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At the root of domestic and global growth in the previous decade lies the substantial expansion of the business of risk insurance. And, as the facts are now rapidly unfolding, the exponential rise in the provision of coverage mechanisms for corporate bond default risks, sovereign debt risks, trade credit risks and political risks became the single biggest contributor to the unprecedented levels of debt and leverage exposed this October.
I believe I said we were heading towards that direction and fast... I figure it will happen in February (although it won't be "declared" for the fear that it may cause fear and people will lose trust in their governments)... However it is absolutely NOT inevitable... there are soo many opportunities to stop it but the governments own stupidity won't do what it needs to do... the basis of the problems is not being addressed... and one of the main problem is Big Government... and the payoffs (bribes, corruption, etc.) they get for being a Big Government...
The brawl in the south korean congress yesterday over free trade agreement is probably an insight to what lies ahead. Although pretty common in korea, this one was nasty. Have to think everyone is going to be looking out for internal interests
Great example of BLATANT CLICK BAIT headline with ABSOLUTELY NOTHING OF SUBSTANCE!!! I am sure that site will generate thousands of dollars from its banner ads for PokerStars*net and SogoTrade...
Its another square off the two-ply roll of blue pill economic financial press.
In the article the word debt appears 4 times. WE DO NOT HAVE A DEBT PROBLEM.
Its real simple . CDS or credit default swaps was just a way for banks to breech the only reason they don't want to lend and that is defaults. Their little charts and graphs said they could move another notch out on their risk belt so they could eat more fried chicken(more loans) . That is because they had default insurance. Insurance puts homes on precarious rocks that otherwise no fool would build upon.
Debt has not a thing to do with it. The fact that it created MORE MONEY is the problem. Money is debt, debt is money. Now that the CDS has fallen apart they must tighten the notch and trillions of dollars are gone. The problem now is we have LESS MONEY.
Banks don't loan they create money at the risk of a borrower default. Banks print the money and the borrower gets it. At that moment however they have the liability of the principle on the books(that is how it stops unlimited printing). If all goes well they keep printing money as it comes back in deposits.
As this system accelerates more money is created and more incentive is created to buy assets with debt(money creation) since not doing this puts you in the poor house.
Family A saves $20,000 per annum
Family B has 250,000 house go up in value 10% per year.
The economics are obvious and it so happens the average American is not such a fool because they saw for oh about 60+ years the longer they waited to buy into assets the worse off they were. It was self sustaining. However Americans do have a government and financial complex that works against them on all levels. This is not a failure of self control but a failure to overcome their oppressors who are sadly just a bit more clever.The more people that saw buying power erode the more they would borrow to buy which as a whole continued the erosion. The banks love this since they are drawing interest on this new money sucking more relative wealth from the host country.
Plan B when they break the system is to access the FED. This shelter is for the big banks while the little banks are culled off.
The system either steals from us all though inflation in parallel like a hair cut every month or in serial as we all stand in line for our turn of financial decapitation(default).
Its another square off the two-ply roll of blue pill economic financial press.
In the article the word debt appears 4 times. WE DO NOT HAVE A DEBT PROBLEM.
Its real simple . CDS or credit default swaps was just a way for banks to breech the only reason they don't want to lend and that is defaults. Their little charts and graphs said they could move another notch out on their risk belt so they could eat more fried chicken(more loans) . That is because they had default insurance. Insurance puts homes on precarious rocks that otherwise no fool would build upon.
Debt has not a thing to do with it. The fact that it created MORE MONEY is the problem. Money is debt, debt is money. Now that the CDS has fallen apart they must tighten the notch and trillions of dollars are gone. The problem now is we have LESS MONEY.
Banks don't loan they create money at the risk of a borrower default. Banks print the money and the borrower gets it. At that moment however they have the liability of the principle on the books(that is how it stops unlimited printing). If all goes well they keep printing money as it comes back in deposits.
As this system accelerates more money is created and more incentive is created to buy assets with debt(money creation) since not doing this puts you in the poor house.
Family A saves $20,000 per annum
Family B has 250,000 house go up in value 10% per year.
