Wednesday, October 30, 2013

El Lobo de Pared Calle

This time its different

Real estate will go up forever ... or at least as long as the music continues to play (the Fed keeps pumping).

See also http://www.zerohedge.com/news/2013-10-30/what-real-estate-bubble-oh-you-mean-one-thats-bigger-2007-bubble

Tuesday, October 29, 2013

Panama Canal expansion fuels shipping boom



The Panama Canal expansion should open in April 2015.  Panamax ships will have triple the capacity of the previous big ships.

DJIA at all-time high





Next stop: 16,000

The President's Handler Speaks

Source: http://www.huffingtonpost.com/2013/10/29/white-house-nbc-news-obamacare_n_4173145.html

 When the going gets tough, the power behind the throne feels a need to step in, as if she has any credibility.


Source: http://lamecherry.blogspot.com/2009/09/bingo-barango-obambo-and-got-cha.html

Panama City



Despite being founded in 1519, Panama is really only 13 years old, Mr. Fábrega argued, its birthday being Dec. 31, 1999, the day the United States gave the Panama Canal and its surrounding land back to the Panamanians. For the first time in a century the country was whole and independent.

Over the past 13 years, Panama City has been racing to become a world-class metropolis, and for travelers, the changes have been enormous. In 1997 there were perhaps 1,400 hotel rooms in Panama City. Now there are more than 15,000 with another 4,582 rooms in the pipeline, according to STR Global, a London-based agency that tracks hotel markets. In the last two years alone, Trump, Starwood, Waldorf-Astoria, Westin and Hard Rock have opened hotels here. A new biodiversity museum designed by Frank Gehry is nearly complete. The country’s first modern dance festival unfolded last year, the same year Panama held its first international film festival. The Panama Jazz Festival is going strong after 10 years. The country even has its own year-old microbrewery.
http://mobile.nytimes.com/travel/2013/05/05/travel/panama-city-rising.html

Panama City .. the next Dubai.

Friday, October 25, 2013

Michelle's classmate got the Obamacare website contract

First Lady Michelle Obama’s Princeton classmate is a top executive at the company that earned the contract to build the failed Obamacare website. Toni Townes-Whitley, Princeton class of ’85, is senior vice president at CGI Federal, which earned the no-bid contract to build the $678 million Obamacare enrollment website at Healthcare.gov. CGI Federal is the U.S. arm of a Canadian company. Townes-Whitley and her Princeton classmate Michelle Obama are both members of the Association of Black Princeton Alumni
 Read more: http://dailycaller.com/2013/10/25/michelle-obamas-princeton-classmate-is-executive-at-company-that-built-obamacare-website/

Michelle Obama graduated from Princeton in 1985, as did Toni Townes-Whitley.

Toni Townes-Whitley bio
Toni Townes-Whitley, Senior Vice-President CGI Federal

Obamacare's achilles heel

"The Affordable Care Act proposes to make health insurance affordable to millions of low-income Americans by offering them tax credits to help cover the cost. To receive the credit, the law twice says they must buy insurance "through an exchange established by the state."
But 36 states have decided against opening exchanges for now. Although the law permits the federal government to open exchanges instead, it does not say tax credits may be given to those who buy insurance through a federally run exchange."

Thursday, October 24, 2013

NYSE margin debt hits an all-time high

Source http://www.nyxdata.com

Whenever NYSE margin debt hits an all-time high and then declines, it means the stock market will crash in a few months.  (An exception was in April 2013 where the stock market did not crash and margin debt just declined slightly and then went back up).

Look for the DJIA to exceed the current high of 15,677, (which it hit on 9/18/2013), and then decline.  Then look for margin debt to decline.  This would portend a stock market crash.

However, I think that the market will go up more because of QE3, and also most stock market crashes occur in September or October, so the most likely time would be next September.  This is something to watch.

See also
http://aftermath2022.blogspot.com/2013/06/nyse-margin-debt-declines.html

Obamacare is destroying the economy

740 Park Avenue

'Park Avenue: Money, Power and the American Dream'

The most exclusive and powerful building in the world.  Only billionaires need apply.

