Money Flow Trading Method along with Risk Management

Good Morning

loveandpeace

There is only one way that respect can be shown. Words are words are words.

A honest days dollar for a honest days work.

Send me an E Transfer of $250.00 Canadian funds to [email protected]

Thank You


Benjamin

From a Thread called Knowledge Is Power
Copy and Paste


We welcome constructive criticism and well founded discussion. Inflammatory, rude, repetitive, offensive, off-topic or otherwise disruptive messages designed intentionally to annoy, stimulate or antagonize the existing members or alter the flow of discussion are NOT welcome and will be reported to the moderator team.

I will also start a sister-thread as a digest and to store all the cream from this thread and also as storage for all indicators posted for ease of reference.

10 Trading Rules for Successful Traders
1. Limit your losses.
2. Let your profits run.
3. Keep position sizes within reason.
4. Know your risk-reward ration.
5. Be adequately capitalised.
6. Dont fight the trend.
7. Never add to losing positions. Dont average out.
8. Know market expectations.
9. Learn from your mistakes keep a trading journal.
10. Have a maximum loss or retracement in profits.


For beginners, please read this free Forex education material and learn to be a successful trader: www.BabyPips.com

And also you are advised to read these excellent books:
1. Day Trading the Currency Market: Technical and Fundamental Strategies To Profit from Market Swings (Wiley Trading) (Hardcover) - by Kathy Lien

2. Technical Analysis of the Currency Market: Classic Techniques for Profiting from Market Swings and Trader Sentiment (Wiley Trading) (Hardcover) By Boris Schlossberg

3.High Probability Trading Setups for the Currency Market By Boris Schlossberg, Kathy Lien


You can preview the 1st and 3rd books here:
http://books.google.com.my/books?id=...sec=frontcover

http://books.google.com.my/books?id=...+lien%22&psp=1

The Essence of the 3rd book is here:
1. Never let a winner turn into a loser
2. Logic wins, impulse kills
3. Never risk more than 2% per trade
4. Trigger fundamentally, enter and exit technically
5. Always pair strong with weak
6. Being right but being early simply mean you are wrong
7. Know the difference between scaling in and adding to a loser
8. What is mathematically optimal is psychologically impossible
9. Risk can be and is predetermined but reward is unpredictable
10. No excuses, ever

BEWARE:
Why Currency Trading Is Not For Everyone?
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for everyone. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. Remember, you could sustain a loss of some or all of your initial investment, which means that you should not invest money that you cannot afford to lose. If you have any doubts, it is advisable to seek advice from an independent financial advisor.

RISK WARNING: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your monetary objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your deposited funds and therefore you should not speculate with capital that you cannot afford to lose. You may be liable for losses that exceed the amount of margin that you post. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent advisor if you have any doubts. Past returns are not indicative of future results.

http://icecapassetmanagement.com/glo...eading-needle/


June 2019 IceCap Global Outlook – “Threading the Needle”


For many, the investment world can be a confusing place. Banks, mutual finds, stocks, bonds, currencies, insurance, inflation, taxes, economies – it’s no wonder the majority have glossed eyes.

And sitting on top of this confusion pie are central banks.

Each country has its own central bank which is responsible for setting overnight interest rates and the amount of money in that country’s financial system.

Yet, there is one central bank that is the most important, sits on top of the world, and all of its actions impact not only their local country, but also every other country in the world.

This central bank is the US Federal Reserve.

In this latest IceCap Global Outlook we share how actions by the US Federal Reserve are always reactive to a crisis which, ironically, it helped create in the first place.

Today’s central banks are once again, trying to thread the financial needle, and rescue us from the crisis that was born from the depths of the 2008-09 Great Financial Crisis.

The crisis is happening, yet there is good news – the crisis is creating opportunities to not only preserve your hard earned savings, but to capitalize too.
Please continue reading.

PDF 2019.06 IceCap Global Outlook

World News

https://finviz.com/news.ashx?v=2

World Futures

https://finviz.com/futures.ashx

Forex Prices

https://finviz.com/forex.ashx

Cryptocurrency Prices

https://finviz.com/crypto.ashx

Bond & Notes Charts

https://finviz.com/futures_charts.ashx?t=BONDS&p=d1

Charts 10 Year Notes

https://finviz.com/futures_charts.ashx?t=ZN&p=d1

Charts 5 Year Notes

https://finviz.com/futures_charts.ashx?t=ZF&p=d1

Charts GOLD

https://finviz.com/futures_charts.ashx?t=GC&p=m5

Charts DJIA DOW 30

https://finviz.com/futures_charts.ashx?t=YM&p=m5

Charts 2 Year Notes

https://finviz.com/futures_charts.ashx?t=ZT&p=d1

Charts USD

https://finviz.com/futures_charts.ashx?t=DX&p=m5

Charts Euro EUR/USD

https://finviz.com/forex_charts.ashx?t=EURUSD&tf=m5

Charts British Pound GBP/USD

https://finviz.com/forex_charts.ashx?t=GBPUSD&tf=m5

Charts YEN USD/JPY

https://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5


Benjamin

https://internationalman.com/article...Ppock.facebook


Why not? It’s not yours.

Most people assume that, if they have money on deposit in a bank, they own that money. That’s not necessarily the case. Decades ago, some of the world’s most powerful countries began to pass legislation that, if you deposit money in the bank, it becomes the property of the bank. In those countries, if you open a bank account and make a deposit, you sign off legal title to that cash. It becomes an asset of the bank.

The reason they got away with this obvious “theft through legislation” was that the banks were required to henceforth regard your deposit as a debt in your favour.

So, technically, you were still owed the money as a bank liability, even though it was no longer truly yours.

On the surface, the change of ownership may seem to be a moot point, as, surely any bank would allow you to withdraw whatever you have deposited, or there would be a run on the bank and the bank would fail.

Well, that’s a definite “maybe.”

What if there were a financial crisis, such as in Greece, where an anticipated run on the banks was circumvented by freezing all accounts, then partially reopening them? If that were the case, the bank in question could allow small amounts of cash to be withdrawn by its depositors each week or each month until the crisis had been safely averted.

Surely, that would be a good thing to do, yes?

Well, there might be a problem there. It’s just possible that the bank would decide that it was enjoying the revised relationship, that it would like to continue to take in deposits the normal way but only pay out “allowances” to depositors as it saw fit.

And that’s just what’s happened. The end of the Greek banking crisis has never been acknowledged, and depositors have to accept whatever the banks choose to allow them to withdraw, long after the crisis ended.

If other banks, throughout the world, were to do the same as Greece, depositors would, in effect, be on an “allowance” from the bank.

But if that were the only concern, depositors could feel assured that, as their deposits were a liability on the bank’s books, the debt to them would remain, albeit without the depositor having free access to the deposit.

Well, unfortunately, the US came up with an idea that further lessened the chances of bank deposits being redeemed at some point.

A law was passed in 2010 that allowed any bank, if it declared a bank emergency, to confiscate deposits in such a way that the liability could be diminished or eliminated by the bank unilaterally. In effect: a license to steal.

This law was then tested. A trial balloon went up in Cyprus, where deposits were confiscated as a result of a declared but unannounced bank emergency. Since Cyprus is merely a small island nation, most people outside the country paid the event little heed, but it established the principle that it was all right to confiscate deposits if the bank felt an emergency condition existed. (And remember, the bank wasn’t required to announce the emergency prior to confiscation.)

Since the trial balloon was so successful, Canada also passed confiscation legislation (in 2013), as did the EU (in 2014).

Then, in 2017, Greece began seizing bank accounts due to alleged unpaid taxes. It’s important to bear in mind that, since these confiscations were taken directly from bank accounts, the seizures were not a part of any agreement of level of debt between the taxpayer and the government, but were determined by the government, unilaterally, then taken.

