Historic Duffminster From Our Own Eisenhower...

Submitted by <Veteran_Lender on Mon, 02/08/2016 - 22:47.

Submitted by Eisenhower on Wed, 12/14/2011 - 14:24

Jim Sinclair is one of the world's foremost experts on gold, currencies, trading and commodities and has been accurate on virtually every prediction on the price of gold he has made as to price goals even if the timing was slightly off. And who's isn't. This formula, is playing out even though in a bit of a convoluted way with the rising interest rates being capped by infinite monetization at the beginning rather than the end but the results are the same, infinite debt and credit leading to infinite internal monetization, leading to currency debasement and economic stagnation. While Bernanke is hedging his time, possibly waiting for a massive market sell off for political cover, the longer he waits, the less effective his printing press will be. I am seeing each phase of this formula playing out. It is vital for long term investors who are seeking to preserve their wealth to understand this formula in my opinion. The Fed has painted itself into a corner, QE to Infinity or Default in the death of existing financial order in my and I believe Jim's opinion.

Jim Sinclair's Economic Formula

1. First interest rates rise affecting the drivers of the US economy, housing, but before that auto production goes from bull to a bear markets.

2. This impacts many other industries and the jobs report. An economy is either rising at a rising rate or business activity is falling at an increasing rate. That is economic law 101. There is no such thing in any market as a Plateau of Prosperity or Cinderella – Goldilocks situations.

3. We have witnessed the Dow rise on economic news indicating deceleration of activity. This continues until major corporations announced poor earnings, making the Dow fall faster than it rose, moving it deeply into the red.

4. The formula economically is inherent in #2 which is lower economic activity equals lower profits.

5. Lower profits leads to lower Federal Tax revenues.

6. Lower Federal tax revenues in the face of increased Federal spending causes geometric, not arithmetic, rises in the US Federal Budget deficit. This is also true for cities & States as it is for the Federal government.

7. The increased US Federal Budget deficit in the face of a US Trade Deficit increases the US Current Account Deficit.

8. The US Current Account Balance is the speedometer of the money exiting the US into world markets (deficit).

9. It is this deficit that must be met by incoming investment in the US in any form. It could be anything from businesses, equities to Treasury instruments. We are already seeing a fall off in the situation of developing nations carrying the spending habits of industrial nations; a contradiction in terms.

10. If the investment by non US entities fails to meet the exiting dollars by all means, then the US must turn within to finance the shortfall.

11. Assuming the US turns inside to finance all maturities, interest rates will rise with the long term rates moving fastest regardless of prevailing business conditions.

12. This will further contract business activity and start a downward spiral of unparalleled dimension because the size of US debt already issued is of unparalleled dimension.

Therefore as you get to #12 you are automatically right back at #1. This is an economic downward spiral.

I heard all this “slow business” as negative to gold talk in the 70s. It was totally wrong then. It will be exactly the same now.
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People are calling the Federal Reserve out now. It stands to fall in the light of it's terribly BAD actions. The way we recover unfortunately, is to raise rates, collapse external ties and force economic recovery by crushing bastions and greed. Literally, number 3 is happening right now. Notably, Eisenhower posted this here in late 2011.

The fly in the ointment is that gold is sabotaged by massive holdings in China, Germany, Russia and others. They can force a non-sell premise and strand gold-mongers indefinitely, then buy those stashes for next to nothing in future currency. The better hedge is common goods not made in China because they will outlast over-supplies of the cheaply made replicas of better stuff.

Thanks V_L

We have busy minds that often cause us to overlook importnnt milstones. We post and post, read, observe, cogitate and try to render the confusion into somethng comprehensible - so busy doing that that we overlook the obviosu.

In retrospect, this piece should have been somehwere as a preface to or summary of our efforts for the last four years.

The Makings Of The Super Nova Effect

Where will you go? All the places we will go. Go now, go now, go now.... what goes around comes around if you are dumb enough to keep standing in the same place.

To every reader... do yourself a giant favor... MOVE. I didn't advocate packing up and relocating for everyone... a small step changes the place where you were standing to a new one. Get it done. Do it now. Beat the rush.

Scientists will argue adnauseum about the spark that caused the big bang- in theory only, because they weren't there and have no proof of anything, BUT, everything we are and do can be found in Nature, SO, it only makes sense that an enormous cloud of complacency is about to receive a spark kindled by living things in need of motion mired in awful secular stagnation for too long. The Great American Racket-- has had it.

Will you still eat your cheese after it has been moved or can you tolerate any cheese or have you trained your taste buds to handle just about anything? We are about to see.

Bernie's fan club will be PISSED if Hillary wins. The Cruz and Rubio cockroaches will be PISSED if Trump wins it all and they take the fall. Hillary's supporters are not evident, so who are they? Bernie's people won't vote for Hillary and a whole lot of folks swear to rebel if she approaches Oval Office potential. Republicans won't vote for Trump and if it looks like The Donald gets close to the Oval Office... there will be World War III.

There is somebody behind a curtain somewhere, pulling a LOT of levers. THAT person is a problem the whole world needs to get RID of. Everything falls and fails either way... I have an intriguing idea of who it is and all I can say is-- the whole world won't like to know that person one nano-second after her revelation.

Bad Elections, Bad Businesses, Bad Economy

Only 15% of voters turned out to allow the media the spew to claim victories for Trump and Clinton. If we stay on course, we get World War III.

Do 350 Dow points impress you? Dig in, notice that the majority of that fake lift was owed to Goldman Sachs-- who went to the Federal Reserve to borrow billions to-- bail Apple, which is spiraling downward since it's 4:1 split.

Word is-- Draghi can lie but not make people listen. Buffett remarked that Europe needs a huge mattress to put all those hoarded dollars into. What does that mean? It means the Euro is stalling as a currency, people are hanging on to Dollars because they know the Euro is tanking and every member nation beholden to the Euro has ZERO economy, so why not hoard the Dollar?

We crash now.

Clinton-Trump

A Clinton-Trump general election would be the dirtiest, nastiest, sleaziest and most divisive since the Civil War. In that case, God help the United States of America.

No Worries...

No one would vote and the elections would fail. Read your own other post of today and put that into perspective here in America. Clinton is just out there... all air, no validated voter base, her opponent CLEARLY has more followers. Trump doesn't know who his supporters are. For all you know--- they could be sheep dressed in wolf clothing and pull a different color lever because they can. One thing is for absolute surety... this is the wrong election to rig.

2 - 9 - 2016 - Yesterday's Market activity

It was an active big day with 5.6 billion DJIA trasactions during the day, and what has become the expected: the index wandering all over the board in the now accustomed confusion.

The exchange index numbers are indicative - if we care to look at them. The volume

. . . . . . . . . . . . DJIA . . . . . . . . . NASDAQ . . . . . . NYSE. . . .

Advances . . . 1,029,495,295 . . 1,161,208,471 . . 1,903,172,102
Decl. . , ; ; . . 4,510,432,911 . . 3,704,449,361 . . 2,335,827,134
Total. . . . . . . 5,583,728,872 . . 4,902,734,492 . . 4,296,669,920

Other than noting it was heavy day of activty, we'll let the numbers speak for themselves. The gyrations - the ups and downs for the day also tell a story - mostly that of lost souls wandering trough the forest.

I Can Barely Post, But Here Goes...

That substantial market activity and the massive online suppression I am enduring should be painting all of you a masterpiece... the GOP falling apart.