740 Park Avenue: Where the Über-Wealthy Go to Live

You Supposedly Must Have $100 Million In Cash To Live In This New York Apartment Building

740 PARK AVENUE: Inside The Most Powerful Apartment Building In New York
"740 Park Avenue is a legendary address, at one time considered (and still thought to be by some) the most luxurious and powerful residential building in New York City. The co-op, on the corner of 71st Street and Park Avenue, has an impressive past. Built in 1929 by the grandfather of Jacqueline Kennedy Onassis--who lived there as a child--740 Park has just 31 residences that have, over time, commanded some of the highest real estate prices in New York history."






Update:
See http://www.businessinsider.com/740-park-avenue-powerful-address-2014-8?op=1

Wednesday, October 23, 2013

Fandango, Contango and Backwardation

Fandango:
  1. 1.
    a lively Spanish dance for two people, typically accompanied by castanets or tambourine.
  2. 2.
    a foolish or useless act or thing.
    "the Washington inaugural fandango"
    "And the long-term trend remains in mortgage lenders’ Grim Fandango. That is, zone of stalled mortgage purchase applications."

Contango is a situation where the futures price (or forward price) of a commodity is higher than the expected spot price.
Backwardation is the market condition wherein the price of a forward or futures contract is trading below the expected spot price at contract maturity
Contango is the normal situation.  You expect prices to go up in the future.  Backwardation can occur when there are tight supplies of a commodity now, which are expected to increase, causing the price to fall later.

Contigo is Spanish for "with you", i.e. "quiero ir contigo" means "I want to go with you".
Conmigo is Spanish for "with me", i.e. "por favor ven conmigo" means "please come with me".
Mendigo is Spanish for beggar or panhandler.
Quango is a British term meaning "quasi-autonomous non-governmental organisation".
Farrago means "a confused mixture".
Mundungo means 1) someone with a foul odor, usually tobacco. "A mundungo monopolist". 2) slang for an illegal immigration.  3) In Harry Potter, the alternate name of Mundugus Fletcher, who was a "smelly sneak thief".
Tortuga means turtle in Spanish, and it is also the name of an island in the Caribbean.

Tuesday, October 22, 2013

Fitch says 80% of GDP is the limit

 "Fitch's medium-term fiscal projections imply federal and general government (which includes states and local governments) gross debt stabilising next year and over the remainder of the decade at around 72% and 104% of GDP, respectively. This is below the 80% and 110% thresholds that Fitch previously identified as being inconsistent with the U.S. retaining its 'AAA' status."
http://www.fitchratings.com/creditdesk/press_releases/detail.cfm?pr_id=805079&cm_sp=USecon-_-research-_-Fitch%20Places%20United%20States%20AAA%20on%20Rating%20Watch%20Negative

When will the US debt hit 80% of GDP?  About 2028, based on the last CBO projections.  Debt held by the public is actually supposed to decrease as a percent of GDP until 2019 (when it will be about 68%), after which it will start increasing again.

Global Business Cities

These are the cities with the most headquarters of the world's largest companies.
  1. Tokyo
  2. New York
  3. London
  4. Osaka
  5. Paris
  6. Beijing
  7. Moscow 
  8. Seoul
  9. Rhine-Ruhr
  10. Chicago
http://www.businessinsider.com/a-third-of-the-worlds-biggest-companies-are-located-in-these-20-cities-2013-10

The Day the System Almost Collapsed



October 20, 1987

"What is often lost in the retelling is that the next day, Tuesday, was far more dangerous.  It was the day that the wheels almost did come off the locomotive.
 
The Dow opened up about 200 points Tuesday to a round of cheers on the floor. But, stocks quickly turned lower.  The 200 point gain was erased and the Dow went negative, accompanied by an audible gasp on the floor.  Soon it was nearing -100 and trading was being halted in several of the Blue Chips that make up the Dow.
 
Then we learned that several key banks were shutting down the credit lines of market makers and NYSE specialists.  The banks feared exposure to an apparently collapsing stock market.
 