In reviewing all the above, it would be reasonable if the reader were to conclude that, if he does his banking in the EU, US, or Canada, his government and his bank have him in a financial straightjacket that he cannot escape. He is, in effect, a turkey that’s trussed up and ready for slaughter, and in terms of a pending economic crisis, “Thanksgiving” is rapidly approaching.

It would seem clear, then, that any deposits that are in any bank within these jurisdictions should be regarded as sacrificial. It may be convenient to have some expense money in one of these banks, but any “wealth” should be removed to a safer place as soon as possible.

But where would it be moved to? Are there safer jurisdictions? Well, yes. What you’d want to do would be to seek out jurisdictions whose government revenue is based on foreign depositors using their systems, more than locals.

This would indicate the many small countries that depend primarily on foreign deposits – whose political class would lose their careers if they were to alienate foreign investors.

There are quite a few to consider using: Singapore, the Channel Islands, the British Virgin Islands, Hong Kong, the Cayman Islands, Switzerland, etc.

Next you may want to do some research on what form of legal system is used in each of those countries. In the Western Hemisphere, there are two predominant systems: Civil Law, as is employed in most Spanish countries, and English Common Law, which is found in most all non-Spanish countries.

Under Civil Law, not everyone has the same rights within the country. Those who are not citizens tend to take a lesser position than citizens, under the law. This provides a layer of opportunity for fraud by local banks with regard to deposits of non-nationals.

In Mexico, such fraud has become a lucrative business. In 2018 alone, there were an astonishing 7.3 million complaints of fraud, amounting to about $1 billion. And under Civil Law, such fraud can be difficult for the foreigner to address.


So, does this mean that you’re toast, no matter where you move your wealth for safekeeping?

No, quite the contrary. What it means is that you select those countries that do not come under the wings of the US, EU, or Canada. Then focus on those remaining jurisdictions that operate under English Common Law (or a similar-based system)
.
Then, narrow your study to those smaller jurisdictions whose economy depends upon serving foreign investors well.


Most countries have no confiscation laws, and for the US, EU, or Canada to confiscate your deposits in other countries, they’d need to adhere to the laws of those countries. In your home country, you could suffer confiscation without warning. But in a country without confiscatory laws, any attempt would need to pass through that country’s court system, which would be, at a minimum, ponderous and time consuming for your home country to pursue. And if the economic future of the country you’d chosen depended on keeping overseas investors happy, the political will would exist to make any confiscation by your home country difficult, if not impossible.

Above all, if your wealth is no longer yours in your home jurisdiction, you can benefit by expatriating it to one or more carefully chosen non-confiscatory jurisdictions.
Editor’s Note: The US, Canada and the EU have already passed laws that open the door to future theft by banks. In an economic crisis, deposits in these jurisdictions could get the Cyprus treatment—in which a bank emergency is used as justification for confiscation.

The good news is there are far more favorable banking options. That's why The New York Times best-selling author Doug Casey and his team have created a comprehensive offshore banking guide outlining our favorite banks and offshore banking jurisdictions. It includes crucial information on the limited jurisdictions that still accept American clients and allow them to open accounts remotely with small minimums. Click here to download the free PDF now

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Submitted by Michael Every of Rabobank

Gresham's Law, Say's Law, and Godwin's Law
It’s Fed day and I honestly can’t bring myself to repeat what was already said on Monday and Tuesday other than “Yes, the Fed will cut but it won’t be enough”.

Instead, let us take a moment to contemplate several laws that seem pertinent to our current situation.

First, Gresham’s Law: that bad money drives out good. That used to be the measure of how far a government or a central bank could debase money before everyone hoarded the good stuff and circulated only less valuable coinage. Yet as we contemplate everyone slashing rates again, the opposite appears to be true: everyone is piling into bad and/or directly money-losing assets as benchmark rates decline! One could make the argument for gold, of course, given there is a clear desire to see currencies go lower on the part of central banks, even if they can’t openly say so. (They now leave that to the politicians, of course.) But USD is still, for now, a modern version.

Second, Say’s Law: supply creates its own demand. This is the “Just build and they will come!” hope as we re-embark on monetary policy previously reserved for extreme crisis: Of course, first you have to get them to build, not speculate on money-losing assets. And even then Say’s Law doesn’t hold true – you can and do get over-supply of goods relative to demand both in one market and in aggregate. Then we end up with all vs. all as sluggish economies parasite the consumers of others – all the more so if the central banks nudge-nudge wink-wink their currencies lower too.

Consider those laws and is it any surprise that as the US and China sit down to talk trade we see US President Trump tweet: “China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product now - no signs that they are doing so. That is the problem with China, they just don’t come through. Our Economy has become MUCH larger than the Chinese Economy is last 3 years. My team is negotiating with them now, but they always change the deal in the end to their benefit. They should probably wait out our Election to see if we get one of the Democrat stiffs like Sleepy Joe. Then they could make a GREAT deal, like in past 30 years, and continue to rip-off the USA, even bigger and better than ever before. The problem with them waiting, however, is that if & when I win, the deal that they get will be much tougher than what we are negotiating now...or no deal at all. We have all the cards, our past leaders never got it!”

Meanwhile, a Bloomberg editorial today argues “Hong Kong is running out of time. Signs are building that the city’s political crisis is starting to affect its financial and business prospects…Hong Kong’s reputation for political stability, reliable institutions and effective governance was won over decades. Once lost, it will be hard to regain.” This, as it appears protestors arrested Sunday night are to be charged with rioting (maximum sentence: 10 years) whereas the ‘white-shirts’ who violently attacked protestors the previous Sunday have been released without charge or face much less serious offenses. Bloomberg also reports: “White House Eyeing Chinese Forces Gathered on Hong Kong Border”. That carries implications here that I don’t need to go in to.

But let me now bring in the third law - Godwin’s Law: as an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches 1.

Indeed, nowadays it usually takes no more than two Tweets to get to that accusation in most online interaction. What’s the relevance? There is a growing swell of anti-China opinion in US policy circles. Seasoned pro-China journeymen have been elbowed aside by younger, hawkish experts who sound even more confrontational that Trump: and some of them use Godwin-esque language. Yes, there are still voices in markets lobbying or pricing for US-China free trade winning out. But let’s rewind the clock and see what the economic debate looked like in the mid-1930s before Godwin.

As a recent Jerusalem Post editorial shows, US President F.D. Roosevelt--the progressive champion of the New Deal--had a pre-WW2 policy to maintain trade and diplomatic relations with Nazi Germany; the Treasury Department even permitted the Nazis to forego a “Made in Germany” label and instead mark goods as having been made in a particular city or region to confuse US consumers.

The liberal establishment also shared that stance. Smith College’s president visited Nazi Germany in 1933 and found “no cases of mistreatment” of Jews; Barnard College’s dean toured Germany in 1935 and announced Hitler’s desire to acquire “new land” was “legitimate”; Vassar College’s president saw the boycott as a step toward war, and in 1934, organized a tour of Nazi Germany; and a Bryn Mawr professor similarly denounced the boycott as “simply war without bloodshed.”

Let me make myself abundantly clear: I AM NOT MAKING ANY COMPARISONS OF ANYONE TO HITLER! There is no Godwin goin’ on.

What I am trying to show is that Gresham’s Law matters for markets even in a world without coinage; Say’s Law is a nonsense that will make central banks ignoring Gresham’s Law create worse global imbalances that lead to geopolitical tensions; and hence as US policy hawks start to circle those who think we can avoid a trade rift between the US and China using highfalutin free trade arguments overlook the chequered history of such a principled stance. Anyway, something to think about while we wile away the hours waiting for the Fed.

