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Exter’s Pyramid “In Play” (And Is Martin Armstrong Right?)
Submitted by Paul Mylchreest of admisi.com
Exter’s Pyramid “in play” (and is Martin Armstrong right?)
In a global debt bubble, it concerns us when the benchmark debt security still looks good value, albeit on a relative basis.

Source: Bloomberg, ADMISI
In spite of this, the consensus is (once again) calling for higher US yields and FOMC “lift off.” The two-year Treasury yield has been pricing in the latter…

Source: Bloomberg, ADMISI
…but the question is what is the long end of the Treasury curve pricing in?
Slower growth and lower inflation, most likely. Risk of global contagion, possibly. That the FOMC makes a mistake (in raising rates)…maybe that too.
The Fed might be desperate to raise rates ahead of the next downturn (how embarrassing not to) but this analyst would be surprised to see more than 1 or 2 token 0.25% increases – and that’s if things are rosy.
As we know, the narrative from central banks can change at the slightest hint of trouble, e.g. Ballard’s QE4 comment during last October’s selloff. Watch the spin as the Fed portrays lower energy prices as “transitory” and no reason to alter its desire to tighten, while the ECB’s desire to ease only grows, even though neither is achieving its mandate on prices.
Do what thou wilt shall be the whole of the law?
The key point is that you can’t normalise rates in the “Winter” phase of a long wave (Kondratieff) cycle. There is just too much debt. It’s debt that drives these cycles and eventually brings them to an end.
This is the fourth cycle since the Industrial Revolution and the longest by far. The lack of a gold standard has allowed the central banks to extend it through unprecedented credit creation.
Here is our timing of these cycles:
1788—1843 56 years
1844—1896 53 years
1897—1933 37 years (1937 was a policy error when recovery established in our opinion)
1934—? 81 years (and counting)
The next cycle doesn’t begin until the excess debt from the previous cycle has been purged. Historically this has occurred via debt deflations of varying length and severity. In a world of unlimited credit creation, inflating the debt away remains an option and we question whether renewed onset of debt deflation will ultimately be dealt with via central bank-created inflation? Mr Abe and Mr Kuroda are conducting such an experiment.
In the meantime, we see a possibility that the Fed could raise the Fed Funds rate in several months’ time only for long-term Treasury yields to continue their decline, while the ECB could instigate sovereign bond QE and long term sovereign yields (ex-Germany certainly) could rise…which was the experience of the US (QE1, QE2 and QE 3 pre-taper).
Talking of flattening yield curves…
We’ve been looking at yield curves in the run up to the last two peaks in the S&P 500 in March 2000 and October 2007.
It basically doesn’t matter which part of the Treasury curve you choose in terms of 2s, 5s, 10s and 30s, but spreads declined to roughly zero, or negative, prior to the equity market peaks.
Here is the 2s10s...

Source: Bloomberg, ADMISI
The 2s30s...

Source: Bloomberg, ADMISI
The 5s10s.

Source: Bloomberg, ADMISI
And the 5s30s, although we could have added the 2s5s and 10s30s just for the hell of it.

Source: Bloomberg, ADMISI
Could the same thing happen again in a structurally (much) lower interest rate environment this time around?
Well 190 bp of flattening in the 2s30s might be pushing it, but 46bp in the 5s10s is certainly possible in the fairly near future with the way things are going. Funnily enough, if the 10-year Treasury yield was in line with the 10-year Bund, the 2s10s spread would be -8bp, i.e. close to zero.
While we expect the S&P to be lower at the end of 2015 than the beginning of 2015, our point is that more flattening might be in order prior to a major correction in equity markets like the S&P 500, Footsie, DAX,, etc. In general terms, it also suggests that it might be too early to lose faith in “bond proxies” such as Utilities and some Consumer Staples.
A significant further flattening in the curve is looking increasingly more likely...
Indeed, the major story for us right now is that the broad concept incorporated in “Exter’s Pyramid” is in operation. This something we mentioned in Autumn last year and it’s occurring across currency and credit markets and, to some extent, in equities.
To recap, John Exter (a former Fed official, ironically) thought of the post-Bretton Woods financial system as an inverted pyramid resting on its apex, emphasizing its inherent instability compared with a pyramid resting on its base. Within the pyramid are layers representing different asset classes, from the most risky at the top down to the least risky at the bottom.
He foresaw a situation where capital would progressively flow from the top layers of the pyramid towards the bottom layers.
“…creditors in the debt pyramid will move down the pyramid out of the most illiquid debtors at the top of the pyramid…Creditors will try to get out of those weak debtors & go down the debt pyramid, to the very bottom."
Below is his drawing of the inverted pyramid as he saw it in the late-1980s, when the riskiest assets were Savings & Loans (“thrifts”), Third World debt and (relevant to today) junk bonds, etc.

We think that Exter’s Pyramid went “live” in in late-June/early-July 2014 when the dollar index (DXY) began to strengthen…

Source: Bloomberg, ADMISI
…along with junk spreads.

Source: Bloomberg, ADMISI
The perfect illustration of Exter’s Pyramid is across the credit markets (as seen via ETFs) with capital flowing from HY through IG…

Source: Bloomberg, ADMISI
…and from IG into Treasuries.

Source: Bloomberg, ADMISI
There is some evidence that this is happening intra-equity market.
For example, here is the chart of the S&P 500 High Quality Index versus the Low Quality Index, where “Quality” is measured in terms of growth and stability of earnings and dividends.

Source: Bloomberg, ADMISI
The point about Exter’s Pyramid is that there is a large amount of capital in riskier financial assets in the upper layers of the pyramid which can flow downwards.
Consequently, the valuations of perceived “safe” assets could obviously overshoot if there is no let up.
Capital flows into dollar assets are a major part of this process right now.
We haven’t mentioned Martin Armstrong’s “Economic Confidence Model” (ECM) for quite some time but we’ve been thinking about it recently. The ECM, based on 8.6 year cycles, is often very successful at tracking turning points in the “hot money” flow of global capital.
Now is not the time for a detailed explanation, but for anybody not familiar with the ECM, Armstrong’s report “It’s Just Time” (google it) from several years back is one of the best we’ve ever read and provides excellent background.
The ECM’s peak on 2007.15 (i.e. late-February 2007) picked out the emergence of the sub-prime problems almost to the day. It did the same with the peak in the Nikkei Index in December 1989 and, we know this because we checked, the Great Crash of 1929 (which was 7 x 8.6 years back from the Nikkei’s peak). The 1987 crash was an intermediate peak in the cycle which ended in 1989.
