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Throughout human history, those in the ruling class have found various ways to force those under them to work for their economic benefit. But in our day and age, we are willingly enslaving ourselves. The borrower is the servant of the lender, and there has never been more debt in our world than there is right now. According to the Institute of International Finance, global debt has hit the 217 trillion dollar mark, although other estimates would put this number far higher. Of course everyone knows that our planet is drowning in debt, but most people never stop to consider who owns all of this debt. This unprecedented debt bubble represents that greatest transfer of wealth in human history, and those that are being enriched are the extremely wealthy elitists at the very, very top of the food chain.

Did you know that 8 men now have as much wealth as the poorest 3.6 billion people living on the planet combined?

Every year, the gap between the planet’s ultra-wealthy and the poor just becomes greater and greater. This is something that I have written about frequently, and the “financialization” of the global economy is playing a major role in this trend.

The entire global financial system is based on debt, and this debt-based system endlessly funnels the wealth of the world to the very, very top of the pyramid.

It has been said that Albert Einstein once made the following statement…

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”

…click on the above link to read the rest of the article…

Schäuble: Another Financial Crisis Is Coming Due To Spiraling Global Debt, “New Bubbles”

October 8, 2017

Schäuble: Another Financial Crisis Is Coming Due To Spiraling Global Debt, “New Bubbles”

Following the disappointing for Angela Merkel and her CDU German election results, which propelled the populist AfD into Germany’s political establishment with 92 members of parliament, the first casualty was Germany’s finance minister, Wolfgang Schäuble, who in a few days will relinquish his long-held post and move on to the ceremonial role of Bundestag president. As part of his farewell tour, Schäuble – like so many other former members of the establishment- took a parting shot at the system he helped create and warned that “spiraling levels of global debt and liquidity”, as well as “new bubbles” present a major risk to the world economy.

Speaking to the FT, the Europhile beloved in Germany for successfully steering one of the world’s largest economies for the past eight years, and who nearly led to Grexit in the summer of 2005, said there was a danger of “new bubbles” forming due to the trillions of dollars that central banks have pumped into markets. Confirming another fear widely propagated by the Putin propaganda alternative media, Schäuble also warned of risks to stability in the eurozone, particularly those posed by bank balance sheets burdened by the post-crisis legacy of non-performing loans, something we have warned about since 2012, and an issue which remains largely unresolved.

A strong advocate of fiscal rectitude and debt reduction, Mr Schäuble dominated Europe’s policy response to the eurozone debt crisis and has been vilified in countries such as Greece as an architect of austerity. But he will mainly be remembered as the most ardently pro-European politician in German chancellor Angela Merkel’s cabinet, skilled at selling the benefits of the euro and of deeper European integration to an often sceptical German public.

…click on the above link to read the rest of the article…

The Globalists Are Systematically Destroying America’s Middle Class

October 2, 2017

The Globalists Are Systematically Destroying America’s Middle Class

When people are dependent on the government they are much easier to control. We are often told that we are not “compassionate” when we object to the endless expansion of government social programs, but that is not how the debate should be framed. In America today, well over 100 million people receive money from the federal government each month, and the number of Americans that are truly financially independent is continually shrinking. In fact, only 25 percent of all Americans have more than $10,000 in savings right now according to one survey. If we eventually get to the point where virtually all of us are dependent on the government for our continued existence, that would give the globalists a very powerful tool of control. In the end, they want as many of us dependent on the government as possible, because those that are dependent on the government are a lot less likely to fight against their agenda.

Back in 1992, the bottom 90 percent of American income earners brought in more than 60 percent of the country’s income. But last year that figure slipped to just 49.7 percent. The wealth of our society is increasingly being concentrated at the very top, and the middle class is steadily being eroded. Surveys have found that somewhere around two-thirds of the country is living paycheck to paycheck at least part of the time, and so living on the edge has become a way of life for most Americans.

Earlier today, I came across a Business Insider article that was bemoaning the fact that the U.S. economy seems to be rather directionless at this point…

…click on the above link to read the rest of the article…

BIS Finds Global Debt May Be Underreported By $14 Trillion

September 17, 2017

BIS Finds Global Debt May Be Underreported By $14 Trillion

In its latest annual summary published at the end of June, the IIF found that total nominal global debt had risen to a new all time high of $217 trillion, or 327% of global GDP…

… largely as a result of an unprecedented increase in emerging market leverage.

While the continued growth in debt in zero interest rate world is hardly surprising, what was notable is that debt within the developed world appeared to have peaked, if not declined modestly in the latest 5 year period. However, it now appears that contrary to previous speculation of potential deleveraging among EM nations, not only was this conclusion incorrect, but that developed nations had been stealthily piling on just as much debt, only largely hidden from the public eye, in the form of swaps and forwards.

