Graphics in text mode : - ( - Edited 1-22-16

Apologies beforehand on my lack of working knowledge and familiarity with html and posting graphics on this site.

Nevertheless, a description is in order if it is only the second or third best means of conveying ideas. We've been through this in the tsunami, but a detailed step-by-step review may be worth the effort for new readers. Much of what is suggested here is common knowledge, but somehow escaping notice until we're deep into another recession or worse.

The contribution of borrowing, credit, debt and stock of and the circulation of money stock changes in the process is NOT a difficult concept, yet it has been and is still ignored by commercial and central bankers - flagrantly!!! Ignoring the details may set their minds at ease or ease their pursuit of career opportunities for the moment but the consequences hang over the global economies with promises worse and much more frustrating than the sword of Damocles.

In sequence, (and in the manner of Irving Fisher's explanation of his debt-deflation theory) this is what happens:

  1. An economical sector or enterprise needs cash to combat a "temporary" (or more persistent) condition: the larger the sector, the more disastrously multiplied are the results.
  2. The mechanics are observed through application to a commercial bank;
  3. The bank sets up a current account in the amount of a loan against which the applicant can draw and dispense funds to limits granted.
  4. The amount of the current account is listed as a liability in the bank's accounting system.
  5. That liability is discharged as payments are received.
  6. In the meantime, the credit is circulated as money or purchasing power.
  7. The increased circulation has the same effect - though temporary, as we'll see - of increasing the stock of money available.
  8. Purchases are made: the consumer gets her goods, or buys her new house, tidies up and augments her living quarters to a level not possible with savings or income at the level then present. For a business enterprise, capital equipment or supplies are purchased, an investment is made which would not be possible at current income/reserve/resource levels.
  9. In the meantime, the currency/credit is released more deeply into circulation in the community to supplement the stock of available currency creating a condition of temporary imbalance. . . meaning inflation-inducing expansion of money supply.
  10. Graphs depicting this would start with the solid trend line of REAL economic progress - be that an upward or downward slant signifying improvement or deterioration of the basic economy.
  11. The effect of the additional available currency delivered by the banking activity has immediate consequence; it begins a second line, dotted (to indicate its temporary nature), diverging from the trend line and moving upward at a slightly greater slant than the Trend line.
  12. This second, dotted line may be insignificant with one or a dozen loans; but, depending on the mood (sic!) of production industries, or the aggregate households community as a whole, may have a tendency to find a less resistant line at a steeper incline, indicating more freely flowing currency path options may be enticing others to do the same: either spruce up the aggregate (meaning total economic entity) neighborhood(s), or globally if this is the consumer sector, or, increasing production facilities if that applies.
  13. The second line can balloon above the trend line at some suggested angle until it meets the resistance of market satisfaction or capabilities - meaning all consumers have committed to whatever fancies they have generated and there are no more buyers, or all production facilities have finally supplemented their ability to satisfy markets and are now in over-production mode.
  14. During this time, borrowers have been paying off their loans, banks have been reducing their liabilities with the "income" and the entire economy has been experiencing the effect of the "retired" currency put into circulation, with all expectations adjusted to new levels and this causes a withdrawal of purchasing power without notice on the community.
  15. Sated consumers cut back on their spending spree, or production facilities now find themselves with declining market interest and begin shutting down their facilities and begin forced layoffs which then alters the amount of normal income to both production and household.
  16. At the same time, the dotted line above the trend line on our graph, takes a dip toward the original solid trend line and the impact of the aggregate constriction may impel the trend line down into a tailspin decline which would never have been suggested by a normal economic trend, one not augmented by the temporary introduction and subsequent deprivation of credit/loan currency. Very often the weight of the dotted line and the strength of the impact turns the trend line down, and we're into a recession or worse in search of something solid - stability.
  17. At this point, production/consumption slowly become aware of the effect of the collapse of the trend line but may disbelieve the suggested consequence, either the severity or persistent effect, and, expecting a quick turnaround and recovery, they continue a certain amount of spending on the basis of savings, or small loans they fully intend to repay.
  18. After a period of adjustment, they discover the savings are not as sound as they believed, or the lenders not as anxious to loan, or the downturn, more persistent than expected, takes on a gloomier outlook, suggesting it will last longer than first believed, or other income is absent - this, then, is the "liquidity" crisis too often described as "lack of demand". But, overall, reality sets in.
  19. Consumers of both household and production goods are forced to admit the constriction of money supply and the over-capitalization of production facilities has become an unsupportable burden which, coupled with the sudden evaporation of currency supplies, becomes too weighty for the economy or its financial slight-of-hand.
  20. Some obligations are not met due to "cash flow" difficulties in banks and their borrowers, while the trend lines drift lower and lower at a too rapid rate.
  21. Not satisfied with the lesson of the credit bloat and the impact of the temporary increase of circulating currency, central banks then determine that what is needed is doubling the burden by augmenting stock of currency thereby alleviating cash flow problems by selecting one sector or another as beneficiaries of their largesse and proceed to generate more imbalance by distributing funds beyond the economy's support level.
  22. The industries are trying to make do in an environment which is over-capitalized for normal activity which means cutting back, and the community of both production and consumer goods are trying to live within the means of a less than normal economic society, another retraction. Into this, central banks pour Quantitative easing. The mismatch aggravates the situation.
  23. The net effect of the central bank intrusion with additional currency is to tax further the already struggling economy with false stimulation hoping to resuscitate market activity while consumers are not yet prepared to adjust to normal. In a sense, the effort is overkill - as bad or possibly worse than the effects of over-ambitious credit creation which is now meant to force the community into a support mode for capitalization that has no legitimate market to service.