What is fascinating is that the current ECM cycle peaks on 2015.75, i.e. at the end of September this year. The low point of this cycle was 2011.45, i.e. June 2011 which Armstrong refers to as:
“The 2011 bottom was the peak in oil and gold and the start of the breakout in stocks and the beginning of the Euro Crisis in full bloom.”
In contrast, we think that the 2011 low in the ECM marked the low in the dollar…here is the DXY again back to 2010.

Source: Bloomberg, ADMISI
Furthermore, the intermediate peak of 2013.60 (July 2013) and the intermediate low of 2014.68 (early-September 2014) also align quite closely with the dollar, as is obvious from the chart.
Armstrong is talking about this September 2015 being the peak in the “bond bubble”.
If our interpretation is correct, the dollar AND long-term Treasuries could have further strong upward moves between now and late-Summer 2015.
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You and I, bro...
We control the horizontal... You know ZH is doom porn at it's best and you can always switch to Sesame Street...
Doom porn, good one!
And then we're Japan.
We've Japanesed some folks
We've exported inflated & indebted some Folks.
I'm expecting a credit event, bank event or currency event to interrupt the complacent market's rise into Mario's Thursday delivery of his deep-sh*t-dish pizza: Eeee Uuuuwww
The Problem is , our economies are bigger than the supply of gold can support on its own.
Which is where other elements should come in.
Many online games support their virtual economies with multiple currencies
Platinum - Gold - Silver - Copper
1P = 100G
1G = 100s
1S = 100C
Or similar systems, and even with rampant looting of currency (inflation of supply) , prices stay in check.
I think we should operate under a similar model in the real world, it would probably work out very well until the bankers start counterfeiting deposit slips... like they always do...
Banking needs to be replaced as an industry, you should not be able to borrow something that doesn't exist in order to pay for something you can not afford.
If the system operated like this, the prices of things " you cant afford " now, would go DOWN until the masses COULD afford them.
Debt raises the prices of goods and allows an economy to grow beyond its means, which in the long run leads to cascading defaults and loss of capital improvements (buildings go vacant and fall apart) because that building was built before the owner could afford it which turns out to be an event that was repeated all over the place. . . and you endup with wasted materials that decay in a landfill because we rushed to build a house no one could afford.
Debt is the problem . . . without debt the economy would operate 1000x more efficient.
The problem counterfeit money in circulation (bank deposits, credit cards, home loans, govt borrowing and spending) creates is that it allows money to flow into place it normally would not under a free market sound money system.
We have had free markets for some time (more or less), but we have never ever had a sound monetary system.... the ages of the gold standard were ripe with banker fraud (the great depression) was the byproduct of banks printing more receipts for gold on deposit than gold that was deposited.... the banks caused the great depression quite literally by stealing the gold which blew mal-investment bubbles and caused the crash/pain.
So don't let anyone tell you we cant have a gold standard because the gold standard failed.... the gold standard did not fail.... banks cheated and failed and took the economy with them and the chaos that ensued masked the thief's dirty deeds... just like the bailouts of 2007~2010.
Technology can make a gold-standard work in the modern era, but the entire banking sector will have to shrink.... and that means firing about 50,000 ~ 100,000 useless eaters that work for banks which wont be popular (especially in states that survive on fraud ) like New York... if it wasn't for all the counterfeiting going on between New York banks . . . . New York would look worse than Detroit.
But thats another story.
Long story short.
The next Great Depression will be started by counterfeit paper that is "legal".
So now look at all the paper out there, what paper has the largest volume by dollar size???? that is backed by very little of the "stuff" it is supposed to represent?
Derivatives
Derivatives will most probably cause the next cascading systemic failure and the banks that are most invested in them will be the first to fall.
There are probably other counterfeit paper ponzis out there to watch out for.... Bank Deposits for one are a complete lie, we all know if everyone went to withdraw that only 1~4% of currency on deposit can be withdrawn from the system and that withdrawing 2% of the money on deposits probably wipes out 99% of the capital banks have as reserves.
So ask yourself is this system sound? and how long can it operate like this?
Im a bit lazy to get the numbers
but
If you took the total dollar value of deposits (Y) and then multiplied Y by 0.04 and then took that number and divided it by (P) population with deposits, you would probably get (T) total amount of money needed to be withdrawn to cause all the banks to fail.
So Total Amount of Withdraws Per person needed to make all banks fail = (Y*0.04)/P
Its a rough number but I would wager a few bucks . . . that the number would be close to actual.
I would estimate roughly if 320,000,000,000 / 300,000,000 = about 1066$
So if every american simply went and withdrew 1000~1100$ at the same time, it would cause all the banks in America to fail.
Obviously some people would have to witdraw more $$$$ than others because I would wager most americans have between 300~ 2000$ in their bank account and probably half of us dont even have bank accounts.
Banks must not be allowed to invent debt, if the public can not also uninvent debt.
Element Let's all hold our breath for that. Too intelligent for USA and others.
When a small group can create 'money' from nowhere and charge everyone else interest on it there's bound to be problems for 'everyone else', especially when a loan only 'creates' the principal - the interest has to come from elsewhere.
Usury makes the world go bad.
Interest has to come from elsewhere----it comes from "growth" --- the biggest lie that is.
Very interesting point and relevant given the propensity for central banks to debase currencies which encourages more and more peope to simply not use the banking system.
A measure of money supply that includes cash and checking deposits (M1) as well as near money. “Near money" in M2 includes savings deposits, money market mutual funds and other time deposits, which are less liquid and not as suitable as exchange mediums but can be quickly converted into cash or checking deposits
US M2 here 11.6 trillion
http://research.stlouisfed.org/fred2/series/M2/
US M1 here 2.9 trillion
http://research.stlouisfed.org/fred2/series/M1SL
number of households here
http://www.statisticbrain.com/u-s-household-statistics/)
M2 stats include corporate and banking sector deposits, so i guess use M1
that makes around 2.9e12 for M1 divided by around 1.16e8 = around $25,000 (2.5e4)
different from your number
of real interest to me is whether the canary of Swiss Franc equivalent numbers starts to signal the end of QE and the banking system in general beacuase it is unfit for purpose. I
t is not rational for the Swiss to hold bank deposits and they are better off holding bank notes and not incurring 0.75% negative interest rates for certain deposits. I think this is a canary because if there is a run in the Swiss Franc banking system, it will be the symptom of the gas leak in the QE debasement mine.
just thinking, if you can stand it, check this bit out:
https://www.fdic.gov/deposit/insurance/
retail investors here in the US will be mostly insured and under $250,000 per depositor per bank.