The economics are obvious and it so happens the average American is not such a fool because they saw for oh about 60+ years the longer they waited to buy into assets the worse off they were. It was self sustaining. However Americans do have a government and financial complex that works against them on all levels. This is not a failure of self control but a failure to overcome their oppressors who are sadly just a bit more clever.The more people that saw buying power erode the more they would borrow to buy which as a whole continued the erosion. The banks love this since they are drawing interest on this new money sucking more relative wealth from the host country.
Plan B when they break the system is to access the FED. This shelter is for the big banks while the little banks are culled off.
The system either steals from us all though inflation in parallel like a hair cut every month or in serial as we all stand in line for our turn of financial decapitation(default).
Creating money with debt must end.
^^^^ Bingo! Of course good luck effecting this change with a populace addicted to a standard of living they cannot afford and an affinity for escapism (the TV and football/pop culture) and denialism (the 'if it's sooo bad you should leave America' crowd). We are the worst kind of slaves.....
^^^^ Bingo! Of course good luck effecting this change with a populace addicted to a standard of living they cannot afford and an affinity for escapism (the TV and football/pop culture) and denialism (the 'if it's sooo bad you should leave America' crowd). We are the worst kind of slaves.....
Hello hindsight2020,
We have an example of a country that did deny themselves. Frugality also failed. We need brains, the TV pop culture will not supply that either.
Lets looked at the most virtuous saver of all, Japan. Japanese banks have fallen all over themselves to coax the great masters of saving into debt. The Japanese would have none of it. Nobody saves better than a Japanese citizen. So, the government spent it for them on "projects" that fed the same financial complex. If those dastardly Japanese ever got it directly they would pay off what little debt they had. What a pickle.
So in walks the speculator. The spectators start eating from the trough of the Japanese surplus. Instead of the buying power of Japaneses going up as it should, yen, were finding their way into the international market anyway and the rest of the world fed in the trough like pigs as Japanese died from Karōshi "death by overwork". Toyotas go out yen come in and speculators recycle yen into American and other world markets. So instead of every Japanese benefiting, it was sucked through the straw of speculation. The Japanese have a bag with holes.
If you look at the power of the Fed they can monetize (and have) aka buy foreign or sovereign debt. If we don't spend then the FED could just buy Mexican debt which will create a well spring of American dollars there. American private banks will have branches with their open maws ready to receive interest bearing deposits....at our expense.
Oh No.... (Foreign Debt Bought by The Fed) - The Market Ticker (http://market-ticker.denninger.net/archives/631-Oh-No....-Foreign-Debt-Bought-by-The-Fed.html - broken link)
We have an example of a country that did deny themselves. Frugality also failed. We need brains, the TV pop culture will not supply that either.
Lets looked at the most virtuous saver of all, Japan. Japanese banks have fallen all over themselves to coax the great masters of saving into debt. The Japanese would have none of it. Nobody saves better than a Japanese citizen. So, the government spent it for them on "projects" that fed the same financial complex. If those dastardly Japanese ever got it directly they would pay off what little debt they had. What a pickle.
So in walks the speculator. The spectators start eating from the trough of the Japanese surplus. Instead of the buying power of Japaneses going up as it should, yen, were finding their way into the international market anyway and the rest of the world fed in the trough like pigs as Japanese died from Karōshi "death by overwork". Toyotas go out yen come in and speculators recycle yen into American and other world markets. So instead of every Japanese benefiting, it was sucked through the straw of speculation. The Japanese have a bag with holes.
If you look at the power of the Fed they can monetize (and have) aka buy foreign or sovereign debt. If we don't spend then the FED could just buy Mexican debt which will create a well spring of American dollars there. American private banks will have branches with their open maws ready to receive interest bearing deposits....at our expense.
Oh No.... (Foreign Debt Bought by The Fed) - The Market Ticker (http://market-ticker.denninger.net/archives/631-Oh-No....-Foreign-Debt-Bought-by-The-Fed.html - broken link)
Wow, that one really calls for a stiff drink (or ten)!
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