The puzzle of the moment is how can economists pose a process as obvious as this in such complex terms that they confuse themselves? Shouldn't they enter into the financial arena with words of advice well before the predictable critical point of issuing credit-based circulating currency to the degree that threatens stability? The advice would be as simple as rephrasing a borrowed line from a movie
"Couldn't you stop your scribbling for a minute? Put down your pens, stop fiddling with your equations and look at the situation through a normal pair of eyes? Couldn't you do that little?"

No! They're above that. They love "errors of composition". After the errors are generated, they can fill their empty hours searching for solutions.

There was an escape suggested in the tsunami thread which will be repeated here, though some deaf ears may be beyond remedy:
The way out of the Boom/Bust cycles is to determine how much currency augmentation is needed for an acceptable rate of growth. If that rate is established, credit issuance should be limited to its support and not allowed beyond that into the areas of speculation and the accompanying disaster.

Bankers’ objections are specious! We set up reserve limits for every kind of banking activity through BIS. We've heard of Basel I, II, and III; what's wrong with instituting Basel IV which would deal with over-issuance of credit and preventing the destructive false purchasing power? Control credit and loans with a sense of urgency?

At this stage of scientifically developed Economics, we should know and have equations which would detail the needed amount of capital which would safely support growth at a reasonable rate. Capital funds and credit should be retained and/or limits marked for circulation and the limits of credit that can be safely issued. That is to specify a range of needs in those respects, instead of catering to the satisfaction of those who would manipulate finances for their own benefit at a sustainable level of expense for all. This can all be managed on the basis of existing data sets.

There is one danger to the attempt to control development which needs recognition and that is the concentration of effort. It has been demonstrated in controlled societies. When central authorities issue growth or development plans, inadequate attention is directed toward the weight of over-concentration of community effort - a neglect of the advantages of "random walk" concepts. We've used the example of a boatload of passengers rushing to one side of the ship and causing a capsize. As long as there is a equal distribution of passengers on the ships deck, no harm will come to anyone. But, once they all find a reason to rush to one side, danger follows. Imbalance and disaster follow.

The paramount example of this was the concentration of Russia's term plans for development. Longer range capital development became the prime concern and consumer goods were reduced to secondary importance; shortages developed and we know about the long lines and inadequate supplies of food, clothing and almost all consumer necessities. "Random walk" approaches must be preserved. We might point out that the rush to capitalize on trends, the rush to profit before the opportunity passes, even when central authorities are absent, causes the fluctuations of the Boom/Bust cycle and the catastrophes large and small that follow.

We've resisted attempts to control this concentration through regulation to this point to our detriment. Through this neglect, we promote the business cycle, explained away with every conceivable concept as we've mentioned several times over the past seven years. But, then, if we follow Veblen's depiction of the businessman's goals, and concede the high ground to them, the cycles will continue.

It is that simple.

What ratio prevents a solution to such a problem? 80 something against 6 1/2 or seven billion? What in the world is the obstacle here? If the equations are not yet ready for deployment, they could literally be generated - overnight! And, we could smooth out the fluctuations the next day. But, it would appear, only if the 80 would permit it!

The alternative is the eventuality of a self-destructive community proving itself - as Eccles, with a successful banker's insight, suggested some 80 years ago.

De-globalize The World

Do you not think, sir, that the obstacles the global economy faces are not rooted in economics, but in politics and ideology?
What are the origins of the financial crisis, of the ongoing crisis, of the crisis with no end in sight?
This crisis is not 'just happening', it is directed, fabricated and maintained by a globalized elite. The worldwide economic crisis is manipulate by the very purpose of globalization.

Summing up ILO's projections, by 2017 more 300 million people are likely to be unemployed. The projected 300 million in 2017 do not account for the more than 60 million refugees. Their situation is extremely precarious, considering health, nutrition and they are all unemployed.
Does Washington want Europe divided and working for their corporations as so-called low wage hi-tech servants?

