Economic Devastation

[hdbuck]

Why do we have to read some article to respond to this thread? Can't you summarize the article, state your thoughts on it and just provide the link as a source...how many ppl actually have interest in going to another site to read an article just to comment here?

Maybe OP is promoting his site and wants some clicks.

[UnunoctiumTesticles]

Why do we have to read some article to respond to this thread? Can't you summarize the article, state your thoughts on it and just provide the link as a source...how many ppl actually have interest in going to another site to read an article just to comment here?

The attention deficit disorder problem is why it takes a 100 years for sheeple to wakeup, and then they can be fooled again with a new shell game.

If you don't read the linked articles in the OP, then you don't have a clue what the thread is about.

I don't get anything from clicks on my site (I own coolpage.com and am the author). I don't even track clicks any more. That site is basically dead.

[Rassah]

On this one year anniversary post I want to give a plug to zerohedge.
When the comment above was posted I had not heard of zerohedge.
This comment caught my eye I started reading it.

Zerohedge is now probably the only news page I check on a daily basis and I highly recommend it to anyone who was even remotely interested in this thread.  

I used to be a fan of Zerohedge too, until they went "full retard" on the whole Russia/Ukraine thing  

Question #1 Is there any actual solid statistical analysis to show these Kondratieff cycles really exist.

I found this very interesting statistical analysis of Kondratieff waves.
https://escholarship.org/uc/item/9jv108xp#page-1

These authors did a tremendous amount of work on Kondratieff waves or K-waves and world GDP dynamics.
Their analysis supports the existence of a K-wave with a period of 52-53 years with a level of evidence or p value between 0.04 and 0.05.  
With data like this it cannot be argued that this is something totally made up. Advocates of K-waves may be wrong in their assumptions
or analysis or they may be wrong in arguing that any cyclical behavior seen in the past is predictive of the future but there is at least some
data to indicate that K-waves are real.

One thing that immediately jumped out at me is the relatively short time period of the tests versus the large period of time between each wave. How do we know that this is an actual wave that has existed and will continue to exist for centuries, and not just random few points within a short period of time that happened to fit into a graph? After all, if I give you just 3 points on a line, you can fit a perfect sine wave to them, regardless that the points before and after those three could be completely off.

[Morbid]

On this one year anniversary post I want to give a plug to zerohedge.
When the comment above was posted I had not heard of zerohedge.
This comment caught my eye I started reading it.

Zerohedge is now probably the only news page I check on a daily basis and I highly recommend it to anyone who was even remotely interested in this thread.  

I used to be a fan of Zerohedge too, until they went "full retard" on the whole Russia/Ukraine thing  

 zero hedge is one of the few sites out there with truth presented in most exposive form. with quite intelligent readers you can always be amused by sharp comments and unique kind of humor shared by very narrow group of people. those whose third eye is wide open can clearly understand the narrative.
see, as far as i know you are ukrainian living in american continent. most ukrainians that moved abroad after ww2 are the ukrainian national army (UPA) types who were suppressed by ussr even way after the war for all the war crimes they have commited (you might as well disagree with that but thats just your 'truth' - there is plenty of evidences out there to prove my statment). so when it comes to harvesting information about your country you have to rely on ukrainian msm to construct opinion. you dont live there and cant possibly see the whole picture even if your friends in kiev are convinced that ukraine is a sovereighn state right now. ether way you are unable to be a subject of this matter as it contradicts with your understanding of events.
there is a saying: пpaвдa глaзa peжeт - truth irritating eyes

[Rassah]

On this one year anniversary post I want to give a plug to zerohedge.
When the comment above was posted I had not heard of zerohedge.
This comment caught my eye I started reading it.

Zerohedge is now probably the only news page I check on a daily basis and I highly recommend it to anyone who was even remotely interested in this thread.  

