cash – Page 6 – Olduvai.ca

Many people have been predicting another stock market “crash”. I have not been in that camp for reasons I will explain below.

Yet, I believe the stock market is at least 50% overvalued, and a 40% to 60% “net” decline is coming.

My view is the decline will be slow and miserably painful for all involved, but there will not be a “crash” defined as a 35% plunge or greater in a single year.

To understand my view, we first need to discuss corporate debt.

It’s the Debt Stupid!

Yesterday, Bloomberg author Sho Chandra wrote Corporate America Has Amassed a Record Amount of Cash.

Lisa Abramowicz

✔@lisaabramowicz1

Corporate America’s cash reached a record of almost $2.3 trillion in Q2, up nearly 60% since mid-2009: Fed data https://www.bloomberg.com/news/articles/2017-09-21/corporate-america-has-amassed-a-record-amount-of-cash …

4:30 PM – Sep 21, 2017

Corporate America Has Amassed a Record Amount of Cash

Corporate America has never been in better shape to put its cash hoard to use on everything from investment to acquisitions, share buybacks and dividends. Or just hold on to it.

bloomberg.com

The idea that “Corporate America has never been in better shape to put its cash hoard to use on everything from investment to acquisitions, share buybacks and dividends. Or just hold on to it,” is preposterous.

I “politely” replied to Lisa Abramowicz‏ …

Mike Mish Shedlock @MishGEA

Pure bullshit
How much debt is behind that alleged cash? https://twitter.com/lisaabramowicz1/status/910964395743866881 …

2:11 AM – Sep 22, 2017

I do not know if I inspired her or not, but today she accurately Tweeted …

Lisa Abramowicz

✔@lisaabramowicz1

$2.3 trillion in cash but still deeply in debt https://www.bloomberg.com/gadfly/articles/2017-09-22/corporate-cash-isn-t-doing-much-but-hiding-debt … This one’s for you, @DougKass

1:48 PM – Sep 22, 2017

The Great Corporate Shell Game

Stockpiles of liquid assets aren’t a safety net.

bloomberg.com

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

Japan’s “Deflationary Mindset” Grows As Household Cash Hordes Reach Record High

September 21, 2017

Japan’s “Deflationary Mindset” Grows As Household Cash Hordes Reach Record High

After being force-fed more stimulus than John Belushi, and endless rounds of buying any and every asset that dares to expose any cracks in the potemkin village of fiat folly, Japan remains stuck firmly in what Abe feared so many years ago – a “deflationary mindset.”

As Bloomberg reports, cash and deposits held by Japanese households rose for 42nd straight quarter at the end of June as the nation’s consumers continued to favor saving over spending.

The “deflationary mindset” that the Bank of Japan is battling to overcome was also evident in the money laying idle in corporate coffers, which stayed near an all-time high, according to quarterly flow of funds data released by the BOJ on Wednesday.

Still, as Bloomberg optimistically notes, with the economy expanding much faster than its potential growth rate, greater inflationary pressures could be on the way, which may prompt a shift in behavior by consumers and companies… or not!

The Cardinal Sin Of Investing: Permanent Impairment Of Capital

September 16, 2017

Victor Moussa/Shutterstock

The Cardinal Sin Of Investing: Permanent Impairment Of Capital

How to avoid making it

The key message was: When smart analysts independently find the same patterns in the data, it’s time to take notice.

Well, many of you did, by participating in this week’s Dangerous Markets webinar, which featured Grant and Lance.

In it, both went much deeper into the structural fragility of today’s financial markets and the many reasons why economic growth will remain constrained for years to come.

The excessive build-up of debt in the system — and the absolute dependence on its continued expansion to keep the economy from imploding — is, of course, seen as the prime risk to future growth.