De-globalize the world.

Over The River Going Through The Woods Now...

Triple digit jerk movements in stock markets signal... CRASH coming. Make no argument to the contrary. To raise the price of oil to sustain the industry leads to increased destitution in people-- who rebel by wiping things off the face of topography. Damned if you do it because you are greedy. Mandating every Human Resources department to hire back all the fired and prepare exit plans for garbage executives may sound fully improbable but remember... Big Oil has no soul. If a finite fossil fuel industry shall survive itself, it must benefit the rest.

February traditionally... corrects markets. This year started off on the slope and has momentum already. I wouldn't touch a stock as a gift. The four horse's asses of the Apocalypse finished on top in Iowa. Not one is a relevant and capable leader for these days and times. One isn't even American... lol. How desperate will the Koches get?

flash from the past

The developed world is experiencing a time when most have never experienced a long term decline in stock prices. The only ones that would remember would be those that are O&G's age or older.
The people alive today have only experienced crashes, sometimes severe, but a quick recovery in a few years. The result being that they ask questions like "Why do you think it would be different this time?" "After all, the market always recovers".
Most people have little interest in economic history. They don't have to go back very far to discover that the DJIA average peak in 1929 did not see that closing number until the early 1950's, over 20 years! The Dow Transportation and Utility Averages did not recover until the early 1960's! Over 30 yrs!
Interestingly, the period from 1900 to 1929 looked similar to the past 15-20 yrs. Lots of sharp drops but relatively fast recoveries.
These charts were brought to my attention maybe 6-7 yrs ago on the old board. A thread was started by a quiet guy but he was laughed off by the stock cheer leaders.
The 1929 event started a good change in peoples investment habits. Savings and conservative bonds were the norm for many decades.
Fwiw, the period of 1921 to 1929 saw the Dow triple. Very similar to the S&P low in 2009 to the high early last year.
I'm not saying things will be the same but it makes me go hmmm. Lots of old folks chasing yield in risky assests that they feel are safe. They feel they might be able to survive a 4-6 yr down turn. It doesn't occur to them that less than a century ago most did not live long enough.

Most "Winters" In K-cycles Last 20 Years

Back before 2008, my Professor used to teach us that during a disturbance in the business cycle, we'd be 40 percent of the way back to normal in a year. The long-run trend of economic growth was barely affected by short-run business cycle disturbance. There would always be short-run bubbles and panics and inflations and recessions. They would press production and employment away from its long-run trend, perhaps by as much as 5 percent. But they would be transitory. After the shock hit, the economy would rapidly head back to normal. The equilibrium restoring logic and magic of supply and demand would push the economy to close two-fifthies of the gap to normal each year. After four years only a seventh of the peak disturbance would remain.

In the light of the facts, he was wrong.

Back before 2008, if my Professor had been Kundratieff, he would teach us that most "winters" cycles last 20 years. The winter commenced in the year 2000, thus, in all probability, will be moving from a recession to a depression phase and it should last until approximately 2020. The Fed and Central Banks will react with an unprecedented level of stimulus and the manipulation of "natural" prices will be only going to make the "winter" more catastrophic when it really takes hold. In other words the winter cycle will be pushed out, but not eliminated. The longer the inevitable "winter" is ignored the more violent will be the eventual political, social and economic collapse. We must be courageous enough to allow the "winter" to become fully manifest. As long as this truth is denied the longer will be the delay in the commencement of world reinvention, renewal, rebirth and expansion.

As Sovereign Man says:

Maybe the world has realized that the path to prosperity is not in conjuring money out of thin air, raising taxes, or going deeper into debt.
Maybe people have finally figured out that an insolvent government and insolvent central bank cannot possibly continue to underpine thr entire financial system.
Or maybe not.
Maybe this will all be forgotten in a few weeks.


I used to do much reading about them. I still find them interesting.
The one thing that I've found most serious cycle theorists agree on, not those that are trying to make a buck off of it, is that cycles are usually difficult, perhaps nearly impossible to predict. Most agree that they are often unrecognizable when they are occurring.
We are I believe still definitely in a long term cycle of prosperity that roughly coincides with advances in technology. Some use a date that roughly coincides with the industrial (fossil fuel, steam, etc) revolution. Others use a starting point that roughly coincides with the Renaissance period.
Using the Renaissance period as a starting point, there have been many minor periods of set backs that looked like the end at those times but then were followed by rather rapid recoveries.
So where are we at now? Is it a minor set back or is it a K Cycle Winter? Or could it be worse and actually be a period of many hundreds of years as experienced during the Dark Ages? I guess the answer will only be known by our prodigy when viewed through a rear view mirror.
I do find cycle subjects fascinating. All of it from time frames a few months to super cycles that are measured in centuries or millenia.

