Friday, November 18, 2016

The Second American Revolution Pt 2: The Massive Reset That We Need

In my blog post "Time For a New American Revolution: Burn Down Our Bloated, Failing Central Planning Bureaucracy," I ranted about the massive failure and waste that aptly describes the federal bureaucracy that has become a huge waste of our nation's resources. The completely incompetent, bloated Fed Govt is a huge $4 Trillion per year leech sucking all of the blood from the US economy. I suggested that much of it needs to be "burned down."

Such a drastic outcome would never come from any elected politician. Even Donald Trump is not considering a radical downsizing of any part of the government. If I were in Trump's shoes, I'd be hiring the heads of major departments with the sole goal of dismantling, privatizing or seriously downsizing them, including Education, HUD, Commerce, Energy, Homeland Security and TSA, Fannie Mae, Freddie Mac, Sallie Mae, Defense, and the Federal Reserve as a start. Many other agencies need a complete house-cleaning including the SEC, EPA, IRS, NLRB, for example.

Why do this?  Because the US government is ruining our economy and our society!

Stagnating incomes coupled with inflation of health care, rent, college tuition, even defense procurement costs are all the result of government spending or policy. Rising rents are caused by zero interest rates engineered by the Federal Reserve, who have created a new housing bubble that is pricing out a new generation of buyers and hurting the economy. If you can't buy, you must rent. But even the price of renting is a severe hardship to many, many people. It's really a catastrophe as record high house prices aren't sustainable at "normal" interest rates. The geniuses, the educated idiots like Bernanke and Yellen, haven't thought about what happens when rates and mortgage rates rise again with record high house prices?  No one can afford anything! "Government" is CAUSING THIS!

Meanwhile debt at all levels, and across the world continue to pile-up with no end in sight. Perhaps, like Japan, the US will be able to skate by and double our national debt (once again) in the coming decade or so.  It's possible. But peripheral countries like Nigeria, Venezuela, Italy, Portugal, Russia and many, many other countries can not sustain stagnated economies coupled with higher debts. Something will break. Sovereign debt defaults will bring down the banking system in Europe and start the end-game crisis.

Declining and zero interest rates has prolonged the debt game for 30 years, but that too is becoming exhausted. Now interest rates are rising. And it's entirely possible now that more debt hurts rather than help going forward a consequence of "debt saturation." The spike in interest rates after Trump's election has come with an expectation of much higher debt levels to be funded. Rising rates in anticipation of higher debt levels may be the mechanism where more debt hurts the economy.

The massive amount of debt written in recent decades, now totally unsustainable in a slow-growth environment, has to default to a more sustainable level. This will blow-up the entire world economy in a massive financial, economic and humanitarian crisis. In fact, analysts at Deutsche Bank said the following:
..the global financial system remains broken and extremely fragile. Secular stagnation trends are everywhere. The world has too big a debt burden for the current growth environment. We would feel far more comfortable if the world went through a huge creative destruction period where zombie, inefficient debt was allowed to default - thus 'right-sizing' the ratio between debt and GDP. However we've long accepted that this is highly unlikely to happen outside of perhaps a future break-up of the Euro.
Bottom line:  I’m afraid only financial catastrophe will force the kind of reset that is needed. With that, we need the Federal Government itself to go broke in the next financial crisis (for which, the Government will be rightly blamed). But, with the money printers still in business at the Federal Reserve, there is NO WAY the government can go broke. So, the Federal Reserve has to go. The "bureaucracy" can't be permitted to save itself at everyone else's expense.

The US government going broke is EXACTLY what is required to reset the welfare rot, toughen our ignorant, lazy, entitled population, end the money center ‘hedge fund’ banking cartels, cut down the drastically bloated government bureaucracy, and to create a massive deflation in medical, tuition, defense procurement, housing, rents and all other costs to levels that the people and the nation can afford. This becomes more clearly true when you realize that average incomes are never going to catch up with all the inflated prices if we continue our current path. Our delusion Federal Reserve head, Janet Yellen, has demanded even MORE inflation! But the reality is: Inflated prices need a drastic depression-like reduction. A government bankruptcy would pressure personal incomes too for a few years, but I think prices would drop a lot faster.

A repeal of the Revenue Act of 1913 (income tax law), passage of a balanced budget law and repeal of the Federal Reserve Act would force the radical overhaul of the Federal Bureaucracy as well. Note, in this scenario, payroll tax deductions could continue to fund Medicare and Social Security, but these taxes are only covering ~60% of actual spending in these categories, so even there cuts are required. Reduced government spending will drop all prices. A national sales tax could replace income tax for only the strictly Constitutional functions of the government.