* * *

The BIS then provides substantial background data on who, where and how uses FX swaps (as both a lender and borrower), as well as where this “missing debt” can be found when looking away from the balance sheet. Here are the details:

…click on the above link to read the rest of the article…

Bank of America Stumbles On A $51 Trillion Problem

September 13, 2017

At the end of June, the Institute of International Finance delivered a troubling verdict: in a period of so-called “coordinated growth”, total global debt (including financial) hit a new all time high of $217 trillion in 2017, over 327% of global GDP, and up $50 trillion over the past decade. Commenting then, we said “so much for Ray Dalio’s beautiful deleveraging, oh and for those economists who are still confused why r-star remains near 0%, the chart below has all the answers.”

Today, in a follow up analysis of this surge in global debt offset by stagnant economic growth, BofA’s Barnaby Martin writes that he finds “that as global debt has been mounting to more than $150 trillion (government, household and non-financials corporate debt), global GDP is just above $60 trillion.” His observation is shown in the self-explanatory chart below.

As a result, both the global economy and central banks are now held hostage by both the unprecedented stock of debt injected into capital markets over recent years to offset the financial crisis depression, and the record low interest rates associated with it.

As Martin writes, “the global fixed income market (as captured by the GFIM index) is now above the $51trillion mark“, which means that “more than $51 trillion at risk if rates vol spikes and yields move higher” and adds that “amid a record amount of assets acquired by the central banks we have seen the global fixed income market growing to the largest size it has ever been.” This is shown in the left panel on the chart below, while the right side chart shows the accompanying housing bubble: “amid record low funding costs the housing market is also experiencing rapid price gains in some regions as prices are now higher than pre-GFC levels. All main housing markets (US, Europe, Japan and UK) are above the 2007 highs, propped-up by record low yield levels.”

…click on the above link to read the rest of the article…

Debt Nightmare: Does Anyone Actually Care That Our Exploding National Debt Is Destroying Our Future?

September 12, 2017

Debt Nightmare: Does Anyone Actually Care That Our Exploding National Debt Is Destroying Our Future?

When will America finally wake up? The borrower is the servant of the lender, and we now have a colossal 20 trillion dollar chain around our collective ankles. We have willingly enslaved ourselves, our children and our grandchildren, and yet our addiction is so insatiable that we continue to add more than 100 million dollars to our debt load every single hour of every single day. The national debt is sitting at a grand total of $20,162,176,797,904.13 at this moment, but now that the debt ceiling has been lifted that number is expected to shoot up very rapidly toward 21 trillion dollars by the end of the year. The national debt had been held down by accounting tricks to keep it under the debt limit for many months, but every time this has happened before we have seen the national debt absolutely explode back to projected levels once the debt ceiling was raised.

But very few of our “leaders” in Washington seem to care that we are in the process of committing national suicide. There is no possible way that we will be able to continue to be the most powerful economy on the planet if we continue down this road. During Obama’s eight years in the White House, we added more than 9 trillion dollars to the national debt. That certainly improved things in the short-term, because if we could go back and take 9 trillion dollars out of the economy over the past 8 years we would be in an absolutely nightmarish economic depression right now.

But even with all of this borrowing and spending, our economy has still only grown at an average rate of just 1.33 percent a year over the last 10 years.

And by going into so much debt, we are literally destroying the future for our children and our grandchildren.

…click on the above link to read the rest of the article…

Is This The Generation That Is Going To Financially Destroy America?

July 13, 2017

Is This The Generation That Is Going To Financially Destroy America?

Did you know that the federal government is going to spend more than 4 trillion dollars this year? To put that into perspective, U.S. GDP for the entire year of 2017 is going to be somewhere between 18 and 19 trillion dollars. So when you are talking about 4 trillion dollars you are talking about a huge chunk of our economy. But of course the federal government doesn’t bring in 4 trillion dollars a year. At the beginning of Barack Obama’s first term, we were 10.6 trillion dollars in debt, and now we are nearly 20 trillion dollars in debt. That means that we have been adding more than a trillion dollars a year to the national debt. When you break that down, that means that we have essentially been stealing more than a hundred million dollars from future generations of Americans every single hour of every single day to pay for our debt-fueled lifestyle. Even Federal Reserve Chair Janet Yellen is warning that this is not sustainable, and yet we just keep on doing it.