I used to be a fan of Zerohedge too, until they went "full retard" on the whole Russia/Ukraine thing  

 zero hedge is one of the few sites out there with truth presented in most exposive form. with quite intelligent readers you can always be amused by sharp comments and unique kind of humor shared by very narrow group of people. those whose third eye is wide open can clearly understand the narrative.
see, as far as i know you are ukrainian living in american continent. most ukrainians that moved abroad after ww2 are the ukrainian national army (UPA) types who were suppressed by ussr even way after the war for all the war crimes they have commited (you might as well disagree with that but thats just your 'truth' - there is plenty of evidences out there to prove my statment). so when it comes to harvesting information about your country you have to rely on ukrainian msm to construct opinion. you dont live there and cant possibly see the whole picture even if your friends in kiev are convinced that ukraine is a sovereighn state right now. ether way you are unable to be a subject of this matter as it contradicts with your understanding of events.
there is a saying: пpaвдa глaзa peжeт - truth irritating eyes

Uh... what? No, I just meant that Zerohedge is typically antigovernment and nonconformist when it comes to news reports, rightfully pointing out that the government controlled media typically lies and that there is always more to the story, but in this case the media was reporting about an actual dictatorial warmongering power with actual control of the media, and Zerohedge went full retard when it again decided to be contrary to media reports, and starting to support those dictatorial warmongering power claims (or rather propaganda). It has actually been somewhat depressing seeing so many libertarians and anarchists assume that since the media lies, it is obviously lying about the Ukraine/Russia situation too, so obviously they should support Russia. It's like watching the EFF come out in full support of the NSA.

[ne0futur]

thanks for all the info you have shared with us was interesting to read

[Morbid]

On this one year anniversary post I want to give a plug to zerohedge.
When the comment above was posted I had not heard of zerohedge.
This comment caught my eye I started reading it.

Zerohedge is now probably the only news page I check on a daily basis and I highly recommend it to anyone who was even remotely interested in this thread.  

I used to be a fan of Zerohedge too, until they went "full retard" on the whole Russia/Ukraine thing  

 zero hedge is one of the few sites out there with truth presented in most exposive form. with quite intelligent readers you can always be amused by sharp comments and unique kind of humor shared by very narrow group of people. those whose third eye is wide open can clearly understand the narrative.
see, as far as i know you are ukrainian living in american continent. most ukrainians that moved abroad after ww2 are the ukrainian national army (UPA) types who were suppressed by ussr even way after the war for all the war crimes they have commited (you might as well disagree with that but thats just your 'truth' - there is plenty of evidences out there to prove my statment). so when it comes to harvesting information about your country you have to rely on ukrainian msm to construct opinion. you dont live there and cant possibly see the whole picture even if your friends in kiev are convinced that ukraine is a sovereighn state right now. ether way you are unable to be a subject of this matter as it contradicts with your understanding of events.
there is a saying: пpaвдa глaзa peжeт - truth irritating eyes

Uh... what? No, I just meant that Zerohedge is typically antigovernment and nonconformist when it comes to news reports, rightfully pointing out that the government controlled media typically lies and that there is always more to the story, but in this case the media was reporting about an actual dictatorial warmongering power with actual control of the media, and Zerohedge went full retard when it again decided to be contrary to media reports, and starting to support those dictatorial warmongering power claims (or rather propaganda). It has actually been somewhat depressing seeing so many libertarians and anarchists assume that since the media lies, it is obviously lying about the Ukraine/Russia situation too, so obviously they should support Russia. It's like watching the EFF come out in full support of the NSA.

have it ever come across to you that it might be resonating events rather correctly when covering russia/ukraine situation? ohh and you clearly avoided the last part of my previous statment.

[CoinCube]

andrey fursov, a prominent current russian analyst, historian and academic claims that kondratieff wave cycles are generally correct but total defeat in cold war and pillage of soviet block prolonged the capitalist system until now since its been at its end as far back as 80s-90s. so we are in late autumn now but the winter is far overdue.

Another proponent of Kondratieff wave cycles is Ian Gordon at longwavegroup.com. Below is a chart of his overlaying Kondratieff waves over some economic metrics including the S&P 500.



