As leviathan government, Central Bankers and the welfare states battle
Mother Nature and Darwin, the stakes for the global banksters
and elites could not be higher. Governments in the US and Europe are striving
to place debt and legal shackles on those they pretend to serve and working
for the interests of banksters, power-hungry public
servants and entrenched government bureaucrats against that of their own
Welfare states on both sides of the
Atlantic are creating legions of government dependents to justify their
TAKINGS of the private sector. Having already spent the money they have
collected and borrowed since Bretton Woods II, credit markets are REJECTING
their requests for further lending. New sources of REVENUES must be found
since they have effectively DESTROYED wealth and income creation in their
economies. So it's off to the printing press and PROGRESSIVE, rubber-stamp
legislatures they go.
Using FEAR, FORCE and runaway
legislation/regulation to achieve their goals of domination, unaccountable
socialists in Washington and Brussels are working overtime with their
mainstream media to dupe and subjugate their constituents. The public
misunderstands socialism. They think socialism is the government transferring
wealth from the rich to the poor. NO, it is the transfer of wealth from
the poor and confiscating the fruits of the private sector for government to
spread as thin gruel for all. It is misery spread widely for all.
The Jaws of DEATH spell
doom for the dollar over the long term. This is the mother and father of
dozens of BLACK SWANS throughout the financial systems of the world. What are
the Jaws of Death you ask? Take a look:
See that YAWNING gap on the right
side of that chart? That is the Jaws of DEATH. It is signaling
the UNFOLDING demise of the US dollar and ultimately the financial systems of
the WORLD. Keep in mind this DOES NOT include the Social Security holiday,
the extension of unemployment insurance or the theft of Social Security,
Medicare or Highway Trust funds which would add another 5% to the GAP. This
is the demise of the world's financial systems on the HORIZON.
In a fiat currency world everything
is a DERIVATIVE of the dollar. Why? Because between 60 and 70% of most of the
major central banks' RESERVES are dollar denominated. They and US treasuries are the FOUNDATIONS of the world's major
currencies. When they become worthless the foundations of all the major
central banks will COLLAPSE. It is inevitable. It has happened to every fiat
currency in HISTORY, and this time will be NO DIFFERENT.
Just how much more in new obligations
to pay runaway entitlement spending can US citizens ABSORB? Let's take a look
at this SHOCKING table showing how much is already absorbed by each citizen:
My guess, not much more. Of course
this does not include STATE and Municipal debt, but that is a debacle yet to
come. But the plans have been hatched to tie them up in more un-payable debt
and lash them to the debt to pay bankster creditors . In the first two months of 2012 US banks
bought more treasury securities than all last year COMBINED. In other words,
these are injections of un-payable TOXIC promises into the US financial
system to spend on CONSUMPTION!
Currently the United States is
BORROWING more than 41 cents of every dollar they spend. The deficit in
February was the worst in HISTORY at $231 BILLION plus, and the trade deficit
exploded to $50 billion plus. That's $281 billion
in RED INK in 1 month. Take a look at this MONTHLY deficit chart
(courtesy of www.zerohedge.com ) and
look at the beginning of the Ob@ma Administration
and its uber-corrupt socialist supermajority in
Monthly surpluses have become EXTINCT
under the current administration and CONGRESS. When was the last year the US
or European governments ran a SURPLUS? Don't say Clinton; that surplus did
not include the money borrowed from Social Security and Medicare. How can the
US and European governments pay any previous borrowing when they NEVER take
in more than they spend? I would say anyone doing this may be criminally
insane. This is a recipe for a COLLAPSE.... And Bernanke says things are on
the mend. He hints at no more Quantitative Easing. HA HA.
What is he thinking? He is trying to keep a straight face as he FOOLS the
useful idiots into believing his paper money will hold its value.
The biggest OBSCENITY is that the
deficit spending is counted as GROWTH in the GDP numbers. The US is currently
running a 9% deficit (the latest $150 billion Social Security suspension and
unemployment extensions are not shown). This is the BLACK SWAN of the MORAL
and FISCAL Bankruptcy of the US federal government WRIT LARGE.