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Authored by Michael Lebowitz via RealInvestmentAdvice.com,
“All assets are priced where they are today because of central banks. That’s modern finance — it’s not about psychology or flows anymore, it’s about what the central banks are going to do next.”
– Mark Spitznagel


Cause and Effect
Rene Descartes, a 17th-century mathematician, asked the fundamental question of how causal power functions. He was interested in how things relate to each other in terms of causality and how the thought of an action gets translated into a physical action. The theory he came up with, called “Interactionism,” affirms the relationship between thought and action. Importantly for our discussion, Descartes knew that any effect must have an antecedent cause.
When we are unclear about something, Descartes teaches us to search diligently for first principles, those things about which we are certain, and then explore what might have caused an event or observed the effect.


Warnings
In recent weeks, we have heard a variety of pundits, including a parade of Federal Reserve (Fed) officials speaking about mounting risks in the credit markets. Steve Eisman, who correctly pre-identified the magnitude of the sub-prime mortgage debacle, expressed confidence in commercial banks but worried that a U.S. recession would bring “massive” losses to the corporate bond market. The Fed published a report stating that there are meaningful risks in the corporate bond markets due to the amount of issuance that has occurred over the past decade and the weak credit quality of much of that issuance. As documented in many prior articles, we concur with those concerns and suggest the effect has a nasty way of sneaking up on central bankers. For our latest on the topic please read The Corporate Maginot Line.


The potential problems brewing in the credit markets are an effect. Corporations did not just decide to issue mountains of debt, much of which is low rated and of poor quality, for no reason at all. They did it, in large part, as a result of the economic and market environment created by the Fed through low interest rates and quantitative easing (QE).

The Fed removed over $4 trillion of the highest quality bonds out of the domestic market. In doing so, they pushed interest rates to historic lows. The combined effect all but forced investors to seek out higher-yielding, riskier instruments. As a result, the demand was ready and more than willing to absorb the on-coming wave of corporate supply and to do so at remarkably low yields and therefore very favorable terms for the issuers.


Cause
At the depths of the financial crisis, the Fed advertised QE as a means to boost asset prices, create a wealth effect, and fuel consumer borrowing and spending. It was sold as an economic growth booster that would benefit everyone. The ultimate objective was to staunch the crisis and foster an economic recovery.
Through QE, the Fed did this by acquiring mortgage and Treasury bonds from large banks and crediting those banks’ reserve accounts with digitally manufactured U.S. dollars. From September 2008 until January 2015, when the third round of QE was completed, the Fed balance sheet swelled by nearly $4 trillion while bank reserves grew from $2 billion (that’s $0.002 trillion) in July 2008 to almost $3.0 trillion.

As the Fed acquired vast amounts of high quality fixed-income securities from banks through QE, it created a vacuum in the bond market that had to be filled. The vanishing high-quality Treasuries and mortgages generated fresh demand for investments of lower-quality bonds.

Strong investor demand was met by corporations increasingly anxious to issue cheap debt to fund their activities. While those activities included capital expenditures, the debt increasingly was used to fund dividend payouts and share buybacks. Not coincidently, while the Fed’s balance sheet was expanding by $4 trillion, corporate debt outstanding exploded from $5 trillion to well over $9 trillion.


Debt-for-equity
As mentioned, the Fed removed high-quality securities from the market enabling corporate issuers to step in to fill the resulting gap. Since QE began, nearly 30% of the new corporate debt issued was used for stock buybacks. Putting the pieces of the mosaic together, it is fair to say the most intense corporate debt-for-equity swap in recorded history was enabled by the Fed via monetary policy and the federal government through tax-cuts.

This is symptomatic of a variety of issues that have been created by prolonged extraordinary monetary policy. In the same way that corporate behavior has been seriously altered as described above, every central bank in the developed world has undertaken even more extreme measures to foster growth, dictating that the behavior of market participants transform in some manner.


The chart below is a stark reminder of how the Fed has changed the natural order of the corporate debt market. Over the past 25 years, when corporate debt loads became onerous, investors required higher yields and wider spreads to compensate them for the added risks.

Today, despite the extreme amount of corporate leverage and the low quality of corporate credit, junk spreads remain near all-time lows. As shown below and highlighted by the red arrow, the long-standing correlation between leverage and high yield spreads is broken.

https://zh-prod-1cc738ca-7d3b-4a72-b...ages/1-8_0.png

Data Courtesy: Bloomberg
This gross distortion and many others throughout the market offer clues and compelling evidence of a “cause.” Collectively, they point to a monetary policy that is manipulating the price of money and fostering irrational behaviors.


Effect
In his book, Economics in One Lesson, Henry Hazlitt states, “…the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

The side-effects of extraordinary monetary policy, especially those that have been left in place for a decade, have scarcely been considered by the Federal Reserve. What was great (as in “get filthy rich” great) for the banks and the wealthy was not such a hot deal for the rest of the American public. The side effects are becoming more apparent and serious every day. As an aside, the rolling wave of populism did not emerge unprompted. It too is an effect. As Deep Throat said to Woodward and Bernstein, “Follow the money.”


Instead of investing in new property, plant, equipment, innovation, and employee training for the long-term benefit of their shareholders, employees, and the communities in which they operate, companies instead are taking advantage of ultra-low funding costs to buy back expensive stock. In a desire to prop up stock prices to enhance their compensation and satisfy short term investors, corporate executives have and continue to make poor capital allocation choices.
If the goal was to increase shareholder value via a temporarily higher share price, then corporations succeeded, albeit temporarily. The goal always should be to increase long-term shareholder value via stronger growth; a goal corporations have largely ignored. After ten years of poor decision making, many companies are left with inflated stock prices but dim prospects for future growth to fund their obese debt structures.


Summary
A weak post-crisis economic recovery that hurt low income wage earners alongside monetary policy that fueled steady gains in the cost of living meant many people were going to be left behind. The calculus did not anticipate that effect would extend so far up into the middle class. Struggling to maintain their previous standard of living, consumers borrow at the Fed’s new cheap rates. Quoting from the book, The Big Short, “If you want to make poor people feel rich, give them cheap loans.”
That is exactly what the Fed did after the financial crisis for more than a decade and counting. That game has an unhappy effect as the economy loses productive capacity and has little fuel to spur organic growth and wage gains.

The series of events playing out right before us, like a pre-release movie trailer, reveals teasing fragments of information. The corporate debt market is today’s teaser. The set-up for that was the Fed-induced debt-for-equity swap. To anyone willing to pay attention to the data, it is again plain to see the excesses brewing in today’s environment which is eerily similar to those of 2005 and 2006. Even Dallas Fed President Kaplan has raised a warning flag by highlighting the amount and poor quality of corporate debt which could add to the burden on the economy in a downturn. He diplomatically understates the problem but at least he acknowledges it.

Monetary policies of the Fed are the cause. Those policies enable imprudent deficit-spending and accumulation of leverage at ultra-low interest rates.
Debt loads in the government, corporate and household sector, and various other hidden imbalances are the effect. What we know about circumstances is a concern, but what should be especially troubling are those things of which we are not even yet aware.

Turning back to Descartes, he offers this wisdom: “The senses deceive from time to time, and it is prudent never to trust wholly those who have deceived us even once.”

FEDERAL RESERVE ANNOUNCEMENT at 2:00 AM - July 31, 2019


Benjamin

https://www.nakedcapitalism.com/2019...ritedowns.html

Michael Hudson: The Coming Savings Writedowns

Posted on July 29, 2019 by Jerri-Lynn Scofield

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “and forgive them their debts”: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year.

