Saturday, February 6, 2021

"The Storm Is Coming! Get Prepared For A Catastrophic Stock Market Crash"

"The Storm Is Coming! 
Get Prepared For A Catastrophic Stock Market Crash"
by Epic Economist

"Warnings that the stock market bubble is about to burst are becoming increasingly more frequent amongst experts as the GameStop rally has intensified asset overpricing tendencies that have been making the current stock valuations extremely unsustainable. Doomsday predictions for a sharp market correction were already popping way before the whole battle between online investors and hedge funds had started, but now several signs are pointing out to an imminent and violent crash that is likely to suddenly happen, sparking even more chaos in Wall Street. That's what we investigate in this video.

Over the past weeks, several market and industry experts have been publishing an alarming number of convincing statistics and arguments that stock markets worldwide are in a dangerous ‘bubble’ territory. As stock prices are now trading at unsustainably high levels, particularly driven by investors' unreasonably rosy expectations for a V-shaped economic recovery, but when those expectations start to be crushed by the real facts, prices will return to normal, violently collapsing in the process. 

After a record rebound from a health-crisis-induced market crash last March, most stock benchmarks around the world have registered new record-highs in the early days of 2021. However, as stock prices continue to climb, numerous top banks are getting increasingly worried this unprecedented boom, which considerably resembles the dot-com bubble, will result in a similar bust. At this point, stock prices are truly at what experts define an "insanely high" level. Almost every research and analysis using price-based indicators are signaling that the bubble continues to grow, and the larger the bubble, the steepest the crash. 

Traditionally, a stock market bubble is formed when investors get overly optimistic about a new development or possibility, which then prompts fast price surges as they pump money into these stocks. Oftentimes, caution is thrown to the wind and a speculative frenzy starts supported by future prospects for that asset that might never come true. Right now, the leading stocks in the market are Facebook, Apple, Tesla, Microsoft, Amazon, Google, and they account for 24% of the index, and the reality of it is they don’t really participate in the reopening of the economy per se. Those stocks are already trading at extremely high multiples. They’ve got regulation issues coming down the pipeline and the reality of it is they’ve benefited the most from us being locked inside.

One of the most alarming pieces of evidence pointing out to an excessive market speculation is the fact the Tesla shares are trading at unprecedented highs while there's no guarantee the company's future growth will match investors expectations. Even though some may defend that risk in the markets has vanished due to the latest bullish run, bubble markets often present bizarre behavior right before they collapse. The current rally is very similar to what was witnessed during the dot-com crash of the late 1990s, when stocks have sharply risen and then dramatically fell. In recent days, global stocks have been facing extra pressure as millions of online investors gathered up to send the share prices of the unprofitable U.S. video game store chain GameStop to sky highs.

One of the world's top market experts, Mohamed El-Erian said that there will be "serious and widespread unintended consequences" if global output fails to return to pre-virus levels. He stressed that there is "no doubt" that company valuations have become "massively disconnected" from the economy, and if the crash doesn't happen as a result of the investor frenzy, the current bubble will certainly pop if the economy fails to catch up with record-breaking valuations. Mr El-Erian added that the staggering amount of stimulus money unleashed by governments and central banks is inflating shares instead of boosting the economy. 

Furthermore, the US Securities and Exchange Commission came reported that "extreme stock price volatility" has the potential to cause "rapid and severe losses" for investors and to undermine market confidence. On every front we look, there are several warnings that the markets are hanging by a thread and could collapse with the blink of an eye. As Richter outlines in his article, the stock market has been broken for a long time, but now it has finally blown into the open for all to see. The growing risks, speculation, manipulation, and frenzy are spiraling out of control and soon we will be witnessing an astronomical explosion that will reset the course of the financial markets for once and for all."