Overlaying the traditional Kondratieff wave over modern times predicts a crash into winter or economic slump starting in 2000 and bottoming out in 2020. Interesting enough this matches up to with the burst of the stock market bubble of 2000.
However, in 2000 we had the FED with the ability to dramatically and artificially alter the economy via  11 interest rate cuts and a $200 billion injection into the economy through open-market operations. This is felt by many to be responsible for the subsequent housing bubble. When the housing bubble burst the FED again rapidly lowered interest rates. However for the first time in history they essentially hit zero and ran out of room.



At this point the FED transitioned over to quantitative easing as an alternative way to artificially stimulate the economy. Note the abrupt increase in Monetary base that occurred as a result.




If Kondratieff wave analysis is correct then we are perhaps 14 years post due for a major downturn. In this scenario the FED has artificially delayed/postponed this downturn first via artificially low interest rates leading to the housing boom and more recently doubled down with QE leading to our current artificial stock market boom.

It seems probable that each intervention causes further disruption malinvestment and damage to the underlying economy.

[contagion]

Overlaying the traditional Kondratieff wave over modern times predicts a crash into winter or economic slump starting in 2000 and bottoming out in 2020. Interesting enough this matches up to with the burst of the stock market bubble of 2000.
However, in 2000 we had the FED with the ability to dramatically and artificially...

Look at it internationally then you will see that Asia will bottom in 2020 and they will be the new financial center of the world by 2032.

Armstrong has 32,000 variables in his computer model. It tracks global metrics. You can't just cherry pick and expect to have a model.

[CoinCube]

But if the western central banks continue to QE their sovereign debts and the direct or indirect recapitalization of the banks, why wouldn't the game go on indefinitely?

Imagine someone handed you a $trillion. How would you invest it such that you earn a return and your capital would be safely returned?

How efficiently does the money handed to large entities distribute into the economy? The metrics available are:

• velocity of money; that is how fast money is changing hands in the economy
• marginal utility of debt; that is the ratio of increase in real GDP per increase in debt

The above illustrates unarguably that the only way for central banks to create inflation would be to distribute money directly into the hands of spenders. The government is distributing money to constituents in the form of social welfare, but this does not increase exponentially. For example the COLA adjustments for benefits are typically below the actual rate of inflation.

ZIRP caused interest rates to decline globally because bond investors sought the arbitrage of higher yields in the developing world. This caused a bubble in the developing markets, but there is now an excess of capital in the developing markets evident by recent corporate bond offerings are denominated in local currencies to mitigate betting short against the dollar. That is excess in terms of what their economic structures can currently absorb at a given rate.

Excessive debt via ZIRP monetization collapses the economy because it redistributes capital from savers (that includes the most productive) to capital misallocation as illustrated by the charts of the metrics above. Eventually the marginal utility goes negative, thus the more QE the faster the economy implodes. Either the government dissolves itself by distributing hyperinflation directly to the constituents, or to sustain itself the government is forced to raise taxes and confiscate wealth as its tax base withers due to the aforementioned destruction of the economy.

I think we would agree that government will find this an easy choice and choose to raise taxes and confiscate wealth every time.

Overlaying the traditional Kondratieff wave over modern times predicts a crash into winter or economic slump starting in 2000 and bottoming out in 2020. Interesting enough this matches up to with the burst of the stock market bubble of 2000.
However, in 2000 we had the FED with the ability to dramatically and artificially...

Look at it internationally then you will see that Asia will bottom in 2020 and they will be the new financial center of the world by 2032.

Armstrong has 32,000 variables in his computer model. It tracks global metrics. You can't just cherry pick and expect to have a model.

But Armstrong does not disclose his methods. It is easy to claim you have a superior computer model that tracks 32,000 variables. It is far harder to actually develop such a thing. Armstrong is also selling a product (investment advice) so there is a potential financial motive for convincing others he has something that does not necessarily exist.