My feeling is that only crisis will change the trend to ever bigger government. Let it burn!

Sunday, November 13, 2016

Democrats Headed to Political Wilderness, Not GOP

The result of the election not only went to Trump, but GOP governors also gained ground (+3), where Republican governors now hold 33 out of 50 statehouses (66%) and hold a similar number of state legislatures. This is the most since 1920.

It's Democrats that are headed to the political wilderness, not Republicans. It's entirely fitting as the Democratic Party has become the epicenter of failure, corruption, delusion, false narratives and deception. Check out this map of Congressional Districts that are held by Republicans.

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Friday, November 11, 2016

Uh Oh, Higher Rates Herald Downward Economic Spiral

From Brexit panic lows, interest rates on the 10 year US Treasury bond have gone from 1.35% to 2.1%. And rates are still rising. World rates are rising too.

Some of that rise is due to a violent reversal of a bubble mania flight to bonds worldwide immediately after Brexit. Some of it is that Trump has spoken the most obvious truth in the world: that interest rates have to rise from zero and negative levels. Since Trump's election, interest rates have risen significantly.

Central banks around the world have also begun to hint that QE will end in the future. The US Federal Reserve has vowed to raise Fed Funds rate to 0.75% in December.

All of these extremely low "emergency" rates had to end at some point since NIRP and especially ZIRP is killing banks, retirees, pension funds, insurance companies and capitalism itself. Even the educated-idiots, who occupy our institutions and central banks, could see this (finally). It's insane and never been seen in 5000 years of history!  Now the same investor front-running that drove $11 Trillion in debt to negative interest rates has now begun to reverse. The front-running was investors "getting ahead" of the Central Bank buying of bonds during QE. That's likely reversing now.

Rates may also be rising because Trump has signaled significantly more debt spending. I think we're seeing the dynamic that higher debt equates to rising rates. If so, rising rates will slow an already slowing world economy.  We're seeing the end of debt's utility to create growth as shown in the following graph:

Debt Saturation Means Debt Begins to Hurt The Economy. China is now in a similar position

The End of China's Debt Bubble Is Near

To build on my blog post "We're Reaching the End of Road," here's the dynamics that could lead to a significant downward financial and economic spiral:

  1. Slowing economy causes rising government debt (has been true for decades due, in part, to persistent trade deficits)
  2. Suddenly the prospect of rising debt is, in part, causing rates to rise in US
  3. Rising rates cause US dollar strength which hurts the emerging market/commodity producing countries
  4. Rising rates also hurt business, mortgage and consumer loans, Economy slows further into contraction
  5. Slow growth causes debt distress in corporate world and corporate rates rise further. Debt distress in sovereign debt of commodity-producing countries causes their rates rise further
  6. Debt distress turns into debt defaults
  7. Defaults hurt the banking sector that is already teetering on the edge of default, especially in the EU. 
  8. Financial crises risk a repeat of 2008 financial crisis; or even worse
  9. Debt defaults and banking crises lead to recession, then Depression 

As I've said, we're reaching the end of the road of debt and prosperity. I believe that we are on the precipice of a financial maelstrom that could change history and endanger millions of lives around the world.

Thursday, November 10, 2016

Expect Negative Returns On Stocks And Bonds Going Forward

The Trump rally probably has legs here that will take indices to even higher highs. But prices matter. Historically, if you buy at these market levels, your expected returns are going to be very low, ie., negative for the next 7 years..

According to respected GMO, your expected returns for the next 7 years is now negative 3% for stocks and negative 2% for bonds.  So, if you buy US bonds for 2% yield, you can expect no return at all as prices will likely fall.  Worse, you can expect negative price returns for equities AND the prospect of stomach churning declines of 30 to 50% along the way!  It won't be a pleasant ride. At equity prices today, you're not being compensated sufficiently to endure such risk!

GMO: Expected Asset Returns for Next 7 Years
We're enjoying the 3rd large peak in equity prices in the past 15 years. But two times already, equities plunged 50%  after those peaks.  We've going to have a down cycle in prices going forward! 