"The Federal Deposit Insurance Act requires the FDIC's Board to set a target or DRR for the DIF annually. Since 2010, the Board has adopted a 2.0 percent DRR each year."
Designated Reserve Ratio (DRR) Deposit Insurance Fund (DIF).
How I read this is that the DIF needs a minimum (which is waht it gets) to survive a crisis or 2% of either m1 or m2 (I don't know which so either 58 billion if you use M1 or 223 billion if you use M2.
Lastly, this looks like interesting reading, if only you could see the actual size of the deposit base used.
https://www.fdic.gov/deposit/insurance/assuringconfidence.pdf
Very good points.
The general premise will be proven when you start to have more canaries dropping dead in more mine shafts (countries) . . . which I think we are about to witness... a slow but methodical mass-die off of flocks of proverbial canaries.
The Problem is , our economies are bigger than the supply of gold can support on its own.
That basic premist is broken. The gold supply can support any economy if sized right. In fact, even if the supply were limited to a single oz for eternity, it'd still be able to support the global economy if priced right.
I don't disagree with the rest of your premise. The next great depression has already started (pick your date, 1971, 1999, 2008) and in every case it's been due to overvalued paper.
During the OWS protests, I said basically the same thing except I didn't put a figure to it...All I said "ifthe bottom 50% of the population asked for their monthly check in cash at the bank teller...the entire finacial banking system would collapse, because there isn't that much cash printed.
Dre4dwolf
Sorry, your post is too wordy, and all over the place.
Also, likely hedgeless_horseman, you too are working with false and erroneous information.
Here's an example:
Your wrote: Bank Deposits for one are a complete lie, we all know if everyone went to withdraw that only 1~4% of currency on deposit can be withdrawn from the system and that withdrawing 2% of the money on deposits probably wipes out 99% of the capital banks have as reserves.
By Professor Richard Werner:
What is written in the newspapers and even in financial economic text books (about bank deposits) are wrong….
https://www.youtube.com/watch?v=wDHSUgA29Ls“#t=0m24s”
The only universal commodity to all economies is confidence. When this confidence is well placed, the economy can prosper, but when it is based upon lies and deceit, it, will, fail....
Thanks, nice link, a clear demonstration by Werner on the CREDIT creation process in about 6 minutes.
"The Problem is , our economies are bigger than the supply of gold can support on its own."
This is patently false. If gold is priced correctly, then it can support an economy of any size.
The denomination in my view becomes arbitrary.
If you have one oz of gold backing the entire global economy, the oz of gold losses it significance because it becomes so fractionalized that if everyone was to claim their steak in the gold their portion would be soo small that it would be meaningless to collect.
And thats why there has to exist a proper ratio of gold to people to market demand and use for the metal.
You cant split a few hundred tons of gold between 7 Billion people because everyone's steak in the metal feels insignificant and pointless.
If someone told me I could exchange 1 dollar for 1 oz of gold at a bank , I would be ecstatic.
If someone told me I could exchange 100 dollars for 1/1000 an oz of gold at a bank, I really wouldn't give a shit about the backing and I would treat the currency as FIAT.
If I told you that you have 1/100000000 claim checks on a stone, you would probably not give a crap.
But
If I told you tha tyou had a 1/10 claim check on a stone, you might be tempted to work for that claim check.
If you don't feel like you are working to obtain a reasonable steak in an asset . . . then the currency is no different than FIAT as you are still operating on a lie to back the currency.
Th is is like the reverse of blowing a bubble, instead of inflating the value of an asset, you are deflating the supply to the point where no one can obtain a useful steak in the asset at all.
3Q?
Sept. 13
http://www.timeanddate.com/calendar/monthly.html?year=2015&month=9&country=34
What finally is happening is USD and Gold are both going up. It's about time Gold goes up in ANY scenario !
USD and AU up - can't get more deflationary than that.
However, ONLY AU extinguishes debt. After 2015.75, only AU will rise (versus all other currencies). AG will follow as usual (with much drama).
I M H O.
Don't hold her to that, she could be early.
Just going to be interesting times to live in, amazing it's all still holding together. And the best part is we have nothing to look forward too. I guess you could say the economic event horizon will clear the deck of vile leftist Dems and Rinos setting the stage for some form of sanity. But first comes the pain.......
"and it’s occurring across currency and credit markets and, to some extent, in equities"
... someone accidentally hit the space bar between "in" and "equities"
Fox Business Maria and the Talking Heads are having orgasms this morning over the 200 point last minute rally in the DOW...looking forward to next week and the benefit of lower oil prices and the pent up consumer. W T F...Now, the Pulitzer Prize Winner is fawning over Maria, telling her how brilliant she is. PUKE! Is it just me, or is that cunt getting REALLY old and wrinkled looking....just like her ideas.
Most of this debt is very easy to dispose of. Take them all out of equity courts, and try them in law. Poof, 95% of that debt just vanishes for want of consideration.
Well it seems to me like this: The inverted pyramid shows gold doing what it has always done, now the dollar being what it is, I heard this the other day which seem pretty easy for a layman to understand, "in a bad neighborhood, the dollar is the best place to live" at least for this moment in the unwinding of the great keynes experiment.
The State of the U.S. Markets online conference available this week at EWI ...
http://www.globaldeflationnews.com/the-state-of-the-u-s-markets-online-c...
Until WS takes responsibility or is forced to take responsibility for their own gambling losses, no "investor" is safe.
Until taxpayers are safe from being forced to pay for WS gambling, no one should be in "the market".
Meanwhile, no real economic recovery; never was, never will be.
Where are the customer's yachts? http://www.fool.com/investing/general/2013/05/31/where-are-the-customers-yachts-2013-edition.aspx
Until Jon Corzine is behind bars, no one should be in "the market".
Step back from the money, derivatives, pyramids just for moment folks, and just try putting a little context into play with those that were 'Picked', to rule.
Take the clown Cameron who was picked for us lot, and extrapolate this mug against your mug.
This outright idiot, the 'Heir' to B.Liar is just like your outright idiots, never held a job in their over pampered, over bliddly privileged lives, has no real world experience because none of them have lived it, well over promoted to something they couldnt comprehend even if you showed them, picked just because of who they were, who birthed them, or what the prevailing situation called for. By those you never actually see. See where I'm going here? Not just everything you have ever believed was a lie, it was managed by people who put the likes of Cameron in place, the utter fucking failure of an in-bred cunt what he is.
Its just the internet has allowed you to see such utter fucking parody for what it is, a fucking charade.
This spineless fucking idiot clown wont even take part in the upcoming televised debates because he knows Mr Farage will make him look like the fucking in-bred clown he most surely is.