Yellen's days in front of Congress this week will have a far different tone now. She must answer WHY her economics are completely off and the nation is gripped by tyrannical control bringing all sectors down. The correct answer is that the data she evaluates is complete trash. It's telling and ignorant that the Federal Reserve doesn't have validity mechanisms and had not gone forth to seek them 7+ years ago when it was evident that data was garbage.

I liked the article-- oil will be cheaper than water soon. True, but it doesn't rain oil-- ever. What we won't see in writing is the FACT that nearly every traded stock rose in lock-step format without economic validity. There are thousands of stocks that will drop like rocks with oil. The call to sell all was seen today.

While New Hampshire isn't a big state, last night's primary results were and today we will hear that nobodies like Jebster Bush, Crispy Christie and maybe even the Cruise-meister will drop out. The Hill's move to dig up her Women's Liberation Movement heroes was not a good one. She will go downHill for now on. Bill to Hill-- I wish we weren't married right now.

Net Man Yahoo wants to fence-in Israel. Good. We need a prison of that magnitude for our financially corrupt. We all end up in a box when dead, it is disappointing when the living get so greedy and materially possessive that they want to live in a box in life. God never intended it, maybe Israel's new god-- Satan- does.

Have fun today... everybody needs some. Unless you are GOP, then you will just need an extra supply of Depends as you dwell on financial tyrannical control gone-wrong.

Cashless Society

Who are the people that Yellen takes orders from?
What do these people want?
What are their long-term positions?
Who might they protect, aside from themselves?

Over the last few months a stream of articles have crossed my screen, all proclaiming the need of governments and banks to eliminate cash. It is terrorists and other madmen, we are told, who use cash. And so, to protect us from being blown up and dismembered on our very own street corners, governments will have to ban it.
It would actually take some effort to imagine a more obvious, naked attempt at fearmongering.
Cash, in daily use for centuries, is now, suddenly, the agent of spring-loaded, instant death? And we are supposed to just accept that line? But there is a good reason why the insiders are promoting those stories now. Negative interst rates is the real driver. The urgency of their move to ban one of the longest-lasting pillars of daily life means that the backroom elites think it will be necessary soon.
It would appear that the Central banks, the IMF, the World Bank and all their backers see the elimination of cash as a central survival strategy. Cash is currency that we hold in our own hands. It is primaly external to bank control.

They syphon our money away, drip by drip and there is nothing we can do about it.

Online And Then Downhill From There

Saldeck? You can't see the broader picture of WHY so much corruption and WHY only a few people seem to be so "lucky" about stock market picks? By corrupting paper money worldwide and ringing up debt so high that it touches the sky... by creating a network of funds and banks lofty and seemingly untouchable by mortals-- the next movement will be to replace our tangible assets with phony virtual money. While we have demonstrated commonsense, others are groomed to lead and live tremendously irresponsible useless existences that are the bread and butter of corruption. How else can you willingly turn billions into indentured slaves that lose the ability to survive unaided by those in control and omnipotence. And impotence.

The machine is roaring but the bolts are pulling loose from the mortar and it's shaking apart. Obama's oil barrel tax. Figure it out-- at 99 cents a gallon for gas in Michigan, the first 75 cents is tax. We are at $1.31 today. In other news... groceries are doubling. Check your inflation index lately?

The Paradoxical Stabilty

What puzzles me is that, in our globalized world, the dissolution of modern political and economic forms seems to assume a paradoxical stability, as if the world system could hang in a state of permanent disintegration. It seems like the system feeds itself with its crises, that they renforce it, rather than weaken it.
But the paradoxical stability is fragile. Actually, chaos has not arrived yet, the social body remain relatively controllable through surveillance and control systems that are constantly developping.
What makes me pessimistic is the persuasion that there are no global solutions within the current dominant system. It is neither moralizable nor reformable. It will not collapse under the blows of its opponents. It will collapse by itself.

Parting of the way for reason and economics.

Straight line? From Richard Cantillon to Jean Charles Leonard Sismonde de Sismondi and abandon the suggestion that could have been our salvation. Instead we end up with Clement Juglar and an ongoing struggle to find something that might accept the blame and explain every failure - an impossible quest.

If we had spent the next two hundred years in a positive attempt to develop ratios and equations which prescribed the essential amount of money in circulation, investment needed producing necessities, providing adequate employment, supporting reasonable markets and prices, instead of training an army of mathemeticians insterested in promoting discontinuity and inappropriate answers to unnecessary questions, we may have solved the problem of ills that developed under the control of financiers with the attitudes and goals of warlords.

In Re Sismondi and his "New Principles"

Sismondi's New Principles of Economics begun in 1815 reached a temporary completion in 1824 and final form in 1827, had been at that time - and probably continues to be largely ignored. He was not a member of the brotherhood. . and may still not be since he spent a great deal of his productive life looking into histories - that of Italy, then France, then "meddling" in British affairs to one extent or another, always with what is now referred to disparagingly as "normative" thoughts, i.e., what "ought to be":.

His first printing of the Nouveau Principes. . (1819), and 2nd edition (1827) was reviewed in 1934 by Henryk Grossman and the review printed in the Encyclopaedia of the Social Sciences. Grossman gave Sismondi more recognition and credit for the depth of his work than any economist would then or now. The reason is clear: Sismondi deals with facts and truth of real life. Grossman introduces the second edition and Sismondi's role as an Economist in part with these words -

his "2nd ed. 1827, . . . constitutes a devastating criticism of the basic axioms upon which the classical economists built their idealized and static conception of capitalism. He showed clearly the untenability of the doctrine that competition always tends to establish an equilibrium between production and consumption. More specifically he emphasized that general crises, or gluts, are not only possible - a fact denied by the classical economists, although they admitted the possibility of partial gluts arising from an occasional disproportion between individual branches of industry - but an inevitable periodic concomitant of the prevailing economic structure. The direct cause of such crises he found in underconsumption on the part of the working classes, whose purchasing power is insufficient to absorb the annual economic output. The second inherent characteristic of capitalism overlooked by the classical economists was the necessity of continuous expansion and conquest of new outlets, resulting from the restriction of the internal market. While Sismondi was incorrect in limiting demand to consumers' demand and in other aspects of his argument, the essential validity of his conclusions makes him the scientific discoverer of capitalistic dynamics."

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Copies of his economics writings are on O&G's shelves in their original tongue and treasured.

Old and Gray....

...our 403 ghost woke up. I can't post.

Happy Valentine'day to all of you.

Another year - another day in your honor

. . . And may there be a Happy Valentine's day every day of the year!

Sismondi

Sismondi's analysis on the contradictions, dysfunctions and evil social and economic consequences of the unbridled capitalism is still valid.

The fact that his critic analysis is still valid happens because the system we have today is the same, only enlarged and worsened, tha the one shaped two hundred years ago.

It still follows the ideas of Ricardo and the rest of the Anglo-Saxon school.

Their version of the capitalist system has not evolved, the basic principles are the same, regardless of the social failures and recurring devastating economic crises.
Those principles are still taught as established economic science. It is now labeled as neo-liberalism.
Sismondi was very exceptical about the market proclaimed virtues to turn greed and self interest into an instrument for social and economic equity.

Sismondi was the first philosopher to worry about wealth distribution among the population.
What was then Sismondi's lonely concern, is now, two centuries later, and a major subject of political debate. In a time of systematic crisis, it is urgent to build a new proposal.
Allow me, sir, to highlight Sismondi's words that sound so modern: There are no more peasants in the fields, no more artisans in the cities or independent chief of small industries, there are big factories only.

where are we going?

