Economic Outlook for 2017: debt deflation, supply shortages, currency inflation, bank failures, repossession

[ThePythonicCow]

Posted by Paul (here)
My take differs in a subtle way from Brandon's (beware: his track record of accurate forecasts is far better than mine). I am expecting the globalists to construct a world structure out of a multi-lateral political structure and multiple national currencies, all subject to global, albeit partially covert, control. "If you want your national government, you can have it" -- but you have to "play by the rules" (that we dictate, for "your own good.")

• With the Jesuit control of the Catholic Papacy,
• with the ancient entanglement of the globalists with both banking and the Jewish faith,
• with the deeply embedded Jesuit and banking control of multi-national corporations,
• with the Chabad-Lubavitch control of both the US and Russian governments,
• with (I presume) some form of control over China as well,
• with some climax to the "War on Terror" involving dreadful acts of terror or regional destruction in the Middle east, thus justifying global enforcement of "peace keeping" operations there too, and
• with central control through the BIS of multiple national currencies,

the global elite will be secure in their power, as the hidden hands behind a panopoly of political, economic, corporate, religious and monetary institutions.


I do not expect that the globalists need or particularly want our children pledging allegiance to some global UN flag. Rather our children will pledge allegiance to the flags of their various nations, and spend the currencies of those nations, proud in the knowledge that their nations are peace loving, rule obeying, members of the global community, under the auspices of various United Nations and Bank of International Settlement controls.

[TargeT]

I think the daily KOS is a leftist site, so I'm sure these numbers are a bit exaggerated... but still interesting sign of the times....




https://www.dailykos.com/story/2015/...news-stupidity

[ThePythonicCow]

Here's an excellent article on the ways in which economic activity, energy costs, and debt interact, from Gail Tverberg: What has gone wrong with oil prices, debt, and GDP growth?.

Gail "The Actuary" Tverberg has a long standing and well deserved reputation for her acute analyses of humanity's use of energy, it's availability and costs, and the changing impact over time of these factors on human economic activity.

However I was not aware, until reading this latest article of hers, of how perceptive are her insights into and analysis of the role of debt-money in all this.

Debt sows prosperity in the present, at the expense of the future.

In my analogy (not hers) it's like taking steroids in order to bulk up for some athletic event. One might be stronger in the short term, but at the risk of being sicker some years out.

When the debt burden on the economy gets too high (as has happened now, world wide) then things go into reverse. If at the same time (as is also happening now) the cost of the main energy source (how much energy can be extracted and delivered for a given amount of energy spent getting it) starts to rise, this places a further burden on economic activity, alongside the excess debt burden.

Nothing, short of a fundamentally newer and even cheaper energy source that can fuel the bulk of economic activity, can start a new round of prosperity.

Meanwhile, expect a fundamentally deflationary environment. The economy will be less and less able to pay for even ongoing activity, much less for pulling yet more future income into the present with more debt or promises. Austerity, poverty, and "pulling back" will be order of the day.

If a government tries to counter this deflationary trend (less money available) with money printing or with even more debt issuance, then they will get inflation of their currency in the short term, soon leading to high or hyper-inflation and destruction of that currency.

Thus will outbreaks of inflation in one or another national currency punctuate a primarily deflationary trend.

In plain English, people will have less and less money, while the things they need will cost more and more, and be increasingly scare.

So ... you can't find it, or if you can find it, it costs too much, or you can't even afford to buy it at all.

Debt - it's a major part of the ebb and flow of economies.

Energy - another major part of the ebb and flow of economies.

Both global petro energy and global debt at all levels have peaked ... like a roller coaster, the down side goes faster than the trip up.

[ThePythonicCow]

I had read some of Michael Hudson's economic work in past years, but had found his writings a bit difficult to read, and hadn't read anything by him in the last year or so.