And the people who picked the Cameron run your money system?? Let that sink in and just compare my consummate fucking cunt with yours. Any difference? No, I didnt fucking think so. These people are not just maniacs, they are psychotic maniacs. And now they know, that we know just what clueless clowns they truly are.
Cunts.
Rant off
;-)
Inthemix96
All are "sociopaths" (i.e. fussed-up alternate name for psychopaths). NO sarc.
Yup.
And, it is just human nature underlying this whole farce. Same as it always was. Hence, Martin Armstrong is correct in the grander sense (that history repeats because the passions of men never change)... similar to many other cycle theories. All just looking at the same thing from different perspectives.
Funny thing is that when I was in elementary school I was introduced to a concept called the "social pendulum." That society swings between extremes - back and forth. Cycles. This concept stuck with me and I have personally watched it occur not just at the macro level, but even within individuals including myself, my wife, etc.
Fucking sociopaths are just natural predators who for thier own lust seek power. The size and complexity of the modern community allows them to thrive (for now) where otherwise a smaller "pack" would eat them alive. The price we are all going to pay is sadly going to be nothing short of historic. Rope and lamposts are long overdue.
"These people are not just maniacs, they are psychotic maniacs."
Might I add pedo to your rant?
inthemix96 doesn't have to mention the pedo part anymore since it recently hit the MSM with prince andrew.
Add whatever you think might work WillyGroper, I get lost in the fog every now and then.
But you are 100% correct mate, and look at the cover-ups these foul swine are committing, just google it.
These cunts cant be human, no human could condone this.
are you implying that Farage is not picked by the same puppetmasters?
The apex of Exter's pyramid is physical gold, and understanding physical gold's prospective role is something that Martin Armstrong absolutely and positively gets entirely wrong. The $IMFS is a fatally flawed construct, and, by far, the path of least resistance out of the $IMFs house of horrors entails a revaluation of CBs reserve assst, aka physical gold. Martin Armstrong would have it be that physical gold is just another asset amongst a sea of assets, but on that point he is egregiously wrong as he is on a number of others. In the meantime, will policymakers make further bad decisions until they make the right one? Not exactly. Policy makers will continue to make bad decisions, until, like cattle in a shute, they have no choice but to make the correct decision.
How does gold retain value if our society is ruled by tyrants? Do you really think they will allow this "relic" to pose a threat to their dominance? While I believe in the ultimate power of the "market" it, as with the weather is a composite of a lot of highs and lows. The existing tyranny shows no signs of weakening and a stack of gold may have no more value than a stack of clay bricks, or maybe even worse, a gigantic target on your head. The "market" may not reassert itself for decades if not centuries.
Don't get me wrong though. I believe in a diversified portfolio, as long as it does not put my assets into their hands. But ultimately our problem is not money, not cash or gold, but government and freedom. Our financial debacle is hardship for sure, but it is but the symptom of a much worse disease, like a headache indicating brain cancer.
I think to go all-in on gold, you have to believe that the government will no longer be functional and therefore not the continuing menace that you describe.
Or that the government gets replaced, or that it becomes impotent as a practical matter.
If people just collectively ignored most of the laws out of DC, absolutely nothing would happen. TPTB are already ignoring financial laws without condequences, when things get so bad that the EBT card deposits won't buy a loaf of bread, no federal law enforcement arm will have any real power -- they'll be struggling to feed themselves.
It won't necessarily be mad max, but 99.9% of your troubles are going to be local, with people that can physically interact with you that are in walking distance.
Yes. One thought I had was to buy up several shacks in a small town for cash, live in one and rent the others. Maybe half and acre to grow some vegetables. Fix the inside up for the old lady, but keep the outside looking unkempt. Bury some PMs (for property taxes), stock the basement with some commodities for barter. Be close to shopping and get there with bikes. Maybe a scooter and older car.
If I could convince the old lady, I could do that tomorrow and never have to work for the man again. But alas, I am still on the hamster wheel for the time being.
I have the same old lady problem too.
Let me simplify this for everyone. In a society that believes in justice and real law and order, physical gold is paramount, yes. It's a placeholder of value because it last and takes work to create.
In a world that is full of arrogant tribes and tyrants where fraud is the status quo and absolute power is corrupting absolutely, the simple truth is that possession and trust are 100% of the "law" now. It applies to any physical asset or person that is of real value.
Period.
Farty Marty has some nice computer model toys to play with... but always remember that he is a liar, an ex-convict and a egomaniacal douchebag. His hatred of gold and those who use it for protection are indications of his deep mental illness.
part of his contempt of court charge, was refusal to turn over the gold.
Armstrong doesn't hate gold. He just hates goldbugs and pumpers.
Derivatives market = 10 times global GDP
Inverted pyramid ..... top heavy ..... unstable ........ plain stupid
Yep, There is a reason why you don't see inverted pyramids in Egypt...
the gold at the apex in egypt is missing. sounds familiar.
It's amazing to me how far out by Larua's house they go to rationalize printing money to save the TBTF and charging it to the other 99%. You can pull new derivatives out of thin air forever, but it still doesn't change the fact that the underlying problem in our economy is jobs and decimation of the middle class. Incredibly O'shithead is this week outlining his insane idea of how to fix it. Unbelievable.
A very thought provoking article although I'm not so convinced in believing Armstrong's 8.6 year cycle.
Don't look now but the base of that "inverted pyramid" just got $320 billion higher!...
Is this a robbing Peter to pay Paul moment after AG Holder's ringing endorsement to pull back "civil forfeiture" theft at the local, state and Federal level?...
http://www.washingtontimes.com/news/2015/jan/17/obama-propose-320b-highe...
Republican control ... it's time-wasting political noise ... and he knows it.
That's the sort of useless do-nothing shitbird the US got lumped with, sorry, voted for.
What makes you think they are pulling back on civil forfeiture. They simply must charge you with a crime before stealing you assets, so now you are not only robbed but will go to jail with no funds to defend yourself. Is there a more punitive and aggressive industry than the legal one?
And yes, higher taxes have ALWAYS been the solution. Look what its done for education.
What makes you think they are pulling back on civil forfeiture. They simply must charge you with a crime before stealing you assets, so now you are not only robbed but will go to jail with no funds to defend yourself. Is there a more punitive and aggressive industry than the legal one?
+ 1,000,000,000,000 O
I knew I should have put a /sarc tag on the end of that!
In a banksters paradise.
The paradise designed and for banksters.
Assumption1 – Banksters are really smart and can do no wrong (false)
Remove all regulations to allow super-smart banksters to do their stuff (completed by 1999)
(Banksters have always been a bit resentful of their traditional role, where they just act as a service industry for the real economy)
Great idea – We banksters can produce our own products (Complex Financial Instruments and Complex Derivatives) we can be just like the other players in the real economy.