FEBRUARY was the BIGGEST DEFICIT
month EVER. Keep in mind this is a government that has operated
WITHOUT A BUDGET since the chosen one was elected, with a legislature which
REFUSES to cut spending or the rate of growth in spending. A government which
has NEVER paid off a dime of principle in 50 year,
only rolled the notes and BORROWED more. When will the global holders of
dollars and treasuries WAKE UP? Do you really think you can store wealth in
the IOU's (Junk Bonds) of this borrower? Those are the questions. Now let's
look at how many promises to pay are on the HORIZON for the world's biggest
debtor and the foundations of the world financial system:
The US is hemorrhaging cash. Why
hasn't it crashed already? Because the United States Dollar is the only
currency in the world in which the shorts and the longs do not want it to
move. The shorts are the groups printing it endlessly -- The US government, banksters and the Federal Reserve. This is runaway
confiscation of wealth. The longs are those trying to STORE WEALTH IN IT,
which is a fool's errand. Keep in mind the Fed hinted that QEIII is off the
table. HA HA. It is an April fool's joke. And YOU
are the FOOL! IT IS ONLY A MATTER OF TIME. PERIOD.
These numbers DO NOT include mortgage
giants Fannie and Freddie or the guarantees on student debt which topped $1
trillion TODAY -- new graduates are debt slaves to the government; 27% are in
functional default, the 2005 bankruptcy reform prohibits discharge through
bankruptcy and there are no jobs to pay it back due to government policies.
Governments here and in the Euro zone
(The EFSF - European Financial Security Fund, European Development Bank,
etc.) ALWAYS issue guarantees with the idea they will never have to PAY.
These are endless obligations Of MORALLY and FISCALLY bankrupt public
servants and their governments. When the bill come due it is the duty of the
private sector and public at large to pay. Ask the Greeks how that works?
It's coming to you...
The SQUANDERING of WEALTH and CAPITAL
is BREATHTAKING in its immensity throughout the developed world. In no
place is capital investment taking place except in windmills and solar power.
All capital is going to CONSUMPTION, not self-liquidating capital
investments. Rewards that go to the savers and private sectors for virtuous
behavior, job creation and wealth creation are PUNISHED. So there will be
LESS of it. Would someone please show me where government spending is going
into something PRODUCTIVE and produces more than it costs?
We are at the Von Havenstein
moment: it is easier to PRINT the money rather than curtail the benefits. Von
Havenstein was the central banker to the Weimar
The other currencies that central
banks hold as RESERVES: Yen, UK Pounds, Euros, Aussie Dollars and Swiss
Francs are all hopelessly in debt, have little or no REAL growth in income
and wealth generation and have debts which are compounding at 4 to 8%
annually. These are called a debt spirals and all the world's major economies
are hopelessly caught in them. These economies DO NOT GROW! How are they
going to pay for new borrowing and maturing debt?