Wednesday, November 2, 2016

Hillary's Horrible and Sordid Legacy

Here's the real and sad story of Hillary's legacy for your consideration (quite a few points taken from Wikileaks 100 Most Damaging Leaks): 
  1. Bill and Hillary both profited enormously from Hillary's role at the State Department, to the tune of $100 million and more. She had ZERO accomplishments as Sec of State except enriching herself and the Clinton slush fund otherwise known as the Clinton Foundation. She was all about "pay for play" peddling influence for money. Shameful! There is not one successful US policy during her entire "reign" as Sec of State -- only a 100% record of failures.
  2. Clinton foundation is mostly a fraudulent charity. It's virtually all about business and influence peddling.
  3. Hillary/Obama's pivot to Asia is nearly a complete joke. All talk and no action. Many Asian countries are aligning with China due to the US vacuum.
  4. Hillary/Obama's "Russia reset" is a complete joke. Now we're nearly at war with Russia in Syria 
  5. Hillary's Iran deal is a farce. Secret deals with the Iranians negated much of the deal's significance. Iran is more in control of the Middle East now than ever thanks to Hillary and Obama.  Iran and Russia are the dominant players in the Mideast. US influence is finished.
  6. Hillary and Obama completely botched US Syria policy, virtually handing Syria to Russia. Now our "sour grapes" administration is trying to pick a fight with Russia in Syria risking world war.
  7. Hillary/Obama's ISIS "strategy" has really been no strategy at all except stonewall and wait until their administration is over, They want to lie and delay and leave the mess for the next administration.  Fine upstanding people, huh?
  8. The US's hasty departure from Iraq and the result has been the rise of ISIS, thanks to Hillary, is a massive immigration crisis into Europe, which is destabilizing Europe. 
  9. ISIS is speading out of the Middle East into Europe and elsewhere, while the US southern border remains even more porous thanks to Obama. Maybe someone from ISIS will kill Obama? That would be entirely fitting.
  10. Hillary and Obama both explicitly depend on an ignorant public to impose their agenda. Jonathan Gruber, one of the paid consultants for Obamacare, admitted on video that the administration's strategy for imposint Obamacare depended on "dumb" Americans that are uninformed. Sad. Oh, and the administration denied that Gruber was a consultant at all. LIARS!!  
  11. Hillary wants a 100% government-run healthcare system at a time when the US government can't do ANYTHING well. Obamacare worsened costs and quality of US healthcare. A complete US takeover of the healthcare industry will be disastrous. Remember Obamacare is just a rehashed Hillary-care.
  12. Hillary Clinton denied Libyan Ambassador Stevens request for security....then he was murdered. Then the entire Obama administration lied about the real cause for weeks. Nothing was done to help even though the attack in Benghazi lasted 13 hours. Even in the following days, the facilities in Benghazi were ransacked by militants and ordinary Libyans. The truth is that Obama and Hillary didn't give a shit. These people don't care about anyone whether it's US interests or Americans!! 
  13. Hillary Clinton used her power as Sec. State, to facilitate a Uranium mine deal in Kazakhstan, which netted her Clinton Crime Foundation over $30 million dollars...The Russian government owns the mine and is using the ore to replenish their nukes, which are aimed at you.
  14. Hillary and Obama botched US policy in Libya, quickly backing the ouster of Gaddafi. The result is total chaos. Now ISIS has infiltrated Libya.
  15. Hillary/Obama quickly got behind the ouster of Mubarak in Egypt and installed the horrible Muslim Brotherhood (Obama's pals). A year later, Egypt had a 2nd revolution to get rid of those Islamist Fascists.
  16. Hillary Clinton is the darling of Wall Street donations.
  17. Hillary Clinton voted for all of the Bush's wars.
  18. Bill Clinton managed to divert 93% of $13 Billion of aid money intended for Haitians to party's outside of Haiti. Haiti organizations got only 7%
  19. Hillary Clinton voted for all of the Wall Street bailouts.
  20. Hillary Clinton dreams of completely "open borders”
  21. Hillary Clinton supports and protects a serial woman abuser (Bill Clinton) who has raped and abused and used women like a disposable diaper.
  22. Hillary Clinton received money from and supported nations that she KNEW funded ISIS and terrorists
  23. Hillary was hateful, neglectful, above the law, “contemptuous” to her security detail, and “blatantly disregarded” security, (FBI docs)
  24. Hillary has public positions on policy and her private ones
  25. Hillary and Democrat supporters like Soros have been paying people to incite violence and unrest at Trump rallies, then they try to demonize Trump as hateful and "creating a culture of hate and violence" Who are the real haters?
  26. Hillary's campaign wants "unaware" and "compliant" citizens
  27. Top Hillary aides mock Catholics for their faith
  28. Hillary deleted her incriminating emails. State covered it up. Asked about using White House executive privilege to hide from Congress
  29. Bribery: King of Morocco gave Clinton Foundation $12 million for a meeting with Hillary, 6 months later Morocco gets weapons
  30. State Department tried to bribe FBI to un-classify Clinton emails (FBI docs)
  31. Hillary caught on tape about rigging the Palestine election 
  32. Latinos are "needy". Latino outreach is "taco bowl engagement"
  33. Clinton campaign was in direct communication with DOJ regarding Hillary's investigation
  34. Bill Clinton receives $1 million "birthday gift" from ISIS-funding Qatar while Hillary was SoS, Qatar receives arms flow increases of 1,482%
  35. Hillary cheated in debates: DNC head Donna Brazile caught giving MULTIPLE debate questions to Hillary
  36. Hillary campaign prays for shooters in news stories to be white
  37. Rigging the primaries against Bernie Sanders (DNC favored Hillary)
  38. Rigging the primaries against Bernie Sanders (Hillary’s team)
  39. Clinton Foundation schemed with Big Pharma: keep the price of AIDS drugs high in America and NO to cheaper generic versions
  40. Hillary Clinton supports and protects a serial woman abuser (Bill Clinton) who has raped and abused and used women like a disposable diaper.
This is a record of someone as President of a corrupt 3rd World country, not President of the United States.  If she becomes President, then the US will truly become a 3rd world country.