As Lance demonstrates here with several of his excellent charts, so much leverage has been taken on that its servicing is increasingly stealing capital that would otherwise go to savings, consumption and productive investment. Going forward, the demands of the debt service will simply result in less and less capital available left over to grow the economy:

As financial assets are (supposed to be) valued on future growth prospects, lower forecasted growth demands lower valuations. Grant calculates that, should the US see another decade of 2% average annual GDP growth (and it has averaged less than that over the past decade), stock prices should be roughly half of what they are today to be considered fairly valued:

And Lance builds further on this, explaining how this moribund growth, coupled with America’s aging demographic trend, will simply savage the nation’s (already troublesomely underfunded) pension and entitlement systems:

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

Pennsylvania Will Run Out Of Cash Tonight, Leaving $860MM Of Bills Unpaid

September 15, 2017

Pennsylvania Will Run Out Of Cash Tonight, Leaving $860MM Of Bills Unpaid

As equity markets spike to all new highs with each passing day, the number of fiscal crises springing up within local and state governments around the country are reaching somewhat alarming levels, even if they’re being completely ignored by investors. As Reuters notes this morning, the state of Pennsylvania may become the latest example government failure when it runs out of cash later tonight leaving some $860 million worth of bills unpaid.

Pennsylvania could run out of cash on Friday, leaving $860 million of bill payments up in the air as lawmakers continue to argue over a revenue package that is more than two months overdue.

The state legislature passed a $32.5 billion spending plan on June 30, the end of the fiscal year and the deadline for the current year’s budget.

But it failed to agree on a revenue package to pay for those expenses, and the state has been borrowing money from its own short-term investment pool.

Treasurer Joe Torsella has said he will not issue more such loans and that the state’s general fund will likely run down to zero on Friday.

While Pennsylvania will be able to make some payments – including nearly $102 million of debt service costs due on Friday – it will not be able to pay all the bills that are due, said Treasury spokesman Mike Connolly.

An estimated $860 million of payments for various items, possibly including schools and Medicaid, could be delayed until the legislature fully funds the budget.

Not surprisingly, Pennsylvania’s funding crisis has only been exacerbated by a political dispute over whether the state’s budget gap should be filled with extra taxes and/or expense cuts.

…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…

Hackers Break Into Equifax – Big Time!

September 11, 2017

Hackers Break Into Equifax – Big Time!

Welcome to the reality of the Digital World and there are those in government who want to eliminate cash and force everyone into electronic deposits. Well the new data breach at credit bureau Equifax appears to have affected up to 143 million people. On top of that, Equifax has been slow to deal with the issue. This is reminiscent of the real Insider Trading from the 1930s when directors realized the company was bankrupt so they sold their stock before any announcement. Here we have the company’s chief financial officer and two other senior executives cashing in on almost $2 million of Equifax stock once they learned about the hack, according to Business Insider’s Mohammed Hadi and Bryan Logan.

The Equifax data breach may have really profound lasting effects . Because they may have access to your information on consumers’ credit reports, including their Social Security numbers, credit card numbers and driver’s license numbers, they could open credit accounts in consumers’ names. They then could file an income tax return and get a refund before you even file your taxes. The Federal Trade Commission warned consumers last Friday to file their taxes early — “as soon as you have the tax information you need, before a scammer can.”

The IRS doesn’t initiate any contact with taxpayers by email, text message or social-media channels requesting any information. If anyone is contacted, be very concerned and do not answer any questions or validate anything. Call an accountant ASAP.

The Death Of Cash – New Tech To Revolutionize The Payments Industry

August 28, 2017

The Death Of Cash – New Tech To Revolutionize The Payments Industry

p2p-blockchain

The world has had enough of paper money.

Now that consumers are done with physical wallets, the multi-billion-dollar mobile pay app market is minting new digital barons at breakneck speed.

And we’ve just identified one company at the forefront of the revolution which has a very compelling story.

Glancepay is already the no. 1 mobile payment app in Canada, ranking at over 92 percent of mobile payment app downloads. It’s also making big waves across North America, where it ranks 37 percent of all mobile payment app downloads.

This could be a timely opportunity for early investors who understand what’s about to happen.