“Don’t Be Dumb, Be Your Own Central Banker; Humans Will Be Replaced; Hyperinflation Can Happen Fast”

Jeremiah Babe,
“Don’t Be Dumb, Be Your Own Central Banker; Humans Will Be Replaced;
Hyperinflation Can Happen Fast”

Musical Interlude: 2002, "Deep Still Blue"

2002, "Deep Still Blue"
Full screen recommended.

"A Look to the Heavens"

“These three bright nebulae are often featured in telescopic tours of the constellation Sagittarius and the crowded starfields of the central Milky Way. In fact, 18th century cosmic tourist Charles Messier cataloged two of them; M8, the large nebula left of center, and colorful M20 on the right. The third, NGC 6559, is above M8, separated from the larger nebula by a dark dust lane. All three are stellar nurseries about five thousand light-years or so distant.
The expansive M8, over a hundred light-years across, is also known as the Lagoon Nebula. M20's popular moniker is the Trifid. Glowing hydrogen gas creates the dominant red color of the emission nebulae, with contrasting blue hues, most striking in the Trifid, due to dust reflected starlight. The colorful skyscape recorded with telescope and digital camera also includes one of Messier's open star clusters, M21, just above the Trifid.”
"When I heard the learn’d astronomer,
When the proofs, the figures, were ranged
in columns before me,
When I was shown the charts and diagrams,
to add, divide, and measure them,
When I sitting heard the astronomer where
he lectured with much applause in the lecture-room,
How soon unaccountable I became tired and sick,
Till rising and gliding out I wander’d off by myself,
In the mystical moist night-air, and from time to time,
Look’d up in perfect silence at the stars."

- Walt Whitman

"Never Forget..."

"Take risks! That is really what life is about. We must pursue our own happiness. Nobody has ever lived our lives; there are no guidelines. Trust your instincts. Accept nothing but the best. But then also look for it carefully. Don't allow it to slip between your fingers. Sometimes, good things come to us in a such a quiet fashion. And nothing comes complete. It is what we make of whatever we encounter that determines the outcome. What we choose to see, what we choose to save. And what we choose to remember. Never forget that all the love in your life is there, inside you, always."
- Linda Olsson

Paulo Coelho, "The Bird And The Cage"

"The Bird And The Cage"
by Paulo Coelho

"Once upon a time, there was a bird. He was adorned with two perfect wings and with glossy, colorful, marvelous feathers. One day, a woman saw this bird and fell in love with him. She invited the bird to fly with her, and the two travelled across the sky in perfect harmony. She admired and venerated and celebrated that bird. But then she thought: He might want to visit far-off mountains! And she was afraid, afraid that she would never feel the same way about any other bird.

And she thought: “I’m going to set a trap. The next time the bird appears, he will never leave again.” The bird, who was also in love, returned the following day, fell into the trap and was put in a cage. She looked at the bird every day. There he was, the object of her passion, and she showed him to her friends, who said: “Now you have everything you could possibly want.”

However, a strange transformation began to take place: now that she had the bird and no longer needed to woo him, she began to lose interest. The bird, unable to fly and express the true meaning of his life, began to waste away and his feathers to lose their gloss; he grew ugly; and the woman no longer paid him any attention, except by feeding him and cleaning out his cage.

One day, the bird died. The woman felt terribly sad and spent all her time thinking about him. But she did not remember the cage, she thought only of the day when she had seen him for the first time, flying contentedly amongst the clouds. If she had looked more deeply into herself, she would have realized that what had thrilled her about the bird was his freedom, the energy of his wings in motion, not his physical body.

Without the bird, her life too lost all meaning, and Death came knocking at her door. “Why have you come?” she asked Death. “So that you can fly once more with him across the sky,” Death replied. “If you had allowed him to come and go, you would have loved and admired him ever more; alas, you now need me in order to find him again.”

The Daily "Near You?"

Tijeras, New Mexico, USA. Thanks for stopping by!

"Having One Of Those Days?"


"It Simply Means..."