The truth is they never planned on
paying maturing debt, only rolling it over. They declared their debt risk
free and believed their own lies. If sovereign debt was marked to market,
then these financial systems would be INSTANTLY INSOLVENT. The structure of
the Long Term Financing Operations (LTRO) guarantee's the smart money will
exit while the getting is good, as now EVERYBODY is subordinated to the
European Central Bank (ECB) and the sovereign central bank holders! Mayhem
Now let's look at the winds of
deflation versus inflation as they Wind Sheer each other. First
let's look at the velocity of money and its CRASH, signifying how terrorized
the private sector has become of the unpredictability of developed-world
governments and the lack of capital opportunities that can PAY OFF after
taxes and runaway regulations:
Don't forget the ZOMBIE banks that
are unwilling to lend except to governments (which they still think is risk
free). The money keeps piling up, because if velocity does not pick up, the
FED must keep printing to fill the hole caused by the lack of monetary blood
flow. Just as FEAR has caused the collapse, FEAR will cause it to turn up at
some point, fear of money printing and uncontrolled socialism. Look at these
mountains of worthless paper money PILING up (courtesy of www.zerohedge.com ):
That is $2.2 trillion of purchasing
power subtracted from bank accounts around the world. It's as simple as the
Principle of Double-Entry Bookkeeping. That is a domestic measure now let's
looks at some INTERNATIONAL numbers:
These small illustrations MASSIVELY
understate the amount of worthless, paper IOU's, aka money, that are sitting
in banks around the world. When will these PILES of cash turn in fright from
the printing press? At that point VELOCITY will turn viscously HIGHER and the
LOSS of purchasing power will go exponential as it FLIES off the sidelines
seeking shelter. Are you waiting for this? Do you think it might be
INFLATIONARY? The velocity of money is a testament to the amount of FEAR
of the policies of government past and present, public servants and inferior
financial products (guaranteed to return less than you deposited) of the big
brokers and banks.
UNFORTUNATELY most people don't know
they are holding IOU's rather than REAL money. Dodd Frank is KILLING the
nimble competitors who actually provide a REAL return and it is LEGISLATING you into the poor offerings of the banksters, whose offerings have NO chance of making a
REAL return after inflation! DO YOU STORE YOUR WEALTH IN THESE RISK-FREE
US Bonds have given SELL signals on
the weekly and monthly charts (German Bunds and UK Gilts have as well and
they echo the chart below). Make no mistake, CREDIT is expanding and so is
the US economy; without it GROWTH disappears. Take a look at this MONTHLY
chart of the 10-year Note (trend lines back to the 80's), a decline to the lower
trend line leaves the multi-decade BULL market INTACT. Notice the mini
violations going back years? That is where the interventions were taking
place by the central banks. Just how powerful will the intervention have to
be to counter this UNFOLDING LONG-TERM pullback? Bigger than EVER.
Notice the active MONTHLY SELL
signals on the slow stochastics and MACD indicators
at the bottom of the chart? Just returning to the lower channel of the
long-term trend line will be ENORMOUS pain (LOSSES) for most BOND investors
because all other rates (investment grade and junk) KEY off this BENCHMARK.
In a search for yield and safety, DESPERATE investors are LOADED with bonds
and in at the TOP! Just when will the 30 year bull market in bonds end?
A quick look at Euro zone Bond Market Credit Default
Swaps over the last three years is one of a crash in creditworthiness, check
this chart courtesy of www.bloomberg.com and www.gordontlong.com:
YEARS: One, two and three, CAN you
say DOMINOES? Do you store your wealth in the bonds of these countries?
INSOLVENCY will ULTIMATELY engulf them all. None have the printing press and
Germany has guaranteed it all. She will fall as well. NONE of these countries
GROW or create wealth in real terms except Germany. She is the definition of
Austrian wealth creation. The NEW Stability and Growth Pact has ALREADY
FAILED as Spain has already broken its promises. Portugal and Spain are on
their Sovereign, economic and financial system DEATH BEDS. Their
CDS's have rallied VERY LITTLE. In fact the next wave (domino) of insolvency
is at the doorstep, look at Spanish CDS's TODAY:
Uh oh, Spanish CDS's are back on the
rise and why not. It appears the European financial crisis is going to leap
frog Portugal and go directly at Spain. If properly MEASURED, it is in a
deflationary depression with NO ESCAPE if they stay in the EURO. When it
comes to OVERLEVERAGED banking systems and economies, BLOWOUTS in interest
rate spreads equal BLOW UPS.
Crashes loom as the short end of the
US Treasury Market is being abandoned and primary dealers CHOKE on inventory.
When will the long end suffer the same fate? China and Russia HAVE ALREADY
left the playing field.
