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Bartlett Naylor: The Banks Are Becoming Untouchable Again
Bartlett Naylor: The Banks Are Becoming Untouchable Again
And while legislation was passed in the aftermath to place restrictions on the ‘Too Big To Jail/Fail’ banks, it was heavily watered down and has been under attack by finanical system lobbyists ever since.
To talk with us today about the perpetual legislative warfare pitting citizens on one side and lobbyists (and many lawmakers) on the other, is Bartlett Naylor. Naylor is a veteran of the Wall Street wars. He spent a number of years as an aid to Senator William Proxmire at a time when Proxmire was head of the Senate Banking Committee. Naylor himself served as that committee’s Chief of Investigations.
Sadly, Naylor sees the banks winning out here. More and more of the prudent restraints placed on the banking system are being dismantled, as further evidenced by the recent bill President Trump just signed:
The President signed S2155 last week. This bill has 40 or so provisions in it. The most troubling one reduces what’s known as enhanced supervision for a class of banks that are between $50 billion and $250 billion in assets.
Enhanced supervision means tighter capital controls. Capital is assets minus liabilities — the amount of net worth, if you will, of the particular bank. You think of banks of being very solid; but in fact, they’re in hock. They are highly leveraged. 95% of their assets are financed by debt. They really don’t own that much. They mostly owe things.
…click on the above link to read the rest of the article…
Making It To The 4th Second
Prince Ea
Making It To The 4th Second
Our work here at PeakProsperity.com focuses on raising awareness of the serious challenges facing humanity as we continue to live well beyond our economic, energetic and ecological means.
Through the Three Es framework presented in The Crash Course, we’ve engaged millions of critical thinkers around the world. And we’ve inspired many of them to invest in a more resilient lifestyle, for their sake as well as the planet’s.
But at this point, we’re still only talking to a small minority of the people in the world. And we’re always looking for new channels, new approaches, and new partners that can help get this message out to a wider audience: If humanity wants a future worth inheriting, we need to become agents of regeneration, not destruction.
We especially keep an eye out for effective vehicles that resonante with a younger demographic. The millennials and the generations behind them are the ones who need this information most, as they’re the ones who will experience the full brunt of the Three Es during their lifetimes and on whose shoulders the responsibility of finding solutions will rest.
But as older guys in our forties and fifties, Chris and I realize that we’re probably not the most compelling messengers to this segment. So we’re constantly looking for others who can be.
In that vein, this short video below from Prince Ea recently caught my attention. It delivers a hard-hitting emotional call-to-action for sustainability and resilience using much of the same data we frequently cite here at Peak Prosperity:
If there are people in your life, especially younger ones, whom you think would benefit from watching this video and contemplating the existential question it poses (Will we adapt our behavior in time to make it to the 4th Second?), please share it with them.
…click on the above link to read the rest of the article…
Art Berman: Think Oil Is Getting Expensive? You Ain’t Seen Nothing Yet.
After issuing clear warnings on this program that sub-$50 oil prices were going to be short-lived, oil expert and geological consultant Art Berman returns to the podcast this week to explain why today’s $70 oil prices will go higher — likely much higher — and start materially contricting world economic growth.
Art explains how the current glut of oil created by the US shale boom — along with high crude output by both OPEC and non-OPEC producers — is a temporary anomaly. Fundamentally, we are not finding nearly as much oil as we need to continue the trajectory of the global demand curve. And at the same time, we’re extracting our reserves at a faster rate than ever. That’s a mathematical recipe for a coming supply crunch — it’s not a matter of if, but when:
The price of oil has gone up 30%+ percent just here in the last year alone. There are some very good reasons for that.
In the United States, we’ve been drawing down our reserves, our inventory and the amount of oil we have in storage, consistently since February of 2017. We’re going into the 15th month of drawing from storage each week because we’re not producing enough to meet the need.
To those paying attention: the United States is right now producing more oil than it ever has in its history. We are a million barrels a day higher than the peak in 1970 — the one that King Hubbert got in trouble for warning about. We’re higher by 50,000 or so barrels per month of production. Yet, here we are, still sucking oil out of storage. What does that tell you? There is only one way to interpret that: We are using more than we are producing.
…click on the above link to read the rest of the article…
Bill Ryerson — Dealing With The Elephant In The Room: Overpopulation
Strategies for dealing with this massive, third-rail issue
Worldwide, three new humans are born every second. Every day, 225,000 more mouths are added to the global dinner table.
That adds up to 80 million new people per year — the population equivalent of the five largest cities in the world. That’s like a new Shanghai, a new Beijing, a new New Delhi, a new Lagos, and a new Tianjin being added every year.