It's difficult to believe that a short time ago (2008) the surprise that the Bank of England had lowered interest rates to a level not seen since the 17th century.
Today, the financial sector giddily discusses nirp as being the coming new norm! I've seen numbers of -4% - 5% being discussed as a welcome possibility by the financial sector.
It's very disappointing to see political leaders not questioning such foolishness. What do they expect from a policy of nirp? Are they hoping to push demand forward yet another decade or two? Are they hoping to double the merchant fleet capacity? Do they really want more consumer debt at this time?
I suppose if you are able to borrow at zero or less and charge 20% for credit cards then you could probably afford a high default rate. Is that what they hope for?

Where Are We Going?

What made the 90s so amazing? What did we have? We had expectations. These great expectations contribuite a lot to our happiness. The shining future becomes a kind of wealth and everyone feels rich.
The 1990s saw the explosion of information technology. The world just exploded. It is impossible to describe the change. One of the most remarkable and wonderful change in the 1990s was the progress of gender equity. In the late 90s full employment was reached, wage growth was rapid. Manufacturing rebounded. What mattered most was the sense that this was only the beginning. The 20th century was a long, dark tunnel from which we had finally emerged. We saw a bright future of peace, freedom, equality,health and neverending wonder.

Oops.

That is how it seemed. Then the world had Bush, 9/11, the Iraq war, Lehman. years of falling incomes, a resurgent racial income gap, falling femal labor force, slowing productivity, rising inequality, the heroin epidemic, the alcoholism epidemic, the huge rise in suicide.

We know that although the dreams of the 90s may all still come true, it will be a longer, harder, bumpier road than we have hoped.

Where are we going?
One thing is for sure: being old in 2040 will be very unpleasant. It is more or less true for the world as a whole.

The M.O. of finances/economics

That would be management through the rear view mirror and a weak memory.

Whether the thoughts generated by neoh's prompt can be put in a comprehensible sequence or not - well, here goes!

The "science of Economics" has one over-arching goal: keep our ducks in a row - that's why it's a "science". Once committed to that, we lose sight of goals, purposes, viability and feasibility. We appear to have the proverbial one-track mind approach to whatever we do.

Case in point: 1998, prior to the opening of the ECB, 5 "level-headed economists" attempted to bring to the fore, concerns about the incomplete planning which introduced the Central Bank mechanism to Europe's unrelated, therefore unbalanced economies. They arranged their suggestions in the form of a publication through the Centre for Economic Policy Research (CEPR) and offered, The ECB: Safe at any Speed?, the 15th of October, 1998.

Without acknowledging any of the listed objections or suggestions the five advanced, consider the formation of the ECB since the 1960s and its long gestation period. The ECB has been that long in the making - with a surge of effort at different times: in the seventies, following the collapse of the Bretton Woods arrangement - only to meet with another delay, that flush of inflation and the near collapse of the early eighties; the proponents of the ECB then enlisted the organizational skills of Baron Lamfalussy by enticing him to leave his general manager position at BIS for the surge to finalization in the 1980s; which ended up finally opening the doors of the ECB in time to enter the new millenium.

But, just before opening the ECB, the 5 economists mentioned above still recognized short-comings and recorded their views. To no avail! "Damn the torpedoes, full speed ahead" is the motto of the politically oriented movers. And so they charged into the sea with torpedoes churning every which way with the probability that if it wasn't done immediately with deficiencies, there would be no ECB. Another one of those, "Let them take care of it down the line. I hate sloppy work," kind of thought processes.

Fast forward to the 23 economists who've decided to revisit the unfinished project to see if reason can in any way rescue the Eurozone - this is the new "narrative" approach addressed here recently. They are still at it - the original 23 with an attached list of interested follow-up endorsements by economists - surely they must number over a hundred by this time. (It stood at something in the neighborhood of 75 when last checked.) The "narrators" have produced Volume II of their concerns - 18 chapters by distinguished internationally oriented economists from the top shelf of talent.

First assessment? The two editors, Richard Baldwin and Francesco Giavazzi have condensed their introductory chapter of the new e-Book How to fix Europe's monetary union: Views of leading economists into a shorter voxeu.org article with the same title. O&G was struck by the thought line which probably exemplifies - in his view_- the path of the publication (which has not yet been read, much less studied). The following lines from the vox article are in their order of appearance and may generate a sense of the larger message:-

  1. "The Eurozone remains a damaged vessel. It has been made seaworthy with makeshift solutions and half measures."
    .
  2. As Agnès Bénassy-Quéré writes in her chapter, “The Eurozone was conceived as a monetary union without a sovereign. It was just an arrangement between several member states to share monetary sovereignty, provided they commit not to abuse the system through fiscal profligacy. This arrangement failed.”
    .
  3. The Full range of coherent solutions
    "Although they disagree on solutions, our authors broadly agree on the list of things that needed to be fixed.
    .
    These include:
    .
    • Completing the Banking Union;
    • Breaking the ‘doom loop’ between banks and their sovereigns;
    • Ensuring EZ-wide risk sharing for Europe-wide shocks;
    • Cleaning up the legacy debt problem;
    • Coordinating EZ-level fiscal policy while tightening national-level discipline;
    • Advancing structural reforms for a better functioning monetary union."

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O&G believes that Economists and the state of Economics itself are on trial in this venture.

Something in the habits of economists needs to be abandoned or re-ordered to permit the progress required here. Whatever impels them to insist on pursuing separate paths to demonstrate acquired personal skills at the expense of loss of prestige for the discipline. This must be modified before they can work in unison. That is a cold, hard truth. Working separately, the attitude of independent thinking is cherished and probably acclaimed as a desirable trait even though it does little more than contribute to the disparate lines of thought that encounter unending series of obstacles that prevent a unified line of thought which would effectively deal with the warlord financial mentalities that will forever bless us with crisis after crisis with their arms dipped into cash flow up to their elbows in self-enrichment at society's expense. (Now that they have most of the currency under their personal control, they'll try to move Heaven and hell to deny the public the right to any part of it. It's in the works!) It is an historical truth documented by that fateful - and neglected 1930 - study by the OCC, followed up by every recession and false start to develop a unified policy that would deliver us to a stability we never met. This included the progress from the Great Depression to the Great Recession - a "recession" in name only in view of our avoidance of the word "Depression". That does not eliminate Depressions, just avoids the reminder of how inept we are.

The economists' habits inhibit - if they do not block - projects initiated with good intentions, running afoul of goals due to the rugged individualism of the trade. The result is a history of incomplete policies and programs which are left dangling in often skeletal form and turned away from in neglect, too much of a reminder of ineffective, therefore wasted, scholarship.

The end result of the habit-inhibited work ethic is an impending near-dismissal of the importance of economists and their economic "science" by those intended to benefit from the scholarship gone awry: businessmen, financiers and all the various practitioners of commerce and interactivity (including households and housewives) which the "experts" supposedly study. It would appear Economists are tolerated because, in their flailing intellectualism, they justify the indecencies that commerce inflicts on their wards and clients, the general public. The walls surrounding the enclave of Economics are impenetrable - meaning their work is presented in terms divorced from practicality and to a degree that threatens their near-extinction. Just what is it they do behind that protective veil that is so important to society at large? When the answer is punctuated by another failure or two, the new age of dinosaurs will descend.