Today, thanks to an interview by Yves Smith, Michael Hudson: Economists’ Deadly but Innocuous-Seeming Proclamations (NakedCapitalism.com), which led me to a book that Hudson published a year ago, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy, which in turn led me to a paper that Hudson published back in 2010, From Marx to Goldman Sachs: The Fictions of Fictitious Capital, I am coming to agree with Paul Craig Roberts that Hudson may well be the World’s Best Economist, and one of the few, if not the only one, worthy of the name.

Perhaps it is because my understanding of the role of debt-money in our civilization is improving to the point that I can understand Hudson better now, or perhaps it is because Hudson is learning to become more readable in his old age (he's in his late 70's now), I am now finding his work a bit more readable. He presents the most brilliant, coherent, comprehensive and learned history and analysis of debt-money that I know of.

Give him a try, and see if you find him worth pursuing. The opening pages of his Killing the Host book (readable in the Amazon "Look Inside" preview) contain a nice, and quite readable, biographical sketch, explaining how Michael Hudson came to where he is now, in his studies.

[TargeT]

Posted by Paul (here)
to bulk up for some athletic event. One might be stronger in the short term, but at the risk of being sicker some years out.

Just a side note, even "fairly high" doses of Testosterone/steroids are perfectly safe as long as you manage the end of your cycle well

the only people that have had issues are the ones that go "OMG OVER THE TOPPPPPP" levels.

Posted by Paul (here)
Nothing, short of a fundamentally newer and even cheaper energy source that can fuel the bulk of economic activity, can start a new round of prosperity.

interesting... Germany just had a big step forward in Fusion.... renewable are doing amazing.. there MAY be something to the E-cat (cold fusion)... I wonder if we are being "pump and dumped" to get the last squeeze out of oil before these are released?

[ThePythonicCow]

Posted by TargeT (here)

Posted by Paul (here)
to bulk up for some athletic event. One might be stronger in the short term, but at the risk of being sicker some years out.

Just a side note, even "fairly high" doses of Testosterone/steroids are perfectly safe as long as you manage the end of your cycle well

the only people that have had issues are the ones that go "OMG OVER THE TOPPPPPP" levels.

It's the same with debt.

Debt that is directly tied to real-world production and distribution of real-world goods, and that is self-limiting (lending decreases when the productivity that would support it decreases) is safe enough, so long as it's managed well, meaning it's managed for the improved production and distribution of real-world goods, not for the profit and power of the wealthy elite and their bankster agents.

Unfortunately, the entire world, individual, corporate and government, large and small, far and wide, is at "OMG OVER THE TOPPPPPP" levels of debt.

That which cannot end well ... won't.

[ThePythonicCow]

Posted by TargeT (here)
I wonder if we are being "pump and dumped" to get the last squeeze out of oil before these are released?

Likely so. First I am guessing that "they" (the infamous Bastards in Power) want to crash "us" (human civilization) hard, so that "they" can gain further control over humanity and ownership of the land, the resources, and the means of production, before they unleash the next wave of technological expansion, involving energy, information, and (across the solar system) mining.

[norman]

Posted by Paul (here)

Posted by TargeT (here)
I wonder if we are being "pump and dumped" to get the last squeeze out of oil before these are released?

Likely so. First I am guessing that "they" (the infamous Bastards in Power) want to crash "us" (human civilization) hard, so that "they" can gain further control over humanity and ownership of the land, the resources, and the means of production, before they unleash the next wave of technological expansion, involving energy, information, and (across the solar system) mining.

If I think about it as seen from their point of view, it's obvious that they don't want 7 to 10 billion people playing around with advanced tech toys. In their sequence of events they MUST either kill or control us ( most ) before releasing the good stuff. That's why it's been so long covered up. If we wriggle out of being controlled, they will go for killing us.

[pyrangello]

When the comment is made about repossessing items because the banks want to collect their note, I would submit to you there isn't enough space or buyers out there to repurchase the repos that we could be discussing about. What was stated a few months ago that 60% of the households in the US have less than a $1000 US in the bank. If anything it is just the opposite as when I had a conversation with my banker about repossessions and that they (the bank) don't want to repossess because it cost them so much money to begin with in fees, administrative, ect ect. and then they are stuck with an asset they need to sell. It would frankly be overwhelming period.