Nobody can pretend that what we have today is the kind of limited federal government that our founders intended. When federal spending accounts for more than 20 percent of GDP, it is hard to argue that we haven’t moved very far down the road toward socialism. As I mentioned above, total federal spending will surpass 4 trillion dollars for the first time ever in 2017…

Both the Congressional Budget Office and the White House Office of Management and Budget project that federal spending will top $4 trillion for the first time in fiscal 2017, which began on Oct. 1, 2016 and will end on Sept. 30.

In its “Update to the Budget and Economic Outlook: 2017 to 2027” published last week, CBO projected that total federal spending in fiscal 2017 will hit $4,008,000,000,000.

…click on the above link to read the rest of the article…

Global Debt Hits A New Record High Of $217 Trillion; 327% Of GDP

June 29, 2017

Global Debt Hits A New Record High Of $217 Trillion; 327% Of GDP

The Institute of International Finance is perhaps best known for its periodic – and concerning – reports summarizing global leverage statistics, and its latest Q1 report was the most troubling yet, because what it found was that in a period of so-called “coordinated growth”, global debt hit a new all time high of $217 trillion, or over 327% of global GDP, up $50 trillion over the past decade. So much for Ray Dalio’s beautiful deleveraging, oh and for those economists who are still confused why r-star remains near 0%, the chart below has all the answers.

Not surprisingly, China continues to be the biggest source of global debt growth, with the country’s total debt load now surpassing 300%.

While much of the debt issuance at the financial sector level has moderated in recent years, supplanted by outside money created by central banks, debt in the non-financial sector has continued to grow, and as of Q1 2017, hit an all time high of 242% of GDP.

An interesting observation by the IIF: despite the recent dollar strength (if not so much in the past quarter), dollar bond issuance in Emerging Markets has been on a tear over the past year.

Another notable observation: while the EM bond universe has increased by $2.5 trillion to $18.4 trillion since 2016, only 25% of this debt is tradeable via benchmark bond indices.

What is more troubling, however, is the IIF’s observation that despite the relentless foreign portfolio inflows into EM, the credit quality of many emerging markets has deteriored rapidly in the past year.

This is an especially acute problem because there is over $1.9 trillion in EM bonds and loans coming due by the end of 2018. Should the EM sector fall out of favor with investors, and if the debt can not be rolled over, it could result in substantial liquidity events across the EM space.

…click on the above link to read the rest of the article…

Soaring Global Debt Sets Stage For “Unprecedented Private Deleveraging”

April 7, 2017

Soaring Global Debt Sets Stage For “Unprecedented Private Deleveraging”

The UK’s Telegraph just published an analysis of global debt that pretty much sums up the coming crisis. Here’s an excerpt with a couple of the more hair-raising charts:

Global debt explodes at ‘eye-watering’ pace to hit £170 trillion

Global debt has climbed at an “eye-watering” pace over the past decade, soaring to a fresh high of £170 trillion last year, according to the Institute of International Finance (IIF).The IIF said total debt levels, including household, government and corporate debt, climbed by more than $70 trillion over the last 10 years to a record high of $215 trillion (£173 trillion) in 2016 – or the equivalent of 325pc of global gross domestic product (GDP).

It said emerging markets posed “a growing source of concern” to financial stability and the global economy as debt burdens in these countries climb at a rapid pace.

Growing vulnerabilities
The IIF data showed the increase was partly driven by a “spectacular rise” in emerging markets, where total debt stood at $55 trillion at the end of 2016, or 215pc of total emerging market GDP.

Debt has risen from $16 trillion in 2006 and $7.4 trillion in 1996.

The body, which represents the world’s top financial institutions, said a wave of maturing debt this year presented a “growing refinancing risk”.

It estimates that more than $1.1 trillion of emerging market bonds and loans will mature this year, with dollar-denominated debt accounting for a fifth of all redemptions.

The Bank of England’s Financial Policy Committee (FPC) said on Tuesday that credit in China continued to grow at a “rapid” pace.

Corporate credit in the world’s second largest economy has climbed to 166pc of nominal GDP.

The IMF at the end of last year warned of broader risks to the global economy.

…click on the above link to read the rest of the article…

March 2017: The End Of A 100 Year Global Debt Super Cycle Is Way Overdue

March 2, 2017

March 2017: The End Of A 100 Year Global Debt Super Cycle Is Way Overdue

Global Debt Super Cycle - Public Domain March 2017: The End Of A 100 Year Global Debt Super Cycle Is Way OverdueFor more than 100 years global debt levels have been rising, and now we are potentially facing the greatest debt crisis in all of human history. Never before have we seen such a level of debt saturation all over the planet, and pretty much everyone understands that this is going to end very, very badly at some point. The only real question is when it will happen. Many believe that the current global debt super cycle began when the Federal Reserve was established in 1913. Central banks are designed to create debt, and since 1913 the U.S. national debt has gotten more than 6800 times larger. But of course it is not just the United States that is in this sort of predicament. At this point more than 99 percent of the population of the entire planet lives in a nation that has a debt-creating central bank, and as a result the whole world is drowning in debt.