Debts that can’t be paid, won’t be. That point inevitably arrives on the liabilities side of the economy’s balance sheet.

But what of the asset side? One person’s debt is a creditor’s claim for payment. This is defined as “savings,” even though banks simply create credit endogenously on their own computers without needing any prior savings. When debts can’t be paid and debtors default, what happens to these creditors?

As President Obama showed, banks and bondholders can be bailed out by new Federal Reserve money creation. That is what the $4.6 trillion in Quantitative Easing since 2008 was all about. The Fed has spent the last few years supporting stock market prices (and holding down gold prices) by manipulating the forward option markets.

But this artificial life support to keep the debt overhead afloat is nearing the reality of the debt wall. The European Central Bank has almost run out of available euro-bonds to buy. The new fallback position to keep the increasingly zombified U.S. and Eurozone financial markets afloat is to experiment with negative interest rates.

Writing down savings by a few percentage points helps bring the glut of creditor claims marginally back towards balancing bank deposits with the ability of debtors to pay. But such marginal moves are rarely sufficient. A quantum leap is needed.

Governments have long followed a basic guideline when faced with a need to devalue their currencies (for instance, as the dollar was devalued against gold in 1933). Nothing is worse for a politician or central banker than to be overly shy when it comes to devaluation. The motto is, “Always depreciate to access.” That means at least 25 percent, often a third when a basic structural adjustment is needed.

The recent experiment in negative interest rates writing down savings as a necessary compliment to the inevitable debt write downs means that financial policy makes are beginning to fact the hitherto unthinkable fact that many zombie companies and debtors have no foreseeable means of paying the amounts that they owe on paper.

The tendency of debts to grow exponentially at rates in excess of the economy’s ability to create an economic surplus to pay creditors has been known for nearly 5,000 years. My book “… and forgive them their debts” describes how ancient Near Eastern rulers recognized the inherent tendency of financial dynamics to cause instability, leading to debt bondage and forfeiture of land to creditors.

To prevent this rising indebtedness from tearing their realms apart, rulers started their first full year on the throne by clearing away the overhang of arrears that had been accruing on personal and agrarian debts. The aim was to restore an idealized “mother condition” in which bondservants were liberated, able to start with a Clean Slate with their self-support land returned to them, in balance with regard to their income and outgo.

An analogy would be the idyllic condition that the U.S. economy would achieve if we could restore the financial situation that existed in 1945. The end of World War II left an economy in which most families were almost debt-free. Families and businesses and were rife with cash, as there had not been much opportunity to spend during the wartime years, and the Great Depression had wiped out substantial debts. Returning soldiers were able to start families and buy homes by committing to pay only 25 percent of their income for 30 years. This era was as close as the United States came to a Clean Slate. Today it seems an unrecoverable golden age – as the ancient Near East seemed to be to debt-wracked imperial Rome.

Germany’s Economic Miracle consisted of its Allied Monetary Reform of 1948 – a Clean Slate erasing most personal and business. That debt cancellation was fairly easy because most debts were owed to Nazis, and the Allies were glad to see their savings claims for payment wiped out.

Fast forward to today: Indebted students graduate with an obligation to pay so much education debt that they cannot qualify for mortgages to buy homes of their own. Marriage rates are down, U.S. home ownership is plunging, and rents are rising. Automobile debt also has soared, leading to rising default rates second only to student debt defaults. The overhang of junk-mortgage debts that crashed the economy in 2008 remains on the books of families who managed to survive the ten million foreclosures under the Obama bailout of Wall Street. (His constituency turned out to be his Donor Class, not the junk-mortgage victims among his voters. He characterized them as “the mob with pitchforks” to the banksters he invited to the White House to celebrate his bailout.)

By driving down interest rates, the Fed’s policy of Quantitative Easing has subsidized an enormous debt buildup without increasing the interest burden proportionally. This has enabled corporations to carry much higher debt and even indulge in leveraged buyouts and stock buyback programs.

This QE policy has made financial engineering much more enriching than industrial engineering. But it has painted the U.S. and European economies into a corner. At some points interest rates will inevitably begin to rise back up. Some countries will have to increase rates in order to borrow to stabilize their exchange rates when their balance of trade and payments falls into deficit. Other countries will simply see that the game is over and will give up the pretense that the personal, corporate and public-sector debt overhead can be paid.

It is to prepare for this inevitable eventuality that Europe is experimenting with its trial run of negative interest rates. Once the technique is established, it will prepare the way for the inevitable step of writing down national savings in line with the economy’s ability to pay.

That ability is shrinking much more than at any time since the 1920’s, which gave way to the Great Depression despite the many debt write downs of 1931-32. The exponential mathematics of compound interest have created more and more claims on personal income and corporate cash flow, leaving less and less to be spent on goods and services.

Until a debt write down occurs, storefronts will continue to close, arrears will mount, students will continue to postpone marriage and family formation, high-risk bonds will begin to give way and default.

That should be what economic theory is all about. But for the past generation, economic models have pretended that banks and creditors act responsibly enough not to make bad loans. Pension fund managers pretend that they can provide for future retirement by corporate or public employees by earning 8 percent annually ad infinitum, doubling every 7 years, as if this is really possible in an economy not really growing outside of the Finance, Insurance and Real Estate (FIRE) sector (and even so, growing at only 1 or 2 percent). How then can the economy pay its debts without imposing financial austerity much like Third World countries subjected to IMF austerity programs?

Today’s economic orthodoxy denies that this debt problem can exist. Debt dynamics and the exponential growth curve of compound interest does not exist in the parallel academic universe that somehow has been situated in the social science department instead of the literature department as science fiction.
Perhaps someday a revamped economics curriculum will include the study of history to see how earlier societies have coped with the inherent tendency of debts to increase faster than the ability to be paid. It is a long history with many examples. Western civilization has failed to solve the financial problem that Near Eastern societies were able to cope with by intervening from “outside” the economy.

But these formative debt experiences are as repressed today as sexual drives repressed academically before the work of Freud. Academic economists are financial prudes. Debt cancellation is historically the solution. Quantitative Easing and bailouts of the One Percent can only be a temporary substitute. We should think of them as “abstinence” from recognizing the need to write down bad loans (“savings”) along with the bad debts.


This entry was posted in Banking industry, Economic fundamentals, Free markets and their discontents, Guest Post, Income disparity, Social values, The destruction of the middle class on July 29, 2019 by Jerri-Lynn Scofield.

https://goldswitzerland.com/next-5-y...d-WaNpDS53D0JQ

NEXT 5 YEARS NOT ABOUT WINNING BUT SURVIVING

August 1, 2019

by Egon von Greyerz

The messages from the ECB and the Fed couldn’t be clearer. They are seeing major problems in the financial system and in the world economy and they will do whatever it takes to save the system. But they will fail.

The autumn of 2019 will see a major shift in sentiment as markets turn from a secular bull to a secular bear. We are likely to see major crashes in many global stock markets. Virtually no one is prepared for this so there will be both panic and despair.


US STOCK MARKET AT HISTORICAL OVERVALUATION
The US stock market is today more overvalued than in 1987, 1999 and 2006.
http://goldswitzerland.com/wp-conten...acro_model.jpg

The bearer of bad news is at best ignored or at worst executed. Hopefully I will avoid both those destinies in spite of continuing to alert people to the potentially cataclysmic dangers ahead. As I warned readers last week, stocks, bonds and derivatives will at some point go to no bid. This means that these markets will fall precipitously with no buyer offering to buy crashing assets at any price.

Most people will totally ignore this advice. The majority of investors have total faith in central banks’ ability to rescue the world yet again by printing endless amounts of money and lowering interest rates.


