Economic Devastation

[smooth]

@RealBitcoin I'm pretty sure I understand what you are getting at and I'll just say there are different perspectives on how an economy works. I happen to think that the defaults would be worse without easy money, but I'd also acknowledge that they probably would have happened a long time ago and the problem would be far smaller now. Then again counterfactuals are impossible to validate. Anyway, I don't think it is worthwhile to go back and forth on it, as we both certainly agree that the current situation is a mess.

[sidhujag]

It would be ok if velocity of money rose to saturate all the printed money but it didnt. So most of it didnt do the trick but kicked the can thats it.

If velocity rises it would mean the market accepted the printed money and demand was high enough. We probably would be alot higher gdp if thats the case.

[TPTB_need_war]

The velocity of money rose in emerging markets because that is where the $9 trillion QE ended up. And interest rates dropped a lot over here significantly due to all that money swashing around (and the concomitant perceived reduction in risk as economies improved, which is congruent with Armstrong's point that interest rates are lowest where capital concentrates not only due to balance of supply and demand because also because of economies-of-scale in confidence).

But that has nothing to do with the long-term homeostasis of inexorably lower interest rates, as smooth points out.

[smooth]

A lot of the so called printed money was nothing of the sort. It was recapitalizing of banks. That meant there wasn't really any more money to circulate (banks just used it to meet the existing capital requirements that were being ignored, and earn risk-free interest), but it also means that massive cascading defaults and liquidations were avoided (or more likely just deferred, as you said).

But yes, some of it certainly swirled around making speculative investments all over the place.

[TPTB_need_war]

It was a transfer effect, wherein the concomitant ZIRP sent capital fleeing to find yield in emerging markets. And the prevention of Western defaults providing the confidence to do so.

[tabnloz]

Doesn't QE just cause deflation?

[TPTB_need_war]

Doesn't QE just cause deflation?

No. It caused misallocation and extension of corruption. That can lead to much worse outcomes than simply having productivity expand greater than the money supply. When you fuck up society and cause people to waste the precious years of their life and end up at a dead end. Then some example of outcomes that are likely are totalitarianism, war, and potential collapse of society into chaos.

[OROBTC]

Doesn't QE just cause deflation?

Arguably, declining interest rates cause deflation and will raise all kinds of Hell.  Dr. Antal Fekete is a controversial gold and economic analyst who has written on what happens with interest rates going down (briefly: OLD loans are harder to pay off if rates keep going down -- think about that statement (there always more OLD loans than new ones)) and the gold basis going negative ("backwardation").

Positive interest rates are a good thing.  They are also normal (as TPTB has shown with Martin Armstrong's graphs).

Gold backwardation (sustained, not just a one day or one week expiration phenomenon) will lead to NO ONE selling their physical.  Backwardation means that spot price is higher vs. nearby futures prices.  With backwardation no one will lease their gold out for less than they could get just by sitting on it...


Fekete argues his cases better than I can, it has been a while since I read his work.

[TPTB_need_war]

Stop reading Fekete. I debated him in email 6 or 7 years ago and blew apart all of this logic. I've debated in private many of the significant personalities on the net who are accessible, including Armstrong and Noam Chomsky.

None of these other chumps on the internet are any where near the league of Armstrong in their intellectual and extensive historical data understanding.

Gold backwardation is complete nonsense. I will dig up Armstrong's explanation for you.Here they are:

http://www.armstrongeconomics.com/archives/9858
http://www.armstrongeconomics.com/archives/15131
http://www.armstrongeconomics.com/archives/18165

OROBTC, you are not focusing on the extenuating effects of stomping on the free market. It has nothing to do with whether higher or lower interest rates are preferable. It has everything to do with hijacking what would have been the optimum annealing (fitness) of the free market and then the after effects of "feeding drugs to toddlers" (as a dysphemism or cacophemism example of what happens when you distort what would have been natural). Time (entropy) is irreversible, i.e. people can't get back their innocence and recover the time they lost investing the wrong education which was stimulated by an extension of the Industrial Age past its useful life. Thus effects of Coasian barriers can be visualized as wind turbulence coming off a airfoil (wing) or the build up of effects of a water damn the turbulence of the damn failing (e.g. to an accumulation of silt or failure of the surrounding ecosystem, etc). So the after effects of QE will be increased turbulence.

See the free market is smarter (about fitness) than any one top-down decider, because it has more degrees-of-freedom (i.e. more opportunities to relieve pressure points and find synergies).

[CoinCube]

Doesn't QE just cause deflation?

No. It caused misallocation and extension of corruption. That can lead to much worse outcomes than simply having productivity expand greater than the money supply. When you fuck up society and cause people to waste the precious years of their life and end up at a dead end. Then some example of outcomes that are likely are totalitarianism, war, and potential collapse of society into chaos.

Systemic malinvestment creates a population dependent on continued government intervention for their livelihood. Such a population will demand continued intervention (and redistributive taxation) further corrupting market incentives until the underlying governments themselves become insolvent. While war and potential collapse of society are possibilities I believe it is more likely that the bankrupt nation states will instead be forced to surrender national sovrenty in exchange for continued access to global debt markets.

Below is a chart from zerohedge showing total debt burdens per country.

[TPTB_need_war]

While war and potential collapse of society are possibilities I believe it is more likely that the bankrupt nation states will instead be forced to surrender national sovrentysovereignty in exchange for continued access to global debt markets.