Cycles Illuminated

Everything exists in cycles... everything. There is no such thing as linear existence in perpetuity. Man has tried to harness cycles since his Dawn. Enduring cycles is more the thing to do. The Farmer's Almanac attempts to do that for the meeker and wiser who employ commonsense.

Right here right now, we are dominated by a fixation on algorithms and an attempt to harness cycles. Data is only reliable to the extent that it's relevant. The moment it goes into a spreadsheet or is used to validate some premise it is beginning to age and stale. Our current dominance by administrators and financial tyrannical manipulation is a cycle. There was an article already today on the "bottom". Calling a bottom is an age-old myth. A market "bottom" is not something called, it is observed in passing. Flat out, when the majority are actually working (not data that has tens of millions in exclusion to create a false figure) and their earnings restore buying confidence and they desire things and aspire to higher places and take modest risks based on commonsense cemented to confidence... we rise from a "bottom" to begin a village-style pile that ramps up into prosperity. It isn't rocket science. You don't call it a "bottom" when the Federal Reserve is fake-printing zillions of market-bolstering consumer-excluding dollars lent out at zero or near-zero interest rates while non-performing assets are mysteriously auctioned off to 62 people across the world at undisclosed prices without validation of cash exchanged for them.

The Cycle of Inevitability is: Birth to Growth to Maturity to Decline leading to Death and/or Re-Invention. Yes, even when things die, the parts and pieces are regenerated in something else's Invention or Birth.

We aren't remotely near the bottom of market activity degradation. Manufacturing is in recession now. We import, under-pay labor, over-pay administration, cook financials and clear out more dead stock than active inventory at manufacturer's suggested retail price (MSRP). There are no fashions and fads driving consumer spending because no one has confidence. Our most thriving retail aspects are thrift and surplus and reconstitution. Suppressing them instead of recovering consumers is being attempted. In fact, every possible initiative to circumvent recovering consumers is employed now. Such things lead to Death. Re-Invention or Invention (Birth) will occur regardless of any tampering or meddling.

Evolution is a cycle, so as for how long of one we are in... millions of years and likely more ahead. What we are is not linear so continuance is inevitable until our planet is obliterated with us contained on it. Then we will be re-invented as a component of something else. As for this economic cycle... it has been attempted before and ended badly for everyone. Best to be meek when peaks rise with only artificial sustainability.


One of the most revealing aspects of Andrew Dickson White's- Fiat Money Inflation in France was the chronicling of an organized financial tyrannical initiative to scuttle the French economy so that certain individuals could buy up stock at deflated prices, knowing that the French Government would intervene with fake (fiat) money printing so the common person would not fall completely into destitution. The terror act is brilliant... buy stock for pennies on the dollar while controlling an economy into recession, then use the fiat money to recover it in such a way that it made the deflated stocks really valuable. Linear thinkers masterminded this. They never considered the will, whim and emotion of the consumer. They knew nothing at all about actual labor, craft, skill and grass roots. When the fake money went into those stock markets instead of the real economy, it caused dilution, revolution and the demise of the architects of that failure... or did it?

There should be no doubt that the blueprints of that stupid greed initiative were dusted-off by seemingly educated people recently and modified with modern components. Needless to say, the chassis and motor were the same outdated linear thinking model. We are where we are because we were there back then. The near future should be obvious.

Bottoms... stock markets might have bottoms but they are not not beholden to stocks, money or the businesses those stocks are supposed to represent. Literally, everything is degenerating, degrading, decaying, dysfunctional now. I struggle offering necessities to consumers who need them. The challenge isn't in the way I present things, who sees them, how to pay or expedition once a sale is made... it's about how the brain thinks. I run across people who are highly thankful for quality insight, recommendations and clarity that helps them make an intelligent and informed buying decision. To others-- that same assistance is demeaning, condescending and immature. They are the ones making wrong decisions constantly and angry that the world doesn't work the way they want it to.

That last sentence is the key. More and more, the few people left in the world with wherewithal are cautious and seek sense in their lives. They are not in competition with the destitute and impoverished. They are competing for survival against fully delusional fools who's means of survival is completely artificial. The fools will break a working mechanism because they are angry with it. They will not stop to examine how it works and learn how to use it correctly. They will break it. Things are breaking everyday that are critical to make a bottom.

It seems wholly plausible that the old history is being repeated and we are zinging along headed for the same outcome. Experts say there is more "volatility" ahead for stocks. No one is really taking a good look at what the People of the world are becoming. If they did, they wouldn't hold on to stocks at all.