“Never be ashamed of a scar. 
It simply means you were stronger than whatever tried to hurt you.” 
- Unknown

"The Truth Virus: The Most Dangerous Virus in the World"

"The Truth Virus:
The Most Dangerous Virus in the World"
by Dog Poet

"I’ve got a virus. It doesn’t have a common name because it isn’t a common virus. It’s difficult to catch this virus because there are only so many ways for it to enter your system. You can catch it as a result of extreme trauma which results in all of your defenses being shut down. This includes all subconscious resistance and all systemic defenses. You can catch it as a result of long term abuse. This includes abuse visited upon you or abuse you visit on yourself. Often this abuse comes about because the virus is already looking for a foothold and it will attract one of these two kinds of abuse. You can catch it through diligent and repeated efforts to catch it, in an environment of quietude, created by a relentless persistence of the mind to cease from the production of thought. There are a few other ways.

Once you’ve got this virus there’s no cure for it. Every cell in your body is going to be replaced and the world will gradually- and sometimes not so gradually- take on the appearance of an insane asylum, while also becoming remarkably predictable. People think insanity is unpredictable but that’s just one of the illusions that are part of the ordinary mindset of the collectively insane.

People who have this virus can understand one another without having to say anything at all and if they should speak they are also understood by people who are vulnerable to this virus. This is one of the ways that the virus spreads. The impact of the virus speaking induces trauma that naturally moves toward the extreme. People who do not have the virus- and who are not susceptible to catching it- will not understand a single word being said. It will make them uncomfortable and sometimes it will make them angry but at no time will it be understood.

There’s a lot of news, noise and argument about Howdy Doody’s comprehensive health plan for the Teletubbies. Most people think that some permutation of universal health care is going to be a major step up for American society. They seem to think that having it is somehow going to lead to a more general state of well being among the population. There are several reasons why this isn’t going to make the slightest difference no matter what kind of a program finally gets decided on.

It doesn’t really matter whether you can see a doctor of your choice or not and have some amount of it paid for. It isn’t going to have any positive effect on your health. Health is the result of a few basic things and one of them is youth. The other things are diet and ones mental and emotional state. An awareness of ones relationship to all of these leads to making the right decisions about how one lives their life. A conscious awareness of diet has a profound effect on one’s well being. One’s mental and emotional states also play significant roles. One needs only to study how many stress-related diseases there are to understand this. If you factor bad diet into unbalanced mental and emotional states you’ve got a problem no doctor can deal with, especially if your medical system is of the allopathic variety.

The people who decide what doctors can and cannot do and what doctors can and cannot tell you are permanent bed-partners with various corporations for whom good health is a bad thing. These are the pharmaceutical concerns; the AMA, the hospital equipment industry and related suppliers of related products. These corporations have another relationship with the various food industries in the sense that they will not write or permit policy that impinges on major enterprises that bring you processed foods, fast foods, mystery meats, candy and soft drinks and whatever else hides under that umbrella. What this means is that, according to the capitalist mentality that rules this society, it is possible; it has to be possible and it damn well will be possible to eat anything you want, avoid exercise and generally break any and every rule of intelligent behavior and if there’s a problem they will either cut it out of you or suppress the symptoms until they have to cut it out of you.

Because the will of corporations is the rule of the land, there will be no change in the profit line for participating corporations. What will change will be the language that the non-change is presented in. To see into the black heart of the system in charge of American life you have only to look into the prison industry where 5% of the American public and 25% of the world’s prison population are incarcerated in American prisons. Why is this? It’s a business. Is it coincidence that America uses 60% of the world’s resources as well?

The unstated objective of American society is that a small percentage of its members shall possess the greatest amount of wealth at the expense of everyone else and will then be lauded for their efforts to assist the less fortunate where no such efforts exist. Such a system cannot survive and will not survive and is presently at the state where a number of shell games are being used to give the impression that the system is doing fine and going to get better as it approaches the lip of a high cliff. As things begin to fall from the cliff, you will see charts and graphs appear that indicate the true state and direction of the culture and economy but they will probably be holding these charts and graphs upside down.