The importance of the CEPR work? It epitomizes the flaws of style in the study as well as the entire discipline. Their expertise is under fire. If they cannot deal with the EZ crisis effectively, they'll fade to a level of unimportance that will parallel the trail of aberrant ants that have been isolated from the colony of workers because they have nothing worthwhile to contribute to society. And, though these words appear aimed toward the European EZ crisis, our Fed is under fire just as intensely.

Marriner Eccles was the first Economist to serve in the Federal Reserve; since his term, it seems that we've become dependent on economists and they've disappointed us at every turn. The tally of effects through their trail of flaws and faults is abominable. They are regulators who do not regulate effectively, supervisors who debate the purpose of supervision from one crisis to the next to no productive end, and theorists who present no cogent theories. Whether they have learned anything or not will soon be of no consequence; nearly all of us are effected by their failures and the decision will be wide-spread and popular when they are dismissed as valueless.

If they fail here, Economists will follow the trail of the Wobblies as labor leaders, the Alchemists as wealth generators and Cultists as intellectuals.

Agree

This is one of the reasons I'm not a precious metal enthusiast.
It's obvious that the war on savers began with Greenspan. The next obvious step would be to generate fees through electronic transactions.
The sheeple will probably fall for the terrorist/criminal/tax evasion explanations.
The world will be in a world of hurt. Terrorists/criminals will target electronic hacking. Much easier than robbing banks!

Negative Interest Rates

Omnipotence keeps pressing the 403 button but it knows what I wrote... and choked. Fear not, it dies soon by it's own hand.

It is theoretically possible that the implementation of a negative interest rate environment vacates savings and in doing so, collapses the banks. Further, forced evacuation of saved funds does not put them in contention for use in markets, especially stock, it could in fact drive collective assaults that cause upheaval in complacent venues and vessels. Essentially, negative rates would bite the hand off of the people forcing it's use.

It is wholly possible that we are actually IN a catastrophic failure right now and artificial forces hold us alive, but not functional. If this were the case, a shift wipes out everything. We all knew the exponential climb, but the reverse would be so far beyond our comprehension that it's extent cannot be ascertained.

Oil moguls meet tomorrow. They have agreed already that they cannot salvage their sector.

Banks shot in the foot by "wet noodles"?

Interest rates are a difficult problem, at least as difficult as trying to infuence output or job rates by controlling inflation. What we have a mind to try has never worked.

We don't have economists of the stature of the true monetarist, approaching the standard as set by Milton Friedman; yet, despite his understanding, even his arguments explaining interest rates are sometimes tangled to the non-economist mind. His standard advice was deal with what you can control - which, in this case, was the money supply in the aggregate (meaning M2 and/or M3). Interest rates can only be set by market activity. This was based on his study of the calamity caused by the Fed's attempts to adjust rates, an extensive study of history in that regard, which picked up in the mid-1860s a half century before our central bank was spawned.

The Fed has already tried the quantity of money stock ploy with the Qe series and the bail-outs. Banks obstinately refuse to allow the money to circulate, using the funds rather to build up reserve which absorb the deficit created by converting valueless derivatives to on-balance sheet "assets". . . an empty, ineffective gesture. Zero value is zero worth. They attempt to play with junk money and breathe worth into it. In the meantime, the concern with that drags the limp economy along with it into the darkness.

Our history includes attempts to influence economic outcomes and controlling monetary policy behavior with interest rates and the results proved that ploy is operating with the cart before the horse, no-effect results or expectations of results by "pushing on the string". In the early 1980s Friedman didn't recognize his own study in play when the Fed under Volcker attempted to put his own, Friedman's, teaching into play: control the money supply and market interest rates (which were then in the 20% rank) will follow. Volcker did, obstinately; and banks and markets responded as they should have. Prematurely, Friedman declared it wouldn't work, we'd have a debilitating strong counteraction. We didn't - which did not mean smooth sailing because other influences were at work, more than half of them political.

In 1992, Friedman wrote a column, copyrighted and published by the Wall Street Journal, in which, after a discussion of interactions of stock of money and interest rates, although he does not change his posiiton, that quantity of money stock ("high powered money") as controlled by the Fed is its sole effective control. He again makes the point that rates should be left to the markets. That is exactly what Volcker did, and it worked! Loud choruses of complaints followed before the Fed began its push, but the desired results were attained in the Freidman favorite lag-time of a year and a half to two and the banks' wild charge through the interest rate brambles fell back. It was not a "fortunate accident" that the market converted to more rational rates without interference from authorities, it was a natural consequence.

In the most recent visit, the close of that article "Too Tight for a Strong Recovery", which dealt with the early 1990's problems when some banking systems were threatened severely, my mind couldn't help but drift forward to the current, long-lasting crisis we're suffering through and alight on the idea that Fed actions exascerbated if they did not actually bring on both cause and consequence today. That was the gist of my prior posted comment that we are "pushing" on the string in vain. So, despite Bernanke's promise not to "do it again", as commented before, he did!

At this time, what banks should be asking themselves, in order to resolve the issue of negative interest rates, "Will negative rates do any good?" The only recourse was to review the words of the Master Monetarist. Which then updates our current situation and the specter of rates, low or negative.

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Have low rates inteh ZLB helped to date? Are they the problem or a distant factor and we are missing the target by expecting rates to resolve the lack of confidence in the recovery? You may speculate what might have been had we not lowered rates, but you can't dispute the slow motion recovery that cannot even maintain steady-rate, jobless growth. More than five years of reduced interest rates and we're back - again - at the same point in the circular pattern we follow. We're going down the same dark lane continuing to tempt fate, which only means that sooner or later we'll meet that dreaded threat waiting for us. Forcing rates into a niche has no curative power. That string has already collapsed and has less resistance than ever. It's more like a wet noodle.

No Bottom... No Net...

It would seem apparently so. Oil moguls gather tomorrow. Financial pariah already have. The world doesn't need them but they have grafted themselves to everything. No one is keeping tabs on the credit extension, no one is revealing the true costs. The rest of the world believes it is isolated from this... war. It is not.

Someone has to go bust.

Something Is Coming Quickly Now...

"WASHINGTON — Eight years after the financial crisis, the world is coming to grips with an unpleasant realization: serious weaknesses still plague the global economy, and emergency help may not be on the way. Sinking stock prices, flat inflation, and the bizarre phenomenon of negative interest rates have coupled with a downturn in emerging markets to raise worries that the economy is being stalked by threats that central banks — the saviors during the crisis — may struggle to cope with. Meanwhile, commercial banks are again a source of concern, especially in Europe. Banks were the epicenter of the 2007-9 crisis, which started over excessive loans to homeowners with shaky credit in the United States and then swept the globe into recession."
$$$

Two points worth noting... a few still believe Central Banks did good. A few still believe totally powerless lenders collapsed us. The few-- are bankers. The majority KNOW that bankers destroyed us for greed.

The rise in the Euro this week is intriguing. It isn't based on any actual economy, just moving the pea under the cup from one dead nation to another. Apparently, Portuguese bonds like appetizing but no one sees the cork industry springing back to life. Notably here and in my own dealings-- I cannot score on an obvious bargain the old fashion way-- by seizing on it. The ground rules are changed to keep greed in the game-- no matter what.

The Great Complacency has another name-- Death. Recall the cycle-- Birth, Growth, Maturity and Decline to Death or Re-Invention. Notably, Re-Invention follows Death involuntarily. That's why it's a cycle.

We May Be Entering The "Worst" Depression In History

Where are we going? We may be entering the worst depression in history.