I do agree however the world is swamped in debt , credit default swaps, and currency issues. My grandmother told me about when the depression hit. It was a time for everyone to come together to make it thru . And there were those who it didn't impact at all. But then again that was a time when there were no extended credit cards, lines, ect ect. and people were more self reliant, farming, canning food, ect ect.

[Helene West]

Back during the 2008 crash some of us knew it was coming from listening to the usual interviewees that still appear on Greg Hunter et al and we moved our 401ks etc to "safe" categories like the company's Stable Market Fund or money markets, i.e. government short term bills of some sort. But all these interviewees appearing on shows are saying this time the Bond market will collapse as well.
If that is the case I haven't a clue how to protect myself. If you can't put money in short term Bills or a money market, etc. and you are not a savvy finance person, a lay person like myself, what the heck do you do?
Please don't tell me stock up on canned food, that won't help the loss of an entire retirement fund and not all of us live in large spaces to be stocking up on canned goods. A stock market crash I'm prepared for but a bond market crash, I can't even fathom....

[ThePythonicCow]

Posted by pyrangello (here)
When the comment is made about repossessing items because the banks want to collect their note, I would submit to you there isn't enough space or buyers out there to repurchase the repos that we could be discussing about.

Yes, the ordinary stuff that we bought retail off the shelf won't be repossessed, for the reasons you note.

What gets "repossessed" are larger items. Homes have been one item repossessed, not so much for their value to the bank, but (I suspect) to keep the remaining mortgage holders making their monthly payments. The items that get repossessed for their own value are even larger items, such as businesses, infrastructure (ports, utilities, ...), land, resources (water, minerals, oil, gas, ...) and farm production. These are more valuable, and end up more under the control of the creditor (such as China) with the strongest position.

[ThePythonicCow]

Posted by mgray (here)
...

I found your blog post today to be an especially insightful and well written analysis of the Fed interest rate increase that is anticipated in two days: Federal Reserve will move after the greatest transfer of wealth.

Well done - thanks.

[TargeT]

How the individual US citizen was robbed by its government... This is the one thing that kind of excites me about a trump president,, perhaps these will be reversed?

Despite hitting this all-time record for individual income-tax revenues during the first two months of this fiscal year, overall federal tax revenues (in constant 2016 dollars) declined from $424,284,540,000 in October-November 2015 to $421,567,000,000 in October-November 2016. That is a drop of $2,717,540,000.

While individual income tax receipts increased from last year to this year in the October-November period, inflation-adjusted revenues from corporate income taxes, Social Security and other payroll taxes, excise taxes, estate and gift taxes, and customs duties all declined.

In constant 2016 dollars, corporation income tax revenues dropped from $8,085,610,000 in October-November 2015 to $2,920,000,000 in October-November this year.

Social Security and other payroll taxes dropped from $165,746,890,000 in October-November of last year to $164,936,000,000 in October-November this year.

Excise taxes dropped from $13,407,350,000 in October-November of last year to $12,938,000,000 in October-November this year.

Estate and gift taxes dropped from $3,921,440,000 in October-November of last year to $2,875,000,000 in October-November of this year.

Customs duties dropped from $6,447,680,000 in October-November of last year to $5,966,000,000 in October-November of this year.

That means that the record $213,300,000,000 in individual income taxes the federal government collected in October-November of this year was approximately 36 times as much as the $5,966,000,000 in customs duties it collected on foreign imports brought into the United States during the same period.

http://www.cnsnews.com/news/article/...-2-months-fy17

I'm sure they are adjusting based on inflation numbers given to them by the Dept of Treasury.. which are dubious numbers at best.. It's probably much worse.

[Helene West]

wish I understood how the fed rate hikes announced today will impact our money and our accounts

[ThePythonicCow]

Posted by Helene West (here)
wish I understood how the fed rate hikes announced today will impact our money and our accounts

Once the Fed starts raising rates, the likelihood of an economic and stock market decline rises.