(Unfortunately, banksters trading with each other is a zero sum game and contributes zero to GDP)
Bankster work around – Complex financial instruments allow both parties to file profits with zero initial up front cost.
1999 -> 2008 Bankster ponzi scheme runs for 8 years before crashing and burning.
Profits posted on both sides of trades suddenly nett to the zero they always were, trillions disappear from the global economy.
The emporers new clothes are exposed for all to see but massive cover up ensures those not looking closely don’t realise.
The banksters paradise part 2 – the days of the Central Bankster .....
"In a world of unlimited credit creation, inflating the debt away remains an option and we question whether renewed onset of debt deflation will ultimately be dealt with via central bank-created inflation?"
That is a question already answered - many times since 2008... But if one is still Prechter-izing over the thought of a true market-clearing event, ask yourself just (1 overall) question: Is our society today, the same society that existed in the 1930's...? Stated differently, is society today as 'polite' as it was then? Does today's society respect life & property as it did then? There are dozens of other like questions of course, but why bother - everyone instinctively knows what the answers are. So then, print money? Hand out cash? An EBT card for everyone with a $100k limit? Who knows? Whatever it takes to keep the socio-economic-political structure from imploding on itself - will be done.
Right up until the supply lines break in earnest, yes.
Same as it ever was.
Mr. John Exter has taken 3 lines and some words that have handily eclipsed the efficacy of most economic departments of Ivy League schools; reminds me of Einstein's classic "E=mc....."
"In a global debt bubble, it concerns me when fewer than 1 in 100 people understand that rate of return moves inversely to price on a debt security. Financial fraud will forever go unpunished. "
It concerns me that fewer than 1 in 50,000 people understand "consideration".... especially in the concept of mortgages...
Perhaps the more fitting title for this would be that "water seeks it's own level" whether in science or money!
It's not the volume but the depth that wins the race!
The author lost me here:
"Here is our timing of these cycles:
1788—1843 56 years
1844—1896 53 years
1897—1933 37 years (1937 was a policy error when recovery established in our opinion)
1934—? 81 years (and counting)"
So the timing s fucking random...gee thanks. At least Martin Armstrong is likely a genius. He knows nothing of history, but he's definitely of the same mold as hawkings. Mylchreet...perhaps not so much.
No actually Kondratiev got it right.
Because economics isn't an accurate science as we all know, in or around 60 years is the close approximation!
Let me add to that...
It's a good thing the Russian economist isn't alive to see how fucked up the Western banking system would become and the unreasonable lengths they would go to to throw out all forms of constraints to move it beyond anything he could have ever imagined in his lifetime!
You see they weren't that stupid or crazy in his day!!!
ding ding ding
Kondratiev
When all of the people who remember the mistakes of the last depression die off, that's when the mistakes of the next depression begin.
note: as we are living longer, the time between these events is lengthening.
note: as we are living longer..., and the banking industry continues to abrogate it's responsibilities to it's business partners most importantly the interest of it's "clients" through the continued abandonment of sound accounting and financial management standards that protected us after the last one... the time between these events is lengthening....
Fixed it!
I'll relay your improvement to Nikolai Dmitriyevich at our next scheduled seance.
Cept Kontratiev's cycles bear absolutely no resemblance to the periods this author mentioned...of course it's all in the interpretation isn't it? Kontratiev was IMO a master of the obvious. In effect, pick an innovation or series ofinnovations and build a wave cycle around it.
Armstrong said to by oil 6 months ago for the big 2 year rally. His trading system is batting zero. He is a convicted financial fraud. I don't care what he thinks. He doesn't understand market structure.
That statement would get the needed relevance, if you could provide a link to Armstrong's site proving he stated "said to b[u]y oil 6 months ago"
http://armstrongeconomics.com/2014/07/09/crude-oil-the-future/
It is called Google.
No it's called reference.
You tell me what you are referencing, not I guess what you may have meant.
In the link you provided, I can only read that Armstrong believes oil will hit a high in 2017.
Not more and not less.
2009:
"Gold $ 5000."
All "Systems" are inherently Fraudulent for One Simple and Absolute Reason:
HUMAN NATURE CANNOT BE QUANTIFIED.
Thus any such "System" perforce cannot produce a RELIABLE METRIC when the CRUCIAL INPUT is a VARIABLE.
This is SIMPLE LOGIC and MATHEMATICS.
TIME and PRICE are the ONLY Absolutes, and at BEST only PRODUCE an Approximate Result, Not an Exact Mathematical Result.
With Talent, Skill and a Complete Grasp of VOLUME, approximate is Enough to Out Yield the Market over Time.
Both PROPONENT and BELIEVER subscribe to the Fundamental Lie and Delusion that there exists a Means By which to Put in Some Numeric FORMULA into the MAGIC BOX and Out Comes Money....
On that Note:
As I've Jim, I Greatly Respect You, and Welcome an Alliance......
My Advice remains: Cash Out now or Join Forces with Me.
Because when the REAL BOTTOM arrives, "TIME", The True Master of Markets is going to Serve Up the ARROGANCE of Your "Premier" "BLACK BOXES" and All the Many Lesser.......
I love to see that!
That his uncle on the farm, rustic guy who spoke and direct you despised, he's the guy!
Will all come down to economics-based no-frills derivatives, print insane money etc. .
What do you do sell at a price, if not sell you go bankrupt and ready.
This is and has always been the system of things.
Who get out of this scheme're screwed.
There is an expression in Portuguese: "Wire mustache".
Means that agreements need not pay, only the wire mustache to avail is the word of one another.
Once said and I repeat:
Economy is not "science".
The sons of bitches that raised the economy to the category of science should be hanged.
In day-to-day, the economy deals with daily human needs.
The weather mainly dictates our needs.
Try to know how the trade was done before the invention of the telegraph, will be an interesting discovery.
I wrote much about it when I Bachelors Degree, would be my theme in the Master (which would be very expensive and gave up) but everything that Lily is still in my mind.
hehe.
This is inverted is missing something big and crucial:
GOOD BILLS! Or commercial money market and CDs... (When not bundled with crap).
Well but gold hasn't been playing its part yet. Will that turn around tomorrow?
Could simply redraw the pyramid without gold. Maybe there's just too much money sloshing around the world to be soaked up in a few tons of metal, gold would be driven to $10,000 an ounce or higher, maybe much higher. It could still happen, I have little conviction on it either way.
My late father would always say, "I don't care what venture you embark upon as long as you have two years of interest and living expenses put away in case you hit a stumbling block. Instead of the bank moving in, you will have two years to attempt an orderly solution."