Tuesday, November 1, 2016

A Civilian Coup D'Etat Underway In US; Now Countered By Events and Comey

The vast conspiracy between Hillary Clinton, the Obama Administration, the corrupted DOJ, the Left Wing media enterprises (96% of Media are "in the tank" for Hillary), activities by various operatives paid by Soros or the Clinton Foundation are actually engaged in a Coup D'Etat to take over this country. The breadth and scope of their "operations" are amazing as is the passivity of the Republican "establishment." It's almost Trump against the world!

The video below is from Dr. Steve Pieczenik, who was Deputy Assistant Secretary of State under Henry Kissinger, Cyrus Vance and James Baker and holds a Harvard Ph.D.

The Left had almost succeeded in their Coup and they had planned Hillary's coronation. But a few kinks in their plans have emerged.

Although Obama tried to suppress Health Insurance premium announcements until after the election, that wasn't possible and the news is terrible. The ACA is a disaster for the country of Category 5 intensity. The Healthcare/Medical/Pharma bubble is inflating and threatens to bankrupt this country. It's obviously unsustainable! It's killing families and businesses all over this country! (The medical/pharma bubble must pop --it HAS to).

Julian Assange is one true hero to the counter-coup forces. His Wikileaks have been crucial in exposing the widespread corruption and manipulation. Most of what we know about the DNC, Hillary, the Clinton Foundations and the deep roots throughout the Democratic Party have been exposed by Assange.  See the Top 100 Most Damaging Wikileaks list here.  But the mainstreet media has failed (again) to report most of this information. Only alternative media like Zero Hedge, Breitbart and Townhall are providing adequate coverage of the stupefying subterfuge underway by the Clinton cartel and all their tentacles that extend to every level of government.  Drain the swamp indeed!

Also, James Comey has decided to "call an audible" and throw a kink in Hillary's takeover plans by announcing that the criminal investigations of her handling of classified information and the fraud associated with the Clinton's slush fund: the Clinton Foundation. Comey has single-handedly helped the counter-coup to help Trump. Comey is a Patriot. Even a few days later, polls have shifted dramatically toward Trump and Hillary has gone into hiding. Warrants have been issued for Huma Abedin's laptop and some 650,000 emails to/from Hillary are there (if not deleted).

Information continues to come out to the extent of corruption of the Clinton "machine" and it extends into every level of the Democratic Party including the President and Loretta Lynch.  It's a vast conspiracy. We hear that new DNC chair Donna Brazile was feeding questions to Hillary prior to a debate through Wikileaks I believe. CNN fired her. She should be fired as DNC chair but that would be entirely too ugly after Debbie Wasserman Schultz was forced-out when it came out through Wikileaks that Schultz  DNC had rigged the primaries against Bernie Sanders. These people are scumbags!  Democrats really suck!

And don't forget Project Veritas James O'Keefe who have exposed more Democratic voter fraud and voter manipulation. Remember, the Democrats need an ignorant population to impose their agenda. That's why they are facilitating mass un-selective immigration from Central America who are among the lowest of the low in terms of intelligence!  They are desperate for ignorant voters!

They must be stopped. Forward this blog post to your friends.