This growth trajectory is simply not sustainable from a planetary resources standpoint. As the global population continues to grow at an exponential rate, its demand is causing key resources like fresh water aquifers, rainforest canopies, fishing stocks, fertile topsoils, etc to similarly deplete exponentially. These oppositional exponentials, mathematically, can only result in an evitable planetary ‘overshoot’ — which many argue we are already well into.
What can be done? Bill Ryerson, president of the Population Institute, joins us to discuss the work of the Population Media Center in addressing the interconnected issues of the full rights of women and girls, population, and the environment. It’s mission is to empower people to live healthier and more prosperous lives and to stabilize global population at a level at which people can live sustainably with the world’s renewable resources.
Our earlier podcast with Bill focused on the existential dangers of overpopulation (you can listen to it here). This week’s podcast focuses on the strategies that show the most promise for slowing, or perhaps even reversing, world population growth, should we be willing to pursue them:
All of those new people on the planet have needs for food, shelter, housing, and clothing. When you look at their environmental impact, the number of new people is a major driver of lost biodiversity, and it’s a significant factor in climate change.
…click on the above link to read the rest of the article…
Nomi Prins: Collusion!
Nomi Prins: Collusion!
How central bankers rigged the world
Nomi Prins, Wall Street veteran turned financial industry reformist returns to the podcast this week to explain the findings within her new book Collusion: How Central Bankers Rigged The World.
Nomi has put together a timeline of exactly when and how the central banks have plundered the wealth of the masses since 2008, either directly or indirectly through the loss of purchasing power of the currencies they control:
The relationship between the Central Banks, the major ones — the Fed, Europe Central Bank, Bank of Japan — all the larger Central Banks in the world and their private banks was effectively, and is effectively, kept secret. The relationships they have with each other, a lot of it is secret; so you have to really dig in to it to find out what’s really going on.
What I did was dig into the documents that I could find and create a timeline. That’s why each chapter in each region starts in 2008. It works with Mexico, Brazil, Japan, China and Europe and juxtaposes that with what the Fed was doing at that time to see how that collusive behavior wound up happening. The secret-ness is in the relationships of the banks, where that money that was fabricated by these institutions actually went, and when — or if — it’s coming back.
The ‘cheat and deceiving’ part of that definition is also apparent: people have been cheated out of their futures from the standpoint of the central banks’ strategies. So when the Feds creates cheap money, companies and banks and countries borrow more from the future because it is so cheap and easy. This deceives many people into thinking that the economy is somehow therefore being helped by this strategy, which is in acutality an emergency strategy. It’s an emergency that’s gone on now for ten years.
…click on the above link to read the rest of the article…
The Science Of Community
smallbusinessbc.ca
The Science Of Community
The Peak Prosperity tribe is gathering.
Members from all over the country (including a few from Europe and Asia) are arriving in northern California today for our annual weekend seminar.
Chris and I are really looking forward to this. We’re introducing a host of upgrades this year: a better location, a better venue, new content and exercises, and guest appearances by many of the experts who appear on PeakProsperity.com (including Charles Hugh Smith, Richard Heinberg, Axel Merk, Wolf Richter, David Pare, Mark Rees, the New Harbor team, the folks from Farmland LP, as well as several others).
But as anyone who has attended one of our past seminars (or city Summits) knows, it’s the PP members themselves who are the heart of the experience. Having so many like-minded folks in one place at the same time is a refreshing and energizing rarity.
The community that has developed here at Peak Prosperity is truly special. It attracts members who are smart, curious, open-minded, open-hearted — and share a drive to create a better future for themselves, their loved ones, and the world around them.
Of all the elements of the movement Chris and I have worked hard to build over the years, connecting such amazing individuals together into this community is our proudest achievement. Given our mission of “Creating a World Worth Inheriting”, we know that the path to success depends on the collective action of many than on the efforts of just we two.
Which is why we take community-building so seriously.
As we write about often, Social Capital is very important for each of us to build in order to live a resilient life. And whether you’re building it on an individual level in your local neighborhood, or on a global scale as PeakProsperity.com does, there are several science-based factors that are key to success.
…click on the above link to read the rest of the article…
A How-To Guide For Installing A Home Garden
A How-To Guide For Installing A Home Garden
If you’ve been intending to become a gardener but aren’t quite sure yet how to get started, this how-to guide is for you.
It chronicles the steps that I successfully followed to put in my own garden this year, in my spare time, all while working hard on the Peak Prosperity business as well as traveling frequently for work. From start to finish, it was a 1-manpower project – showing that if I could get this done on my own given my crazy work schedule, most anyone can do this, too.