First comes war, then after a decade of suffering and die off of the boomers, then a reset in a one world reserve currency to back debts. This will be like a global Euro experiment, with the same outcome as Greece but on a global scale where weaker nations see their debts grow in value (deflation) thus bankrupting.

This is all written in the Bible. The first stage we are in now. The second stage is where all the money gets concentrated in hill in Israel which is the one world reserve.

[RealBitcoin]

@RealBitcoin I'm pretty sure I understand what you are getting at and I'll just say there are different perspectives on how an economy works. I happen to think that the defaults would be worse without easy money, but I'd also acknowledge that they probably would have happened a long time ago and the problem would be far smaller now. Then again counterfactuals are impossible to validate. Anyway, I don't think it is worthwhile to go back and forth on it, as we both certainly agree that the current situation is a mess.

Once you get on the printing money bandwagon you cannot stop it. It's a ponzi scheme and it either ends in total default or hyperinflation.

[CoinCube]

I saw today that someone is using the name CoinCube to run some sort of Bitcoin investment scheme using the webpage CoinCube.io

I wanted to note for the record that this is not affiliated with me in any way.
 

[TPTB_need_war]

I saw today that someone is using the name CoinCube to run some sort of Bitcoin investment scheme using the webpage CoinCube.io

I wanted to note for the record that this is not affiliated with me in any way.

Their chief developer Eric was formerly with Euro Pac, which afair is Peter Schiff's company. Their about page lists some individuals with PhDs.

[TPTB_need_war]

https://www.bcgperspectives.com/content/articles/lean_manufacturing_globalization_shifting_economics_global_manufacturing/

[tabnloz]

https://www.bcgperspectives.com/content/articles/lean_manufacturing_globalization_shifting_economics_global_manufacturing/

So can we extrapolate anything from this regarding trouble with their sovereign debts? (I notice there is no Japan).

[rpietila]

So can we extrapolate anything from this regarding trouble with their sovereign debts? (I notice there is no Japan).

1984 posts before this one!

The government debt is not, never, intended to be paid back. It is a product of the incest between banksters and politicians, where banksters add zeroes to the ledgers (which did not cost them anything to add), and the politicians get the money to apparently enlarge their power (the real power is with banksters all the time though, politicians only enlist to be the tools in this process).

Banksters never get the money back and they know it (it did not cost them anything so why stress).

Politicians never pay the money back but the debtor relationship makes them want to do what the banksters say (handy!).

Because the state has grown bigger as product with getting the money, there is a continuous pressure to maintain the "credit standard" (just a measure of slavery of your population, because credit standard means the government's ability to maintain their debt, and the only way to maintain it is to tax the people!).

Holding wealth in the system-approved forms (stock, bond, fund, IRA, bank account) is like standing on the edge of a high wall: the risk of falling seems small, but especially it is not in your control (someone may push you), and there is nothing that you get from such activity! Long-term returns are guaranteed to be less than inflation. Complete surveillance. Equally vulnerable to "liquidity crises".

[smooth]

So can we extrapolate anything from this regarding trouble with their sovereign debts? (I notice there is no Japan).

Japan is within "holding steady" (1-4% decline)

I don't know why it isn't included in the group of "flags" but you can see that from the colors on the map.

[CoinCube]

So can we extrapolate anything from this regarding trouble with their sovereign debts? (I notice there is no Japan).

1984 posts before this one!

I saw that too. The thread reads number of replies = 1984 while the last reply asks what can we extrapolate from this.

A little eerie actually.

[TPTB_need_war]

As further circumstantial evidence that the Russian oligarchs are pulling the strings in Russia and are working together with the Western and Chinese oligarchs, what is the actual result of their war games in the Middle East.

Obviously their goal is to destabilize the Middle East and cause the oil to not flow out there any more. Even Trump is advocating destroying the oil fields.

Why? Ostensibly because as always they want an artificial monopoly and to be able to keep the price of oil from plummeting in the face of advancing technology which is driving the price inexorably lower, as I had explained about the inexorable trend of commodities some years ago:

 

You will probably need a week or two of studying the thread slowly.

I will be the first to admit I needed a week to fully absorb the following works of AnonyMint.

The Rise of Knowledge
Understand Everything Fundamentally

Together these are quite simply the most insightful piece of economic theory I have ever read.

If the author is right and I think he is we are all in the midst of a tragedy of epic proportions.  It is sad unstoppable and will devastate the lives of much of humanity.

...

From The Rise of Knowledge, I quote myself:

Since recorded history began, the knowledge production share of the economy is inexorably increasing, which is why the cost (i.e. relative value) of hard resources has inexorably declined over the centuries (see the chart). Iron was a precious metal 323 B.C..

So apparently 2015.75 marks the new phase of the global economy where the debts have reached the Minsky Moment and the powers-that-be are ready to ramp up war to maintain their monopolies and control.

This has happened over and over throughout history and apparently it follows a cyclical period captured by Armstrong's pattern matching computer.

Note this will also destabilize Europe as a side-effect, i.e. the new proxy war is being fought in Europe and the Middle East. They don't dare fight it in the USA, because there are several million gun owners ready to give their life. Military activities in Europe will be as easy as a warm knife through butter.

Note it is ironic that Armstrong is blind to this interpretation because apparently his data and models do not attempt  to correlate the deception of the powers-that-be. His interpretation is that such synergy occurs not by plan or common interest, but because of dumb luck or that the powers-that-be are too stupid to understand how they destroy the global economy. I prefer the interpretation that these masters are much more astute than that, and know damn well what they are doing.