Currently, Euro zone credit markets
have been rallying due to long-term repo operations from the ECB. Of course
the bond markets at some point must return more in real terms than real
inflation, which is currently approximately 10.5% as calculated by John
Williams of www.shadowstats.com (I
love this site, you should subscribe to get top-quality economic statistics
FREE of the ministry of truth and political correctness):
The difference between your yield on
your paper currencies or bonds and this inflation measure is your real
gain or loss. A US ten-year note yields approximately 2.3% today, inflation is over 10% so your real return is a negative
7.3%. Using the rule of 72, the purchasing power of the ten-year note will be
CUT IN HALF when they return your money to you.
This is FINANCIAL REPRESSION. The
rest of your purchasing power was transferred to those culprits. This is a
RISK-FREE investment according to government and the banksters.
You decide if that is true or a government illusion. It is the soft default
of the printing press. They are inflating their debts away to fund the
welfare state along the way.
The stock market is breaking out from
a yearlong trading range and may be at new highs but has reached this level
only God knows how; the volume has disappeared since last October and the
PUBLIC has continued to BAIL out of the stock markets. Take a look at this
long-term chart courtesy of my friend, Garrett Jones:
If that is not a top it is close to
it; manipulators could send it higher but only a fool would buy here. Most
internal measures, especially sentiment and volatility, are HORRID. Check out
these charts courtesy of Alan Newman's CROSSCURRENTS (http://www.cross-currents.net , I
love his work and recommend it highly):
Do you see the excess positive
sentiment above? Can you say Mania? Now lets look
again at divergence's..
Notice the divergences since the 2010
highs, and look closely when margin debt begins to CONTRACT.
Now let's look at the VIX:
When looking at the VIX just how many
rallies begin from these low levels? These Vix
studies echo the intensity levels above, all nose bleed positive sentiments.
As a contrarian it is buyer beware as seldom is the broad market of
investor's right. Now let's look at mutual fund flows versus price action in
the S&P 500:
WOW, constant OUTFLOWS for the past
two years while price is generally POSITIVE. This is a divergence too great
to be explained except one way: PRICE manipulation by banksters
working with public servants and central banks. You need to WATCH Charles
Biderman of Trimtabs to
see some of the inconsistencies under lying this
Lying is the correct word for this
rally. Finally the volume over the last several years has FALLEN OFF a CLIFF as
the public has withdrawn after being VICTIMIZED by bank and investment-house
trading desks who use their enormous resources to
MANIPULATE market short term. As we can see below, stocks have risen into a
high pole. Are you going to buy those highs with virtually no support
activity from the lows?
This is an incredible SHRINKAGE in
volume versus price and fund flows; a disaster and the unfolding demise of
equity markets under ethically-challenged regulators and the big banks that
Short term on the positive side, the
advance decline line of the NYSE has recently hit new highs and Lowry's is
about to generate a BUY signal. OVERALL it is not pretty... Like I said, the
internals are HORRID.
I believe stocks are driven higher by
just three things: deploying past and present quantitative easing, low rates
driving investors into higher-yielding stocks and HFT (high frequency
trading) under the guiding hands of the big banks and 33 Liberty Street, also
known as The New York Federal Reserve. The authorities, the big
investment houses and banksters are DESPERATE to
get the public to buy these MASSIVELY overvalued stocks which YIELD nothing.
They are offering FOOL'S gold to YOU.
Do you have investments that PROSPER
when STOCKS, currencies and BOMB'S, er.... BONDS go
UP or DOWN? OR WILL YOU BE HURT? Absolute Return Alternative Investments with
the potential to prosper in up and down markets is what I do. If you wish to
explore their potential as diversification of your portfolio target="_blank" CLICK HERE and I
will give you a call!
Now take a look at the RED TAPE
RISING and why all the money is sitting on the sidelines scared to
death and refuses to budge off the sidelines:
This is an illustration of the death
of FREEDOM and capitalism and the rise of the centrally-planned economy and
totalitarians in Washington. This is what "change you can believe
in" means. More MONEY and POWER for the government and less for YOU.