NYSE Chairman Phelan reached out to the recently appointed head of the Fed, Alan Greenspan.  Unfortunately, Greenspan was on a plane.  Desperate, Phelan called the President of the New York Fed, Gerry Corrigan.  He sensed the danger immediately and began calling the banks to reopen the credit lines.  They were reluctant but Corrigan ultimately cajoled them.  The credit lines were reopened and the halted stocks were reopened.  Best of all, the market started to rally and closed higher on the day.  It was an incredible time and the financial system was within hours (and a few phone calls) of an absolute collapse.  It was a time I'll never forget.”

Sunday, October 20, 2013

Crisis in 2039

Date: 10/20/2013. I haven't done a debt forecast in a while.  In the last one, I thought the endpoint would be in 2036. Now I think we have until 2039.  Woohoo!  The numbers come from the CBO, but I tweaked them slightly.  I think that if interest exceeds 5% of GDP, that there is a serious problem.

Once interest hits this amount, the whole thing quickly spirals out of control.  It is impossible at this point to either raise revenue enough or cut spending enough to make a difference.  Entitlements aren't really the problem, since they can be cut. Interest can't be cut without defaulting.  Soon after this point the whole system will either collapse due to default, or launch into hyperinflation.

Med means both Medicare and Medicaid.

Year  GDP   Rev SS  Med  Oth Int Totl Def Debt   Int%
==== ===== ==== === ==== === === ==== === ====  ====
2013 16034 2726 786 754 1603 208 3351 625 11976 1.3%
2014 16646 2946 816 799 1615 233 3462 516 12492 1.4%
2015 17632 3280 864 882 1657 247 3650 370 12862 1.4%
2016 18792 3477 921 977 1691 301 3890 413 13276 1.6%
2017 19959 3652 958 1038 1716 379 4092 439 13715 1.9%
2018 20943 3812 1026 1089 1738 482 4335 524 14238 2.3%
2019 21890 3962 1073 1204 1773 547 4597 635 14873 2.5%
2020 22854 4137 1143 1257 1828 617 4845 708 15582 2.7%
2021 23842 4339 1216 1335 1907 668 5126 787 16368 2.8%
2022 24858 4574 1293 1442 1989 746 5469 895 17263 3.0%
2023 25910 4793 1373 1529 2073 803 5778 985 18248 3.1%
2024 26946 5012 1428 1617 2156 889 6090 1078 19326 3.3%
2025 28024 5240 1541 1737 2242 953 6474 1233 20559 3.4%
2026 29145 5450 1632 1836 2332 1078 6878 1428 21987 3.7%
2027 30311 5698 1728 1940 2425 1152 7244 1546 23533 3.8%
2028 31523 5958 1860 2081 2522 1229 7692 1734 25267 3.9%
2029 32784 6229 1967 2197 2623 1279 8065 1836 27102 3.9%
2030 34095 6478 2046 2318 2728 1398 8490 2012 29114 4.1%
2031 35459 6773 2163 2518 2837 1454 8971 2198 31313 4.1%
2032 36878 7081 2250 2655 2950 1549 9404 2323 33636 4.2%
2033 38353 7402 2378 2800 3068 1649 9895 2493 36129 4.3%
2034 39887 7738 2473 2992 3191 1755 10411 2672 38801 4.4%
2035 41482 8089 2572 3153 3319 1867 10910 2821 41622 4.5%
2036 43142 8456 2718 3365 3451 2028 11562 3106 44728 4.7%
2037 44867 8794 2782 3544 3589 2154 12069 3275 48004 4.8%
2038 46662 9192 2893 3780 3733 2286 12692 3500 51503 4.9%
2039 48528 9609 3009 3931 3882 2426 13248 3640 55143 5.0%
2040 50470 10044 3129 4139 4038 2574 13879 3836 58978 5.1%

See also: http://aftermath2022.blogspot.com/2012/06/interest-rates-explode-after-2029.html

GDP Projections

The CBO makes projections based on a percent of GDP.  Well, what is GDP? Here is a calculation of projected GDP.   Numbers through 2023 come from http://www.cbo.gov/sites/default/files/cbofiles/attachments/43902_EconomicBaselineProjections.xls.  This was issued in February 2013, and I can't find any more recent numbers.  After 2023, I am just using a 4% growth rate, which assumes 2% real GDP growth and 2% inflation. This is fiscal year, not calendar year.