CENTRAL BANKS IN PANIC MODE
Both the Fed and the ECB are now in panic mode although not yet showing it openly. The Fed just lowered rates by 1/4% this week and the ECB has told the world that they will do all it takes.

Draghi said last week that there is:
“need for a highly accommodative stance of monetary policy for a prolonged period of time, as inflation rates, both realised and projected, have been persistently below levels that are in line with its aim.” As a result, the Governing Council noted that it was “determined to act, in line with its commitment to symmetry in the inflation aim. It therefore stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner.”

As a result, the German 10 yr Bund has just gone negative and so has the French. This is an absolutely crazy policy to push rates down in an attempt to create inflation. Central bankers know that inflation is bad for the economy. An inflation rate of 2% means that prices double every 36 years. In the 1970s, I experienced inflation of 15% or above in the UK for many years. A 15% inflation means that prices double every 5 years. Inflation is not desirable for consumers, nor for savers or pensioners.


ECB GOBBLEDYGOOK TO HIDE REAL PROBLEMS
In my view the ECB gobbledygook in the quote above hides a much more serious problem than low inflation. “Symmetry in the inflation aim” is typical central bank meaningless speak, phrased so no one can understand it. The problem lies in the financial system. The German banking system is bust with Deutsche Bank (DB) going from bad to worse. Their bad loans are sufficient to collapse the bank and their derivatives portfolio will bankrupt not just the Bundesbank but also Germany and the ECB. DB has derivatives of EUR 45 trillion. That is 13x German GDP. This means that when derivatives go no bid, which is virtually certain, the €45 trillion will just disappear into a black hole with zero value.

It is not only DB and German banks that are bankrupt, but so are Italian, French, Spanish and Greek banks plus many others. And the ECB is totally bust. It has a balance sheet of EUR 4.7 trillion and 40% of that is loans to EU member states. The capital and reserves of the ECB is EUR 105 billion. So the net worth of the ECB is 2% of the total balance sheet. This means that loan losses of 2% is enough to bankrupt the ECB! The losses are more likely to be 50-100% so the demise of the ECB is certain. Before that they will embark on unlimited money printing.

They won’t give up easily of course. Draghi had already previously indicated that the ECB will do all it takes to keep the financial system afloat. His statement last week was just a confirmation of the inevitable.


GLOBAL DEBT IS NOW OUT OF HAND
The recent messages from the Fed and the ECB couldn’t be clearer. They are at this stage quietly panicking. Later on it will become totally obvious. Because what we are now seeing is the preamble to the biggest money printing bonanza in history. Only in this century global debt is up 3x from $80 trillion to $250 trillion. In an attempt to save the financial system, central banks have expanded credit by $170 trillion in the last 19 years. They have done this by printing money and reducing interest rates to zero or negative.

So we are now in an era of free or extremely cheap money and with the coming actions of the ECB and the Fed, money will be even cheaper. The central banks clearly know that you can’t solve a debt problem with more debt. But plentiful cheap money is the only method they know. And it seems to have worked so far.
But the world is now drowning in free and soon worthless money and there is much more to come.


“AFTER US THE FLOOD”
“Après nous le Deluge” – After us the Flood, was said by Madame de Pompadour, the mistress of the French king Louis XV. The French had just lost a war in 1757 against Prussia and the king and his mistress knew that the consequences would be disastrous for France and for the French finances.
http://goldswitzerland.com/wp-conten...y_printers.jpg

The picture on the left below with Obama and Bernanke was originally made for an article I wrote in 2011. Bernanke printed and borrowed more money during his reign than had ever been done in the history of the USA. But “we ain’t seen nothing yet”. The problem is now totally global and the two biggest central bank chiefs, Powell and Lagarde, are going to become the biggest money printers in history. It is not just a big part of the outstanding global debt which will need to be covered since most of it won’t be repaid. If we add contingent and unfunded liabilities, social security and the $1.5 quadrillion worthless derivatives, the total money printing will be in the quadrillions.


HYPERINFLATION WILL LEAD TO IMPLOSION OF FINANCIAL SYSTEM
All of the money printed will be totally fake of course and have zero value. But before the whole financial system implodes, the world will experience a hyperinflationary period competing with the Weimar Republic. The big difference this time is that there will not be full employment like there was in Weimar and there won’t be a world outside to rescue us. So the whole exercise by global central banks will be totally futile. The coming hyperinflationary period will probably be brief, like 2-3 years, and lead to a deflationary implosion of the financial system.


WANING CONFIDENCE – WANING MARKETS
When an avalanche is triggered you never know which snow flake will cause it. There are so many potential triggers like debt defaults anywhere in the world. Normally the obvious problem, like Deutsche Bank, won’t cause it since the German Bundesbank and the ECB are going to fight tooth and nail to keep DB afloat. In the end they will fail of course.

The most likely trigger will be when confidence evaporates. Since most asset markets are mega bubbles today, very little is needed to pop them. If we look at the biggest stock markets in the world, we find that all of them have already peaked (in US$ terms) and the US market is the last man standing.
http://goldswitzerland.com/wp-conten...tock_peaks.jpg


US MARKETS READY TO CRASH
Technically the S&P index is finishing a long term bearish wedge. As the chart below shows, the momentum indicator shows divergence with price. The last 4 higher tops in the S&P from January 2018 have been accompanied by a lower momentum top each time. This is extremely bearish and happened at the 1999 and 2006 tops with major falls following. The difference this time is that we are most likely at the end of a secular bear market and the duration and magnitude of the coming fall will be massive.
http://goldswitzerland.com/wp-conten...8/sp_index.jpg


WILL THE DOW GO DOWN TO 1,000 OR ONLY TO 10,000
How far down will this bear market go. In 1929-32 the Dow fell 90% and the global economic circumstances were nowhere near as bad as today. The market is likely to find support initially in the 8,000-10,000 area but probably eventually reach the 600 to 1000 range. The latter was an area of consolidation for 17 years from 1965 to 1982.
http://goldswitzerland.com/wp-conten...2019/08/dj.jpg


A decline from the current level of the Dow at 27,000 to the 2nd support would mean a 97% fall. That clearly seems impossible today but is not that much different from the 90% fall between 1929 and 1932.

So let me be absolutely clear. My interpretation of the US stock market is that we are likely to see a major reversal of the long term trend start as soon as August 2019 and at the latest in the next three months. The reversal could initially start gradually but will very soon turn into a crash.
Could I be wrong? Yes of course I could. I have been wrong before as I had underestimated central banks ability to kick the can down the road by irresponsible credit expansion. But all they have achieved is a bigger bubble which when popped will create a much more severe implosion of markets, the financial system as well as the world economy.

I am not normally a betting man although I recently accepted a challenge of a $1 million bet from someone who was convinced that gold wouldn’t break the Maginot Line of $1,350. Unfortunately the party who challenged me pulled out so I was only a moral winner.
Nevertheless, I would say that there is a 95% certainty that stock markets will crater this autumn and that gold and silver will reach substantially higher levels.


IT IS NOT ABOUT WINNING BUT SURVIVAL
But I want to make it clear that I have no interest in making money on bets on financial instruments. Instead, my purpose in making these very strong statements on the direction of investment markets, is to shake up investors and make them aware of the enormous risks that the world is currently facing.

Now is not the time to think about making money on investments. But rather to lose as little as possible in the next five years. Because everyone will be a loser. Even if you don’t own stocks or bonds, you will lose on the value of your house or you will lose your pension, or your job or unemployment benefits. You are also likely to lose the money you have in the bank, either through pure debasement of the currency, or bail-ins, or bankruptcy of the bank.