Michael Moore: Trump's Election to be Biggest FUCK YOU in History

Check out an amazing video from Michael Moore below (link here in case it doesn't appear).  He says "career politicians hate Trump, corporate America hates Trump, Wall Street hates Trump, and the media hates Trump. Trump's election  will be the biggest FUCK YOU vote in history."

I have to agree:

Saturday, October 29, 2016

Trump Speaks Absolute Truth; US At Moment Of Reckoning (Video Corrected)

The following short video is a must see as Trump speaks the truth about our the REAL state of our nation and how the connected elites, oligarchs and connected corporations are those who are REALLY in control of this nation, this election and who will use any method, any amount of resources, any amount of political manipulation to protect their status quo. They have quite literally bought and paid for Hillary and they are determined to get their "return on their investment."

You, the people, are nothing compared to THEIR interests. Any smear will be used to affect Trump's campaign.  This election season has shown the massive media manipulation, the stream of lies, the back-room deals, and the crooked interests making sure that Hillary is coronated as President.  Polls are manipulated, Trump supporters are attacked and harassed at rallies by paid protesters (paid by the Hillary camp), Trump supporters on TV are attacked with "hit piece" stories, witnesses scheduled to speak at depositions regarding the Clinton foundation have been found "mysteriously" dead. There is nothing they won't do to maintain power. Hopefully Trump wears bullet-proof vests.

They have put all their chips on the most incompetent, corrupted, lying, manipulative, and wrong-headed person. She is a FBI certified liar and a criminal. She is literally the worst person in the world for our nation. Obama is a close 2nd worst. Together their legacy is nothing but fiascos, destruction, incompetence and lies, lies, lies.

Washington is corrupt on a level never seen in American history.   And only Trump stands in their way. Trump has repeatedly said that he will "drain the swamp" in DC.

Literally everything in Washington is broken and unfixed. The foundations of our society is now at risk at the exact point that financial and economic collapse is practically inevitable in the very near future, maybe just months.

Trump's short 5 minute video below is as about as close to unvarnished truth as you'll ever hear from a candidate for office:

Collapse of the "old order" may be inevitable despite the election result. Trump's rise at this time is itself a symptom of discontent by ordinary working persons affected by our hollowed-out economic situation. Buckle your seats, stock up on food, water and ammunition. A period of severe hardship is likely very close regardless of the election result. You don't want Hillary at the helm during the next crisis as she is an utterly incompetent puppet beholden to a wide variety of moneyed interests who don't have YOUR interest at heart.

Friday, September 23, 2016

Declining Global Money Supply Taking World Economy With It

Jeffrey Snider at Alhambra Partners is far smarter than any of the over-educated PhDs at the Federal Reserve. He's been writing for a long time saying correctly that the world's central bankers "don't know what they are doing."  Borrowing heavily from Jeff, I wrote a blog post of the same name here.

He's sounding the alarm that now we're really in more of an economic depression, especially in comparison to the deviation and duration of economic trends that existed up to the financial crisis in 2008.  It's gotten worse in the past 2 years. Economic growth across the world is in noticeably fading with no end in sight. US and EU growth is down to 1% or so and still decaying. Nearly all of the commodity producing countries are in recession as oil and commodity prices collapse. World trade is now declining. Chinese imports and exports are down double digits in the past two years and no end in sight.  No one except Jeffrey Snider has a plausible explanation.

In a brief video below (found here), he explains as concisely as possible what he means:


Here's his graphical evidence of a "long period of economic stagnation" in the US only -- from his blog posts at Alhambra Partners. Stagnation has turned into decline in most emerging markets.

Serious and Long-Lasting Deviation In GDP From Previous Trends.  Even after $9T in New Debt Spending (With Nothing To Show For It.) 
The "Eurodollar,"including all of it's derivatives; swaps, forwards, etc.; the real money supply to the world, has been in decay since about 2011 to the present day. Parentheses around "eurodollar" means it's the aggregate of credit default swaps, interest rate swaps, currency forwards/swaps and other derivatives. Janet Yellen, Bernanke, Allen Greenspan, and the minions of US Federal Reserve PhDs have been oblivious to this financial phenomenon for the entire rise and fall of the "eurodollar." Why else has Yellen been so obviously confused by her forecasts and failures?  The problem is that economists are not trained in world wholesale finance.

Here's the 20 year history of the rise and fall of the REAL money supply to the world -- especially to China and the emerging markets. In recent years the world's real money supply is decaying rapidly and taking the world's economy with it.