I see these things and many other things because I have this virus. Others have this virus too and many more are on the verge of infection. The biggest concern of the TPTB is the proliferation of this virus. Their concern about all other viruses, which they manufactured to begin with, is just Slim Shady dining at the Red Herring Restaurant.

With this virus I can see that the appetites and desires being milked by corporations in order to promote and sell their products leads directly to aberrant behavior which leads to the prison industry for those who are not making the laws that route the unfortunate toward the prison or the grave with that long interlude of enslavement at the looping track of life where they chase the uncatchable dream rabbit that is already steaming in the pot of their betters.

With this virus I can look directly at the lies of politicians and religious leaders and hear the truth that spotlights the pies around the corner and their relationship to the pies in the sky which are moving on conveyor belts behind unbreakable Plexiglas. I can see that there are no pies because the pies are only video projections of pies bounced off of a series of mirrors. I can see the people who do no have the virus and I can see the world they are looking at and it turns out that this world is also just a projection bouncing off of mirrors and one of those mirrors is their minds. These projections then activate the furnace in the visceral brain which causes those without the virus to dance like millions of chickens on a hot griddle that somehow got the impression that they are auditioning for American Idol.

It is not possible to create a society, based on the principles that some of us have read and most of us have heard about, when corporations are the ruling authority of the land, because the intent of a corporation is diametrically opposed to the principles that some of us have read and most of us have heard about. You can’t make Beef Stroganoff out of pork rinds and Velveeta but you can convince people that that is what they are eating and that is the point.

There’s a debate that has been going around since Cain brained Abel and that debate centers on whether it is better to have this virus or some form of all the other viruses. The awareness that comes with having this virus can lead to the rack, the auto da fe and other less pleasant locations. Having the other viruses can lead to being a hamster or some part of a compost pile and a fire burns there as well. They can lead to being cannon fodder and the merciless hands of those who practice a form of medicine that has little to do with the stated intentions of the art. The hands of these practitioners are often more dangerous than the problem that brought you there.

Most people spend more than ninety percent of everything they have saved in their lives in the last year of their life on an industry whose purpose is exactly for that reason.

This virus of mine- and perhaps you have it too- is not an easy burden to bear. You can never pull the covers over your head again. You know there’s no monster in the closet but you also know where the real monsters dwell. You are doomed to an unending quarantine even as you move among your fellows. One thing you do acquire as a result of this virus is compassion and, as Lao Tzu said long ago, “Compassion is a weapon from the sky against being dead.” Realization may not be all the things we imagine it to be, but it is preferable to the restless sleep of nightmares wielded by the whip hand of psychopaths."
"They Live," "Sunglasses"
If you know, you know...

"For Nothing Is Fixed..."

"For nothing is fixed, forever and forever and forever, it is not fixed; the earth is always shifting, the light is always changing, the sea does not cease to grind down rock. Generations do not cease to be born, and we are responsible to them because we are the only witnesses they have. The sea rises, the light fails, lovers cling to each other, and children cling to us. The moment we cease to hold each other, the sea engulfs us and the light goes out."
- James Baldwin

The Poet: Rainer Maria Rilke, "Book of Hours II, 16"

"Book of Hours II, 16"

"How surely gravity's law,
strong as an ocean current,
takes hold of even the strongest thing
and pulls it toward the heart of the world.
Each thing-
each stone, blossom, child-
is held in place.
Only we, in our arrogance,
push out beyond what we belong to
for some empty freedom.
If we surrendered
to earth's intelligence
we could rise up rooted, like trees.
Instead we entangle ourselves
in knots of our own making
and struggle, lonely and confused.
So, like children, we begin again
to learn from the things,
because they are in God's heart;
they have never left him.
This is what the things can teach us:
to fall,
patiently to trust our heaviness.
Even a bird has to do that
before he can fly."