What we must remember is that wealth preservation means trying to protect your assets from total destruction rather than making high returns.
Physical gold and silver is the best insurance you can own. If they go to the levels that we expect, you are also likely to achieve major capital appreciation but that is not the primary reason for holding precious metals.


Egon von Greyerz
Founder and Managing Partner
Matterhorn Asset Management
Zurich, Switzerland
Phone: +41 44 213 62 45

Matterhorn Asset Management’s global client base strategically stores an important part of their wealth in Switzerland in physical gold and silver outside the banking system. Matterhorn Asset Management is pleased to deliver a unique and exceptional service to our highly esteemed wealth preservation clientele in over 60 countries.

GoldSwitzerland.com
Contact Us

Articles may be republished if full credits are given with a link to GoldSwitzerland.com.

https://wolfstreet.com/2019/07/30/ec...lems-stack-up/

ECB’s NIRP-Forever Policy “Destroys Banks’ Profitability Equation”: Bankia CEO. Spanish Banks Reel. Problems Stack Up


by Nick Corbishley • Jul 30, 2019 •

Spain’s Big Five banks (already down from the Big Six) could soon be four.

By Nick Corbishley, for WOLF STREET:
The ECB’s NIRP forever policy is crushing Eurozone banks’ ability to turn a profit, warned[COLOR=var(--color-text)] the CEO of Bankia, José Sevilla, on Monday. [/color][COLOR=var(--color-text)]“It is clear that the current rate scenario is hurting the profitability of the banking business,” he said. “We think low rates are good and perhaps even desirable. But the same cannot be said of negative interest rates since they destroy banks’ profitability equation. Sustained over time — and we have been negative for five or six years now — they hinder and penalize the profitability of Spanish and European banks.”[/color]

In February last year, the formerly bailed out lender launched an ambitious three-year plan (2018-2020) that included an earnings target of €1.3 billion for the third year. By this Monday, that plan was already dashed after the bank unveiled half-year profits that were down 22% year-over-year, prompting Sevilla to admit that the lender will not come even close to achieving its €1.3 billion target for 2020.

Over the last decade, as rates have gone from low to zero, to below zero, the shares of Spanish and European banks have been crushed, re-crushed and, for good measure, re-crushed again. Over the twelve years since May 2007, when Europe’s seemingly interminable banking crisis began, the Stoxx 600 bank index has plunged 75%, and is now back where it first had been in October 1995:
https://wolfstreet.com/wp-content/up...2019-07-30.png
There are plenty of reasons for this spectacular decline, including the 2008 Financial Crisis, the Euro sovereign debt crisis that quickly followed, and the huge piles of non-performing loans that both of these crises left festering on many banks’ balance sheets. There have also been other aggravating factors such as Brexit and Italy’s ongoing banking crisis, which have further decimated investor confidence in the sector.

But a source of pain for European banks is the ECB’s negative interest rate policy (NIRP), which squeezes the interest margins they are able to earn. Despite all the ECB’s hype, NIRP was never meant to boost the real economy or make banks healthier. Its goal was to boost bond prices and thereby bring yields down, which lowers the costs of borrowing for debt-sinner countries. It’s worked beautifully: now, even Italy, with its 132% debt-to-GDP ratio, struggling banking sector, and recalcitrant government, is able to borrow for free with maturities of up to essentially years.

But there is a high price to pay. And that price is being paid not just by Europe’s legions of forsaken savers, depositors, and yield-hungry pension funds, and future retirees, but also by many banks.

In Spain, the shares of three of the big five banks have fallen by 10% or more since last Thursday, when Draghi telegraphed the further loosening of ECB monetary policy. Bankia’s shares have fallen 13%, to €1.76. Five years ago, they were worth €6 a piece. At the beginning of 2018, when European banking shares were staging a brief recovery, the bank had a total market cap of €11.5 billion. Today, it’s worth just €5.5 billion, a mere fraction of the €24 billion bailout it received in 2012.

Spain’s third and fifth biggest lenders, CaixaBank SA and Banco de Sabadell SA, have also seen their shares slump since announcing results last week that fell short of analysts’ estimates. Both banks cut the outlook for their core lending businesses and reduced their forecast net interest income — a measure of earnings on loans minus deposit costs — sending CaixaBank’s shares to their lowest level in three years and Sabadell’s to a historic low of 79 cents. In the last two weeks alone, Sabadell has lost almost 20% of its market cap and is down over half since Jan 2018.

The irony is that Sabadell, on the surface at least, is having a much better year than last. The huge self-inflicted IT problems at its UK subsidiary, TSB, are apparently largely behind it, after having cost hundreds of millions of euros to put right. Last Friday, Sabadell reported first-half net income of €532 million, a 340% increase on last year. Yet its shares have responded by plunging every day since, for four main reasons:

1. Falling margins. If, in September, Draghi does what he does best and cuts EZ interest rates even deeper into negative territory, the pressure on the bank’s margins is only likely to get worse. Sabadell’s CEO, Jaime Guardiola, has even opened up the possibility of charging individual depositors interest on their accounts, which would send these deposits fleeing.
2. Its huge exposure, via TSB, to the UK economy, which could be just three months away from feeling the full brunt of a no-deal Brexit.
3. Its wafer-thin capital buffers. Spanish banks have the lowest solvency ratio (11.1% CET1 fully loaded) in the Eurozone, behind even the likes of Cyprus (11.4%), Italy (11.9%), Greece (12.7%) and Portugal (12.8%). And Sabadell has the lowest solvency ratio of all Spanish banks.
4. Another huge fine from Brussels could be in the offing. Spanish banks may soon have to pay out billions of euros in compensation to mortgage holders if the European Court of Justice rules, later this year or early next year, that the IRPH mortgage reference index, used in over a million mortgages, was abusive. Sabadell is estimated to have total exposure to IRPH of around €800 million while Caixabank could end up holding a tab for some €6.7 billion, which could be enough to wipe it out completely.

The worse things get for Sabadell, the more investors are reminded of the collapse of Banco Popular in 2016 and its shotgun acquisition by Banco Santander, in which shareholders lost everything. Already, rumors are swirling about the possibility of merging Sabadell with Bankia, an operation that would spawn Spain’s second biggest bank by domestic assets. But just as happened with the creation of Bankia in 2010 from the bedraggled remains of seven semi- or fully defunct savings banks, the risk to taxpayers is likely to be huge. By Nick Corbishley, for WOLF STREET.

Just when European banks need to inspire confidence more than ever. Read… Not Helpful for Crushed European Bank Stocks: Stress Test a Sham, European Court of Auditors Warns


PLEASE WATCH - THE END HAS ARRIVED - PREPARE

Posted August 2nd, 2019 at 1:38 PM (CST) by Bill Holter & filed under Jim's Mailbox.

Jim/Bill,
This period, the era of global interdependence under the guise of capitalism, will go down in books as the greatest heist in history! Allow me to explain.

Anybody who believes the actions of Central Banks are for the good of the people, needs their head examined.

This is all being done to support the banking community’s balance sheets and profitability.

Case in point……
With interest rates in the U. S. near zero and actually negative across the board in Europe, does anyone see mortgage rates dropping to around 1%? Or credit card interest dropping from the current 15-24% rate? Or home equity rates dropping from the current 6-7%?

Fat chance.
And to boot, now people have to PAY banks to store their money!

That tells you everything.
Now we can look forward to weaker currencies because of lower rates and more importantly, weaker economic growth, possibly leading to massive global recession.
The exorbitant rates being charged by the banks will do nothing to alleviate the financial pressure people are under. Housing will not recuperate, spending will continue to decline, debt will continue its exponential rise.

How could this not happen under these conditions?
Unless there is a trickle down effect from the banks to the populace, nothing will change. Of course, can you blame the banks for not wanting to prevent margin expansion?