Global Economic Jitters

According to the dominant economic narrative of recent time, 2016 was the year when the world economy would recover fully from the 2008 crash. The US would lead this recovery by generating growth and jobs. So what has gone wrong?
The truth is that there has never been a real recovery from the 2008 crisis.
The 403 blocks my comment here. Only a few lines.

nonsense lines and the 403 error does not appear


Manipulation Doesn't Lead To Recovery

You are correct. We never recovered from 2008 and all the fake money created by central banks has been stuck in stock markets, not used to generate activity. That's what secular stagnation means-- no movement, globe-wide, that generates actual economy-- anywhere.

People go to jobs that involve endless projects. There are spreadsheets, conference calls, task lists and a whole lot of paper pushing and button pressing... but no tangible actual purpose to any of it. We have apparently created millions of jobs but if the whole world is stagnant... what good are they?

The End-Game for Lame is quickly approaching. When Donald Trump proclaimed that he could shoot someone on stage and not lose voters-- he wasn't being insane, he was telling the world that the seeming "powers that be" are not very powerful now and that ordinary people control more than they think. A reminder that Man made fear, God did not. The Public can liquidate stock positions now that literally compromise the Federal Reserve and wipe out Wall Street. It isn't a "maybe they can" premise... it's a DO IT and jar us free from secular stagnation. Every company giving out dividends is-- dead. That's borrowed money. The stock is worthless. Most investors apply liberal rules to rigid or linear financial structure that is dysfunctional to society. Idiots sense a trap but greed cannot resist.

Catastrophic failure straight ahead.

A Wildly Oscillating World-system

We have wasted the past seven years propping up a bankrupt economic model. The reality is that we are living amidst a wildly oscillating world-system and this is very painful. The present system cannot survive. We need to replace it or the alternative is a permanent state of low growth, instability and depressed living standards for the vast majority.

saldeck, what is really happening?

News is unreliable here. One source (known for racist comments) will have you believe that white women are victims of numerous rape gangs and another source (known for sometimes over exaggerating) describes your beaches being covered with drowned children. The American MSM says nothing.
What is really happening?

The Europe Of Humanism We Used To Love And Respect

News of the Cologne assaults was delayed by the fact that the police and certain news agencies were hesitant to report these events for fear they might aid right-wing political groups. Something similar happen in Sweden. At the We Are Stockholm music festival in August sexual assaults occurred that were similar to those that occurred in Cologne, and, like the assaults in Cologne, they were perpetrated by young men of Middle Eastern extraction.

Danish parliament approved a law allowing the state to seize assets and valuables from refugees along with other measures to deter migration. The law allows police to search asylum seekers to secure cash and valuables. In the mind of the Danish lawmakers, in this way the cost of the refugees would be covered. The law also prevents family reunion.

Keep granny's ring but drop in the kid's teddy!

Morally it is a horrible way to treat people fleeing mass crimes, war, rapes. They are fleeing from war and how they treat them? They take their jewellery!

There goes the Europe of Humanism we used to love and respect.
All I have to say is: Beware of Danes Granting Asylum.

Unwilling to accept migrants and refugees on their soil and obey to the decisions they have taken (refugees quota), EU member states officials put all the blame on Greece and accuse it for not doing enough to control the influx of migrants into Europe via its shores. And their threat to "expel Greece from the Shengen" is an agreed thing.
While EU politicians are unable to bring up even the slightest specific idea on how to solve the influx of migrants and refugees to Europe via Greek shores, some juornalists apparently know and show the way out. Trade Greek Debt for migrant camps!

Is this the end of the old Europe? Or will it reappear in a shower of a foam like Aphrodite?

difficult problem without a viable solution?

Thanks saldeck. As I mentioned earlier, it is difficult to find reliable news.
It seems, at least according to what I've read, that Germany is the favored destination. German government seems to be the most tolerant (so far).
Can the German economy support such a huge influx of people? The country is already a favored destination for Eastern Europeans.
There also seems to be a problem with many of the migrants coming from countries that are not affected by war (Morocco, Iran etc).
Could the migration be a combination of both war refugees and those that are economic immigrants?
If it's the latter, then I'm afraid that there is no place in the world at this time to support the volume of people.

Solution? Stop Illegal Wars

Europe is on a dangerous, sloppery slope of increasing xenophobia and racism engendered by the influx ofrefugees. Denmark's new confiscation law is a sign of the brooding, baleful climate.
But the real answer to the problem is dealing with Europe's support for Washington's criminal wars.
When we incur secondary problems such as the massive displacement of refugees from wars and conflicts -that our governments have fomented - we illigically focus on blaming the victims of our governments' criminality.
Individual government and military leaders should be prosecuted for war crimes and crimes against peace. The fact that European governments have waged dubious overseas wars is the real shame and root of problem.
The spate of sex assaults in German and Swedish cities has fueled a popular blacklash. A French magazine cartoon depicting the little Syrian boy who died from drowing as a grown-up sex attacker is a despicably irresponsible incitement.
The misplaced histerya over refugees is a distraction from the real issue. Which is that European states are complicit in illegal wars of aggression and covert regime-change interventions.

