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A new book has exploded on the alternative / conspiracy / fringe landscape over the past few weeks – I don’t mean that in a derogatory sense. Zerohedge, Bombthrower Media, et al, we all occupy this space. Let’s call it, “anti-mainstream”.

The book is called “The Great Taking” and there is now a YouTube video documentary of it here. You can’t actually find it on Amazon (deliberate choice by author, I presume); I bought my copy via Lulu, but you can download the PDF for free here.

At the risk of oversimplifying it: The Great Taking puts forth a warning that a virtually unknown entity called “The Depository Trust & Clearing Corporation” (DTCC) is effectively the “owner” of all the publicly traded companies in the world, and in fact all debt-based assets of any kind:

“It is about the taking of collateral (all of it), the end game of the current globally synchronous debt accumulation super cycle. This scheme is being executed by long-planned, intelligent design, the audacity and scope of which is difficult for the mind to encompass.

Included are all financial assets and bank deposits, all stocks and bonds; and hence, all underlying property of all public corporations, including all inventories, plant and equipment; land, mineral deposits, inventions and intellectual property. Privately owned personal and real property financed with any amount of debt will likewise be taken, as will the assets of privately owned businesses which have been financed with debt.”

Over the course of the book, the author describes a 50-year process by which ownership of shares in public companies, and all debt collateral has been “dematerialized”.

In the olden days, you invested in a company – they gave you physical share certificates – and you were now part owner of the company. This is still how many value investors including me think of stock ownership.

…click on the above link to read the rest…

“This Is Off The Charts”: Economist Claims 2024 Will Bring ‘Biggest Crash Of Our Lifetime’ In US

December 21, 2023

“This Is Off The Charts”: Economist Claims 2024 Will Bring ‘Biggest Crash Of Our Lifetime’ In US

An economist who focuses on consumer spending has issued a dire warning about the U.S. economy in the coming year.

“Since 2009, this has been 100 percent artificial, unprecedented money printing and deficits: $27 trillion over 15 years, to be exact,” economist Harry Dent told Fox Business on Dec. 19. “This is off the charts, 100 percent artificial, which means we’re in a dangerous state.

“I think 2024 is going to be the biggest single crash year we’ll see in our lifetime.

“We need to get back down to normal, and we need to send a message to central banks,” he said. “This should be a lesson I don’t think we’ll ever revisit. I don’t think we’ll ever see a bubble for any of our lifetimes again.”

*A trader looks over his cellphone outside the New York Stock Exchange in New York on Sept. 14, 2022. (Mary Altaffer/AP Photo)*

As Jack Phillips reports at The Epoch Times, Mr. Dent, who owns the HS Dent Investment Management firm, told the outlet that U.S. markets are currently in a bubble that started in late 2021 amid the COVID-19 pandemic.

“Things are not going to come back to normal in a few years. We may never see these levels again. And this crash is not going to be a correction,” he said.

“It’s going to be more in the ’29 to ’32 level. And anybody who sat through that would have shot their stockbroker,” Mr. Dent said, making references to the stock market crash in 1929 that led to the Great Depression throughout the 1930s.

“If I’m right, it is going to be the biggest crash of our lifetime, most of it happening in 2024. You’re going to see it start and be more obvious by May.

…click on the above link to read the rest…

The World Is Sitting on a Powder Keg of Debt

December 20, 2023

The World Is Sitting on a Powder Keg of Debt

The Federal Reserve recently surrendered in its inflation fight. But price inflation is nowhere near the 2% target. Why did the Fed raise the white flag prematurely?

One of the major reasons is debt.

The world is buried under record debt levels and the global economy can’t function in a high interest rate environment.

Fed officials know that and it is certainly one of the reasons they don’t want to raise rates any higher and hope to bring them down as soon as possible.

Over a decade of easy money policies incentivized borrowing to “stimulate” the economy. As a result, governments, individuals, and corporations all borrowed to the hilt. That was all well and good when interest rates were hovering around zero, but when central banks had to hike rates to battle the inevitable price inflation, it pulled the rug out from under the borrow-and-spend economy.