For example, when Alipay hit the Chinese market with its instant mobile app pay features, it was an overnight sensation. Now, it’s conducting a massive $1.7 trillion in business annually in China.

And this story is very exciting because GlancePay (CSE:GET; OTC:GLNNF) is also making inroads in the billion-dollar cannabis market in a deal that gives them direct ownership in Canapay Financial Inc. and they are planning moves into cryptocurrency markets, too.

Mobile payment technology is one of the fastest-growing markets in the world, and GlancePay is hoping to be the major market disrupter—filling a gap that not even the trillion-dollar Chinese turnover is filling, nor major players on the North American scene.

How? By focusing equally on merchants and consumers, losing cumbersome and security-plagued hardware, and offering much more than just one-click payments: rewards, choices, and even tab-splitting.

In short, GlancePay (CSE:GET) has apps that can simply take a glance at where you are… using proprietary and patented GPS / micro-location and image identification technology… and pays your merchant…in seconds.

It’s holistic, streamlined, and has the technology with patents to protect it, an issue that has kept major players from securing greater market share over the past few years.

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

Can Switzerland Survive Today’s Assault on Cash and Sound Money?

August 21, 2017

CAN SWITZERLAND SURVIVE TODAY’S ASSAULT ON CASH AND SOUND MONEY?

“Switzerland will have the last word,” wrote Victor Hugo in the late 19th century. “It possesses one of the most perfect forms of government in the world.” A contemporary of his, Frederick Kuenzli, a scholar of the Swiss Army, boasted: “No purer type of Republican ideals, no more fixed and devoted adherence to those ideals can be found in all the world than in Switzerland.”

On many levels, there is reason to believe that, indeed, Switzerland remains a unique oasis of rationality and intelligence in the ocean-wide bloodbath that is contemporary Western fiscal and social self-sabotage. On the other hand, there is the Swiss National Bank — the central bank — that oddly appears to be encouraging the same monetary policy dance-with-death that has tripped up the country’s masochistic neighbors. How viable yet is the Swiss element in that which we still admire as the nation of Switzerland? First the good news:

Direct democracy is alive and kicking: No mere opinion poll, the power and vibrancy of the referendum — one that can be launched by any local who can gather 100,000 signatures in support — constitutes one of the most impressive displays of true citizen-republicanism that there is. There is an upcoming vote on the Swiss Sovereign Money Initiative — a movement to obstruct financial speculation; recent referendums that were voted into law include a phasing out of nuclear energy to be replaced by renewables, and easier naturalization of third-generation immigrants.

Cash is still very much king and carrying around personal debt is a social blackmark. In fact, the love of cash has a counter-cultural dimension to it as an anti-State, anti-globalist, anti-anti-privacy gesture intended to underscore the Swiss love of freedom.

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

Governments to Control Large Cash Transactions

August 17, 2017

Governments to Control Large Cash Transactions

I have been pointing out the crisis we face moving forward. The gist of this is the total fiscal mismanagement of government for which we, the people, are always blamed. This hunt for taxes has led down the path of arguments for eliminating currency. While people think Bitcoin is an answer, they do not understand government’s hunt for taxes no less the lack of a true rule of law. The government need only pass a law that anyone who fails to report what they have in Bitcoin is criminal and they get to confiscate all your assets.

Switzerland has its “wealth tax” which they argue is nothing just 0.02%. However, it requires you to report all assets worldwide. They then know precisely what you have and it is merely one vote away at anytime to raise the tax or impose criminal penalties for failure to report everything. Yet, once Switzerland has that info, under G20 they must share it with all other governments.

We have stood by and watched India cancel all high denomination notes. Try walking around with €500 notes in Europe and they look at you funny or won’t accept them. ATM machines have been reduced in Europe to taking a maximum of €200 in cash at best. This is all th hunt for taxes because government cannot function ethically no less morally.

Now the German Federal Minister of Finance, Wolfgang Schäuble, is proposing to control all large cash transactions claiming this will prevent black money transactions and money laundering. Of course, they see these two issues not as typical crime like drugs, but tax avoidance.