Year  GDP Growth%
2011 14929 4.0 
2012 15549 4.2
2013 16034 3.1 
2014 16646 3.8 
2015 17632 5.9 
2016 18792 6.6 
2017 19959 6.2 
2018 20943 4.9 
2019 21890 4.5 
2020 22854 4.4 
2021 23842 4.3 
2022 24858 4.3 
2023 25910 4.2
2024 26946 4.0 
2025 28024 4.0 
2026 29145 4.0 
2027 30311 
2028 31523 
2029 32784 
2030 34095 
2031 35459 
2032 36878 
2033 38353 
2034 39887 
2035 41482 
2036 43142 
2037 44867 
2038 46662 
2039 48528 
2040 50470 4.0
  

Friday, October 18, 2013

17 trillion national debt







The total National Debt now exceeds $17 trillion.  It first crossed $16 trillion on September 28, 2012, $15 trillion on November 15, 2011, and $14 trillion on January 4, 2011.  The rate of increase has slowed a bit, so the $18 trillion amount should hit about November 1, 2014.

On 10/17/2012, the total public debt was $16.193 trillion.  So it increased $883 billion in one year.

Update:
The National Debt hit $8.5 trillion on 9/29/2006, so it took 7 years to double it.  If current trends continue, it should hit $34 trillion about 10/1/2020.

Thursday, October 17, 2013

Has the debt ceiling been abolished?

The new deal extends the debt limit until February 7, 2014.  Another report said that it "extends the nation's borrowing authority through Feb. 7".   I don't see any mention of a number, like $17.5 trillion or something.  This is similar to the previous deal which "suspended" the debt limit through May 19, 2013.  Before that on August 2, 2011, the debt limit was raised $2.1 trillion in a strange, 3 part deal subject to a meaningless "resolution of disapproval".  The last time the debt limit was raised in the traditional way was on Feb. 12, 2010 when it was raised $1.9 trillion.

So the new limits are based on time, not on numbers.  And when the time expires, Congress will just renew it again.  I doubt we will ever see a standoff like the one that just ended, and if we do it will just be showmanship and posturing.  So the truth is that the debt ceiling has been abolished.

The national debt is now at $16.747 trillion, and it hasn't budged for the last 5 months. I expect the national debt to rise at least $500 billion in the next 20 days.  The $17 trillion mark will be breached any day now and I will make a blog post to celebrate another milestone on our path towards infinity.

See also: http://dailycaller.com/2013/10/17/theres-no-actual-debt-ceiling-right-now/

http://www.dailymail.co.uk/news/article-2465544/Surprise-Debt-ceiling-deal-gives-Obama-blank-check-loophole-allow-government-spend-WITHOUT-LIMIT-February.html

=================
Update:  It actually took until 12/16/2013 for the national debt to go up $500 billion.  On that date it was at $17.259 tn.  So it took 60 days.

Monday, October 14, 2013

Graph of M5

The formula is Federal Debt Held By the Public + M2 - US Treasuries Held By the Federal Reserve.  This number will continue upwards forever, although its growth has stalled recently due to the DC budget wars.  Our system is based on debt and more debt must continuously be created in order to pay the interest on the old debt.  Even slowing down the rate of increase causes pain to the powers that be.

Saturday, October 12, 2013

Sobre Las Olas y El Danubio Azul

Sobre Las Olas by Juventino Rosas El Danubio Azul by Johann Strauss These are not the same but they are very close. And compare this.

Thursday, October 10, 2013

Cierra Los Ojos

Top 60 Cities in the World

This is a hobby of mine, ranking cities.  I used to do it a couple of times a month.  What makes a city great, separate from having a lot of people?  I think having a lot of skyscrapers, having a large economy, and having name value recognition.   The most important factor here is the skyline ranking, followed by estimates of GDP.  Some cities with nice skylines are excluded, just because the city otherwise isn't that important or has under 1 million people (Panama City, Macau, Honolulu, Gold Coast City).  And some cities/regions with large economies are excluded because they don't have a city center or are overshadowed by a bigger city (N. New Jersey, Ruhr).  So, in general, this is the skyline rating. Cities that are given a boost because of their economy are shown in italics, but they really should build more skyscrapers.  American cities are in bold, just because. There are only 3 cities from the EU on here - London, Paris and Frankfurt.