Governments around the world are feeling the squeeze as they try to deal with trillions in debt in a rising interest rate environment.

According to projections by the International Monetary Fund (IMF) global government debt will hit $97.1 trillion in 2023. That represents a 40% increase since 2019.

By 2028, the IMF projects that global public debt will exceed 100% of global GDP. The only other time global debt-to-GDP was that high was at the height of the pandemic lockdowns.

Americans like to brag about being number one. Well, when it comes to debt, they’re right.

The US national debt makes up 32.4% of the total global government debt.

According to the IMF, America’s debt-to-GDP ratio stands at 123.3%.

This chart by Visual Capitalist captures the extent of the problem.

THE DEBT SPIRAL

Unless governments dramatically cut spending and/or raise taxes, this debt spiral will only get worse, especially if interest rates remain elevated.

…click on the above link to read the rest…

The Great Simplification Ahead

November 27, 2023

The Great Simplification Ahead

“Until debt tear us apart”

There is no denying that a major economic downturn is now in the books, and that lacking an energy miracle, the world economy is about to go through a major shift. After discussing the faulty nature of prevailing economic metrics (GDP) in last week’s essay, and understanding how economic growth has turned into stagnation 18 years ago already, let’s turn our eyes towards the future. What might the world economy look like after the onset of the coming crisis? How would world leaders react? Could gold or bitcoin save the day? Let’s dive in.

There is a yawning gap between real economic productivity and debt in the world economy. Despite the fact that GDP seems to be growing, real economic output (best measured by energy consumption) has been stagnating for almost two decades now. As a result Western nations have lost their dominance in the world economy, and now face a steep decline due to an ever worsening energy balance and their colossal import dependence.

You see, this is not a matter of money or the lack thereof. Governments all around the world had the chance to print all the money they wanted in the past two decades. There were two thing they could not conjure up, however: cheap raw materials and energy. Contrary to common wisdom, the green energy transition is not a miracle waiting to happen, only an expensive and utterly unsustainable addition to the existing fossil fuel energy infrastructure. Shale oil, the much heralded “solution” to peak oil, has also run its course and now is close to reaching its all time high… Only to embark on a steep decline afterwards. None of this is a monetary question, only a matter of geology and economics: resource depletion and the resulting cost increase. Printing money does not solve any of these issues, only creates more inflation.

…click on the above link to read the rest…

The Crash Will Be Spectacular

November 22, 2023

THE CRASH WILL BE SPECTACULAR

“Interest on the federal debt is now so immense that it’s consuming 40% of all personal income taxes… If federal finances continue on their current path, we are only a few years from the entirety of income taxes being needed to finance the debt…”

The government collects $2.6 trillion of individual taxes at the point of a gun and threat of prison. Meanwhile they still operate at an annual deficit of $2 trillion. And this is before interest on the national debt starts to really skyrocket. Our Troll Secretary of the Treasury Yellen had the opportunity to lock in trillions of our national debt for 30 years at 2% rates, but purposely kept rolling it on a short-term basis.

Interest on the debt will surpass $1 trillion annually within the next year, and, as you can see, will be approaching $2 trillion per year in a few more years. The government already spends every dime of the taxes they collect. That means they are already printing more fiat and borrowing from the rest of the world in order to pay the interest on the debt they already have.

Foreign countries, in particular China and India, are not only not buying any new US Treasuries, but unloading the Treasuries they already have. With the BRICS purposefully moving away from the USD for their trade, it’s only a matter of time until our mountain of debt crashes down in an epic avalanche upon the unsuspecting American public. The writing is on the wall, and if you refuse to read it, you will be shocked and devastated when you see your supposed paper wealth evaporate.

Now you know why Biden and his handlers are attempting to provoke wars across the globe against those countries who they realize are engineering the demise of the USD as the basis for world domination and control. We have evil men ruling our nation and they would rather burn it all to the ground than lose their wealth, power and control.