The "Eurodollar" is unregulated liquidity that exists on (and off) the large bank balance sheets in Europe and the US. There are nearly no dollars backing these instruments. It's nearly pure leverage and very unstable in times of crisis -- as we found out in 2008. That's why the banks are now fleeing these markets in increasing desperation. It's too risky. "Eurodollars" are literally the antithesis of sound money. It's like "internet money." It's pure leverage with no real "backing" except faith in the money center banking system. But faith in the European banking system is dropping like a rock, especially this year. Major EU bank stock prices are plummeting this year, indicating declining faith in these institutions. Fear is rising as shown by rising LIBOR rates.

Here's the effect of both the rise AND decline of the real global money supply:

Shrinking "Eurodollar" Money Supply Causing Worldwide Economic Stagnation. No One Notices
The US labor market and employment "recovery" has been weak and not as strong as the administration has proclaimed. For the first time ever, job gains are not keeping up with population growth. The so-called economic recovery from the 2008 financial crisis is not anything close to a "real recovery" when you consider Labor.  Still think the unemployment rate is really 4.9%?

Labor Participation at 40 Year Lows As Job Gains Fails to Keep Up With Population Growth. Also, Do You See Any Recovery Of Industrial Production? 
Jeff Snider goes on to say:
According to Snider, there is a realistic chance that there is an intractable structural monetary problem that is leading to economic problems that central banks don’t seem to be able to solve or even recognize. When there are problems in liquidity, LIBOR rises. Looking behind the curtain, Snider finds monetary contraction, not monetary expansion.
There are other implications as well, perhaps more important than just investing. If this is indeed a depression, Snider says, “Historically periods of prolonged economic stagnation, lead to some of the worst types of historical events, usually social disorder, political upheaval, all those kinds of things.”
Most of the economic data after the 2008 data is poor, including Industrial Production. The US Federal Reserve's goals of stronger growth and higher inflation through repeated QEs has not worked. They don't know what they're doing!

Two Years of Falling Industrial Production Begins to Resemble Recession or Depression

Bernanke and Yellen's Inflation Targeting A Total Failure Now

US manufacturing's decline in the past two years will eventually be reflected in declines of the larger service sector. It's happening now. Retail sales, still positive, but still hovering near recessionary levels.

US Services PMI is Trending Down and Now Following Industrial Production Declines.  Soon Contracting?
Until this problem in money markets is recognized, the economic damage continues to accumulate for a longer and longer period of time.  Already, the decay of the world economy is now 2 years in duration. Money markets are now in turmoil due to decreasing liquidity and monetary "tightness." LIBOR rates are rising indicating tightness in wholesale money markets for the banks. Falling liquidity is likely to seriously affect stock and bond markets too. There have already been steep stock market liquidation periods like we saw in August 2015.  Expect more economic pain and market turmoil in the very near future.

Wednesday, September 21, 2016

12 Step Program to F*ck-up Your Country

From Burning Platform blog (h/t ZeroHedge)

  1. Take one country built by other people [take the lands from native Americans, I presume?].
  2. Have a central bank debase the currency.
  3. Inflict metric shit-tons of rules, regulations and taxes on the citizenry, personally.
  4. Drive a stake through the beating heart of the economy – small business (See #3). [Small businesses create 70% of the new jobs in our economy.]
  5. Import millions of illiterate, low-IQ mouth breathers from 3rd world shitholes who have no intention of assimilating or producing.
  6. Dump them on the producers – the descendants of those who built the country.
  7. When the citizenry have a problem with the flood of mouth-breathers, guilt them into submission. If you can’t guilt them, hoot them into silence by screaming PC-conflict epithets at them.
  8. When Government can’t meet payroll – literally paying for all the Free Shit they’ve ‘promised’ to everyone – continue to take out loans you “promise” to pay back (See #2).
  9. Play identity politics by pitting racial groups against each other. The winner gets privileged status. (Pro tip: There is no ‘winner’ and will never be one).
  10. Use the distraction created by #9 to loot the treasury.
  11. Use the friction created by #9 as an excuse to disarm the citizenry using the fig leaf of “safety”.
  12. Keep the citizenry distracted by ginning-up useless foreign wars, bread, circuses and a conga-line of retards in the [Leftist Dominated] ‘media’…

Saturday, September 10, 2016

We're Reaching the End of the Road

I'm afraid that we're reaching the end of a very long road.