Hopefully this guide will give you the direction, inspiration, and confidence that you, too, can be tending your own well-constructed garden beds soon.
Plan Your Work
Site Selection
To thrive, garden plants need sun, water, and good soil. Taking the (short) time to identify a site that offers the best combination of all three will dramatically increase your odds of successfully growing food.
During the prime growing months (May-Sept in the Northern Hemisphere), inspect your property for sites that offer the most sun exposure throughout the day. From those options, look then at the sites with the best drainage.
Worry less about the soil conditions at first, because you can control that easier than the prior two variables by using raised garden beds. But by all means, if you have sites of equal sun/drainage rating but different soil quality, pick with the one with the better soil (most vegetables like a sandy loam consistency).
If you have more than 0.25 acre of land on your property, then another factor to consider is proximity. You’ll be making a lot of trips to your garden over time, so picking a convenient spot relative to your house (your kitchen and tool storage area, in particular) will result in reduced schlepping, which your future self will be awfully appreciative of.
…click on the above link to read the rest of the article…
The Economy Is Cooked
© Albund | Dreamstime.com
The Economy Is Cooked
Hours ago, European Central Bank chief Mario Dragho conceded: “The growth cycle may have peaked”
Of course, those paying attention to the data already knew this. Our politicians and central planers have been peddling to us the fantasy that the global economy is strengthening, finally ready to fire on all cylinders after nearly ten years of dependence on monetary stimulus.
That just ain’t so.
The Federal Reserve of Atlanta’s GDPNow measure, which gives a forecast of Q1 2018’s expected GDP, is currently coming in at 2.0%, down from the much more vigorous 5.4% growth predicted as recently as early February:
Generating this growth, meager as it is, has required a tremendous amount of new debt. So much more so that the US will soon have a worse debt-to-GDP ratio than perennial fiscal basket-case Italy:
U.S. Debt Load Seen Worse Than Italy’s by 2023, IMF Predicts (Bloomberg)
In five years, the U.S. government is forecast to have a bleaker debt profile than Italy, the perennial poor man of the Group of Seven industrial nations.
The U.S. debt-to-GDP ratio is projected widen to 116.9 percent by 2023 while Italy’s is seen narrowing to 116.6 percent, according to the latest data from the International Monetary Fund. The U.S. will also place ahead of both Mozambique and Burundi in terms of the weight of its fiscal burden.
The numbers put renewed focus on the U.S. deteriorating budget after the enactment in December of $1.5 trillion in tax cuts, and the passage more recently of $300 billion in new spending. President Donald Trump’s administration argues that the tax overhaul combined with deregulation will help the economy accelerate, which in turn will generate enough extra revenue to avoid any fiscal fallout.
…click on the above link to read the rest of the article…
Doug Duncan: Even US Government Economists Predict Trouble Ahead
Doug Duncan: Even US Government Economists Predict Trouble Ahead
Doug Duncan is not your average beltway economist.
The chief economist for Fannie Mae is surprisingly outspoken about the troublesome outlook for the US economy. He’s worried about the rising cost of debt service as outstanding credit continues to mount at the same time interest rates are starting to ratchet higher, too.
He predicts the US will enter recession within a year, concurrent with a topping out of America’s real estate market. It wouldn’t surprise him to see the stock market falter, too, as central banks around the world begin a coordinated tightening of monetary policy and — similar to the thoughts recently expressed within our podcast with Axel Merk — Doug expects Jerome Powell to be much more reluctant to intervene in attempt to support asset prices. Having met personally with Powell, Doug thinks the Fed is now happy to see some of the air come out of the Everything Bubble (just not too much and not too fast) — a market change from past Fed administrations:
Our forecast definitely sees slowing economic activity, particularly in the second half of ’19. Part of it has to do with the length of the expansion. Just because an expansion is long doesn’t mean it’s going to end; but they all have eventually ended, and this one is getting pretty old. I think if it’s not the second longest, it’s getting to be the second longest that we’ve ever had shortly.
The tax bill was viewed differently by different parties, but the capital markets initially took that — plus the $300 billion agreement to get past the expiration of government funding plus the budget agreement — they took all those things as inflationary.
…click on the above link to read the rest of the article…
Wolf Richter: The Era Of The Fed “Put” Is Over
To all those investors expecting the Fed to step in to backstop the recent weakness seen in the stock market, Wolf Richter warns: The cavalry isn’t coming.