Shame the villains, don't blame the victims.

And shame on Europe!

I will start by declaring that while I'm pointing my finger at Europe, I fully realize that two more fingers are pointing back at me and my country.
I fully agree that the hysteria, along with most hot button issues as reported by the MSM, are only meant to be a distraction. Refugees in Europe. Gay marriage etc in the US. The money people don't care who lives or dies.
Is the US fomenting unjust wars? absolutely! And it won't stop as long as we have the support of Europe! Europe is not an American colony but they are sure acting like one.

It Is Useful Recognise That...

It is useful recognize that there is not a single United States in action in the Middle East, but several different versions of this powerful country. The United States in its foreign policy in the Middle East often acts like a brutish imperialist, shooting and bombing to its heart's content without caring much for the consequences on the ground.
At other times it acts like a bumblig fool who is totally out of his depht and has no idea what to do in terms of calibrating political, economic and military policy and stumbles from one crisis to another.

There is another United States and this is the country that functions with the mentality of an engineer.
The Atlantic Council and the Carnagie Endowment for International Peace employ the engineer's best approach to dealing with the world. These two respected organizations have launched major projects to probe deep into the problems that plague the Middle East.

I hope that many of the smart, able and sincere individuals working on these and other projects will come to light and I hope that the people involved will muster the personal courage, political honesty required to do a really complete and useful jobs. If they cannot explore the consequences of continuing American support for Arab dictators, or the consequences of the endless wars and continuing American militaris, if these issues are off the table, then the United States is not acting like the engeener whose work typifies the finest in the America tradition, rather it would be acting like the snake oil salesmen, who is equally part of American tradition.

Because Of The 403 Error...

...all I can say is: if the people were the primary concern, the world would be more free, less violent and more prosperous.

Beginning... Not End

Apple suffered the worst sales quarter since 2007, as reported yesterday. The Davos crowd seems to want a genocide because they can stop all the violence but won't. There are refugees and migration because Oil Lands are in turmoil over a fossil resource currently in over-supply, under-demand. The i-Phone can be generally attributed to the move that selectively mass terminated skill and experience. Oil Moguls wanted that because commonsense wasn't buying in on globalization and stupid arrogant degrees mired by debt would go-material and promote technology without giving consideration to what it undermined and inevitable repercussions.

When you step back and look at everything falling apart, compressing or in crisis-mode today, you see that they are pieces of a massive scheme. Global Economic Domination is starting to stand out.

It's pretty much a foregone conclusion that Draghi goes soon and the European Union dissolves. Greek Debt? Every nation has debt and no one is paying it down. That makes credit contracts useless because although Germany muscled Greece, it did not get substance from it. Before the year is up, everyone will be defaulting on all debt. Sadly we tabled this topic almost 8 years ago in Money Talk. Ivory Tower fortunes will evaporate and the world will face an extreme financial mess... but Earth turns and every day passing that involves useless administrators arguing will create premise to divorce them from Reality and reset that. Life must go on, wealth will not and nether will any glass ceilings or privilege.

I honestly dread the progress because the world will demand capture of every person involved in the financial and political sectors of the world while calling out for alternatives. That new crew will consist of very young and a few surviving near or in retirement aged people. The cool thing may ultimately be a restoration of respect.

I have said repeatedly-- now is not the time to be wealthy or have significant financial assets. Catastrophic failure is straight ahead.

This is a return trip. . .

. . . to the cottage industries of 1700-1750, before the Industrial Revolution, the rise of polluted cities, poverty packed ghettos; insensitive leadership; ignoring starvation and deprivation; the age of the entrepreneur/investor as principle character in the economy. We're in the process of doing away with all other interference - distractions that do not directly ferry pure money directly into select pockets.

A new balance will emerge: by stripping us of an opportunity to work, they give us the blessing of more free time in our lives; and by relieving us of the bother of going down to the welfare lines at the poverty center for indigents, we're relieved of the stress of concerning ourselves with troubling thoughts about whether the nation can afford to sustain the non-productive among us.

It really will be a simpler world, saldeck. That will become apparent as we retrace the steps returning us to peonage.

There Is A Difference...

It's servitude versus nothing-tude and this time, service requires a Hell of a lot of equipment. Two aspects I can see happening relatively soon is-- the flight of the common person to that simpler existence, not as a peon but in areas the Big has failed in. The second being a lifestyle that is not reliant on the machine. You have to have the willingness to be suppressed to keep the machine operating because the Elite cannot. They have bitten off the teet on that one.