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

Can Switzerland Survive Today’s Assault on Cash and Sound Money?

August 8, 2017

Can Switzerland Survive Today’s Assault on Cash and Sound Money?

“Switzerland will have the last word,” wrote Victor Hugo in the late 19th century. “It possesses one of the most perfect forms of government in the world.” A contemporary of his, Frederick Kuenzli, a scholar of the Swiss Army, boasted: “No purer type of Republican ideals, no more fixed and devoted adherence to those ideals can be found in all the world than in Switzerland.”

On many levels, there is reason to believe that, indeed, Switzerland remains a unique oasis of rationality and intelligence in the ocean-wide bloodbath that is contemporary Western fiscal and social self-sabotage. On the other hand, there is the Swiss National Bank — the central bank — that oddly appears to be encouraging the same monetary policy dance-with-death that has tripped up the country’s masochistic neighbors. How viable yet is the Swiss element in that which we still admire as the nation of Switzerland? First the good news:

Direct democracy is alive and kicking: No mere opinion poll, the power and vibrancy of the referendum — one that can be launched by any local who can gather 100,000 signatures in support — constitutes one of the most impressive displays of true citizen-republicanism that there is. There is an upcoming vote on the Swiss Sovereign Money Initiative — a movement to obstruct financial speculation; recent referendums that were voted into law include a phasing out of nuclear energy to be replaced by renewables, and easier naturalization of third-generation immigrants.

Cash is still very much king and carrying around personal debt is a social blackmark. In fact, the love of cash has a counter-cultural dimension to it as an anti-State, anti-globalist, anti-anti-privacy gesture intended to underscore the Swiss love of freedom. The Swiss will use huge denominations (the 1000-franc note, for example) like they use pocket change to pay for everything from monthly utility bills to buying a sandwich.

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

Banks Are Scheming to Dominate a Future Cashless Society

July 25, 2017

Banks Are Scheming to Dominate a Future Cashless Society

(ANTIMEDIA) — Visa recently announced its new Cashless Challenge program, which offers $10,000 to restaurants willing to transition into accepting only digital payments. As the largest credit card processor in the U.S., it’s no surprise Visa is spearheading this campaign. Under the guise of increasing transparency and efficiency, they’ve partnered with governments around the world to help convert financial systems into cashless models, but their real incentive is the billions of dollars in extra transaction fees it would generate.

“We are declaring war on cash,” Visa spokesman Andy Gerlt proudly proclaimed after the program was announced.

The food-based small businesses Visa is targeting are among those that benefit most from accepting cash from customers. When transactions are for amounts less than $10, the fees charged cut significantly into profits. Only 28% of food trucks currently accept credit card payments because of the huge losses they incur from them. The bribe from Visa may seem appealing up front but will be mostly paid back to them over the next few years in fees alone.

Liz Garner, Vice President of the Merchant Advisory Group, which represents over 100 of the largest businesses in the U.S., explained some of the hurdles faced when dealing with card networks:

“For many businesses – both large and small – the cost of accepting plastic cards and other forms of electronic payments is one of their highest operating costs. Most business owners have no qualms about paying reasonable fees for business services, and they do so every day for items such as cleaning services, security systems, Wi-Fi, and other basic needs. However, they have the ability to negotiate for those services in a fair and transparent marketplace, which they do not with the two major credit and debit card networks….Credit card and debit card fees are dictated directly by Visa and MasterCard and are imposed on the majority of merchants in a take-it-or-leave-it fashion.

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

Visa Trying to Bribe Merchants to Stop Taking Cash

July 14, 2017

Visa Trying to Bribe Merchants to Stop Taking Cash

The war on cash is escalating. A big driver isn’t central banks who want to be able to inflict negative interest rates on savers, or Treasuries who see cash transactions as hiding revenues from their tax collectors, but the payment networks that want to kill cash (and checks!) as competitors to their oh so terrific (and fee-gouging) credit and debit cards.

However, one bit of good news is there doesn’t appear to be much enthusiasm on the buyer, as in merchant, end.