Here few events since the beginning of 2016:

1. Rumors that Italian banking system might collapse
2. Rumors that Deutsche Bank could become the next Lehman Brothers
3. Chinese economy is facing a mountain of bad loans that could axceed $5 trillion
4. The negative interest rate programme in Japan
5. The 10 year US tresury rate is going below 1,80% and moving up and down wildly
6. Oil price has gone below $30 per barrel and has moved up and down wildly
7. Gold price has gone above $1,155 per troy ounce and has moved up and down wildly
8. The Baltic Dry Index, a measure of the health of world trade, crashed below 300 for the first in its entire history.

Let me now throw in some terminology.
Marxian "over-accumulation", "overproduction" and "underconsumption" crises theories, Kenesian theory of "lack of aggregate demand",
"financial instability hypotesis" of Minsky, "debt deflation theory of depressions" by Irving Fisher, no matter which theory you use to look at the picture, your conclusion will be the same.

The Guardian asked a number of economists whether the gyrating financial markets are facing a global meltdown, one of the economists was the former Greek Finance Minster Yanis Varoufakis. He concluded his response as follows:" Should we be afraid? Yes. Is it inevitable that a new 2008 is coming? In political economics, nothing is inevitable."

I respectfully disagree.

Worse depression? Maybe, but, not unanticipated.

Last night I found an article on Bloomberg, I believe, by a blogger, Anna Kitanaka, referring to a comment by a JPMChase strategist for a $1.7 trillion fund which I'll post separately.

It started the memory engine which conjured up a host of items to be treated separately to avoid confusion. We have enough of that contaminating the economic discipline right now what with the Eurozone difficulties, the Italian banks and their recent unhealthy develoopments, the attempt of Baldwin and Giavazzi to stimulate some consensus thinking about the EZ situation and a replay of the December, 2000 Mundell-Friedman debate referenced here several times receently.

So, in all, to present them in one posting would probably cause confusion about just what we are addressing. I'm beginning to developo doubt of my own on precisely what that melange suggested in the mix of the subject article could be.

We'll take them one at a time beginning with the JPM strategist and her worries about a piddling $1.7 trillion fund. (We must treat these items casually or there may be no sunshine at all for the next twenty years. That's not our intent here. We'd just like to open the eyes and minds of people who consider themselves irreproachable experets.)

.

Dateline February 16, 2016 -

In an article by Anna Kitanaka @onlyanna100 on the Bloomberg site, it is reported that Marcella Chow at JPMorgan Asset Management Inc. -

“The global strategist for the $1.7 trillion money manager says she’s on edge, her clients are panicky and she’s telling them to stash as much as 70 percent of holdings in bonds including U.S. Treasuries. Calm won’t return until China’s economy improves and central banks regain credibility with investors, she said. She’s waiting for oil to fall to as low as $22 a barrel, and in the meantime she’s battening down and trying to avoid volatility.”

That's a full plate!

US Treasuries, China's glitches, credibility of central banks, oil at $22, all while trying to avoid volatility! O&G would suggest first trying to discover some stability! With US Treasuries facing the threat of negative rates, and negative rates threatening anyone globally with a dollar or two they'd like to put aside for a rainy day - not to mention old age support - there is no alternative to the outlook we face.

A short marginal comment crept out on reading (for the umpteenth time) the accumulation of faults due to flawed eocnmics -

Of course the central banks in question are the Euro central bank and the Fed. For the Fed, no one knows what they will do, they’ll liable to remain on the fence until it collapses, weakened by a lack of support ormaintenance withthe wood rotting out form under them while they proclaim, they knew it would happen all the while, that's why they did what they did - which again, was nothing. The ECB has management problems which are as complex as the cultural diversity of the real and potential member nations using the euro for their main currency - which will not be resolved until a United States of Europe evolves - a highly unliely outcome. We're fighting both culture and politics on this issue.

That has been re-established by the Baldwin/Giavazzi attempt to stimulate a team of well-recognized economists to deal with the EZ problems on a fast evaporating "consensus" basis due to the economists then sitting down at their text generating devices, isolated from each other and beginning their contribution to the "consensus" view - leaving it up to the editors to sweep everything together and bag the essence of the eighteen or twenty five consensuses.

But then we're running onto the next subject. Difficult to restrain oneself in such a situation.

Consider this post one.

Not Unanticipated but...

...but the neo-liberal Groupthink continues to trap political leaders and policy makers in Europe into a web of denial and stupidity. In both case, innocent people have suffered negative impacts, while they have escaped fairly unscathed. The recent data from Eurostat shows that growth is fairly flat in the Eurozone and industrial production is in recession. It also shows that the banking system is in deep jeopardy. Meanwhile. Mario Draghi winds the key up in his back and tells the world that everything is fine and the ECB is on top of the situation. With chaos discending on the monetary union again, the ECB cannot even achieve its single purpose - a stable 2 per cent inflation rate. It has failed to even achieve that over the last four years.

As for Mario Draghi's address to the Commission. . .

Selon de les mots de M. Draghi: Everything is dressed in neutral clothing. . .By that I mean that no one is to blame for anything, the system is just working away and turning its little tricks back onto us. Absolution at the hands of economist/bankers.

That is my overall reaction to his speech, which I have downloaded and read through twice with marginalia galore spotting the pages. The only forgiveness I can find among my priciples is that he was hired and given the paint brush and paint to do exactly what he's done in this instance. It's to be expected of people in positions of authority: number one rule is, don't do or say anything that may upset the rabble. We have trouble enough trying to keep things straight in our own views.

.

By the way there was a formula developed by Fisher - was that back in 1913(?) - which used the profit margin plus the inflation rate to set nominal interest rates. Many objections since then have centered on the claim that the formula does not work in bust times. But side-steppig that diversion, and to fast forward to these times - if the formula were put to use today to help us understand our position, with inflation at about 1.5% and interest rates at 0.25% (even if it were to be the exaggerated amount attributed to our Fed, that of 0.5%) What does that say of th profit margin in general effect?

A loss to open the doors unless we play havoc with the financials? Which indicates our future?
Then, too, if we were at 2% inflation - or any higher level - that would indicate an even weaker profit position for our aggregate economies, wouldn't it?

Central Banks Believe In Their Phillips Curve

Here what Draghi said: "We are very conscious, and wish interest rates could go up again, but this is not the case now. I don't think anybody is thinking about changing policies, but if we were to change it, it will lengthen the timing of inflation reaching 2%".

The more important point is that no one really knows what is going on with monetary policy right now. No one knows, for example, what the Fed is really trying to accomplish, or what it can accomplish, or how to go about accomplish it. Is it still set on raising interest rates in order to avoid the semblance of abnormality from keeping them close to zero? Is it worried about demand-side shocks from China's slowdown? Does it want the public to think that it will never let inflation go above 2%, or does it want people to think that 2% is in the middle of the acceptable range? Is it trying to raise inflation and failing? And if it did want to raise inflation to 2 percent, would it do so by keeping interest rates low, or by rising them?

I have learned anything about how monetary policy works. But I am not confused. There is no good reason for that. The intervionist central banker, in the process of trying to " do all it takes" sows the seeds of his or her own destruction and becomes powerless.

Our monetary policies

No matter which label has been attached to monetary policy advocated by the popular school of economics prevailing at any given time, they all have one caveat attached, "Caution! Will not work in time of stress!"

In other words, monetary policy provisions work only when not needed.