Just remember, its all coming out of our pockets. One day, history will note that this period will mark the greatest robbery of the American public in the history of mankind.

Now all your need is hyperinflation so the 1%, after they have picked our pockets of every last dollar, can pick up assets for fractions of a penny on the dollar. It won’t be long now.

Know the meaning of wealth preservation.

It’s spelled G-O-L-D.

http://www.whatdoesitmean.com/index2943.htm


August 4, 2019

American Mass Shootings Conceal Dangerous Trump Showdown With Defiant US Navy

By: Sorcha Faal, and as reported to her Western Subscribers

A thought provoking new Ministry of Foreign Affairs (MoFA) report circulating in the Kremlin today noting Deputy Foreign Minister Sergei Ryabkov declaring that Russia will never lose the arms race, because it has demonstrated its ability to generate economically effective responses to challenges, states this declaration is in direct response to the citadels of America's elites fracturing and being at odds with each other—a fracturing currently being masked by two mass shootings in America that have claimed nearly 30 lives over the past 24-hours—but whose true and dangerous dimensions of were put on full display during this same time period when President Donald Trump angrily lashed out at the US Navy for awarding commendations to the lying and cheating prosecutors who led, and lost, the beyond disgusting murder trial of US Navy SEAL war hero Edward Gallagher—that saw Trump publicly ordering Pentagon officials to strip them of the medals—with this announcement being a remarkable rebuke by a President of his own Navy leadership—a rebuke followed a few hours ago by an even more stunning announcement that Chief of Naval Operations Admiral John Richardson had removed all court-martial authority from Navy Region Southwest who illegally prosecuted Gallagher—and his further ordering that all charges be immediately dropped against Gallagher’s platoon leader US Navy SEAL Lieutenant Jacob Portier. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

http://www.whatdoesitmean.com/award1.jpg

According to this report, and as shamefully demonstrated time and time again, the socialist Democrat Party aligned American mainstream propaganda media is pummeling their nation’s citizens minds today with an endless stream of false outrage over two mass shootings—the latest one occurring a few hours ago in Dayton-Ohio where 10 have been left dead, that includes the shooter—and came a few hours after 20 were left dead in El Paso-Texas when a madman gunned them down.


Though as senseless and tragic as these mass shooting deaths are, this report notes, the American people are still being kept from knowing that what occurred yesterday is in reality a “Normal Tuesday Afternoon” for the peoples of Mexico—a nation whose strict gun laws The Washington Post says could be a model for the US—most particularly because Mexico has only one store licensed to sell guns that their citizens aren’t even allowed to own—but so far this year hasn’t stopped their citizens from being gunned down in historic numbers—with this year’s gun deaths so far being 14,603—that’s on pace to overtake the historic 29,111 of their citizens gunned down last year.

http://www.whatdoesitmean.com/award2.png

http://www.whatdoesitmean.com/award3.jpg

At the same time the socialist Democrat Party and its mainstream media lapdogs are inventing even greater lies to tell the American people about these mass shootings, this report details, they’ve yet to inform them at all about the most dangerous and consequential happenings that will soon affect them at this past week’s Aspen Security Forum—the “sold out” gathering of all of the top intelligence, military and political leaders in America who determine the future of their nation’s foreign policy—all of whom “united behind the idea of a new cold war”—and that caused two Financial Times columnists – pillars of the Western Establishment—to raise a warning flag declaring: “This is something that takes my breath away…eighteen months ago the phrase was dismissed as fringe scaremongering…today it is consensus”.

http://www.whatdoesitmean.com/award4.jpg

The American people, of course, this report points out, haven’t had “their breath taken away” because no one has told them that their leaders are pushing the United States to the brink of all-out nuclear war with both Russia and China—a natural consequence of a “Cold War” whose last iteration saw the US and former Soviet Union poised on the knife-edge of a nuclear holocaust for nearly half a century—and whose only hope of averting is a President Trump who’s pushing to remove all USmilitary forces from Afghanistan before the 2020 election as he desperately tries to keep his nation at peace.


As in all such nations as the United States, however, this report continues, the leader is never sovereign—as President Trump sits atop a pyramid of quarrelling princelings (Deep State princelings, in this instance), who have their own interests and agenda—and Trump is not immune to their machinations—most particularly because these princelings can initiate actions (including false flags) that drive events to their agenda; that can corner Trump.

The best example of how these princelings have been trying to corner President Trump, this report explains, can be seen in his open warfare against the US Navy—a military service that keeps crashing its own warships, and can only manage to get 2 out of its 11 plane and weapons elevators to work on its newest nuclear powered multi-billion-dollar super aircraft carrier—that caused Trump to turn to the US Army and have them start training on how to fire howitzers from their fleet of ships for the first time in decades—a training regime that proved so successful, this past week Trump ordered the Pentagon to abruptly stop their planned sale of the US Army’s naval fleet.

http://www.whatdoesitmean.com/usarmy1.jpg

President Donald Trump begins rapid expansion of US Army naval fleet to counter renegade US Navy forces

In further moves President Trump has taken against a US Navy openly defying him and pushing for a new cold war, like his ordering the revocation of medals to their spying prosecutors, this report concludes, includes this past week his placing this past week Rear Admiral Shoshana Chatfield in command of the Naval War College after he ousted its former leader Rear Admiral Jeffrey Harley, and his appointing two of his loyalists to serve on the US Naval Academy Board of Visitors—all of which is being kept from the knowledge of the American people who, instead, are having to listen to the deranged lunatic ravings of top Democrat Party presidential candidate former Vice President Joe Biden, who just astonishingly claimed that “The Economy Is Collapsing Because Of The Trump Presidency”—a crazed outburst that caused even top leftist television host Bill Maher to lament that “the 2020 Democrats are blowing it”, but his further adding that he, in fact, “Wishes For A Crippling Recession To Unseat Trump”—a demonic wish no sane person would ever place upon a nation and its peoples—which, however, is being countered by new evidence showing that this nightmare of leftist lunacy affecting America may soon be coming to an end—best exampled by the shaving cream and razor giant Gillette having just posted losses in the billions-of-dollars after they ran a “woke” advertisement insulting every man in the US—while at the exact same time, the conservative pro-Trump and deeply Christian fast food giant Chick-Fil-A refused to bow to any leftist pressure, and because of, has now become the most favorite restaurant in all of the United States.

http://www.whatdoesitmean.com/award5.jpg

President Donald Trump and Chick-Fil-A fearlessly stand up to leftist mobs and keep WINNING-WINNING-WINNING.

August 4, 2019 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.

[Note: Many governments and their intelligence services actively campaign against the information found in these reports so as not to alarm their citizens about the many catastrophic Earth changes and events to come, a stance that the Sisters of Sorcha Faal strongly disagree with in believing that it is every human being’s right to know the truth. Due to our mission’s conflicts with that of those governments, the responses of their ‘agents’ has been a longstanding misinformation/misdirection campaign designed to discredit us, and others like us, that is exampled in numerous places, including HERE.]

[Note: The WhatDoesItMean.com website was created for and donated to the Sisters of Sorcha Faal in 2003 by a small group of American computer experts led by the late global technology guru Wayne Green(1922-2013) to counter the propaganda being used by the West to promote their illegal 2003 invasion of Iraq.]
[Note: The word Kremlin (fortress inside a city) as used in this report refers to Russian citadels, including in Moscow, having cathedrals wherein female Schema monks (Orthodox nuns) reside, many of whom are devoted to the mission of the Sisters of Sorcha Faal.]