David Stockman on Washington’s Fiscal Doomsday Machine

November 22, 2023

David Stockman on Washington’s Fiscal Doomsday Machine

Here’s one that will make your hair stand on end: The US Treasury closed the books on FY 2023, bringing the four-year cumulative deficit to $9.0 trillion!

That’s right. During the last 1,461 days (FY 2020 thru FY 2023), Uncle Sam has generated $6.2 billion of red ink each and every day including weekends, holidays and snow-days. For anyone keeping score at home, that’s $4.2 million of red ink per minute.

For the purpose of perspective, here’s how long it took to generate the first $9 trillion of US government debt: It took all of 43 presidents and 219 years to reach $9 trillion of public debt in July 2007. So the national debt clock has now accelerated to hyper-drive.

Market Value of Public Debt Outstanding, 1940 to July 2007

And, yes, we do mean accelerate. It turns out that when you remove the budgetary Mickey Mouse from the numbers, the federal deficit for FY 2023 clocked in at over $2.0 trillion, or double the comparable level in FY 2022. The reported numbers, of course, do not look quite as alarming, posting at $1.4 trillion last year and $1.7 trillion this year.

But as The Wall Street Journal cogently explained recently, that comparison is very misleading because it includes a $380 billion budgetary shuffle between the two years. It seems that Sleepy Joe’s student debt cancellation got recorded as a cost in September 2022, but then got canceled by the courts in FY 2023, turning it into a giant “savings”!

When the Biden administration announced its plan to forgive federal student debt held by 40 million Americans in September 2022, it logged the long-term cost of the program, $379 billion, on the budget all at once, even though effectively no money was spent on it that year… But in June 2023, the Supreme Court tossed the debt-cancellation program, meaning most of that money wouldn’t actually be spent. Rather than update last year’s deficit numbers, though, the Treasury recorded the changes as a $333 billion spending cut in August 2023.

…click on the above link to read the rest…

U.S. Financial Death Spiral – John Rubino

November 20, 2023

U.S. Financial Death Spiral – John Rubino

Analyst and financial writer John Rubino has a new warning about being fooled into thinking the economy is improving because inflation and interest rates have fallen some recently. Rubino says, “If the U.S. government is running crisis level deficits, which it is right now, borrowing money and paying interest on it means we are in a financial death spiral. The debt goes up, the interest on the debt goes up and that raises the debt even further, and you just spiral out of control. We are there right now. The official U.S. debt is $33.5 trillion. It’s growing by $1.7 trillion a year, and $1 trillion of that is interest costs. Interest costs are rising as the overall debt goes up. Then throw in this incredibly reckless military spending in the guise of foreign aid, and you get a society that has completely lost control. That’s where we are now. We are in the blowoff stage of a 70-year credit super-cycle. Those things do not end with a whimper, and they certainly do not end with a soft landing. They end with a bang, and the bang is going to be centered on the currency. People are going to look at this and say, ‘Do I really want to hold the currency or bonds of a country that is destroying its finances at this trajectory and this scale?’ The answer will be ‘No.’ At that point, it is game over for a deeply indebted economy. We are headed that way fast, and these wars are taking us that way even faster.”

If the Fed keeps raising interest rates, the economy tanks, but you protect the dollar. If you cut interest rates, you spike inflation even more, and the U.S. dollar tanks. Rubino says in the end, we get a “massive reset,” and the everything bubble explodes.

…click on the above link to read the rest…

The Debt Reaper

November 15, 2023

The Debt Reaper

Debt is an integral aspect of modern economies and has long been hailed as a catalyst for growth. When wielded judiciously, it stands as a potent tool for economic development, providing the means to finance projects, expand operations, and invest in essential sectors like education, health, and housing. In the right context, debt fuels economic growth, creates jobs, and fosters innovation. Furthermore, during economic downturns, it offers a safety net for individuals and organizations, helping them weather financial storms.