1. Hong Kong
2. New York
3. Tokyo
4. Singapore
5. Chicago
6. Dubai/Sharjah
7. Seoul
8. London
9. São Paulo
10. Shanghai
11. Paris
12. Los Angeles
13. Bangkok
14. Moscow
15. Guangzhou/Foshan
16. Washington DC
17. Houston
18. Toronto/Mississauga
19. Dallas/Ft Worth
20. Busan, S. Korea
21. Shenzhen
22. Philadelphia
23. Chongqing, China
24. Osaka, Japan
25. Boston
26. Sydney
27. Incheon (Seoul), S. Korea
28. Kuala Lumpur
29. San Francisco/Oakland, CA 
30. Mumbai
31. Beijing
32. Rio de Janeiro
33. Jakarta
34. Atlanta
35. Istanbul
36. Buenos Aires
37. Miami
38. Melbourne
39. Mexico City
40. Recife, Brazil
41. Wuhan, China
42. Ulsan, S. Korea
43. Manila, Philippines
44. Vancouver
45. Seattle
46. Kyiv (Kiev), Ukraine
47. Montreal
48. Daegu, S. Korea
49. Minneapolis
50. St. Petersburg, Russia
51. Tianjin
52. Dalian, China
53. Phoenix
54. Detroit
55. Curitiba, Brazil
56. Frankfurt, Germany
57. Caracas, Venezuela
58. Doha, Qatar
59. Las Vegas
60. Nanjing, China

Monday, October 7, 2013

Die Welle



High school teacher Rainer Wenger (Jürgen Vogel) is forced to teach a class on autocracy, despite being an anarchist. When his students, third generation after the Second World War,[2] do not believe that a dictatorship could be established in modern Germany, he starts an experiment to demonstrate how easily the masses can be manipulated. He begins by demanding that all students address him as "Herr Wenger", as opposed to Rainer, and places students with poor grades beside students with good grades – purportedly so they can learn from one another and become better as a whole. When speaking, they must stand and give short, direct answers. Wenger shows his students the effect of marching together in the same rhythm, motivating them by suggesting that they could really annoy the anarchy class, which is below them. Wenger suggests a uniform, to remove class distinction and further unite the group. Mona (Amelie Kiefer) argues it will remove individuality, as well. Karo (Jennifer Ulrich) shows up to class without the uniform and is ostracised. The students decide they need a name, deciding on "Die Welle" (The Wave). Karo suggests another name, which ends up with one single vote cast by herself.
http://en.wikipedia.org/wiki/The_Wave_(2008_film)

The new X-Date is Halloween


Source: http://www.zerohedge.com/news/2013-10-07/prioritization-payments-would-they-could-they

The Treasury will have enough cash and borrowing authority to last through October 30, but would default on Halloween.

New M5 calculation

M5 is what I call my measurement of total money supply, for a lack of a better term.  Here are the numbers for 9/30/2013:

10,832.0 M2 (as of 9/23/2013)
11,976.3 Public Debt (as of 9/30/2013)
-2,062.0 US Treasuries owned by the Fed (as of 9/26/2013)
======
20,746.3

Previous numbers:
9/30/2012 19,749.4
9/30/2011 17,963.6

So it is up only 5% in FY 2013, after a 10% increase in FY 2012.  I think this is a pretty good measurement of inflation.

==========================
Update:

10880.8 M2 (as of 9/30/2013)
11,976.3 Public Debt (as of 9/30/2013)
-2,076.9 US Treasuries owned by the Fed (as of 10/02/2013)
=======
20780.2

Debt crisis in 2038

"As the population ages, the cost of entitlements will skyrocket. And so we could be looking at public debt clocking in at about 100 percent of GDP in 2038."

http://www.businessweek.com/articles/2013-10-07/think-the-2013-debt-crisis-is-bad-just-wait-for-2038

See also: 
The Federal Debt is unsustainable after 2038 
Year 2038 bug

If I was to name this blog today, I would call it the Aftermath 2038 Blog, but I don't want to rename it.