His second piece of advice was to reduce the amount of risk taken as I became older and wealthier despite any siren calls until in the end I would risk only what I could afford to lose.
His third piece of advice was to never participate in a serious way in any business venture with any of my children so that in the event that they ran into problems I at least could be in a position to assist or rescue.
Fourth piece of advice, teach your kids to save from a very early age. Not for the sake of a few pennies but more so for the discipline it instills.
Finally, get your kids to have a part time job. It teaches many skills that the home cannot.
School never taught these wisdoms back then (other than the visit from a local banker encouraging us to save). And they still don't.
As i always say, the system has no interest in us unless we are spending or borrowing.
The Way We Were!
You are fortunate to have had such a wise father.
Excellent!
Sorry, folks. It has not been 81 years since the last implosion. From 1971-1982 the Stock market dropped 50% and on top of that gold went from 35 to 1000 and bonds got destroyed as yields went from 5 to 17%.. In other words, 92% of America's welath was wiped out.... in gold. This qualifies as as bad or worse than the Great Depression, where stocks dropped 75% but gold only moved a few $ after being confiscated.
1933 to 1971 is 38 years and 1982, the last year of that Depression, to now is 32 years. We are very close to the end, but we are not overdue.
I've got a solution: outlaw government and money.
So, a total free-for-all? Interesting. Sounds like Somalia.
Naw--he's going to pay some authority to do it--
one question.
if you were going to kick-in myra's, wouldn't a flat, low treasury curve be optimum?
Most good commentators know I'm Brazilian.
You know my ideas and where I live and what work.
There are moments in life that you need to make a decision.
For my part I decided that the editorial line ZeroHedge does not meet transparency requirements that my instinct indicates.
I thank those who positivated me just as I thank my comments that became negative (criticism is always interesting from my point of view).
Radical decisions as out of two marriages did not impress me.
Leave to post a blog and warn that return no more is what I consider decent to do.
Especially with Latin Lover, Slave Isaura, COSMOS, Captain Nemo Son among others, many others.
All decent people with interesting ideas.
Here I am "Karaio" out there use since 1995 another nick.
The keyboard is like the eyes, the window of the soul.
It will not be difficult to find in other comment boxes.
To those who say "was already late," I also thank.
Stay with God (whatever it is).
Kind Regards.
Alexandre.
:-)
Most bad commentators must think you are from Argentina !
But as a Brazilian you know your country have the Petrobras disease just like the Dutch had the dutch disease and today the Yanks have the fiat fart and cyberwar spooky bigdata mega-distort of corrupted heart disease.
We are all now living in a diseased world. Staying "clean" is becoming a state of the art!
Your comments^ will never make it through the google translator to Kairao.
Most good commentators know I'm Brazilian.
You know my ideas and where I live and what work.
There are moments in life that you need to make a decision.
For my part I decided that the editorial line ZeroHedge does not meet transparency requirements that my instinct indicates.
I thank those who positivated me just as I thank my comments that became negative (criticism is always interesting from my point of view).
Radical decisions as out of two marriages did not impress me.
Leave to post a blog and warn that return no more is what I consider decent to do.
Especially with Latin Lover, Slave Isaura, COSMOS, Captain Nemo Son among others, many others.
All decent people with interesting ideas.
Here I am "Karaio" out there use since 1995 another nick.
The keyboard is like the eyes, the window of the soul.
It will not be difficult to find in other comment boxes.
To those who say "was already late," I also thank.
Stay with God (whatever it is).
Kind Regards.
Alexandre.
:-)
Good luck to you as I think you are saying you are leaving ZH.
Alex, Not really sure why you are leaving. You should stay.
Thousands turned out on the streets of the Armenian city of Gyumri today to pay their respects to six family members brutally murdered in their home earlier this week, a case that is testing relations for Russia and its closest ally in the region. The youngest victim, two year-old Hasmik Avetisian, lay in a tiny coffin, her arm wrapped around a doll, at St Nshan Church in Gyumri, around 120km north of the capital Yerevan. Described by neighbours as quiet and hard-working, the Avetisians – two grandparents, their son and daughter, a daughter-in-law, and young Hamsik – were shot dead on 12 January. A six-month-old boy, Seryozha – in critical condition after suffering stab wounds – is the only survivor. The crime has proved especially horrifying for the South Caucasus nation because the suspect is not Armenian but Russian – a soldier serving at Moscow’s 102nd military base in Gyumri.
http://www.theguardian.com/world/2015/jan/15/-sp-mass-protests-armenia-c...
This article was a really good read in a really bad time. Thanks for this TD
I am thinking of reading 'All The President's Bankers' by Nomi Prins.
Is this a good read?
back in the early '70's, in the public schools, they taught us Keynesianism
The stock markets have begun the decline into the deflationary vortex. Every other asset class is already participating... bonds, commodities, real estate, gold and silver, oil, etc. Now it's equities turn to get sucked into the abyss.
The stock market will continue to decline next week...
DOW
http://www.globaldeflationnews.com/dow-jones-industrial-averageelliott-w...
S&P 500
http://www.globaldeflationnews.com/sp-500-indexelliott-wave-update-for-w...
You have the calculus backwards. The political system we have is a direct result of the monetary system. Even more saliently, the political class doesn't decide the issue of what kind of monetary system we will have. They never have, though, for periods of time it may appear thus.
Martin Armstrong is nearly always right...
exeter's pyramid is kind of obvious. people will protect their money in times of trouble and risk it when times are good. there is constant flow between the extremes and it ebbs to one side or the other in stable times and to the extremes in unstable times. that is why the bubble description works better. it blows up with risk then pops back into a drop.
what happens when the bubble won't inflate? insn't that where we are now? they have messed up the bond market trying to get it to ionflate. they have printed trillions of dollars and yen and euros to no avail. the bond market blows up last after the currency market blows up. so what happens?
in every case like this, where money cannot be printed fast enough to make up for a collapsing multiplier, hyperinflation in nominal costs, high interest rates, deflation in real value and a reset in the form of a new currency emerge wiping out all old money and assets except gold, the tiny bubble of soap, the ultimate reset.
paul mylcrheet - Do what thou wilt shall be the whole of the law?
ouch. where did you find that? better be careful.
Aleister Crowley
https://www.youtube.com/watch?v=jsm6WI5i7p0
Ozzie - https://www.youtube.com/watch?v=yDVd61caQy8
How about this narrative ( it's a lot shorter and more to the point): The central bank, or should I say the owners of the central banks, have never had it so easy to accumulate everything in sight. And all they have to do is conjure all their different currencies into existence and keep the sheeple in the dark as to what they are doing. Cake!