~ Rainer Maria Rilke

"How It Really Is"

"Covid-19 Pandemic Updates 2/6/21"

"Covid-19 Pandemic Updates 2/6/21"
• There were 131,146 new COVID-19 cases reported in the U.S. on Friday.
• The drop in new daily cases is being felt in all four regions of the country. 
• In the Midwest, the seven-day average for new daily cases per capita has now dropped to a quarter of what it was during the region’s peak in late November.
• Hospitalizations remained below 90,000 on Friday at 86,373.
• There were 3,543 new fatalities reported just a day after the country's deadliest 24 hours.
• The national death toll now stands at 459,360 and more than 26.8million have been infected with the virus."
"When you have eliminated the impossible, 
whatever remains, however improbable, must be the truth."
- "Sherlock Holmes", Sir Arthur Conan Doyle
• "Doctor Admits Masks Don’t Work: “All Viruses Can Get Through”
FEB 6, AT 9:50 AM: "CDC And TSA Form Federal Mask Police... And Enforcement Is Up To Officer Discretion" "Back in early 2020, would you ever have imagined that your decision of whether to wear a face-covering or not could one day be a federal crime?"
 Feb 6, 2021 12:09 AM ET: 
The coronavirus pandemic has sickened more than 105,379,000 
people, according to official counts, including 26,851,698 Americans.
Globally at least 2,297,900 have died.

"The COVID Tracking Project"
Every day, our volunteers compile the latest numbers on tests, cases, 
hospitalizations, and patient outcomes from every US state and territory.
Feb. 6, 2021 8:14 AM ET
Where I Live:
- CP

"Clarity In Trump's Wake"

"Clarity In Trump's Wake"
by Angelo Codevilla

"Either the Constitution matters and must be followed... or it is simply a piece of parchment on display at the National Archives."
- Texas v. Pennsylvania et al.

"Texas v. Pennsylvania et al. did not deny setting rules for the 2020 election contrary to the Constitution. On December 10, 2020, the Supreme Court discounted that. By refusing to interfere as America’s ruling oligarchy serves itself, the court archived what remained of the American republic’s system of equal justice. That much is clear.

In 2021, the laws, customs, and habits of the heart that had defined the American republic since the 18th century are things of the past. Americans’ movements and interactions are under strictures for which no one ever voted. Government disarticulated society by penalizing ordinary social intercourse and precluding the rise of spontaneous opinion therefrom. Together with corporate America, it smothers minds through the mass and social media with relentless, pervasive, identical, and ever-evolving directives. In that way, these oligarchs have proclaimed themselves the arbiters of truth, entitled and obliged to censor whoever disagrees with them as systemically racist, adepts of conspiracy theories. 

Corporations, and the government itself, require employees to attend meetings personally to acknowledge their guilt. They solicit mutual accusations. While violent felons are released from prison, anyone may be fired or otherwise have his life wrecked for questioning government/corporate sentiment. Today’s rulers don’t try to convince. They demand obedience, and they punish.

Russians and East Germans under Communists Leonid Brezhnev and Erich Honecker in the 1970s lived under less ruling class pressure than do today’s Americans. And their rulers were smart enough not to insult them, their country, or their race.

In 2015, Americans could still believe they lived in a republic, in which life’s rules flow from the people through their representatives. In 2021, a class of rulers draws their right to rule from self-declared experts’ claims of infallibility that dwarf baroque kings’ pretensions. In that self-referential sense, the United States of America is now a classic oligarchy.

The following explains how this change happened. The clarity that it has brought to our predicament is its only virtue."
Please view this complete and highly recommended article here:

Friday, February 5, 2021

Musical Interlude: Spirit Tribe Awakening, "Raise Positive Vibration"

Spirit Tribe Awakening, "Raise Positive Vibration"
"Peaceful, empowering and soothing music and nature to nurture your 
mind, body, and soul. Supporting and empowering you on your life journey.
 528Hz positive energy healing music with 417Hz Solfeggio frequency.
These frequencies have a specific healing effect on your subconscious mind."
Be kind to yourself, savor this extraordinarily beautiful
 video in full screen. Headphones recommended, not required.