The Third Wave

2008 German film The Wave, based on these events

To conclude the session on direct action, I instructed students in a simple procedure for initiating new members. It went like this. A new member had only to be recommended by an existing member and issued a card by me. Upon receiving this card the new member had to demonstrate knowledge of our rules and pledge obedience to them. My announcement unleashed a fervor.
The school was alive with conjecture and curiosity. It affected everyone. The school cook asked what a Third Wave cookie looked like. I said chocolate chip of course. Our principal came into an afternoon faculty meeting and gave me the Third Wave salute. I saluted back. The Librarian thanked me for the 30' banner on learning which she placed above the library entrance. By the end of the day over two hundred students were admitted into the order. I felt very alone and a little scared.


When chess is outlawed, only outlaws will play chess



“Police recently confiscated chess gear, tables, and chairs used by the mostly homeless players because they say the games had begun attracting illegal gambling and drug sales…”

http://www.theblaze.com/stories/2013/10/06/this-might-be-the-last-group-youd-expect-to-stage-a-protest-and-defy-a-police-crackdown/

Sunday, October 6, 2013

La Foule



This is the French version of "Que nadie sepa mi sufrir" / "Amor de mis amores".  I like the Spanish version better.

Friday, October 4, 2013

Eso Ehh

Massive monetary inflation is on the way

The Coming New Barbarism
Hugo Salinas Price
When the world’s present troubles surfaced about five years’ ago, I recall reading articles whose central theme was: “there is excessive debt in the world. The amount of debt in the world exceeds the capacity of the world’s economies to service it and pay it down.”
To address the excess of debt in the world, four courses for action were mentioned:
The debt burden could be reduced by paying it down, via a policy of increased taxation.
The debt burden could be reduced by a policy of allowing mass bankruptcies to take place, which would write off substantial portions of the debt.
The debt burden could be reduced by a policy of massive monetary inflation which would devalue all debts and make them payable.
Alternatively, the intolerable debt burden and its absolutely inevitable reduction, nolens volens,would probably be achieved by a combination of all three policies.
In the intervening five years, the world’s excessive debt burden has not been reduced; on the contrary, it has increased. The governments of the world have behaved ostrich-like, burying their heads in the sand to ignore the problem, adopting infantile “extend and pretend” policy to debt and allowing further increases in debt in the hopes of spending their way out of difficulties by adding more debt to existing debt.
What can we expect of all governments in the world, today?
Not one single government is going to raise taxes to pay off debt. Such policy is contrary to the prevailing Keynesian religion. Besides, the debt burden is so gigantic that the idea of paying it down is out of the question. Governments are not even capable of raising taxes to prevent increases in debt, let alone to pay it down. So the first policy mentioned above, is out.
A drastic reduction of the world’s debt burden by cancellation of debt would require its cancellation at national, state, municipal, corporate and individual levels. Cancelling debts means simultaneous cancellation of assets, because every debt is someone’s asset. Massive cancellation of debt would be extremely painful and the last thing that democratic governments want is to inflict pain. Therefore, a process of reducing world debt could not come about by any plan or agreement; it would have to be ignited by some financial fire breaking out, and governments are quite alert to the least signal of fire and will proceed to extinguish any such accident by all means. We may as well forget about cancellation of debt as a remedy for the excessive debt burden weighing on the world -though accidents do happen.
The fact remains: the world’s excessive, un-serviceable and un-payable debt shall be reduced; this is an unavoidable event, as unavoidable as the force of Gravity.
Therefore, what we will see, from here on, is the world’s great slide into the third avenue for policy: massive inflation of the money supply. We are given notice that the slide is now seen as imperative policy: it is announced as “Whatever It Takes”. See zerohedge.com (click here). Now, inflation is not painful like paying taxes or seeing your financial assets go up in smoke. For the majorities, inflation is downright pleasant, like sniffing cocaine or shooting heroin. It is only in the advanced stages of inflation that its painful effects become apparent. So this is unquestionably the policy that will be implemented to deal with excessive debt in the world.
Take Mexico as an example. In 1970 Mexico began an inflationary party that only ended twenty years later; in the meantime, the rate of exchange went from $12.50 pesos to the dollar, to $3,100 pesos to the dollar. Consequently, by 1990 Mexico was quite free of internal debt. When the US applies such a program, the effect will be to cancel world debt, since all debt in the world is tied to the dollar as the reserve currency of the world.
We have only limited knowledge regarding what massive monetary inflation really means. Those who are going to apply it know only some of the effects, not all of them. There remain the known-unknowns, and besides these, the unknown-unknowns. Thus the hand that will implement massive inflation trembles in doubt. Yet, there is no other recourse.
The world will plunge into the darkness of massive world inflation. There is no other alternative. It must take place, but what will happen then is obscure. We are going into uncharted waters.
CODA
Massive monetary inflation in the world will cause massive social disruption, which will give rise to political revolution. The inflation will end at some point. We can only conjecture about what sort of political organizations will prevail when the inflation ends. It is not likely that “Democracy” as we have known it will survive. More likely, Democracy as the present touch-stone for legitimate government will give place to Dictatorship, under the force of circumstances.
When the Barbarians invaded the Roman Empire, frightened Romans hid away their treasure in the form of silver and gold. These treasures are still being discovered today.
In the coming world-uncertainty and fear, humans will adopt the same measures spontaneously, and a flight into gold and silver will take place.
Perhaps some investments in some parts of the world may survive the great purge which is to take place. But, which investments, and where? Nobody can tell us this, with any certainty.
The ruins of the Roman city of Volubilis are situated in what was once the Roman province of Morocco; 1,300 years ago, when the then Christian citizens of Volubilis perceived the imminent menace of Muslim conquest, those who could do so buried their silver. Their little treasures are still being dug up amid the ruins of Volubilis. Alas, their foresight was of no avail to those good citizens of long ago.
To store away gold and silver is one of the important things that humans can do to face the upheavals of the coming New Barbarism. Such foresight provides no certainty, but at least it is a reasonable attempt to prepare for the future with some instrument for survival.