When we study the role of central banks as main keepers and protectors of the money process, we're informed that interest rates imposed by CBs are of limited effect on market rates; regulation or supervision is of limited worth despite the thousands of pages of procedures and instructions supplied to the regulators; and, any and all attempts to enforce what might be considered ethical or rational standards in banking have been met with a backlash of fierce proportion and dismissal. . . if not through counter-legislation from their compatriots in office, then through industry rejection and/or modification through the central bankers central bank in Basel. But, then if those decisions are not met with approval, no problem, since they are disseminated as recommendations - not a rigid disciplinary measure.

Then, too, this should not come as a surprise since theoretical economics, which was once conducted on more practical principles than the current batch attempts, had deduced that all known policy ploys other than the quantity of money adjustments respond on the very temporary, short-term timeline and any corrections disappear in a few months and we return to the condition we tried to evade.

We documented the frustration of Professor Lars E. O. Svennson Back in February, 2013 in O&G's episode 034 in the Monetary Policy Central Bank series. The Professor is not without credentials and impressive stature in the industry, standing proudly in the first 100 and perhaps even among the first 50 economics globally - among the many hundreds of thousands - perhaps millions - of economists worldwide as befits a man of his integrity and diligence. Yet, we are all dependent on not only the history of any discipline we follow, but, the episode depicted in that section seems to indicate that the good professor was persuaded by peer pressure to follow current trends and beliefs. This despite the fact that the chosen path may prove to be not all that reliable in the longer run, no matter how sound they appear at the moment.

Then, there are the promises, such as M. Draghi's "Whatever it takes," which sounds impressive on delivery, but are not that easily enforced or that effective as the commitment may promise. Thus, we had a century or more of debate and discussion on policy effectiveness until even the mere thought of such propositions should be abandoned and a new replacement strategy should have emerged with at least the promise of the first - even though it may not have had much more of a chance of survival in the long run.

The point may be that our teaching methods or learning process may be misleading, promising more than can be delivered. We have yet to see a theory that discusses the course of action when either the public or the targeted faction and/or the banking schemes are addressed directly in the effort to avoid collapse or protect the direct prey or innocent taxpayers. Monetary policy may be as sound as the Rock or Gibraltar but those meant to suffer for banking indiscretions are growing in numbers as the population increases and the banks become more confident in their stature within the community. And, it seems as the population increases banks see more fertile fields ahead and are plotting their course for riper ventures.

Monetary policy is playing a major role in the years ahead. Not in the role we've seen in the past, but more vigorous and less beneficial to society. We'll see more schemes and deceptions ahead as the margins that provide profits diminish or disappear and salaries and dividends need supplementation to capture and retain investment interest while the bloated, non-performing, income appetites of the BIG corporations need to be fed. They'll be supported mainly through finance which will be conducted more intently through banking which in turn will be supported by central banks with a direct line into those sovereign treasuries and taxes.

That's the "new world" future indicated by our current attitudes, corporate and governmental - at least here in the United States. And, what is good for the US, will be used in the rest of the world. They have no intention of being left out of the rush to the golden trough.

Stretch of imagination? What has happened to the socialist bent of European nations? . . And, how does China observe its Communist leaning nowadays? It's in the dead smack center of its rush to not be left behind in the capitalist march to enrich itself by every means possible.

I Will Try Again

I am sorry, sir...the 403 Ghost sucked my reply to you right out of here.
I will try again.

saldeck, are you using firefox?

Mozilla has a post at their site claiming faulty operation for Firefox 43.0 and 43.0.1 where access to websites is attempted, or you may crash on down- or up-loading from or to sites.

Their suggestion? Either upgrade to the latest Firefox or delete a certain firewall.

Firefox 44 is now available.

The info is at this site

http://mzl.la/1QQ1aub

Following their advice seems to have partially corrected my problem. Have not seen the 403 on the Duff Times site, but have encountered a Server not found denial elsewhere on occasion. Hoping they respond to feedback on that soon.

Beyond Monetary Policies

Finance ministers and central bankers met in China to discuss many of the problems for which they alone are responsable.
Neoliberal ideology has dominated world discourse. The mantra has been that the only viable policy for goverments and social movements was to give priority to something called the market.
Of course, allowing the market to prevail necessitated political action. The so-called market was never a force independent of politics.
Is that day over? Is there what a recente article in Le Monde called a timid return by Establishment institution to concern about sustaining demand?

The IMF had long been the strongest pillar of neoliberal ideology, imposing its requerements on all governments that sought loans from it. However, the IMF worried openly about how anemic world demand had become. It urged the finance ministers of the G20 move beyond monetary policies to encourage investments in order to sustain demand by creating jobs. This was quite a turn-around for the IMF.

The dollar still seems the relatively safest place for governments and the wealthy to park their money. But deflation seems to have become the dominant reality of most Europe.

Will the timid moves recommended by the IMF stanch the reality of declining world demand? Will the dollar be able to resist a further loss of confidence in its ability to be a stable depository of value? Or are we moving toward a further, much more severe, wild swing in the so called market, with all political consequences this will entail?
Effective demand is the sine qua non of capitalism as an historical system. Without effective demand, there can be no capital accumulation. That is the reality that seems to be creeping in.

It is not likely however that the timid attempts to deal with this new reality can in fact make a difference. The structural crisis of our system is in full bloom.
The big question is not how to repair the system but with what to replace it.

P.S.
Successfully sent. Thanks for the advice.

Depression, Recession, Suppression... Fear

We actually crashed in April, 2001 and for all intent in purpose... that is when the controls went wonky. We are approaching 15 years aftermath and things look like the brink of catastrophic failure and global rebellion. First, as long as there is an International Monetary Fund, we will continue toward the intersection I state above. There has already been a step one countermand... Too Big To Fail has been abolished and replaced with Too Big To Remain In Business. BIG recognizes it's own demise. When 99.99999% of your team self-assesses themselves as "talented" while rampant global secular stagnation compromises every attempted manipulation, you look at the train you are on and know it is wrecking.

The "big" bolstered for 15 years now is completely inept at enterprise. Whether you embrace Capitalism, Enterprise, Rackets or any other form of Commerce, you recognize first that-- none work right now. So you collapse them all to opt for total Chaos and pray you remain intact. Yes, I see Europeans mainly-- wishing themselves into hopes that an economy appears out of nowhere and they still get paid vacation. It has never worked that way. Here in the USA, the salaried crowd gets the spigot broken off the bucket and a bung pounded in it. ZERO drip philosophy. I wouldn't want to be a paper and button only kind of person now.

15%

That'll probably be the voter turnout for the presidential election if the choices we have are Hillary and Trump.
Regardless of what those two say, they are both made from the same cloth. The only good thing I can say about Trump is that he is putting a stake through the heart of the corrupt war mongering Republican party. The unfortunate thing about Hillary is that she is more of a war monger than Ronald Reagan! It's embarrassing to watch her pandering to the black, Jewish, and rich "democrats". Hopefully a stake will be driven through that parties heart also. The sooner the better.
There has been a tremendous rise in US markets recently. Few realize it is due to a combination of rich foreigners trying to protect some of their wealth and US 401k jockeys rotating out of emerging market mutual funds. Eventually the US market will become saturated and then a crash that this country has never witnessed will occur.
Many will be hurt but the survivors will be wiser for a generation or two.
Yes, we in the USA look a little silly with our current two frontrunners for potus, but then, the rest of the world has plenty of silly politics happening also.
The world is going to be very different. Hopefully for the better once we get through the "Silly Age".

Correct.

I also eliminated the 403 mess by upgrading.