Given his refusal to share his methodology the only way to judge his claims is via Bayesian inference ie recurrently updating the probability he is what he claims to be by the accuracy of his predictions. Confirmed independent records of prior predictions would be helpful here or lacking that a concise report of future predictions.

[contagion]

But Armstrong does not disclose his methods. It is easy to claim you have a superior computer model that tracks 32,000 variables. It is far harder to actually develop such a thing. Armstrong is also selling a product (investment advice) so there is a potential financial motive for convincing others he has something that does not necessarily exist.

Given his refusal to share his methodology the only way to judge his claims is via Bayesian inference ie recurrently updating the probability he is what he claims to be by the accuracy of his predictions. Confirmed independent records of prior predictions would be helpful here or lacking that a concise report of future predictions.

I agree of course; and thus I am operating to some degree on faith supported by the Bayesian intersection of several datums noted below. He has a blog post within this year where he said they will try to open source it before he dies.

How many snake oil salesmen are selling timeshares to institutions for $5 to $100 million annually.

Here is the backdated to 1929 fit of the Global Watch aspect of his model.

Looks like he deserves to recoup his investment before open sourcing it, and to use those resources to do what he feels needs to be done to help the world. He has stated he has enough $ and would retire, except he owes this to his family and the world.

He goes into more unspecifics on his Artificial Intelligence at his Princeton Economics site.

I agree with Rassah's point that in isolation you can fit points such that numerous curves fit and you can cherry pick events ex post facto to fit to curve maxima and minima. However, what I've noted is specificity of predictions before the fact that have been correct, both those corroborated by others (even major publications such as Barron's) since 1980s and my own experience following him more closely since 2012.

[Rassah]

have it ever come across to you that it might be resonating events rather correctly when covering russia/ukraine situation? ohh and you clearly avoided the last part of my previous statment.

It has. But the events Zerohedge is "resonating" are pretty much a rehash or the exact same thing Russia is reporting. Combine the fact that Russia has had almost a century of practicing lying in the media (and has been caught lying about things in just this last year), including about their military involvement in various places over the last century, their massive propaganda campaigns during and after soviet times, and what I and others there actually see happening in and around Ukraine, including lots of photographic evidence, and I am inclined to believe almost the opposite of whatever reports come out of Russia. Which, coincidentally, matches the reports coming out of the rest of the world's media. Everyone knows that when reading Russian news, you always have to read between the lines.

I ignored the last part of your statement because it was irrelevant?

[Morbid]

Everyone knows that when reading Russian news, you always have to read between the lines.

and in ukrainian news you shouldnt? so you just take it as a gospel.. well in that case everybody 'knows' that ukrainian news agencies are blatantly lying and faking their reports to push through anti russian retoric. there are even youtube channels that daily proove accounts of lies on internet and tv. cant you see that they are under control of external enemy force? by the way some russian meadia outlets are also under control of the same entity, and they also lie but just for ukrainian news agencies to pick up as 'putin's propoganda' and evidence of russia being totalitarian. why dont you visit russia and see for yourself that its absolutely not what its being presented as. dont be victim of hate campaign. you have to accept that its ukrainians killing ukrainians there! but after whats been done to their lifes and what have taken place they refuse to associate themselves with ukraine. arrogant attitude like yours forced them to break off and claim independance. with ukrainian army bombing them even harder now they are reassured that they made a right choice. country is not a prison - once uniting strings are lost you cant keep people in it against their will.

[Rassah]

Everyone knows that when reading Russian news, you always have to read between the lines.

and in ukrainian news you shouldnt?

You should but not to the same extent. And you shouldn't be reading just one source of news, either. Ukrainian news matches news from USA, Poland, Germany, Turkey, Bulgaria, Latvia, and others. Russian news only matches Russian.

why dont you visit russia and see for yourself that its absolutely not what its being presented as.