Gregory Mannarino, "IMPORTANT! A Possible EARLY WARNING SIGN From The Bond Market"

Gregory Mannarino,
"IMPORTANT! A Possible 
EARLY WARNING SIGN From The Bond Market"

"GameStop Was A Warning: They Are Weaponizing Censorship To Keep Outsiders Out"

"GameStop Was A Warning: 
They Are Weaponizing Censorship To Keep Outsiders Out"
by Epic Economist

It's not news that the financial system is extremely rigged, but the battle between Reddit Raiders vs. hedge funds has uncovered a much darker reality behind the scenes of Wall Street. The unprecedented restrictions imposed on the trading of GameStop stocks were just a warning. The elites are using their influence to weaponize censorship to keep outsiders out of the markets. It's systemic: the average American is doomed to failure, while the establishment will, of course, always win. Evidently, the ultra-wealthy wouldn't be happy seeing a handful of young online traders profiting from a game created to keep concentrating power on the hands of the powerful while also standing up against institutionalized speculation and the widespread manipulation of the stock markets. The elites are prepared to smash the WallStreetBets' movement and destroy its participants one by one. That's what we expose in this video. 

The founder of Yammer, Craft Ventures, and co-founder of PayPal, David Sacks has recently published an excellent article arguing why the trading ban on GameStop stocks was just a warning coming from the elites. The first issue for the online traders’ group occurred when the digital distribution platform Discord banned the WallStreetBets account after the close Wednesday accusing the group of promoting “hate speech, glorifying violence, and spreading misinformation". At the same time, WallStreetBets investors faced yet another coup. As of Thursday morning, they were locked out of their trading accounts by several online brokerage firms, including Robinhood. Needless to say, that provoked a major backlash and enraged users began registering their discontentment by leaving over 100,000 one-star reviews of the Robinhood app in the Google Play Store, but Google deleted them. 

Keeping in mind that those investors were clumsy outsiders, their primary tools to keep the movement running were online trading and social networking, but both were halted during the peak of the market frenzy, while hedge fund insiders were let off the hook. That is censorship plain and simple, being weaponized to shut up dissonant voices. Currently, tech companies have all the power on their hands, and they benefit from it as much as they can. So whenever is convenient to shutdown a platform, a forum, an account, or whatever means are used to express varying opinions, they will do it on a finger-snap. At a time when Alexandria Ocasio-Cortez and Ted Cruz voice similar concerns over what happened to WallStreetBets, we should all be realizing that this isn't a political issue of Left vs. Right anymore. We're now talking about the force of insiders vs. outsiders. 

What social media provided to outsiders was the opportunity to organize themselves so that their actions could have real power to effect change, and also to express their disgust and expose the way incompetent elites protect each other. That's why the elites of Big Business, Big Media, Wall Street, and Washington are completely panicked about the Reddit movement and are willing to leverage any censorship power to keep the outsiders away. 

Radio host Rush Limbaugh has also recently that the establishment will always censor or cancel anything that doesn’t match with the interests of the ruling class, whether it’s free speech or even attitude. Apparently, right now the elite's biggest fear is social media. For that reason, we constantly see them targeting whatever groups disrupt the status quo by accusing them without evidence of spreading hate and misinformation, just like they did with WallStreetBets. Wall Street has just felt the power that organized social networks can have and how, for the first in history, people can find loopholes in the system created by the elites to infiltrate into it and threaten to take over control. Thanks to social media, the outsiders are threatening to seize the Tower for themselves, and the insiders have never been more terrified."

Must Watch! “I See Red Flags - When Will The Economy Crash?”

Jeremiah Babe,

“I See Red Flags - When Will The Economy Crash?”