The Worst Attack Yet

Last night while posting under an article about Paul Ryan, every post I made was being blocked. This was a physical attempt to censor me. All of the other posts were Tea Party (can't spell, pure hatred and bigotry). This morning 4 out of 10 posts stuck and even those were selective. Here is the kicker... the laptop I used to post from had it's OS deleted and was dysfunctional this morning. I can recover the OS today, but THINK about the background control required to breach my firewall security.

The GOP brought Mitt Romney out of mothballs to condemn Donald Trump, which seems to have helped Trump because no one likes or trusts Romney. Who next? George W. Bush? Maybe the whole Bush Cartel? Maybe Cheney? Meanwhile, an Aide to Hillary has been given immunity about her e-mails and Bill Clinton has apparently spewed something that might be a campaign stopper for Hillary.

A lot of people HATE Donald Trump but they HATE castor oil too. Both appear to help flush out unwanted clogs stuck in vital organs. The image you have to hold in your mind's eye today is of a harried do-badder frantically pulling levers and pushing buttons while the machine around him is hemorrhaging smoke, steam, oil, sparks and noises most associate with death. Paul Ryan has no choice but to deal with the Tea Party he helped create. His job, career and life are tied to the same destiny. One has to try to project forward to after the smash of the Tea and we become free again. So much abuse, so much control, manipulation, crime, corruption and disruption.

Around the whole world, people will need to stand up. Let the 21st Century begin... again... the way it should and would have without extreme financial tyrannical control and manipulation.

A silver lining?

Perhaps there is a silver lining to what appears a dark and confusing political landscape. We've spent many years discussing what should be done to eliminate the harmful effects of a soulless Wall St interests. Perhaps the best way to tackle that issue is to prosecute the political officials that have been complicit in these crimes.
Imagine an investigation that concluded the Clinton administration signed the NAFTA agreement for personal gain. Imagine a sentence that resulted in a long prison term and confiscation of all of that families assets.
Imagine an investigation of Bush/Cheney that determined the invasion of Iraq was for personal gain and each was charged with thousands of counts of premeditated murder. Put them in prison for life, confiscate the families assets, and allow their children to have access to section eight housing and food assistance.
Imagine the current potus being investigated to determine if there was personal gain from the Affordable Health Care Act and the most recent trade agreement. Imagine the "trickle down" effect as the money trail was followed to its source.
And finally, imagine one more illegal war, the invasion of the Caiman Islands and other off shore tax havens for criminal interests. Confiscate the banking records and publicize them along with the home address of those in politics and bankers involved in illegal activity.
The Kardashian's will no longer be on page one. The people won't care about them anymore. I imagine America and Europe would be very different.
Trump is a Jerk. He doesn't care if he's been accused of marital infidelity. He has eliminated the "Lewinsky" effect and the falsetto holier than thou Tea Party battle cry. He went for the jugular when he accused Bush/Cheney of illegally invading Iraq. His beer swilling followers listened.

Imagine..

Many of the happiest people are those who own the least. Are we really happy with our iPhones, our big houses, our fancy cars?
We wait for someone to bring change without ever thinking of changing ourselves.
We are a flash in time, but our impact is forever.
This present moment is what every step, every breath and every death has led to. We are the faces of all who came before us.
And now is our turn. Imagine...

K-Mart's New Idea-- Sell Off Closed Entity Dead Stock Inventory

Yes... it does indeed sound like drunk talk. Millions already do this and don't have to cover the cost of dead air over old shelving in dysfunctional big box locations in towns that once had economies.

Draghi... "listen you band members... you were well-paid and accommodated for to play on our Titanic... keep the tempo even as those cold waves lap on your ankles..."

One has to wonder if they cheer-on grand greedy stupidity in these think tank sessions. Here's one for the psychopaths... you die this time and let the rest of the world suffer through a new economy without your intrusion.

Is it getting obvious? Close the banks, end the Federal Reserve and get RID of Wall Street.

k-Mart

I'm glad you mentioned them.
I stopped in the day before Valentine's Day and it was chaotic. Chaotic because their sales weren't explained to the sales associates. 14ct gold chains were marked down 90%! with an extra 10% if you had a rewards card.
I normally wouldn't buy jewelry from K-Mart but I landed up buying a $1400.00 gold chain for $119.00. I don't know how they arrived at that price. I took it up to a coin/jewelry/pawn shop to make sure it was real. They offered me $96.00 scrap.
I doubt K-Mart will be around next year.

I Love Marketing People Designing Store Pricing

I have some stories... there are reasons why you read on the back of store coupons which brands are excluded from those promotions. The sub-economy forced that. In much the same way that banks abuse and law follows only after abusive gorging occurs, computerized retail was no different.

Gold in big boxes. The graph chart for gold is an arrow pointing down down down until a blip event fairly recently. Consider that jewelry was purchased when gold was high, so a wholesale price tag was not cheap. Assume the 300% mark-up rule. The chain was likely $475 wholesale a year ago. The chain of hands taking it from source to display case was another $475. The Box was supposed to cover remaining costs selling it for the $450 and that included profit. Instead, you paid $119. The entity didn't just lose $356 from the wholesale purchase, it lost it's own internal handling costs-- another $475 at least. I have said often here--- the value of gold is only realized when it sells, not the on-going market pricing, so... the wholesaler did well, K-Mart took a financial beating.

Isolated? Not hardly. Your "score" IS the sub-economy except that the under-radar sellers have developed an entire anti-Big commerce chain. In Europe, it's the mobile sellers who show up at and are afforded space by indigenous commerce because they attract shoppers. This is why I chuckle when we hear that a "Big" wants to offer dead stock. They leave their rigged realm when they do and compete head to head with grass and roots with more street savvy than any degree will ever possess. They become chunks of meat at a Piranha Festival.

I doubt most big boxes will be around next year and all that dead stock won't be controlled by Alibaba, sold by Amazon- either.

Neel Kashkari

"Close the banks"

I am delighted to hear a Federal Reserve official offering in public some of the kinds of thoughts that many of us have been offering for the last few years. This official is Neel Kashkari, the new president of the Minneapolis Fed.
He is making a splash about too big to fail and the need for a deeper and more fundamental reform than Dodd Frank.

" I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy. Now is the right time for Congress to consider going further than Dodd Frank with bold, transformational solutions to solve this problem once and for all.
" I learned in the crisis that determining which firms are systemically important - which are TBTF - depends on economic and financial conditions. In a strong, stable economy, the failure of a given bank might not be systematic. The economy and financial firms and markets might be able to withstand a shock from such a failure without much harm to other institutions or to families and businesses.
But in a weak economy with skittish markets, policymakers will be very worried about such a bank failure.
There is no simple formula that defines what is systematic. I wish there were. It requires judgment from policymakers to assess conditions at the time."

Here I think Kashkari is not really learning the lesson. If it is undefinable ,even in words, and needs "judgment", then perhaps the idea really is empty.

" Breaking up large banks into smaller, less connected, less important entities."

Since "breaking up" has no subject - who is to do this and how? - and no mechanism, I'll give Kashkari the benefit of the doubt that he had something more sophisticated in mind than brute force.