It has been said now that money is liquidating from stocks at the faster rate in history since the first of January and it isn't re-appearing anywhere we can see or tell yet. Think about it... originally fake-printed-money that was hoarded in stock markets then liquidated into dark pools that at no time ever coursed through economy. What is it? Guess-- it's not really currency and you are right as rain.

A recent blog comment put it this way... "it wasn't the Federal Reserve's job to prop-up corporations that did not function in the actual economy." That may sound too basic but it may actually be a masterful rally cry and exit to free the world from secular stagnation. A headline proclaims Putin is corrupt. Compared to whom? We have the IMF and conferences in Davos that do not align with the global condition. That's a pimple to be popped and a flying carpet of sleazy wealth to force drop from the skies.

**** A relevant observation was written here but 403 didn't like it. How interesting that there is that much FEAR of the truth getting out to the masses when they are well-aware of the truth and losing tolerance very quickly.

You can kind-of already sense the change that is coming. Garbage infects governments worldwide. People exist to live, not be suppressed by psychopaths and nut cases. Our future may not even have currencies or allow wealth or tolerate laziness (highest and lowest in classes) and probably won't tolerate lawyers anywhere. Leaders are not politicians, they are pacesetters in progress and that doesn't mean pariah like Bezos of Amazon or the Walton Clan. It may revert to following the words and ways of a Pope Francis, while living in Oriental, North Carolina because there is no Wal-Mart there and it's economy is wholly reliant on cooperative survival.

Catastrophic failure remains inevitable and is straight ahead. Don't be a peon.

dr puma

You all introduced me to a lot of people many years ago. Some came from what I consider far away exotic places.
I remember the above, dr puma, who I think came from se asia, once saying "all you need is ~1500 calories/day and a warm place to sleep".
I thought about that for awhile. Probably half the worlds population would be happy with that.

Standards do not last long.

We mention The Dow Jones Industrial Average and recognize that it has a history reaching back to the 19th century. Impressive indeed! July 1884 to be specific. At that time, 11 firms composed the DJIA and if I read the brochure at hand correctly, 10 of them were railroads. How does that fit with the decriptive title of "industrial"?

In 2013, Alcoa, Bank of America, Hewlitt-Packard and Kraft Foods were dropped from the list of thirty "industrials" and Goldman, Sachs and Co., Nike, United Health Groups and Visa were added. There are food and restaurant chains, phone companies, banks, financial brokers and backers, charge card sponsors, and just about everything squeezed into those thirty spots honored with inclusion.

Why were the changes made? Stock prices of former star performers dropped and may have been embarrassing the committee in charge of putting the market's best foot forward. It was always the same. We turn to the Dow Jones and expect its performance to be an indication of our "progress", but changes are so frequent it seems to be more a matter of ego - trying to uphold the dignity of the markets or some such comparative effort.

Despite the changes in components, market pricing of the DJIA was not unusual in its gains through its earlier history - until the high interest/inflation rate of the 1980s. Even then, a damper of some sort was applied until the early 1990s when the DJIA entered into an exponential climb. This was very little peformance and great deal of adjustments to produce desired results. For some reason a period of name changing took place and when that spate ran its course, the weaker compnents were winnowed out and "substantial" firms replaced them. This carried on through the nineties and into the new millenium.

So, expectations of tying economic performance to the DJIA as a barometer is hopeless. It was and still is all for show. Peraps never meant to track the nation's economy or the health of its businesses. Perhaps, also, it was more to convince potential investor/speculators that the market is a good place to deposit your wealth and let the brokers do the worrying. The only flaw to that was that too many trusting souls found the index rising and their stocks were stagnant or falling along the way and their bank accounts weakened.

If you last long enough in this educational journey through life, you'll become acquainted with many people who are exuberant the first year of investing in the markets and near broke by the forth. . . And, these are people with substantial resources - to begin with.



You mention the 1920s and growth: changes were made to the DJIA list of firms -

  • January, February and May of 1924;
  • Once in August and twice in December of 1925;
  • March of 1927;
  • October of 1928;
  • In January and September of 1929.

And then continued through the 1930s.

Surprised You Didn't Remark On This O&G...

Things are different this time. Literally, it was some form of industry, craft, invention, innovation or shift that put people back to work and resuscitated common economy. Where some say technology is doing that today, it is grossly eliminating jobs so it is a pariah, not a shift. It is unlikely that business platforms will sustain. The world (minus Norway) awaits a catastrophic failure and a subsequent release of the pieces to shape recovery.

Disgruntled Right are cantankerous on the Comments. Generally, that means they are getting hammered in markets or succumbing to Risk they cannot mask with rose-colored glasses any longer. Falling resumes tomorrow.