Unnamed Horror Causes US Air Force To Order Stand-Down And US Navy To Warn “We Have A Problem”
Truth Makes Last Stand In America—Looks For Allies To Defend It
Tech Tyrant Bandwagon Pulls Into America-This Is What Terror Looks Like

Return To Main Page

COMMENTS FROM BENJAMIN:

Most demonically, this report continues, the true and real reason the American mainstream propaganda media relishes mass shootings is for their being able to use them to further the Democrat Party socialist agenda to disarm a population before they violently take control of a nation—most particularly because they can use them like a cudgel against anyone they despise who stands in their way—best exampled in this case by Democrat Party presidential candidate Beto O’Rourke blaming President Trump for the El Paso-Texas mass shooting because he’s a “racist”—a “blame”, however, that stands in direct opposition to the El Paso gunman’s own “manifesto” that saw him declaring “some people will blame the President or certain presidential candidates for the attack…this is not the case…I know that the media will probably call me a white supremacist anyway and blame Trump’s rhetoric…the media is infamous for fake news…their reaction to this attack will likely just confirm that…many people think that the fight for America is already lost”—and about whom it’s critical to note, that upon his capture, his social media MyLife Public Page showed him listing himself as a Democrat—at 2:50 PM yesterday, while he was in police custody, then saw it being mysteriously changed to Republican—at 2:52 saw it being changed again to say he was a Republican and QAnon member—and later on Saturday evening, saw his profile filled with anti-Jewish slurs and links to Trump and Jeffrey Epstein and it calling him an Evangelical Christian—thus leaving one supposing that the next mysterious change will show that he’s really a secret Russian agent who helped Trump get elected and whom the Democrats will subpoena next to appear before them. .

IF THIS IS TRUE AND I HAVE NO REASON TO DOUBT THAT IT IS TRUE THEN WE ALL ARE TOGETHER NEEDING TO STAND UP AND FIGHT BACK BEFORE WE ALL PERISH TOGETHER. MAY G-D help us all !!!

Trade account #: 03294504Created at: Jul 3, 2019 8:05:03 PMStatus: ActiveMargin Call (as at end of statement period): NBase currency: USD
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Total:15,969.100.00-736.30-595.500.0014,637.30
Posted at statement period of time:15,969.100.00-736.30-595.500.00

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Authored by James Grant via Barrons.com,

Modern monetary theory is not so theoretical anymore. In all but name, it’s the description of Republican fiscal policy in this living moment. “Federal Borrowing Soars as Deficit Fear Fades,” said the headline on page one of Tuesday’s Wall Street Journal. For the second year in a row, the Trump administration is spending $1 trillion more than the government expects to extract from the taxpayers.

The Bourgeois Gentleman is the Molière play in which a character comes to the proud realization that he has been speaking prose all his life without even knowing it. By the same token, the Trump administration has been implementing the essential doctrines of “functional finance,” also known as MMT, without seeming to realize it.
No harm came to Molière’s character, M. Jourdain, for his funny lack of self-awareness. The stakes are higher for all who live under the influence of the 20th-century progenitor of MMT, the economist Abba Lerner.


https://zh-prod-1cc738ca-7d3b-4a72-b...04_2-26-27.jpg
Abba Lerner, the progenitor of MMT.
You can boil down MMT, as James Montier did in Barron’s last week, to a few handy precepts. The first is that money is the government’s creation, not society’s. It derives its value from the fact that you can pay your taxes with it.

Right away, you understand the political foundation of the body of ideas associated with Lerner, an avowed Marxist. But MMT is a big tent, and there’s plenty of room for Republicans.

“[W]hatever may have been the history of gold,” Lerner wrote in 1947, “at the present time, in a normally well-working economy, money is a creature of the state. Its general acceptability, which is its all-important attribute, stands or falls by its acceptability by the state.”

President Donald Trump has never put it exactly that way, but Lerner’s idea is implicit in the way 21st-century central banks do business. They set interest rates and print money to achieve prosperity—full employment, as Lerner defined it; full employment plus record-high stock prices, for Republicans. Borrow money, spend it, materialize it out of thin air, Lerner counseled. Stop when economic growth reaches its physical constraints of spare labor and capital. If inflation accelerates, lower the boom by taxing the rich instead of borrowing from them. Except for the admonition to tax, the White House and Lerner are on the same page.

The second big idea in MMT concerns the nature of the public debt. There’s nothing to fear from it, said Lerner - at least, not if a government can borrow indefinitely in its own currency.

“The greater the national debt,” the economist wrote, “the greater is the quantity of private wealth. The reason for this is simply that for every dollar of debt owed by the government, there is a private creditor who owns the government obligations...and who regards these obligations as part of his private fortune.”
Lerner carried the argument to its logical Keynesian conclusion: The greater our collective fortune, the less we need to save. The lower our savings, the greater our spending. The greater our spending, the higher the level of our employment.

The Trump White House talks an orthodox fiscal game, even now; Lerner made no such pretense, believing as he did that the public’s liabilities are identical to the public’s assets. We owe it to ourselves, in other words—and, of course, nowadays, to the foreign bondholders, too.

Lerner was a close reasoner and lucid writer. In his carefully constructed theoretical world, the public debt would not grow indefinitely but rather tend to melt away.

Why?

“The greater the national debt, the greater is the quantity of private wealth” and, hence, the lower the need to borrow.

It has not worked out quite that way. Famously, the debt has not melted away, but spurted. In the past 20 years, the ratio of federal debt to gross domestic product has leapt to 105% from 60%. Over the same two decades, observe Van Hoisington and Lacy H. Hunt, guiding lights at Hoisington Investment Management, in Austin, Texas, GDP has grown at 1.2% a year per capita, 37% below the long-term U.S. average.

Lerner failed to anticipate today’s looming entitlements crisis, the falling national birthrate, and the striking decline in the rate of private saving these past 10 post-crisis years.

The empirical fact, again to draw on Hoisington and Hunt, is that “large indebtedness eventually slows economic growth as resources are transferred from the highly productive private sector to the government sector.”

“We have, indeed, been told that the public is no weaker upon account of its debts,” wrote an earlier commentator, “since they are mostly due among ourselves, and bring as much property to one as they take from another. It’s like transferring money from the right hand to the left; which leaves the person neither richer nor poorer than before.”

That was David Hume, Scottish philosopher and contemporary of Adam Smith, writing in 1777.

Anticipating MMT in an essay entitled “Of Public Credit,” Hume called it “buncombe.”
In fairness to MMT, England did not default, as Hume feared it would, and as American patriots, then fighting the Revolutionary War, hoped it would. In fairness to Hume, many another nation did subsequently default. Indeed, in 1933 and 1971, the U.S. itself left its creditors high and dry by refusing to honor its promise to pay dollars denominated in a fixed weight of bullion.

Now that dollars are fashioned from paper or (an even lighter-weight material) digital keystrokes, formal default is unnecessary.The government can print whatever it needs to service its fixed charges. The question is whether the creditors will cheerfully accept the currency so effortlessly tossed off the 21st-century presses.

Hume, steeped in the classics, reminded his readers that Roman emperors stored up treasure against some future day of peril.

The “modern” expedient, Hume disapprovingly continued, “is to mortgage the public revenues, and to trust that posterity will pay off the encumbrances contracted by their ancestors: and they, having before their eyes so good an example of their wise fathers, have the same prudent reliance on their posterity; who, at last, from necessity more than choice, are obliged to place the same confidence in a new posterity.”

Speaking for the newest posterity - that’s us - I have arrived at one certain conclusion: The word “modern,” written or spoken in the fiscal, monetary, or financial context, is trouble - nothing but trouble.

PLEASE WATCH VIDEO TO COMPLIMENT ARTICLE BY Jim Grant.