Divestiture

Currently in America-- "Too Big To Fail" is a banned phrase. Congress is now required to say: "Too Big To Remain In Business" and bailing is supposed to be taboo. We do it daily to Big Oil so-- so much for that bandwagon.
Less than 25% of Americans use banks and as for product and service offerings, no bank tops the charts for integrity. If all banks were relegated to operate solely within the boundaries of state lines with an interstate transnational facility managing crossed-borders components, not only would intelligent regulation finally come to banking, but a legitimate cross-balancing too. Banks generated undocumented credit and booked them. Simply, if Glass Steagall were revived, that empty file folder would have shuttered a monster and the moron who authorized it is a Fry Cook by the morning after the audit. Banking is not a priority business, neither is accounting. By making both of these ruses attached to enterprise, we have lost real Capitalism and now favor slave labor.
I'm not going to rank myself for my banking knowledge but I was a superb lender and portfolio manager once upon a time and now I operate enterprises. The course for that steps on a lot of pageantry put on by the banking industry. The world needs credit but not commercial-level credit. Imagine a giant business platform like Google approaching someone for credit. What do they truly offer in tangible security and what is the purpose of the credit request? If Wall Street were run FOR America and not FOR greed, those questions would require answers without holes in the elaboration. You and I would make an intelligent decision to extend our resources based on facts. Google is a virtual entity, it's assets require uninterrupted energy to maintain. It desires funds to create Big Brother. Do we NEED a Big Brother and a job-less environment? No. Google stays small and it's breadth harms few if any at all. Without big banks, modular industry would rise as would zillions of jobs worldwide rooted in innovation-with-integrity. The people doing that work would thrive, while the likes of Jamie Dimon would go to his office only after finishing his lawn-cutting contractual obligations.
When you look at where we are and the vast stagnation in everything except money-grubbing omnipotence born entirely by screwing the masses, you achieve calm knowing that divestiture can and will occur naturally-- we are days, weeks, not really months away from the majority walking away from indenture roles in a dead economy-racket in favor of a suntan or a walk on a beach. We simply don't need to die pushing paper and buttons while stressing over pageantry.

Supernova Effect: The slaves walk away from enormously bloated no-density business platforms that fail instantly thereafter. Instead of wandering aimlessly, skills pursue dreams and aspirations and unlikely cooperatives form. From the rubble comes the real 21st Century. If you grasped this 20 years ago, by now your reconstitution capabilities would trump any form of degree. The future is in the surplus, dead stock and revival of fundamental processes married to helper-technology. What is the lesson worth learning and not repeating? When everyone is employed-- they buy what is made so more can be made and more get paid to make it. No raises for lazy asses, no variances along the masses. Market the best, discount the rest and be sure no "banker" ever scurries in the walls of the nation's infrastructure again. Oh... and we kill all the lawyers for profiting while hundreds of millions cried. Sorry, but there will be no need for administrative degrees ever again. Or at least until; we forget this lesson and doom ourselves to repeat the most unfair corrupt era in history.

The need to call out the "Progressives" is here and now-- show us what we got for your terrorism. We will never need self-proclaimed "talented" with a text problem ever ever ever.

worse than that

The world is rapidly moving towards cash elimination. This will allow government and big business to have complete control of individual bank accounts. Imagine a world where cable/internet providers will deduct hundreds of dollars from an individuals checking account for "equipment costs" when there is a billing dispute.
Electrical and other utilities will do the same. Automatically freezing an account over disconnect/reconnect fees.
It'll a get worse. Much worse. Billing errors will be resolved by calling a toll free number. Unfortunately the person won't be able to speak English. Many will give up and just pay.
There will be no political help since the politicians will be on corporate payrolls. Forget everything that you read about people on both sides of the Atlantic supporting alternative parties. These so called "alternatives" are only a version of "Change You can believe in" scam that worked so well for our current potus.

Is The War on Cash Already won?

The only way that central banks can maintain negative interest rates ad infinitum, is by abolishing cash. As long as cash exists, there is no way of preventing depositors from doing the logical thing: taking their money out of the bank and parking it where the erosive effect of NIRP can't reach it.
So in order to save a financial system that is morally beyond the pale and stopped serving the basic needs of the real economy a long time ago, governments and central banks must do away with the last remaining thing that gives people a small semblance of privacy, anonymity and personal freedom in their increasingly controlled and surveyed lives.
The biggest tragedy of all is that the governments and bank's strongest ally in their War on Cash is the general public itself. As long as people continue to abandon cash, for the sake of a few minor gains in convenience, the war on cash is already won.

close to a win

People have been dumbed down.
Tens of thousands of US parents gloat how they've convinced "dear son" or "dear daughter" to join the military to fight for big corporate interests. They don't realize it of course. Years after Bush lied, thousands died, and Halliburton thrived, we have yet to admit as a nation we were scammed.
Donald Trump has millions of minimum wage followers who have somehow deceived themselves into believing that a blowhard billionaire will actually care about their quality of life.
We've lived with zirp policy non stop and accepted it as normal. Nirp will not be given a second though with the exception of semi well to do retirees that will blindly follow some financial advisor advice to rebalance.
Tens of trillions have been wasted during the past 7 yrs but very few question it.
The S&P tripling, during lethargic growth, since 2009 is normal.
So...if people are deluded into thinking that their children who come back less limbs are heroes when the evidence is clear that the entire military campaign is a sham, then I guess that they can be easily fooled into not questioning anything.

edit: I won't even get into how we as a nation tolerated torture on a scale that has not been seen since Hitler's Germany. This omission makes we in the west complicit, just as the German citizen was complicit during the reign of the Third Reich.

I feel so... wise :)

We tend to deploy vast psychological resource to prevent ourselves from changing: sometimes wisely, sometimes foolishly. For fear of the tempest, we can deprive others of the changes we need to become better people
Dante was right. The inner circle of Hell is a place where nothing changes, where life is frozen into immobility, where no one can change their destiny.

Weeds Growing In Cement Cracks

I live ahead of most and you don't see many contributions right now because I'm in-between existences. Age is catching up to me... the sheer broadness of this move is tiring me. Once I shift and settle, much of our economic diatribe will be splayed and wreaking of havoc. You cannot presume to grow something this big and not be exposed to a simple boy passing along and kicking the substance off your master scam like a root-less weed that pushed up through a break on the concrete. When you stand out-- you are exposed. When you are made of nothing good, you get to be a victim no matter how ominous you appear to be.

We knew there was no Euro Bank capable of lasting solely on stimuli. Greece, Portugal, Spain, Italy and a thousand other nations stripped of capacity by Goldman Sachs credit contracts and no economic stability are all failing. All my blog portals are closed-- a sure sign that my venomous words struck a vein. Most of the retailers that should be dead now look like they are. People simply have no cash and BIG has no ability to make the kind of economy that sustains them. It's kind of like chewing your hand off and wondering why you can't lug a briefcase from meeting to meeting. As salaries fall now, people supporting this initiative will be betrayed no differently than the GOP POTUS candidates conned into running when they never stood a rat's chance of staying on board that sinking ship. Betrayal always comes around with a vengeance.

Our new role is simple... carry on. We started with commonsense, gained wisdom and now possess insight. It will pay well long term forward now.

Weeds

There is something fulfilling about pulling out a weed and knowing that you got all the roots.

Weeds Reconstituted

From that pulled weed--- the flowers ferment so you can enjoy wine, the leaf is a wholesome vitamin-packed salad green, the roots baked and crumbled are a fortifying tea. The trick is to know these well enough to make the most of that nuisance as to completely eliminate it's ability to repeat (history).

Draghi... by the end of the first quarter 2016... this man may no longer be free as his words come back around with a vengeance. The glut of oil in barrels is stopping the artificial from faking movement because there is none. Somebody has to give quarter or the whole dollar collapses. Which cold-hearted old fool will it be? It will be one. Or more.