There was a dramatic, but short lived, stock market decline a year ago, the last time (and the only other time in the last decade) that the Fed raised rates, in December of 2015.

My stock market forecasting record is dreadful ... but for what it's worth, I am taking today's rise in the Fed rate to be another indication that the "slow burn" (Catherine Austin Fitt's phrase) economic decline that we've been in for the last several years will escalate dramatically, starting soon (a few weeks or months).

[norman]

Back in the days when I believed everything that came out of the mouth of Pastor Lindsey Williams, he said watch for currency wars and a rise in interest rates at the Fed. As soon as that happens, you'll know it's the time.

[Helene West]

Posted by Paul (here)

Posted by Helene West (here)
wish I understood how the fed rate hikes announced today will impact our money and our accounts

Once the Fed starts raising rates, the likelihood of an economic and stock market decline rises.

There was a dramatic, but short lived, stock market decline a year ago, the last time (and the only other time in the last decade) that the Fed raised rates, in December of 2015.

My stock market forecasting record is dreadful ... but for what it's worth, I am taking today's rise in the Fed rate to be another indication that the "slow burn" (Catherine Austin Fitt's phrase) economic decline that we've been in for the last sever al years will escalate dramatically, starting soon (a few weeks or months).

I've felt for some time that clinton 'winning' would be the continuation of Catherine's slow burn and if trump was installed it meant the ruling class decided to accelerate hardship for whatever reason. It will be funny if we start feeling ramifications right around inauguration time...

[TargeT]

Interesting shift....Looks like Japan has been on a steady diet of US Debt since 2011.. I never realized that, doesn't seem like a smart move on Japan's part (to me anyway).

Japan Overtakes China as Largest Holder of U.S. Treasuries
China’s holdings of U.S. Treasuries declined to the lowest in more than six years as the world’s second-largest economy uses its currency reserves to support the yuan. Japan overtook China as America’s top foreign creditor, as its holdings edged down at a slower pace.A monthly Treasury Department report showed China held $1.12 trillion in U.S. government bonds, notes and bills in October, down $41.3 billion from the prior month and the lowest investment since July 2010. The portfolio of Japan decreased for third month, falling by $4.5 billion to $1.13 trillion, according to the data. Collectively, the two nations account for about 37 percent of America’s foreign debt holdings.

China’s foreign reserves, the world’s largest stockpile, declined for the fifth straight month in November to $3.05 trillion -- the lowest since March 2011 -- amid support for the sliding currency. That stockpile has fallen from a record $4 trillion in June 2015.

The report, which also contains data on international capital flows, showed net foreign buying of long-term securities totaling $9.4 billion in October.

International investors sold $63.5 billion in U.S. Treasuries in October, while foreigners purchased a net $4.5 billion of corporate debt, $20.5 billion in equities, and $32.4 billion in agency debt, according to the report.

https://www.bloomberg.com/news/artic...u-s-treasuries

[ThePythonicCow]

Posted by TargeT (here)
Interesting shift....Looks like Japan has been on a steady diet of US Debt since 2011.. I never realized that, doesn't seem like a smart move on Japan's part (to me anyway).

The elite banksters are playing hide-the-sausage with US Treasuries, the primary reserve holding of the current US Dollar reserve monetary system.

Japan is a willing compliant nation in that shell game, and has the immense pension fund savings of its aging population to play with. What Jim Willie calls the BLICS (not BRICS, rather BLICS) nations of Belgium, Luxembourg, Ireland, Cayman Islands, and Switzerland are other key nations holding the bags to accumulate Treasuries that China and other Treasury holders no longer want.

[Cardillac]

for more info on this subject please check out economist Doug Casey's interview; much of what he states echos Paul's sentiments on this (Casey has an incredible track record in correctly predicting economic events)-

http://moneywise411.com/man-who-predicted-trump-oub7/

are we in for a bumpy ride?

please stay well all-

Larry