"The Founding Fathers knew a
government can't control the economy without controlling people. And they
knew when a government sets out to do that, it must
use force and coercion to achieve its purpose. So we have come to a time for
choosing." ~ target="_blank" Ronald Reagan
The only period
when government was rolled back was REAGAN'S administration; he cut
regulations by over one third! The rollback of TAXES and regulation created a
growing economy until 2000 (see chart below, look what Carter did, then what
the current US administration is doing today, Heavy regulation by would be
socialist engineers), at which time the economy quit growing just as it had
during the 1970's due to over taxation and regulation.
prescription for economic growth worked and it is REQUIRED again for it to
restart. Ever since 2000, growth has come from a printing press not the
private sector. By the way, REAGAN was an AUSTRIAN economic devotee with ties
to Hayak and Von Mises. God Bless you Ronnie and
may you rest in Peace!
His successful recipe for growth
worked decades of magic, but was reviled by progressives because it sparked
growth with its incentives to produce and it was freedom from government and
its predatory practices. Rolling back taxes, legislation and regulation
are acts of giving freedom back to the public; something verboten in today's
political climate of desperate welfare states and public servants.
This is forbidden in Washington
because progressives inhabit both sides of the aisle. Of course these words
ring true. Red tape is now at ALL TIME HIGHS and written by ACADEMICS and BUREAUCRATS
with no knowledge or experience of the private sector they are regulating:
Regulations are a form of
NATIONALIZATION of the productive sector. They take control of an enterprises through DECLARATION. As government
BUREAUCRATS and Socialist academics work their theories and misuse their
power to control the public, thousands and thousands of pages of new rules
and regulations are slated for creation to implement the Dodd Frank financial
reform and Ob@macare legislation. Those bills are
nothing less than tax code, transferring control of larger and larger pieces
of the economy to POLITICIANS, CRONY CAPITALISTS, ELITES and BANKSTERS.
In closing, the
depression has NEVER ended. The GLOBAL FINANCIAL CRISIS has just been
papered over with money PRINTED OUT OF THIN AIR WHICH WILL CONTINUE ENDLESSLY
as WEALTH PRODUCTION IS DEAD! Calling government spending and borrowing
growth is just a Keynesian ILLUSION. WEALTH and INCOME growth have been
OUTLAWED by Socialist welfare states, unaccountable bureaucrats in DC and
Brussels and their something-for-nothing constituents. Private personal
income tax receipts belie the unemployment numbers target="_blank"(www.trimtabs.com ); there is no growth in
personal income and jobs except through government manipulation of the
numbers and the headlines. Oh, and let's not forget the MAC truck about to
HIT the economy known as NEW TAXES set to start in January 2013: Over $300
BILLION plus. Wealth creation's latest NEW HURDLE which the public servants
won't mention in an election year.
I believe stocks are FOOL'S gold with
you as their fool, they yield NOTHING and in order to profit, another fool
has to take your holdings at a higher price. As for bombs, er....bonds the same is true. When the leverage FAILS it
will be bombs away. Do you know how to make money in DECLINING markets?
Recent work by Ray Dalio of Bridgewater (one of the biggest and most
successful hedge funds in the world) puts the total bad debt that needs to be
purged thru default or inflation (printing money out of thin air) at $20 to
25 TRILLION dollars. This is the accurate number at minimum as he is looking
at existing debt. He did not include unfunded entitlements and guarantees on
debt (such as student loans, Social Security, Fannie Mae and Freddie Mac,
etc.) which are not included in the total. THERE IS NO AVOIDING THIS. Income
and wealth creation are DEAD in the developed world if properly measured in
REAL terms. Nominally, the Keynesian illusions of GROWTH still exist.
Authors note: This is the greatest
opportunity in HISTORY. Volatility is OPPORTUNITY for the prepared
investor. As markets price in REALITY rather than Keynesian ILLUSIONS
they will move higher and lower. Diversifying your portfolio into
Absolute-Return Alternative Investments which have the potential to thrive in
up down and sideways markets and can stop the loss of purchasing power by the
printing press should be considered. This is what I do, if you have an
interest target="_blank" CLICK HERE
and I will personally give you a call.