"Stocks markets have been gambling casinos for the wealthy powerful and foolish for a very long time. One thing that repeats just before every major crash is a day like today. The Dow finished UP 116 points on barrels of oil getting more expensive... during a crisis-level over-supply under-utilization period. That's like praising cans of gas leaking in your living room while the fire in your kitchen spreads to the hallway adjoining them. Simply put- sooner than later the flames hit the fumes and your asset goes to Hell. A noteworthy from October, 1929 chronicles the Dow rising just before crashing. I believe the same condition occurred cyclically from 1800 through 1904 like clockwork. Recessions ran concurrently without 3 years gap in-between through that entire period."

Unemployment as tooled by modern statistics

"Things are different this time. Literally, it was some form of industry, craft, invention, innovation or shift that put people back to work and resuscitated common economy."

The difference this time around - and I have no insight as to how it was handled before - is that the employment/unemployment balance is handled by statisticians and mathematicians. Which means, the burning question is, "Tell me what you want the data to show, and I'll show you a way to get there."

So, as has been reported here, after a suitable period which demonstrates an attitude of concern and intent to improve the situation, long-time unemployed are shuttled off to a category that is parked in some comfortable off-site folder and promptly ignored. That cleans up the mess of trying to find work for them: the bureaucrats are relieved of an impossible workload; politicians and economists can bloviate and strut with a loud message that they've rebuilt the economy; and we never mention the growth in "not in the workforce category".


Yes, times have changed!

. . . We'd like to think. . . Or, they'd like to have us think.

Statistics are more sophisticated and their keepers grew stronger, less feeling hearts.

Political Economics

Remembering that it began its existence as "POLITICAL ECONOMICS" and dropped the "Political" appelation when it became "Scientific Economics" for prestige's sake, but never changed its nature, brings it all together again; since, by simple syllogism,

if all man is a political animal, and since Economics is a study of human acitivty, Economics should be known as a study of political behavior.

More to the point, it may be more proper to call it "Mathematical Economics"; all of which does nothing to cause any separation between us.

Head Scratching Economists Ponder...

An article today tables the obvious... the whole world is seen as falling EXCEPT the "data" associated with the fake USA economy. Apparently, we believe highly-paid-by-salary data readers but don't look out our own windows at Real Life. We get the impression that a GROUP assembled this mess and took blood oaths to scheme intact or go together to Hell if it wrecks. It was a train wreck from Day One.

In spite of all the pain we feel, fear we harbor, ill-will toward this one or that one, the clearest FACT is-- when voluntary default triggers the shift from public suppression to commercial obliteration, there is no way cardboard can recover from severe folding, spindling and mutilation. What we are realizing now as markets fall, that those who prospered since 2000 are the bottom-of-the-barrel humans and will return there as the oppressed rise. Can you see a fool standing before a crowd demanding repayment of debts? Even if armed... the episode ends at attempted reload.

WHERE is there economic stability? In simple words... there is NO ECONOMY anywhere in the world.

In spite of all the pain we feel, fear we harbor, ill-will toward this one or that one, the clearest FACT is-- when voluntary default triggers the shift from public suppression to commercial obliteration, there is no way cardboard can recover from sever folding, spindling and mutilation. What we are realizing now as markets fall, that those who prospered since 2000 are the bottom-of-the-barrel humans and will return there as the oppressed rise. Can you see a fool standing before a crowd demanding repayment of debts? Even if armed... the episode ends at attempted reload.

Catastrophic failure straight ahead. God loves me. He has helped me through the valley past death to re-invention and I look forward to whatever opportunities await us after shill fall-out. What do GOP look like after loss and surrender? Fertilizer.

403-- I cannot mention the name of the head ECB guy. I cannot name continents. I cannot state the obvious about actions that failed to generate anything other than failure.

A Fool's game

Anyone engaged in the current stock market antics without knowing the outcome before the start, is playing a fool's game?

Scraping the bottom for most of the day to rocket up as it neared closing in order to cut the false daily loss in half. . . ?? So there's hard evidence that money can be made in a bear market. For those who did end up losing; feel good for the pros - After all, there is a chance - slim though it may be - that on the same type of day, the luck may be yours - somewhere off in the distant future.

It's as the guru said, "You'll win the lottery for sure - as long as you continue playing for 10,000 years. Sooner or later the odds will be in your favor."

The only exception is with the odds being about 23 million to one, it might be more like 500,000 years. if the odds were 50 million to one you could do it in a full million years of playing. . . almost. . . well. . . yes, easily. (Confidentially, the odds maker will tell you no matter how many times you play, you're odds, going in to each new round, are still 23,000,000:1.)

Stock markets are currently operating on a sure thing basis. . . for the insiders!


Since the first day of trading in 2016, the Dow has lost $2.2 Trillion. Where did it go? Nowhere. It wasn't real to begin with. Governments are questioning why they need stock markets now. Better to have workers who pay taxes. The markets (rackets) have set themselves up for elimination.