When people tell me that things are going to “get better” in 2017 and beyond, I find it difficult not to roll my eyes. The truth is that the only way we can even continue to maintain our current ridiculously high debt-fueled standard of living is to grow debt at a much faster pace than the economy is growing. We may be able to do that for a brief period of time, but giant financial bubbles like this always end and we will not be any exception.

Barack Obama and his team understood what was happening, and they were able to keep us out of a horrifying economic depression by stealing more than nine trillion dollars from future generations of Americans and pumping that money into the U.S. economy.

…click on the above link to read the rest of the article…

Global Debt with Negative Rates Reaches $12 Trillion

July 5, 2016

Global Debt with Negative Rates Reaches $12 Trillion

QUESTION:

Dear Mr. Armstrong,

I am really confused regarding long-term interest rates – I had thought they were controlled by the markets – but it seems at time that the central banks control them by buying the governments debt. Can you shed some light on this? Can the central banks just keep printing and buying bonds to keep their yields down or is the private market a bigger force – and if so, who in their right mind buy negative yielding debt?

Confused, and yours gratefully,

George

ANSWER: The central bank can control short-term rates. They are trying to control long-term buying in government debt and in theory the bank would then start to lend long-term. You have to separate government from private debt. Just as sometimes silver rallies more than gold or the other way around, the same is true between public and private debt. Despite the fact that governments are trying negative rates, the net effect has been for European banks to send the cash to their US branch and park it at the Fed. Rates are rising in the peripheral markets already.

Rates have been increasing in some countries and declining in others. Central banks cannot “control” long-term rates. All they can do is try to “influence” it by buying debt in an attempt to reduce the supply. But they cannot FIX LONG-TERMrates. That is purely a market function. Capital is running away from government debt. The bondholders have been willing to sell this to them and many are starting to shift to corporate debt. Many pensions have started that process while others have tried to buy emerging debt with higher yields.

…click on the above link to read the rest of the article…

Deranged Central Bankers Blowing Up the World

February 15, 2016

DERANGED CENTRAL BANKERS BLOWING UP THE WORLD

It is now self-evident to any sentient being (excludes CNBC shills, Wall Street shyster economists, and Keynesian loving politicians) the mountainous level of unpayable global debt is about to crash down like an avalanche upon hundreds of millions of willfully ignorant citizens who trusted their politician leaders and the central bankers who created the debt out of thin air. McKinsey produced a report last year showing the world had added $57 trillion of debt between 2008 and the 2nd quarter of 2014, with global debt to GDP reaching 286%.

The global economy has only deteriorated since mid-2014, with politicians and central bankers accelerating the issuance of debt. These deranged psychopaths have added in excess of $70 trillion of debt in the last eight years, a 50% increase. With $142 trillion of global debt enough to collapse the global economy in 2008, only a lunatic would implement a “solution” that increased global debt to $212 trillion over the next seven years thinking that would solve a problem created by too much debt.

The truth is, these central bankers and captured politicians knew this massive issuance of more unpayable debt wouldn’t solve anything. Their goal was to keep the global economy afloat so their banker owners and corporate masters would not have to accept the consequences of their criminal actions and could keep their pillaging of global wealth going unabated.

The issuance of debt and easy money policies of the Fed and their foreign central banker co-conspirators functioned to drive equity prices to all-time highs in 2015, but the debt issuance and money printing needs to increase exponentially in order keep stock markets rising. Once the QE spigot was shut off markets have flattened and are now falling hard. You can sense the desperation among the financial elite. The desperation is borne out by the frantic reckless measures taken by central bankers and politicians since 2008.

…click on the above link to read the rest of the article…

Shocking, Little-Known Facts About Debt

November 12, 2015

Shocking, Little-Known Facts About Debt

Both liberals and conservatives assume they have a rough idea of how much “the debt” is. But the real numbers are shocking …

Public Debt Is Soaring

Global debt has soared to $199 trillion dollars.

The debt to GDP ratio for the entire world is 286%. In other words, global debt is almost 3 times the size of the world economy. (William Banzai sarcastically suggests we send out a space beacon asking aliens to bail us out.)