After years of force-feeding too much liquidity into world markets, the central banking cartel is now aware of the Franken-markets it has created. And now with a new head at the US Federal Reserve, and soon at the ECB, central bankers have shifted their priority from supporting asset prices to now actively engineering lower prices.
They just don’t want prices to drop too far too fast.
Of course, the big question is: how much control do they really have? The situation may very quickly get out of their hands.
But the big takeaway is to expect lower prices across the board for nearly every “risk on” asset: stocks (including and especially the FANGS), corporate bonds and real estate. The Fed is working to reduce investor exuberance — and as many bloodied contrarian investors will warn you — Don’t fight the Fed:
Now we’re in an environment where we have an Everything Bubble, and even though there’s still a few central bankers out there that say that they can’t see the bubble, others have now acknowledged it. Of course they don’t call it a “bubble”; they say that prices are “elevated”. So they’re seeing this. In my opinion, a lot of the responses from the Fed are not really about inflation; they’re really about trying to avoid the asset bubble from getting any bigger. They’re trying to avoid a deflation of that asset bubble that could be very messy for the financial system.
…click on the above link to read the rest of the article…
John Butman: New World, Inc.
Photos.com/Jupiter Images
John Butman: New World, Inc.
We all learned in grade school that the Pilgrims sailed to North America to escape religious persecution.
That’s wasn’t necessarily the case, explains author John Butman. At least, it certainly isn’t the whole story.
In fact, the Pilgrim’s voyage to the New World was a seventeenth-century entrepreneurial start-up. It was funded by nearly one hundred investors, who expected a profit on their contributed capital.
This fascinating re-visitation of the origins of America, told in full in Butman’s book New World, Inc., highlights how nearly every human endeavor throughout history has been rooted in gaining or maintaining access to resources.
Of course, back in the days of the Pilgrims, there were only about 0.5 billion humans on the Earth. As we write about on this site, resources are likely to play an even more influential role in the future as the planet goes from 7.5 billion souls today to 10 billion by 2050…
By the 1500s, England’s main export was woolen cloth, mostly to continental Europe. But in 1550, for a number of reasons, the bottom fell out of the market and they weren’t selling enough, The merchants and the leading business people of the day,were very gravely concerned about the economics of the country. Population was on the rise at that point and there was a strong divide between the Gentry and the common people. And as the economics got worse, the social situation got very tricky, and there was really severe social unrest. So there was a real need to find new sources of revenue, new sources of jobs — and so that’s what directed their focus overseas.
After 1600, there were many ventures to America. At first, they’d simply send ships over to America leaving early in the spring, ultimately March or April – the trip would take six to eight weeks. The plan was trade with the Indians for certain commodities like fish, furs and sassafras (which was a very prized herb, it was thought to cure almost everything), and then fill up the hull of their ships, get back, sell the goods in England and on the continent, and make a profit. But they discovered that it was just not sustainable. It was just too risky: on any given trip when sailing over to America, you couldn’t be sure that you would get enough of what you needed to return with.
…click on the above link to read the rest of the article…
Steen Jakobsen: Now Is The Time To Be In Capital-Preservation Mode
Steen Jakobsen: Now Is The Time To Be In Capital-Preservation Mode
Steen Jakobsen, Chief Investment Officer and Chief Economist of Saxo Bank, is sounding a clear warning of an arriving market correction.
Over-inflated asset prices, over-crowded trades, anemic market liquidity, and a continued decline in the credit impulse set the table for a banquet of consequences, in Steen’s view.
Confident a market correction of at least 15% lies ahead, Jakobsen urges investors to exit leveraged positions and build cash.
As for a longer view, he predicts commodities will be one of the best asset classes to own over the next five to ten years:
Every single product available to investors today at has less liquidity than is perceived. I think one of the biggest gaps between perception and reality right now is the ability to actually exit the portfolio you’re in. Whether that’s an ETF, whether that’s credit, or whether that’s even some of the small cap stocks.
We already have a proof of this because the spike in February. Think about it: it was just a 5% move in terms of price, but it created almost a 10,000% increase in volatility. If a 5% move creates that sort of noise in the system, it shows that we’re playing musical chairs. And when the music stops we’re not missing one chair, but we’re going to be missing three chairs in a ten-chair race.
It’s pretty clear that the liquidity side is a concern. This afternoon a un-named Central Bank called me up and wanted to talk about liquidity in ETFs and the bigger risk of the market itself.
If you look at the breadth of the stock market over the last couple of weeks, it’s very, very, very narrow. So we’re all chasing the same investments, we’re chasing the same themes. We’re assume everything is benign when we talk about risk.