The ghost of future wealth

Governments have traditionally argued that as long as debt remains manageable and serviceable without difficulty, there’s little cause for concern. While this notion holds some truth, the reality is that recent growth has largely been fueled by an insurmountable increase in debt. Particularly since the Global Financial Crisis of 2008, the creation of what seems like wealth has resulted in soaring asset prices, including equities and real estate, contributing to an alarming rise in wealth inequality. However, there exists a disconnect between perceived wealth and actual wealth, a scenario unlikely to endure. Distinguished economists have persistently argued that debt for consumption essentially borrows demand from the future. This borrowed debt inevitably must be repaid, heralding a probable future slowdown in demand. However, debt allocated for investment purposes differs significantly, capable of fostering future growth and potentially curbing long-term debt.

The trajectory of global debt, as depicted in the chart above, illustrates an unrelenting rise in both government and private debt over time. Up until the 2000s, the surge in debt was primarily attributed to burgeoning private debt, empowering a substantial improvement in living standards, especially in developed nations. Since 2000, private debt has plateaued, whilst government debt has sharply ascended, sustaining the growth in living standards. Yet, the overarching question remains – at what cost? However benign they might seem, debt levels can swiftly move from being a seemingly manageable concern to a formidable challenge once they surpass a particular threshold.

…click on the above link to read the rest…

Doug Casey on the Imminent Bankruptcy of the US Government

November 15, 2023

Doug Casey on the Imminent Bankruptcy of the US Government

International Man: Everyone knows that the US government has been bankrupt for many years. But we thought it might be instructive to see its current cash-flow situation.

The US government’s budget is the biggest in the history of the world and is growing at an uncontrollable rate.

Below is a chart of the budget for the most recent fiscal year, which had a deficit of nearly $1.7 trillion.

Before we get into the specific items in the budget, what is your take on the Big Picture for the US budget?

Doug Casey: The biggest expenditure for the US government are so-called entitlements. It’s strange how the word “entitlements” has been legitimized. Are people really entitled to the government paying for their health, retirement, and welfare? In a moral society, the answer is: No. Entitlements destroy personal responsibility, legitimize theft, destroy wealth, and create antagonisms.

The fact is that once people have an “entitlement,” they come to rely on it, and you can’t easily take it away. The Chinese call that breaking somebody’s rice bowl. In the case of the American welfare state, it’s more a question of breaking a whipped dog’s doggy bowl. It’s a shame because many have come to rely on their mother, the State, not entirely through their own fault. The US has become pervasively corrupt.

The World Economic Forum (WEF)—a pox upon them—isn’t entirely incorrect when it arrogantly calls most people “useless mouths.” An increasing number produce absolutely nothing but only consume at the expense of others. Courtesy of the State.

…click on the above link to read the rest…

The Cycle of Evil

November 3, 2023

THE CYCLE OF EVIL

We are on the inevitable road to perdition for the world economy & financial system, ending in a potential global conflict of uncontrollable proportions.

Evil begets evil as The Cycle of Evil hits countries at the end of an uncontrollable debt expansion.

The pattern throughout history has always been the same – countries and empires, without fail, become victims of their own success -failure, whether it was the Mongols, Ottomans or the British.

As real growth ceases, a country starts to finance expansion with debt until it cannot even afford the interest on the debt, never mind the capital which it has no intention to repay.

At some point, the people, fearing a war or terrorist attack will approve of the leader’s fear mongering by supporting unlimited debt issuance. This is now happening in the US with regard to Ukraine and Israel.

Neither the US nor Europe is taking a single step to remedy the situation. Both are now in the Cycle of Evil of more deficits, more debt, higher interest costs, leading to more deficits, more debt higher interest costs, leading to ……………..

The Cycle of Evil is also accompanied by decadence and moral decline where leaders invent problems that are not real such as climate change, ESG (environmental, social and governance), forced vaccines and incarcerations, 25 new genders and other woke issues etc.

Few Americans understand that the next stage of the Cycle of Evil is about to hit them.

And even fewer Europeans have a clue that they will be dragged down into the same debt collapse quagmire.

The next stage will involve many banks failing, more than the FDIC or government can afford to save without destroying both the Currency and the Bond Market,

A collapsing currency and sovereign debt paper that no investor wants to touch with a bargepole is hardly the right climate for massive debt issuance.