Where's the money coming from to PAY
FOR Social Security, Medicare, Medicaid, unfunded federal, state and
municipal pensions, collapsing shadow banking? Bankruptcy looms for multiple
states where corrupt, progressive public servants have destroyed the economic
well-being of their residents and the rewards for PRIVATE sector wealth creation.
They are handing their futures to crony capitalists and public sector unions.
California, Michigan, Illinois and New York (just to name a few) face brutal
restructurings and are operating in functional insolvency.
California's collapse will be SPECTACULARLY
breathtaking when it arrives. It is 11% of national GDP but has 1/3rd of all
welfare recipients (whose consumption is counted as production in GDP
reporting -- obscene and absurd), and just like the federal government,
California REFUSES to cut spending or torturing the wealth-creating private
sector. So people are voting with their feet and moving to friendlier states.
Illinois will be similarly BRUTAL.
Helicopter Ben is attempting to
challenge the idea that QE III is not in the wings warming up to take flight
soon. He also has taken a BIG SHOT at gold, so he is getting nervous -- he
has never done this except in short denials that it is MONEY, and unless the
insolvencies suddenly disappear nothing could be further from the truth. For
the developed world it is as simple as this: INFLATE or DIE. OFF and ON
balance sheet obligations are AT LEAST 500% of misstated (overstated) GDP.
Approximately $1.5 trillion must be printed to keep up with the debasement in
Europe and Japan, and the countries are BROKE so you can bet on it. Financial
repression is PUBLIC policy. Do you know how to escape it and thrive? I do.
It's called Applied Austrian Economics.
You can expect inflation in
everything you use and deflation in everything you own. When properly, honestly
measured, there has been NO recovery. The REWARD for producing has been
removed and the hassle by voluminous rules and regulations will make sure you
can't even try. It's all Austrian. There is no escape from the final
denouement, only the zigs and zags
in the economy as the welfare states fight their eventual demise. Don't miss
the next edition of TedBits, subscriptions are Free
at target="_blank" www.traderview.com and we are soon
launching the new website: Tedbits.com: Global Macroeconomic Analysis Through
the Austrian Lens.
Thank you for reading TedBits. If you enjoyed it...
Theodore “Ty” Andros
Managed Futures & Alternative Investment
233 West Jackson Blvd. Ste. 725, Chicago, IL 60606,
PH:. 800.253.7689 //
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Tedbits is authored by Theodore "Ty" Andros, and
is registered with TraderView, a registered CTA
(Commodity Trading Advisor) and Global Asset Advisors (Introducing Broker). TraderView is a managed futures and alternative
investment boutique. Mr. Andros began his commodity
career in the early 1980's and became a managed futures and forex specialist beginning in 1985. Mr.
Andros duties include marketing, sales, and portfolio selection and
monitoring, customer relations and all aspects required in building a
successful managed futures and alternative investment brokerage service. Mr. Andros attended the University of San Diego, and the
University of Miami, majoring in Marketing, Economics and Business
Administration. He began his career as a broker in 1983, and has worked his
way to the creation of TraderView. Mr. Andros is active in Economic analysis and brings this
information and analysis to his clients on a regular basis, creating
investment portfolios designed to capture these unfolding opportunities as
the emerge. Ty prides himself on his personal preparation for the markets as
they unfold and his ability to take this information and build innovative
professionally managed portfolios. Developing a loyal clientele.
This report may
include information obtained from sources believed to be reliable and
accurate as of the date of this publication, but no independent verification
has been made to ensure its accuracy or completeness. Opinions expressed are
subject to change without notice. This report is not a request to engage in
any transaction involving the purchase or sale of futures contracts or
options on futures. There is a substantial risk of loss associated with trading
futures and options on futures.