8.6-year cycles? Interesting in a Ripley's sort of way, but science it ain't.
A rush from high risk to low risk assets across the markets? High importance, well worth watching. A part of the gathering rush for the exits.
Before Donetsk was gained by Ukrainian forces it was assaulted by Russian army forces - thats a fact translated on Russian state TV:
http://youtu.be/e5tb64YF_KY
Exter's Pyramid is WRONG.......
US Bills, Not Gold are at the Bottom of the Pyramid.....
This has been PROVEN since 2011, as GOLD did NOT hold its High Point Value, and Not even Close........
Furthermore, the Rally in the Dollar in 2014 actually INCREASED the REAL Value of US Bills....
Finally, Exter cites "Federal Reserve Cash".......
The Federal Reserve doesn't have ANY "Cash";
They can only create LIABILITIES/OBLIGATIONS, which Part and Parcel are NOT "Cash"......
Most Importantly, the Federal Reserve does NOT have the Power to Tax, and Never will.......
US Bills constitute the FIRST CLAIM on the POWER TO TAX.....
Trillions, Not Billions, in LIABILITIES/OBLIGATIONS will Fail;
But ALL US Bills will be Made Good......
You speak with the authority of god. What makes you so certain? Maybe they will be made good, but not with goods or services, or maybe the US will just drop a few zeros from the bills. Come on man, look at history.
The "Authority" of KNOWLEDGE:
FACTS, Not Opinions, or "Feelings":
There are Less Outstanding US BILLS than even 1 YEAR of US Federal Tax Receipts;
There exists No LEGAL MEANS by which ANY CREDITOR, COUNTERPARTY, DERIVATIVE or any other OBLIGATION can ENCUMBER US BILLS held by a US Citizen or US CORPORATION......Unless they AGREE to be So Encumbered....
US Bills are the FIRST IN LINE before ALL other US Obligations, including but Not Limited to, Social Programs, all the so-called "UNFUNDED LIABILITIES"...
"DEBT TO GDP" and all its Constituent Elements are CONTINGENT LIABILITES based on a Myriad of Factors and Inputs......
ALL that "Debt" held by ANY PARTY is Subject to Counterparty Risk, both Known, and with a vertible Unlimted Hypothecation, Infinitely Unknown......
That "Debt" includes ALL Bank Deposits.....
TOTAL OUTSTANDING US Bills are NOT even 10 % of just ONE YEAR of US GDP;
History has PROVEN GOLD can both be Seized, Physically and Legally.....And Most Recently Cut dramatically in Value....
NO US BILLS have ever FAILED....
The above MATHEMATICAL and LEGAL facts Demonstarte Why they Will Not, Going Forward.....
The Choice between IGNORANCE and KNOWLEDGE is made by The Individual.....
The Latter imparts Authority......
So why not Notes or Bonds?
Doble post
since 1979 the workers' productivity has increased by 80%.The income of the top 1% has increased by 240%.
And the average american wage, adjusted for inflation, has gone up by a few percentage points, maybe by 8%.
Needless to say it wasn't ALWAYS this way, especially before Reaganomics was initiated in 1982 ... And, remember when the US was responsible for its money print, before BW revoke, even less so !
As then there was NO "our money your problem" floating rate consequence initiated by Mr Friedman for living off petrodollar debt !
Why has the worker's productivity increased by 80%? Is it because they are working so much harder, or is it due to technology?
Who owns this technology? Or is it owned by the collective?
Early on in my career as a self employed furniture maker, I realized that tools were the most important factor. Rather than spending my earning on booze and women, I started buying tools. I have continued that trend now for thirty years and have a quite impressive array of equipment, most of a high technology nature. My employees have had the exact same opportunity to do exactly the same as me and did not. Instead they have watched as government has left the immigration barn door wide open precipitating stagnant to falling wages.
It is this concept of employment, of avoiding risks, of consuming rather than investing that has limited their earning ability. Yes their productivity has increased because they have the best equipment available...that I own. Virtually none have expressed interest in continuing their education or even expressed interest in learning anything that was not forced upon them.
Policies are designed to enslave us, to use us. It is up to us to resist, to make the more difficult choices, to take risk, to work extreme hours and suffer in many cases.
Hey Oldwood,
Very interesting perspective about the current employees not wanting to learn. I can assure you that's NOT the case with a segment of our youth. Would you consider sharing your knowledge to those that WANT TO LEARN? If the schools don't teach it, we can.
How? Here's your opportunity...
In the past few months I launched the only free vocational online school for students. It already has over 50 full blown courses from how to drive a pendant crane, fork lift, workplace hazards, lead awareness, e.t.c. I'm lining up business and unions to do the hands-on in partnership in students local areas.
The next course category objective is to create financial and monetary awareness, along with entrepreneurship.
As of last week, several tech high schools have come aboard to use it (as well as contribute). This is going to reach a gaggle of students everywhere. It's like a Khan Academy that wears a tool belt and teaches you about the real world of finance and business entrepreneurship.
If you have time to contribute here you have time to contribute there, actualizing your awareness of this need. Come by and I'll give you permissions to make your own courses (or just design the lesson and I'll integrate it). Reach me at info at shopsquawk dot calm, or make an account at ShopSquawk and start preaching OUTSIDE the ZHurch ; )
If in the real world as you say the government is the enemy of efficiency and excellence then we are doomed unless we can change the goverment meme.
But in my opinion its more complex than that. The most productive become greedy and want to become market makers by twisting government's arm; which is not difficult in a democracy as they want to get reelected more than anything else.
Its this collusion between big B and Big G that creates the problem for the small guy outside the "political" loop.
Yes, Montesquieu always lost out to Machiavelli. Separation of powers to regulate fairly never was a strong working solution.
Back to the Rubicon we go !
Yet I have been able to make a good living (most years) for over thirty years now. I am not a Big B as I have never had more than six employees. No, I won't be making an offer to buy out Chrysler anytime soon, but that's not what we are talking about. I have had no inside track, special favors or anything else. And neither have most of the people I know who have businesses, and lest we forget more people work for small businesses than large, so your collectivist battle against the man just doesn't hold water to me. Yes, the problem IS Big B an Big G, but none of that can happen without the power that government holds. You want to blame those who would bribe our government as the evil and those who would accept those bribes as the victims. This is your flaw. We ALL are weak and the only way to limit the risk of corruption is to limit the power that these people can wield. we actually have laws, a constitution, specifically drawn to deal with these issues. Our problem is our government is corrupt. It refuses to follow the law, much less enforce it. We have an executive branch who sets aside any law not to his liking, and that is just the most transparent (and official) signal. We do not need a new government "meme", we simply need to enforce our laws. What possible"meme" could we have that could make that happen, short of a dictator, which is exactly what we are headed for? As government continues its downward slide into dysfunction and corruption, the complete suspension of government function will be our only presented option. A savior to step in and rescue us from our panicked state.