But I’m very concerned. My quantitative model supports this caution; it’s saying we really have to be in the mode of capital preservation now. This is the time for capital preservation.
…click on the above link to read the rest of the article…
James Howard Kunstler: The Coming Economy Of “Less”
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James Howard Kunstler: The Coming Economy Of “Less”
In this wide-raging discussion ranging from the pervasiveness of propaganda in today’s media to the risk of nuclear war, Kunstler also re-news his warnings of a current secular economic slowdown.
After too many years of market interventions, magical thinking, racketeering, and bleeding the 99% dry, he warns that our culture and economic system will soon reach a snapping point:
The important story is what happens in the financial sector and how it effects the economy in the next twelve to eighteen months. As we know, the financial system is the most abstract and fragile of all the systems that we depend on because the other systems can’t run without it. The trucks won’t make the food deliveries to the supermarkets unless the finance system works. The gasoline won’t get to the pumps at the stations.
Nothing’s going to move if the financial system cracks up. People no longer trust each other to transact, to get paid. And so they stop transacting.
We’re talking about a falling standard of living and getting used to an economy of “less”. It sounds kind of Ebenezer Scrooge-ish to suggest that people may have to do with less rather than more, because more has always been the expectation in our lifetime. But that’s probably a fact. And as I’ve said more than once, reality has mandates of its own. Circumstances are going to inform us about how this economy is emerging and where we need to go with it. And we can either pay attention or just sit there with our fingers in our ears.
What we’re talking about here is the armature of our culture and economy that people hang their lives on. And that armature is crumbling. There are fewer things that people can hang a life on in a meaningful way, or a way that even ensures that they can have a little bit of security looking into even a short-term future.
…click on the above link to read the rest of the article…
Dr. Charles Hall: The Laws Of Nature Trump Economics
Dr. Charles Hall: The Laws Of Nature Trump Economics
Dr. Charles Hall may not be a name you instantly recognize, but it should be.
Now a Professor Emeritus of the College of Environmental Science and Forestry, Dr. Hall is a rigorous researcher of energy, oil, biophysical economics — and was a critical early pioneer in developing the key resource metric of Energy Returned On Energy Invested (EROEI).
Here’s how Hall describes EROEI in layman’s terms:
These energy investment ideas are everywhere in nature.
Certainly business people know about investments, but you’ve got to realize that anytime that you’re investing, you investing not only money, you’re investing energy. And, in fact, we consider money to be a lien on energy, a promissory note on energy.
So, if, for example, you buy in New York City a bagel for $1, that bagel cannot possibly get there without the use of a considerable amount of energy. And that energy is, for example, energy used in Louisiana to take natural gas and turn it into nitrogen fertilizer. And then it’s put in a barge and barged up the Mississippi River to Nebraska. And then a tractor spreads in on a field. And then it plows up the field and plants wheat seeds. And then later comes along and tills the soil and maybe takes care of the weeds or whatever and certainly harvests it. And then more energy is used to take the harvested wheat and grind it up and turn it into flour. And then they put it in a sack and put it on a railroad train and ship it to New York City. And there somebody boils a pot of water to cook the bagel. Oh, and they use electricity to mix the batter. And then you have a bagel.
…click on the above link to read the rest of the article…
Daniel Nevins: Economics for Independent Thinkers
Daniel Nevins: Economics for Independent Thinkers
Economists are supposed to monitor and analyze the economy, warn us if risks are getting out of hand, and advise us on how to make things runs more effectively — right?
Well, even though that’s what most people expect from economists, it’s not at all how they see their role, warns CFA and and behavioral economist Daniel Nevins.
Economists, he cautions, are modelers. They pursue academic lines of thought in order to make their models more perfect. They live in a universe of equations and presumptions about equilibrium states and other chimerical mathematical perfections that don’t exist in real life.
In short, they are the wrong people to advise us, Nevins claims, as they have no clue how the imperfect world we live in actually works.
In his book Economics For Independent Thinkers, he argues that we need a new, more accurate and useful way of studying the economy:
However far you go back, you can find economists who had a more realistic approach to how humans actually behave, than the way that mainstreamers assume they behave in the models that the Fed uses to pick winners and losers.
You mentioned credit cycles, business environment, and behavioral economics. What I’ve done is to say, “Okay. We know that the modeling approach, the systems of equations approach doesn’t work. But instead of starting completely from scratch, what can we find in the economics literature that is maybe more realistic?”
And the interesting thing is that if you look at the work that was done, the state of the profession before the 1930s, before Keynesianism took hold, you can find a lot of work that was quite sensible.
…click on the above link to read the rest of the article…