The Hill reports:

The former U.S. comptroller general says the real U.S. debt is closer to about $65 trillion than the oft-cited figure of $18 trillion.

Dave Walker, who headed the Government Accountability Office (GAO) under Presidents Bill Clinton and George W. Bush, said when you add up all of the nation’s unfunded liabilities, the national debt is more than three times the number generally advertised.

***

“If you end up adding to that $18.5 trillion the unfunded civilian and military pensions and retiree healthcare, the additional underfunding for Social Security, the additional underfunding for Medicare, various commitments and contingencies that the federal government has, the real number is about $65 trillion rather than $18 trillion, and it’s growing automatically absent reforms ….”

But former Senior Economist for the President’s Council of Economic Advisers and current Boston University economics professor Laurence Kotlikoff says that – when unfunded liabilities are taken into account – the fiscal gap for the U.S. is actually 3 times higher … $205 trillion.

Many states are also deeply in the red … For example:

Illinois faces a $9 billion dollar annual deficit and $159 billion in IOUs

New Jersey faces a structural deficit of $10.2 billion dollars

Pennsylvania has to deal with a $2.3 billion budget deficit

Wisconsin is running a $2.2 billion dollar deficit

And unfunded pension debts of the states collectively total between $1.4 trillion (according to Federal Reserve figures) and more than $3 trillion dollars (according to a Stanford finance professor).

Europe is in poor shape as well. For example:

…click on the above link to read the rest of the article…

Former Reagan Administration Official Warns That Financial Disaster Is Dead Ahead

November 5, 2015

Former Reagan Administration Official Warns That Financial Disaster Is Dead Ahead

Why won’t the American people listen to the warnings? David Stockman was a member of the U.S. House of Representatives from 1977 to 1981, and he served as the Director of the Office of Management and Budget under President Ronald Reagan from 1981 to 1985. These days, he is running a website called “Contra Corner” which I highly recommend that you check out. Stockman believes that a global “debt super-cycle” that has been building for decades is now bursting, and he is convinced that the consequences for the U.S. and for the rest of the planet will be absolutely catastrophic. His findings are very consistent with what I have been writing about on The Economic Collapse Blog, and if Stockman is correct the times ahead of us are going to be exceedingly painful.

But right now, most people don’t seem to be in the mood to listen to these types of warnings. Even though there is a mountain of evidence that the global economy has already plunged into recession, U.S. stocks had a great month in October, and so most Americans seem to think that the crisis has passed.

Of course the truth is that the stock market is not an accurate barometer of the economy and it never has been. Back in 2008, almost everything else started to go downhill before stocks did, and the same thing is happening once again. In a recent article, Stockman explained that stocks are surging to absolutely ridiculous levels even though corporate earnings are actually way down…

At this point, 75% of S&P 500 companies have reported Q3 results, and earnings are coming in at $93.80 per share on an LTM basis. That happens to be 7.4% below the peak $106 per share reported last September, and means that the market today is valuing these shrinking profits at a spritely 22.49X PE ratio.

…click on the above link to read the rest of the article…

Cash Withdrawal Limits and “Bank Holidays” Coming

September 13, 2015

Cash Withdrawal Limits and “Bank Holidays” Coming

Concerns that next crisis may be imminent
Bail-ins, withdrawal limits and negative interest rates may be imposed
FT proposes a ban on “barbarous relic” cash
Central banks would have people “completely under their control” – Bonner
Gold in safe jurisdictions will again protect wealth

Collapsing commodities prices, erratic market turmoil and the bursting of Chinese bubbles are leading to a crisis in confidence in the economic system across the globe. The long-expected crisis to which the global financial and systemic crisis in 2008 may have been a mere prelude may be upon us.

Governments have no appetite for further bailouts. The EU states have passed legislation which will make the banks or rather unfortunate and unsuspecting depositors liable for the bank’s lending and speculative profligacy.

It is claimed that this is to “protect” the taxpayer. In reality it will likely lead to bail-ins – the confiscation of deposits. It is likely that that in a crisis within the banking system this bail-in mechanism would be imposed on an impromptu “bank holiday” followed by limits on cash withdrawals as were applied in Cyprus and more recently to depositors in Greece.

As has been pointed out by many other analysts, the unelected powers-that-be have used all their conventional weaponry to stave off the consequences of their irresponsible ultra loose monetary policies and massive buildup of debt globally – the largest ever seen in the history of the world.

The typical response to a crisis has been to slash rates from somewhere around 6% – the historic post war norm in the west – to between 0% and 1%. This has stored up an even crisis in the future – the question is not if we have another crisis but when.

…click on the above link to read the rest of the article…

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