Because my family is blacklisted since USSR days and I don't want to risk being turned away at the airport (most people who renounced their citizenship and emigrated in the 80's got on a list, and us more so because my grandfather, who left with us, was head of USSR's polytechnical institute, which is USSR's equivalent of DARPA). Because I'm gay and they can fine, detain, assault, or deport me. Because I am involved with bitcoin, and that is soon to be a criminal offense. And mostly because I don't need to. I talk to plenty of people in Russia, since I have friends living there, and my parents have many friends there too. We hear plenty about their life from them.

you have to accept that its ukrainians killing ukrainians there!

That's really difficult to accept after all the photos of Russian military hardware, Russian troops posing for pictures, and Russia admitting that they sent Russian military to "help" Ukrainian rebels. Especially since this exact same tactic was used by Russia in Georgia, Afghanistan, Cuba, and tons of other places they invaded over the past century.

country is not a prison - once uniting strings are lost you cant keep people in it against their will.

This I agree with. But not when a minority makes that choice for a majority. And especially when that minority originally consisted of foreign agitators. How would you feel if your neighbors wanted to join North Korea, and started a war on your territory, destroying your property, and tried to force you to agree with them? That's not how you break off from a country. Besides, it didn't start with a few people wanting to break away. It started with Russia scaring the fuck out of everyone in eastern Ukraine with their lies about Ukrainian government being completely taken over by Nazis, and that a Nazi is guaranteed to win the presidency. So the entire premise that the war was started on was Russian lie, and was wrong.

[CoinCube]

If Kondratieff wave analysis is correct then we are perhaps 14 years post due for a major downturn. In this scenario the FED has artificially delayed/postponed this downturn first via artificially low interest rates leading to the housing boom and more recently doubled down with QE leading to our current artificial stock market boom.

But if the western central banks continue to QE their sovereign debts and the direct or indirect recapitalization of the banks, why wouldn't the game go on indefinitely?
[snip]

More of the same coming soon. Up next is probably a raid on government insured FDIC bank deposits.
There was a massive push this week to ram through the cromnibus spending bill. This bill effectively scraps the most significant portions of the Dodd-Frank requirements.

Dodd-Frank may be a pale imitation of Glass-Steagall but it did prohibit prevent banks from securing their most risky derivative plays with taxpayer insured FDIC funds. The law was passed in 2008, however 6+ years later this prohibition has not been enforced. As of December 1, 2014, a total of 104 Dodd-Frank rule making requirement deadlines have passed without coming into effect (37.1% of the total). This stall tactic bought banks enough time lobby bribe congress to revoke these requirements altogether. One can only imaging the favors promised/given to get this done.

Targeting FDIC funds has been the major play for a few years now. Back in 2011 Bank of America successfully dumped 75 trillion of derivative exposure on the U.S.
http://seekingalpha.com/article/301260-bank-of-america-dumps-75-trillion-in-derivatives-on-u-s-taxpayers-with-federal-approval
 
This latest round of shifting risk to the taxpayer was just more public and obvious. Perhaps an indication that that time is short? After all these derivatives have to be cleanly foisted onto the taxpayer before the next major downturn.  

[contagion]

If Kondratieff wave analysis is correct then we are perhaps 14 years post due for a major downturn. In this scenario the FED has artificially delayed/postponed this downturn first via artificially low interest rates leading to the housing boom and more recently doubled down with QE leading to our current artificial stock market boom.

But if the western central banks continue to QE their sovereign debts and the direct or indirect recapitalization of the banks, why wouldn't the game go on indefinitely?
[snip]

More of the same coming soon. Up next is probably a raid on government insured FDIC bank deposits...

Yeah and realize the system is a cancer eating itself. Nobody is in control. The corruption will expropriate (tax, confiscate, etc) and squander all private wealth that can't be hidden or secured out-of-reach of the system.

This is highly deflationary. QE was a transfer of wealth from producers to the corrupt. It wasn't inflationary. Thus velocity and marginal utility have collapsed.

We will soon enter a radically accelerated phase with much more extreme volatility, because the disequilibrium has been building since 2008.

