseeable future are for the majority of people in positions at the bottom of the social pyramids to pay with their lives for those systems developing on the basis of triumphant frauds, whereby evil deliberate ignorance towards the relatively more objective facts were the flip side of the triumphs of enforced frauds controlling economic development.
The degree to which we live in a "fake reality" appears to be much greater than would require some relatively painful "reset" to correct. The underlying problems continued to be that human civilizations were controlled by lies, backed by violence, whose "successes" drove those civilizations to become criminally insane. The oscillations of fiat money, with the US Dollar being the most extreme example of ENFORCED FRAUDS, are all fundamentally based upon some humans being able to be dishonest and violent towards other humans. THE "CORRECTIONS" OR "RESETS" TO THOSE SITUATIONS TOO BIG FOR US TO BE ABLE TO PERCEIVE WITH ANY ADEQUATE PERSPECTIVE!
Since our politics is based on people's perceptions, the degree to which those perceptions are based on taking for granted the established systems of enforced frauds means that not only do the vast majority of the people NOT see their own actual situation, even those few that relatively do can not influence anything anyway, since the vast majority continue living inside of social systems based on enforced frauds, that they continue to take for granted.
All data, and the graphs and discussions based upon those data, are based on using bent rubber rulers, which are disintegrating, due to the paradoxes that the more that frauds are able to be enforced, and therefore, the stronger those frauds appear to be, the deeper realities are that those frauds are actually being driven to become more psychotically detached from relatively more objective facts, the more that the political perceptions that prop them up are based on the abilities to enforce frauds WITHIN human societies.
The social pyramid systems that we live in now are all based on the history of being able to back up lies with violence, which all suffer from the problem that the violence never enables those lies to stop being false. Rather, the degree of social success achieved by being able to back up lies with violence drives everything that is measured within that sort of society to become more and more distorted, since the murders that backed up those measurements continue to be as deliberately divorced from those measurements as is human possible.
The "resets" that we are headed towards will probably become short-circuits of the established systems which will become more fatal than we can currently comprehend. The established systems are based on the history of being able to control society through backing up lies with violence, however, the paradoxical final consequences from successfully having been able to do that are impossible to estimate WITHIN those systems, using any of the data that is presented WITHIN those systems.
The "strength" of the American Dollar is the strength of systems of enforced frauds, or the strength of being able to dominate the world through backing up lies with violence. The more successfully that is done, the more criminally insane that globalized society as whole becomes. In that context, it is practically impossible to estimate whatever are the relatively more objective real facts, outside of that human civilization's "fake reality." Moreover, those continue to make little difference, because we live inside such hyper-complicated social pyramid systems, where the perceptions of their world by the vast majority of people are so totally based upon the biggest bullies' bullshit, that it is impossible to image how any significant number of people within those social pyramids could ever gain any better proper perspective upon their relatively more objective real situation.
Any genuine attempt to connect the human political economy to its real environment runs into the basic problems that the central features of that are the social systems in which the actual death controls operate on the basis of the maximum possible deceits, which back up debt controls based on the maximum possible frauds. The relatively more objective realities are that "money" is measurement backed by murder. However, assessing those realities is extremely problematic because those systems actually operate with the most social success within the established social pyramid systems, through maintaining the maximum possible deceits and frauds about themselves!
The challenge for the human species is whether or not enough of it could understand itself better in time, in order to adapt to better reconcile itself with its real environment. The core of that is how the combined murder/money systems operate on the basis of the maximum levels of humanly possible deceits and frauds, within which systems everyone has adapted to operate, so that all of our data, and resulting charts and discussions, are so extremely distorted as to almost be impossible to gain any better perspective upon.
While it is theoretically possible that human beings could understand both themselves and their world better, the major obstacle in the way is that the established systems are based on backing up lies with violence, to a degree that makes that practically impossible, since the only genuinely better resolutions to our real problems would require developing better death controls, to back up better debt controls, so that our political economy made sense from the perspective of evolutionary ecology within our real environment.
The American Dollar, as the global reserve currency, was the expression of the greatest form of ENFORCED FRAUD. However, by and large, none of that is significantly allowed into debates in the public spaces. Rather, we are rushing towards debt insanities provoking death insanities, (which might be the context in which some more radical truths are enabled to emerge from those sorts of psychotic breakdowns of the established systems of backing up lies with violence, that made and maintained the social pyramid systems that we are living inside of now ???)
Of course, generally speaking, it seems it is currently a waste of time to point that out, since almost everyone is still living relatively successful lives WITHIN those social systems of enforced frauds, and thus, they would derive no social benefit from perceiving their situation more correctly. The world continues to be almost totally dominated by the biggest bullies' bullshit social stories, and therefore, most "actionable intelligence" is found WITHIN the context of that bullshit, while any improved perceptions of that sort of bullshit as a whole continues to be relatively useless.
WITHIN the established social pyramid systems, one of the greatest of lies is the meta-lie, to lie by omission, by continuing to deliberately ignore that ALL THE ECONOMIC NUMBERS ARE BASED ON ENFORCED FRAUDS, DUE TO BEING MEASUREMENTS BACKED BY MURDERS, WHICH ARE TRAPPED IN THE VICIOUS SPIRALS OF BEING THE MOST SOCIALLY "SUCCESSFUL" BY BEING THE MOST FRAUDULENT AND DECEITFUL!