Unsound money ("fiat" money not backed by gold) has led, in recent decades, to huge and unsustainable global imbalances in trade and debt. But because trade deficits REDUCE our nation's GDP, persistent trade deficits in our country have led to rising debt at every level as we try to maintain the "appearance" of a rising standard of living. This is partly why the US ran $9 Trillion in government deficits in the past 7 years alone. Can you imagine what our economy would have looked like without all that money? It would have been outright Depression. (I'm not even going to mention the $4T bank reserve creation by the Federal Reserve). All of that debt is masking depression. Even so, the number of jobs is barely back to 2007 levels and "good jobs" are still lower than the last peak.

Even with our still rising debt (deficit spending) in the last year, China has seen a 15% fall in exports. World trade is declining. Why? Because the US and Western consumers can't afford the imports! Trump is right about trade. Our economy is hollowed-out by the loss of manufacturing jobs and it has killed jobs and hurt our people. Now the US consumer is tapped-out. Furthermore, demographic trends have turned negative in most of the West and China just like Harry Dent predicted and has slowed the economy.

The persistent budget and trade imbalances over the past several decades could never have happened with "sound" money, as the deficit nation would have seen a loss of gold (money) that would have slowed the economy and reduced imports to a balance with exports. And debt creation would have been severely limited since new money would have to be backed by gold-- and gold is limited. Exchange rates would have been very stable too. That is the beauty of the gold standard. The gold standard will eventually make a return out of the ashes of the next financial/economic crisis.

Other reasons why we're reaching (or reached?) the end of the road financially and economically:

1) Rising debt in the West has hid the increasing poverty caused by the wealth transfer from US to China (and Japan before them) for awhile. But debt levels have risen everywhere and it's marginal utility to produce growth is nearly gone, even in China. In fact, with a no-growth economy, the world's debt levels are probably not sustainable. Zero interest rates have prolonged that game for awhile but zero rates are unsustainable. As growth falls off, corporate cash flows decline and debt defaults spike causing corporate interest rates to rise. Even sovereign debt implosions are a risk, first in commodity producing countries and peripheral EU countries like Greece and Italy. Interest rates will rise where there is debt distress/defaults.
2) Trump is right, the US economy is hollowed-out with the loss of manufacturing jobs and the loss of entire industries. The non-elite workers in the US are financially tapped-out with stagnate incomes and burdened with rapidly rising costs of healthcare, healthcare insurance, rents, food, drugs. Our imports are way down. China is feeling this as their exports are way down. World trade is declining. The manufacturing sector in this country has been in recession for 2 years now. General recession is likely just around the corner.
3) The economy is in near-recession despite rising debt bubbles. The US government has racked up $9 Trillion in debt in just 8 years.  A vast expansion of auto loans that some people say is reminiscent of another subprime bubble has propped-up the auto sector. A trillion dollars in student loans have been given to students in the past 8 years and 43% of these loans are now not being payed back.And the US is still making more of these loans! Hillary is expected to put all of that bad debt on the tax payer and the next generation.
4) The real money supply to the world, the "Eurodollar" and it's associated derivatives, has been in decay since the great financial crisis with a partial resurrection to 2011. Since 2012, banks have been exiting these shadow banking markets at an increasing rate. Just look at European bank stocks to see the decline in their trading and profits. Central bankers haven't noticed this most important development as they are willfully blind.
5) QE doesn't work. That's obvious. Even the educated idiots at central banks can see that! They just can't admit it and it's making them look like fools. They are starting to tip-toe away from it.
6) NIRP and the risk of depositor "bail-ins" is killing the EU banking system! And NIRP and ZIRP is killing pension funds, insurance companies and retirees everywhere. The situation is completely unsustainable. Never in history have interest rates been zero or negative. It's absurd and causing more harm than good. EU banks are a systemic risk to the world. What can't be sustained, won't!
7) 30 years of declining interest rates is over. So just steady rates is a trend change. US and world rates are now rising as front-running investors can "smell" that the EU and Japan are about to get out of the QE business. Interest rates are rising now; not falling.
8) EU banks are a royal mess. Chinese debt system is a royal mess. The risk of a sudden and substantial Chinese devaluation is increasing as they will surely nationalize huge amounts of bad corporate debt that they created since 2009. Already the Chinese currency is falling slowly this year and is back to 2010 levels. Even small devaluations have roiled markets.  A sudden and substantial devaluation would set off a world-wide crash. It's possible that civil unrest may lead to social disintegration if not outright revolution at some point in China.
9) The era of cheap energy is over. If the economy tries to recover, oil prices rise so high that it kills the economy/consumers. If we can't afford high oil prices, then we cannot have growth. (because growth causes unaffordably high oil prices!) And the price at which oil is affordable, ie., $30 to $50 per barrel, kills the oil producers and oil producing countries (and kills government revenues). So, energy production will continue to drop and all the oil and commodity producing countries will remain in recession or depression. What's needed to "save" us is $20 oil for an extended period or a miracle in cheap energy technology.
10) If growth is dead, then the mountain of debt, which continues to accumulate at an accelerating rate and much higher than nominal GDP worldwide, is unsustainable. The end of the road is defaults, crises, recession and depression. Debt defaults by companies and entire countries will cause a new round of banking troubles and trouble in global supply chains. It happened in 2008 after all. Collapse is a real possibility. When it happens is the $64 Trillion question.