The stock market boom is due to capital having no other place to go. Emerging markets have topped. Sovereign bonds are paying negative rates and can't go much lower (the marginal utility has gone negative on QE and additional debt), thus capital appreciation for sovereign bond investment is a poor risk versus reward. Europe and Japan are in big trouble. Municipal bonds are a huge default risk, since they can't print money to buy their debt. The USA stock market and corporate bonds are the only options available.

[CoinCube]

Cross posting from the Politics & Society forum as it is relevant to the topic at hand

The end times are upon us. I find myself in agreement with not just Senator Elizabeth Warren (D-MA), but House Minority Leader Nancy Pelosi (D-CA).
[snip]

Yep the Blue team has it right this time. Cronmibus is a massive taxpayer funded handout to the big banks we can only guess how many trillions dollars this windfall will net citibank and company.

Liberals (when they are not bought and paid for) can be counted on to oppose redistribution from middle class taxpayers to the banking elite. When the Blue team come to power, however, they are even more destructive as they tax the productive economy to death blindly redistributing in the other direction.

Both the Red and Blue team stand for the same thing, redistributing wealth from those that produce to those that do not. The only conflict between them is which parasitic aspect of society gets the spoils.

[STT]

it did prohibit prevent banks from securing their most risky derivative plays with taxpayer insured FDIC funds.

The real failure is allowing FDIC insurance when consumers would naturally police bank activities to favour the most conservative institutions.  You can tell me banks would just deceive and misled perhaps but this is already covered by various laws on false accounting.   Over governance is generally a negative to business and does not protect people as we see excessive risk continues to be within banking anyway

[MemoryShock]

it did prohibit prevent banks from securing their most risky derivative plays with taxpayer insured FDIC funds.

The real failure is allowing FDIC insurance when consumers would naturally police bank activities to favour the most conservative institutions.  You can tell me banks would just deceive and misled perhaps but this is already covered by various laws on false accounting.   Over governance is generally a negative to business and does not protect people as we see excessive risk continues to be within banking anyway

So when a large majority of the people are more inclined to believe in God and pursue faux biblical explanations rather than delve into economic and scientific reasoning we should expect that consumers would naturally police banks?  Especially when those banks spend ~$50 million dollars a year lobbying for political favor so that they can pass legislation under the radar and through direct (albeit muted) threat of government shutdown?

I am wondering where this confidence in the consumer comes from...it's not like there is a reason why Citizens United was passed and allows an unprecedented amount of money to be spent on misleading advertisements for politicians who want to look family friendly but in fact are very much bought and paid for.  

I would argue that ideology is interfering with a relevant sociological objectivity...

[CoinCube]

FDIC arose from public demands for protection due to bank runs that destroyed life savings and cratered the economy. These bank runs were a direct consequence of fractional reserve lending. FDIC was simply the wrong solution to the problem.

The 1930s was probably the last chance to avert a major economic collapse that is now probably unstoppable. Had we as a nation instituted the Chicago plan our economic situation today would be very different.

The Chicago plan was a collection of banking reforms suggested by University of Chicago economists in the wake of the Great Depression. A six-page memorandum on banking reform was given limited and confidential distribution to about 40 individuals on March 16, 1933. The plan was supported by such notable economists as Frank H. Knight, Lloyd W. Mints, Henry Schultz, Henry C. Simons, Garfield V. Cox, Aaron Director, Paul H. Douglas, and Albert G. Hart.
 
These memoranda generated much interest and discussion among lawmakers but the suggested reforms, such as the abolition of the fractional reserve system and imposition of 100% reserves on demand deposits, were set aside and replaced by watered down alternative measures. The Banking Act of 1935 institutionalized Federal deposit insurance and the separation of commercial and investment banking. It successfully restored the public's confidence in the banking system and ended discussion of banking reform.[1]

Of course even if the Chicago plan been implemented vested interests would likely have overturned it eventually. Sometimes people and societies have to learn lessons the hard way.