First, the overview from the Wall Street Journal:

Visa Inc. has a new offer for small merchants: take thousands of dollars from the card giant to upgrade their payment technology. In return, the businesses must stop accepting cash.

The company unveiled the initiative on Wednesday as part of a broader effort to steer Americans away from using old-fashioned paper money. Visa says it is planning to give $10,000 apiece to up to 50 restaurants and food vendors to pay for their technology and marketing costs, as long as the businesses pledge to start what Visa executive Jack Forestell calls a “journey to cashless.”

There are good reasons to think this initiative won’t get far.

Customer resistance. Food vendors, and in particular restaurants, are low margin businesses with fickle customers who have little to no loyalty. Why risk driving business away?

Aside from the fact that some customers prefer cash, a related issue is that using cards and smartphones often seem to be a tax on time. I really hate using chip cards. Mag cards were often faster than cash, since you swiped and could stuff the card back in your wallet while the transaction was being approved.

…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…

Visa Trying to Bribe Merchants to Stop Taking Cash

July 13, 2017

Visa Trying to Bribe Merchants to Stop Taking Cash

The war on cash is escalating. A big driver isn’t central banks who want to be able to inflict negative interest rates on savers, or Treasuries who see cash transactions as hiding revenues from their tax collectors, but the payment networks that want to kill cash (and checks!) as competitors to their oh so terrific (and fee-gouging) credit and debit cards.

However, one bit of good news is there doesn’t appear to be much enthusiasm on the buyer, as in merchant, end.

First, the overview from the Wall Street Journal:

Visa Inc. has a new offer for small merchants: take thousands of dollars from the card giant to upgrade their payment technology. In return, the businesses must stop accepting cash.

The company unveiled the initiative on Wednesday as part of a broader effort to steer Americans away from using old-fashioned paper money. Visa says it is planning to give $10,000 apiece to up to 50 restaurants and food vendors to pay for their technology and marketing costs, as long as the businesses pledge to start what Visa executive Jack Forestell calls a “journey to cashless.”

There are good reasons to think this initiative won’t get far.

Customer resistance. Food vendors, and in particular restaurants, are low margin businesses with fickle customers who have little to no loyalty. Why risk driving business away?

Aside from the fact that some customers prefer cash, a related issue is that using cards and smartphones often seem to be a tax on time. I really hate using chip cards. Mag cards were often faster than cash, since you swiped and could stuff the card back in your wallet while the transaction was being approved.

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

India: Cash is Back

July 4, 2017

India: Cash is Back

But the Crisis has Deepened and has Become More Entrenched (Part XIV)

Nobody for President

On 17^th July 2017, India will elect a new President through a vote of the elected representatives. The two real choices are between Ram Nath Kovind and Meira Kumar. Afraid of looking completely ignorant, I asked a few people who Kovind is. No-one knew of him and people only vaguely remembered Ms. Kumar.

Adults and juveniles have been arrested in different parts of India for celebrating Pakistan’s victory over India in a recently held cricket match. They have been charged with sedition, a charge that has serious legal ramifications and can potentially send these people to prison for life. With the British gone for 70 years, India’s laws and institutions have lost all mooring to their rational anchors. Photo credit: Amnesty India

India will get a complete nobody as its next President. Both candidates are from the Indian province of Bihar. If it were a country, Bihar with its 119 million inhabitants would be the 12^th most populated in the world. With a GDP of USD 420 per capita, it would also be among the world’s ten poorest countries.

A scene from a slum in Patna, Bihar’s capital. Photo credit: Yuri Birukov

Kovind is from the “lower caste” and is the choice of the Indian Prime Minister, Narendra Modi, who would like to make up for recent atrocities against the “lower caste”. While he is a nobody with hardly any public credentials and a yes-man to the system, Kovind is sympathetic to the cause of Hindu fanatics and has their support.

Why pull a passionate street fighter and rabble-rouser out of the street and place him in a position where he might compete with Modi for visibility?

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

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