Volubilis, Morocco

Thursday, October 3, 2013

T Minus 14


In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth — with many private-sector analysts believing that it would lead to events of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression.Considering the experience of countries around that world that have defaulted on their debt, not only might the economic consequences of default be profound, those consequences, including high interest rates,reduced investment, higher debt payments,and slow economic growth, could last for more than a generation. http://www.scribd.com/doc/173045683/CRL-100313-14151

Wednesday, October 2, 2013

Obama can use the 14th Amendment to raise the debt ceiling


I don't agree with this, just repeating it.


And the other point of view.

The Chosen One






















Obama will single-handedly raise the debt ceiling without Congressional approval, thereby saving the system from collapse.  At this point, he will become a dictator and everyone who disagrees with this will become a terrorist.  His liberal fans will go wild.  Congress will be superfluous at this point.  This is how the Republic dies and the Empire begins.

"Failure to raise the debt will force the president to break a law — the only question is which one. The Constitution requires the president to spend what Congress has instructed him to spend, to raise only those taxes Congress has authorized him to impose and to borrow no more than Congress authorizes. If President Obama spends what the law orders him to spend and collects the taxes Congress has authorized him to collect, then he must borrow more than Congress has authorized him to borrow. If the debt ceiling is not raised, he will have to violate one of these constitutional imperatives. Which should he choose? Professors Neil H. Buchanan and Michael C. Dorf, who parsed the arguments in the Columbia Law Review in 2012, concluded that all options were bad, but that disregarding the debt ceiling was least bad from a legal standpoint. I agree."
http://www.nytimes.com/2013/09/30/opinion/obama-should-ignore-the-debt-ceiling.html

Death Star exploding



Economics commentator Jeremy Warner, the assistant editor of the Daily Telegraph, said the consequences of a default would be cataclysmic.
He said: 'Given the key position occupied by U.S. Treasuries in the world's money system, the effect of such a default would be like a death star exploding. 
'It would be Lehman Brothers to the power of a thousand. Indeed, the effect would be so calamitous that nobody can quite believe it will ever be allowed to happen.'

Read more: http://www.dailymail.co.uk/news/article-2441471/Will-U-S-budget-deadlock-trigger-financial-Armageddon-How-America-defaulting-payments-shake-world.html


Only 15 days away from a complete collapse of the entire world's financial system.