So, we really are reaching the end of the road. We're all in for a rude awakening at some point.

Saturday, September 3, 2016

Obama/Hillary's Foreign Policy Legacy: Failures, Destruction and Lies

Obama and Hillary's foreign policy legacy is a near-perfect record of failures, flops and destruction followed by lies, deception and spin. Then those lies and spin are dutifully and faithfully broadcast by a totally Leftist and administration-compliant media.  Hitler and Goebbels would be proud.

Most people can see that Bush made a huge error in deposing Saddam Hussein as it made a bad situation infinitely worse. But the Obama administration, including Hillary, has been at least 3 times worse! They wanted to depose Assad. That was the US stated policy. Then, they quickly got behind the ousters of Qaddafi in Libya and Mubarak in Egypt when unrest gripped the Middle East.

In Egypt, their installation of Obama's "friends," the horrible Muslim Brotherhood, brought down another Islamic iron fist rule to the country turning it once again into a totalitarian state. A year later, more Egyptians died in a 2nd revolution to overthrow Obama's buddies. The entire episode is a catastrophe of massive proportions.

Speaking of catastrophe, Hillary and Obama's "adventures" in Syria are titanic failures of historic proportions. Their red line to no line idiocy ended up giving Russia and Assad a permanent alliance, assured Assad's survival and vastly increased Russian influence in the region. Meanwhile 10s of thousands MORE people are being bombed and decimated by Russia-backed Assad. Good job Hillary/Obama! Putin is much more clever than the intellectually deficient Obama administration.

Hillary and Obama's hasty departure from Iraq, with no residual force, set the stage for the disastrous rise of ISIS in the region. Libya is now a haven for ISIS too thanks to Hillary/Obama. Yes, the administration wasn't really in control of events in the region but America's positions, actions and inactions did nothing but worsen each and every situation.  Obama and Hillary have been lying for years now claiming that they have a strategy in fighting ISIS. But they have no strategy despite constant assurances to the contrary. Their real strategy is to stonewall and lie to get past the next election.

As a result, Russia and Iran control the Middle East with our traditional ally Saudi Arabia somewhat sidelined. The entire balance of power in that region has been overturned by the extreme ignorance and incompetence of Hillary and Obama. America itself is now sidelined in that region since no one can trust us. We're talking about the most misguided foreign policy fiasco in world history.

News this morning details more lies and subterfuge by Hillary and Obama with regard to the "Iran deal." Almost everything in the Iran deal turns out to be dubious and/or deceptive in effect and implementation -- with Obama and Hillary lying about nearly all of it. It appears that the Obama administration was desperate for any agreement, even if it was bad for America. Every objection on the Iranian side was accommodated. Repeated reports, slowly leaked out since it's conclusion have shown that there are secret side deals with Iran that helped Iran and undermined the intent of the "public"deal!  And there have been plenty of factual reports of Iran repeatedly flaunting the terms of the "agreement."The whole episode stinks to high heaven. To even think that you could trust the Mullahs is a delusion on a massive scale. Obama and Hillary are severely deluded and the Iran deal is fraud meant to impersonate some kind, any kind, of policy success. And we were given a false narrative by our propagandist-in-chief that it was either a deal or war with Iran. That's completely false! And the Media spins these lies!

Remember Hillary and Obama trying to kick-off a Palestinian and Israeli negotiation? Obama and Hillary's proposal STARTED with the assumption that Israel will be giving up territory. Enticing Israel to discussions where the end-result was predetermined was an obvious FAIL!  Nothing happened of course.

And Liberals never understand the concept of peace through strength and have seriously degraded our military for 8 years now. This is one more reason why Liberals are unfit to govern. Not only are they unfit, they can only impose their policies by tricks and lies.

Hillary, Obama, Kerry and nearly all the rest are fools and dunces of the highest magnitude. That they occupy the highest offices in the land is astounding and dangerous. If Hillary fools the people and wins the Presidency, it will probably be the ultimate catastrophe for our country. America may never be able to recover.