…click on the above link to read the rest…

Today’s energy bottleneck may bring down major governments

October 25, 2023

Today’s energy bottleneck may bring down major governments

Recently, I explained the key role played by diesel and jet fuel. In this post, I try to explain the energy bottleneck the world is facing because of an inadequate supply of these types of fuels, and the effects such a bottleneck may have. The world’s self-organizing economy tends to squeeze out what it considers non-essential parts when bottlenecks are hit. Strangely, it appears to me that some central governments may be squeezed out. Countries that are rich enough to have big pension programs for their citizens seem to be especially vulnerable to having their governments collapse.

Figure 1. World supply of diesel and jet fuel per person, based on Middle Distillate data of the *2023 Statistical Review of World Energy,* produced by the Energy Institute. Notes added by Gail Tverberg.

This squeezing out of non-essential parts of the economy can happen by war, but it can also happen because of financial problems brought about by “not sufficient actual goods and services to go around.” An underlying problem is that governments can print money, but they cannot print the actual resources needed to produce finished goods and services. I think that in the current situation, a squeezing out for financial reasons, or because legislators can’t agree, is at least as likely as another world war.

For example, the US is having trouble electing a Speaker of the House of Representatives because legislators disagree about funding plans. I can imagine a long shutdown occurring because of this impasse. Perhaps not this time around, but sometime in the next few years, such a disagreement may lead to a permanent shutdown of the US central government, leaving the individual states on their own. Programs of the US central government, such as Social Security and Medicare, would likely disappear. It would be up to the individual states to sponsor whatever replacement programs they are able to afford.

…click on the above link to read the rest…

Debt, Currency Debasement & War—The Timeless Pillars of Failure

October 24, 2023

Debt, Currency Debasement & War—The Timeless Pillars of Failure

Below, we follow the breadcrumbs of simple math and bond market signals toward an oft-repeated pattern of how once-great nations become, well…not so great any more.

Debt Destroys Nations

Debt, once it passes the Rubicon from extreme to just plain madness, destroys nations.

Just ask the former Spanish, British or Dutch empires. Or ask the inter-war Germans. Ask the Yugoslavians of the 1990’s or ask a historian of Ancient Rome or a merchant in modern Argentina.

It’s all pretty much the same story, just different a different stage or curtain call.

Like Hemingway’s description of poverty, the process begins slowly at first, and then all at once.

Part of this process involves currency debasement needed to pay down more desperate issuance of IOUs, a process evidenced by rising rather than “transitory” inflation.

Thereafter, comes increased social unrest, and hence increased centralization from the political left or right in the name of “what’s best for us.”

Sound familiar?

Centralization—The Last, Failed Act

Centralization never works in the long run, but that has never stopped opportunists from trying.

Just look at our central bankers.

In a centralized rather than free market, the very name “central bank” should be a dead give-away as to their real role and profile.

As private central banks have been slowly increasing their hidden power and control over national markets and hence national welfare, the very notion of free price discovery in bonds, and indirectly in stocks, is now all but an extinct financial creature in the neo-feudalism which long ago replaced genuine capitalism.

How the Central Game is Played—From Temporary Prosperity to Permanent Ruin

When central banks like the Fed repress rates and print gobs and gobs of money, bonds are artificially supported, which means their prices go up and their yields are compressed.

…click on the above link to read the rest…

The Myth of the Invincible Dollar

October 15, 2023

The Myth of the Invincible Dollar

I write a lot about the national debt.

And most people don’t care.

That’s because there’s a widespread belief that the dollar is invincible.

It isn’t.

The prevailing attitude is that the US government can borrow and spend indefinitely. After all, it hasn’t caused a problem so far. But a long fuse can burn for a long time before it finally reaches the powder keg.

I don’t know how long we have before the debt bomb explodes, but I do know we get closer and closer every day. And sadly, very few people care enough to address the problem.

The recent government shutdown drama is a case in point.