Amen.
Of course, you have to believe in yourself.
And you have to either have a personality which helps you to sell what you create, or have the persistence to keep trying until you find some way that you can sell what you create.
I wonder how many factory workers simply lack belief in themselves, and how many lack the discipline to save and invest instead of buying the wife that new car and furniture and kitchen stuff.
As for the government, it seems to me that it usually gets taken over by slick lobbyists who talk the city, state, or nation into creating a fog of obstructions to entrepreneurs, in order to lessen competition to the comfortably established businesses which hire the slick lobbyists.
I am a terrible salesman. Our work is all referral...when we have work.
It is not in the interest of those who would want to rule us to ever instill self reliance in us. Oh sure they can talk a big game about feelings of self worth and sensitivities of all types, but it is they, the government, that presents themselves as the only ones capable of preserving those things, of protecting us from the meanies who would say ugly things to hurt our feelings. We are weak but not completely stupid and when they tell us that the only way to preserve our self image is to not be tested, to not be scored, to not be evaluated...we know. We know we are shit, a pale weak bucket of warm spit. No, they are not interested in "we the people" standing on our own.
As we saw how the progressives dealt with their slaves, they went to great efforts to deprive them of any education. Not to restrain and limit them. Oh no. They were doing it to protect them, to save them from the stress and complications that knowledge and awareness would place on them. No, no, they truly care. So much that they and only they will carry the burden of thinking, of really choosing ( not that election thing) for us. Thank God someone actually cares...no?
A large centrally commanded government is NOT compatible with the individualist. We can put any ism on the end of its descriptor we like, and it makes no difference. Our future is the single payer insurance/employer. Effectively a single employer....or benefactor as it were, and we will take what we are offered because that will be all there is.
Of Course he is right- what I want to know is how the hell did Armstrong know this all the way back in 1997/1998- does he have a time travel machine- LOL
http://i1.wp.com/armstrongeconomics.com/wp-content/uploads/2014/04/1998-Forecast.jpg
Exactly, how did he know???? A little bird maybe, or not so apparent genius?
I think Armstrong is a rare creature, like Mozart or Franklin. And he has been around a long time.
He's rare all right ! He constantly talks his own book -like 24/7. Also he's turned into a Gold hater blaming it all on the crazy Goldbugs & NEVER acknowledging the huge & very obvious paper manipulations.
Some of the supposed responses he gets from loyal fans are a real laugh. The smarmy flattery he publishes addresssed as questions to himself are quite sick. I read his stuff but with a large degree of doubt that he can be such a know all.
"Is Martin Armstrong Right?"
Martin Armstrong is at best promoting NWO's 'plan B'. Check out this interview and see if you can come away thinking otherwise....
Martin Armstrong Interview: The System Will Crack And A New World Reserve Currency Is Coming | Peace . Gold . LOVE
Yes he is right -on the point of his predicton that in 2015.75 we will have a sovereign Debt crackup - He is right, and the point that he knew it all the way back in 1998 makes it even more remarkable. You can go back and look at the slide from 1998 that I produced on my previous Comment that shows he has hit almost every call from 1998 till today, and irrespective of his views on a one world currency – his record stands.
On Thursday, shocking news came out of Switzerland, when the Swiss National Bank abandoned its exchange rate peg against the euro. According to a Bloomberg article, "Not one of 22 economists surveyed by Bloomberg News between Jan. 9 and Jan. 14 expected the SNB to get rid of its cap in 2015."
But Brian Whitmer of Elliott Wave International not only saw it coming, he predicted it in his December European Financial Forecast newsletter.
http://www.globaldeflationnews.com/whitmer-of-elliott-wave-international...
THOSE CHARTS: In those charts, one thing I see is that they rolled over (slowly), which I have read is the way tops often act. If bonds and value stocks peak in September, and then roll over (slowly), then, it seems to me that, as long as one does not use use leverage (Pigs get slaughtered), then one might simply see what has bottomed out and might get its turn to rise.
did he do all this before landing on the moon? oh wait, that was Neil. Oh wait, the moon landing was a false flag for the NWO
https://www.youtube.com/watch?v=ss0tzJuP6VM
Go show Reid some love for his black eye.
Fukn D-bag, sitting there talking about how "he got a black eye from working out in his new home", meanwhile half america is like foreclosed on and this fuck is making millions if not billions on dirty deals enforced by heavy hand of govt.
Perhaps this time........it will be different.
F-PIIG-SUK-US!!!!!
c'mon everybody..we know the scam here..cui bono? the banks of course, who are positioning themselves ahead of MOARRR QE in Europe,
the ECB is about to pay less than 1% for 10y Government in Germany and c. 1.5% for F'ing PIIGS debt (that's France by the way) PLUS c. 0.5% for shorter Government debt(maybe singling out FPIIGS is unfair cos sure as hell the US, UK and Japan are doing the same thing, so i guess F-PIIG-SUK-JUS is a better acronym.
with somoebody else's living standards to pay super profits to banks who own the government debt and those F-PIIG-SUK-US' governments who keep paying out benefits without the tax base to support them...you cant even SAY somebody else's money these days cos what we have is a game of using a medium of exchange (money) as a substitute for a store of value (albeit via deficits and debt).
question: when will central banks ever allow the economy to price government default risk?
question: why isn't there moral hazard for tax payers with the central bank system?- tac-payers elect the F-PIIG-SUK-US governments and the central banks are their dependent agencies (no way no how are CB's independent as they are regulating interest rates just the same as governments were doing before CB's supposedly got their "independence".
now you may say the second question depends on the expression of certain inalienable rights that actuallyno longer exist..
But hey, cui bono? the banking sector - which presumably would otherwsie go tits up if the central banks were paying over massive profits by buying all these horribly expensive government bonds and removing any utlity government bonds have for the public at large as a store of value rather than a means of exchange
Evening viewing pleasure.
911 and War by Deception:
https://www.youtube.com/watch?v=pK6VLFdWJ4I
Verry funny!
"the Fed portrays lower energy prices as 'transitory'”
They might want to explain how the manufacturing of photovoltaics (basically sand with sand with energy) will get more expensive in the future. If it does not then the price of energy will come down, except there will be absolutely no sand anymore.
One of the basic economic theories is learning curves but there seems none at the FED.
One word - Trashury