A stopgap spending deal swept the shutdown threat out of the headlines, but it’s still there lurking in the shadows of the halls of Congress. If lawmakers don’t figure something out by Nov. 17, the government will be forced to shut down.

There isn’t much talk about a shutdown right now, but when people do discuss the possibility, they almost always focus on the mythical crisis that shuttering the federal government might cause. That sidesteps the real problem — out of control government spending.

Conventional wisdom is that Congress needs to do whatever it takes to avoid a shutdown. If that means maintaining spending at current levels or even increasing spending, so be it. The handful of intransigent members of Congress who want to hold out for spending cuts are always cast as the bad guys in this kabuki theater. As economist Daniel Lacalle put it in a recent article published by Mises Wire, “The narrative seems to be that governments and the public sector should never have to implement responsible budget decisions, and spending must continue indefinitely.”

…click on the above link to read the rest…

The Coming Collapse of the Global Ponzi Scheme

September 19, 2023

The Coming Collapse of the Global Ponzi Scheme

It won’t be long before governments around the world, including the one in Washington, self-destruct.

Strong words, but anything less would be naïve.

As economist Herbert Stein once said, “If something cannot go on forever, it has a tendency to stop.” Case in point: fiat money political regimes. Interventionist economies of the West are in a fatal downward spiral, comparable to that of the Roman Empire in the second century, burdened with unsustainable debt and the antiprosperity policies of governments, especially the Green New Deal.

In the global Ponzi scheme, thin air and deceit substitute for sound money. As hedge-fund manager Mitch Feierstein wrote in Planet Ponzi, “You don’t solve a Ponzi scheme; you end it.” Charles Ponzi and Bernie Madoff

made some of their investors a whole lot poorer, but the world didn’t come crashing down as a result.

For that‌—‌for a Ponzi scheme that would threaten to bankrupt capitalism across the entire Western world‌—‌you need people much smarter than Ponzi or Madoff. You need time, you need energy, you need motivation. In a word, you need Wall Street.

But Wall Street alone doesn’t have the strength to deliver a truly cataclysmic outcome. If your ambition is to create havoc on the largest possible scale, you need access to a balance sheet running into the tens of trillions. You need power. You need prestige. You need a remarkable willingness to deceive. In a word, you need Washington.

As Gary North wrote in a brief review of Feierstein’s book, “The central banks have colluded with the national governments in order to fund huge increases of national debt, beyond what can ever be paid off. In other words, [Feierstein] has described government promises as part of a gigantic international Ponzi scheme.”

…click on the above link to read the rest…

The Failure of Neoliberalism

September 3, 2023

The Failure of Neoliberalism

Backing Up Macro Alf, & Showcasing Ravel, in 11 plots and two averages

The macro commentator Alfonso Peccatiello, who writes as @MacroAlf on Twitter/X and publishes the Macro Compass newsletter, recently posted an excellent thread on private debt that cited my work:

Let me show you one of the most underrated and yet crucial long-term macro variables in the world. Debt. But not government debt: people should stop obsessing it! The government can print money in its own currency. Of course, this has limitations: capacity constraints, inflation, credibility…but there is much more vulnerable source of debt out there. Private sector debt levels and trends are by far a more important macro variable to follow.

Let me explain why. The private sector doesn’t have the luxury to print money: if you get indebted to your eyeballs and you lose your ability to generate income, the pain is real. This amazing chart from my friend @darioperkins proves the point quite eloquently…

Figure 1: Alf’s chart of private debt to GDP bubble for 4 key economies

This post follows up on Alf’s lead by producing a private debt-focused profile of all the major economies in the OECD whose debt levels are also recorded by the Bank of International Settlements. It combines data on inflation and unemployment rates from the OECD with private and government debt and house price data from the BIS.

The plots in this post run in reverse alphabetical order from the United States (see Figure 2) to Australia. Their message is the same that Alf made in his tweet stream (x-stream?): private debt matters, and the fact that conventional Neoclassical economics ignores it is a major reason why it has failed as a guide to economic theory and policy.

…click on the above link to read the rest…

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