Musical Interlude: Ludovico Einaudi, "Experience"

Ludovico Einaudi, "Experience"

"A Look to the Heavens"

“While drifting through the cosmos, a magnificent interstellar dust cloud became sculpted by stellar winds and radiation to assume a recognizable shape. Fittingly named the Horsehead Nebula, it is embedded in the vast and complex Orion Nebula (M42). A potentially rewarding but difficult object to view personally with a small telescope, the above gorgeously detailed image was recently taken in infrared light by the orbiting Hubble Space Telescope in honor of the 23rd anniversary of Hubble's launch.
The dark molecular cloud, roughly 1,500 light years distant, is cataloged as Barnard 33 and is seen above primarily because it is backlit by the nearby massive star Sigma Orionis. The Horsehead Nebula will slowly shift its apparent shape over the next few million years and will eventually be destroyed by the high energy starlight.”

"Life's Funny..."

"And It Was Pointless..."

“And it was pointless… to think how those years could have been put to better use, for he could hardly have put them to worse. There was no recovering them now. You could grieve endlessly for the loss of time and for the damage done therein. For the dead, and for your own lost self. But what the wisdom of the ages says is that we do well not to grieve on and on. And those old ones knew a thing or two and had some truth to tell… for you can grieve your heart out and in the end you are still where you were. All your grief hasn’t changed a thing. What you have lost will not be returned to you. It will always be lost. You’re left with only your scars to mark the void. All you can choose to do is to go on or not. But if you go on, it’s knowing you carry your scars with you.” 
- Charles Frazier

"The Debt Death Trap"

"The Debt Death Trap"
by Jim Rickards

"This morning we got our first look at what we can expect for the next two years (assuming Joe Biden lasts that long). The Senate voted on Biden’s $1.9 trillion budget resolution last night. The vote broke along partisan lines, ending in a 50-50 stalemate. Republicans had proposed a package that would cost about $600 billion. Vice President Kamala Harris cast the deciding vote at 5:30 this morning, breaking the tie. Harris’s role is key because she’s essentially a 51st senator who will break 50-50 ties in favor of Democrats. You can expect many more of these types of votes.

This morning’s vote allows the legislation to go forward. But that doesn’t mean the process is over. The Senate added amendments to the bill that the House had already passed. For example, Senate Democrats reversed previous Republican provisions that would have supported the Keystone XL pipeline and fracking for oil and natural gas. Cancellation of the Keystone Pipeline will destroy tens of thousands of high-paying jobs with benefits. Denying new gas and oil leases will increase energy prices and diminish America’s newfound energy independence from foreign suppliers.

I’m not going to get too deep in the weeds here, but because the Senate added amendments to the bill, it had to go back to the House, which needed to sign off on the changes. This afternoon it did. The House passed the resolution. A final bill will be drafted and passed through an obscure process called reconciliation, which would deprive the Republicans of the ability to filibuster the bill (although under Senate rules this can only be used once per fiscal year and for that reason is usually reserved for major legislation such as tax law changes).

Difficult To Comprehend: The size and scope of this spending program are difficult to comprehend. Nothing like it has ever occurred in U.S. history, except for FDR’s effort to redirect the entire U.S. economy as part of the effort to win World War II. It will provide aid to some in need but, it will also supply windfalls to favored political interests, whether they are in need or not.

This $1.9 trillion comes on top of the $900 billion spending package passed last month and the $3 trillion of spending packages passed by Congress between April and June in 2020. Of course, this entire run of (essentially) $6 trillion in COVID and economic relief is in addition to the $1 trillion baseline budget deficits already built-in for fiscal 2020 and fiscal 2021. The total deficit spending tab for both years, pandemic and non-pandemic, comes to $8 trillion.

More economic stimulus is waiting in the wings. After the new $1.9 trillion package passes, the White House and Congress will likely pursue another multi-trillion dollar deficit spending program focused on infrastructure, education and aid to state and local governments. Republicans may complain about such big-ticket spending, but their complaints will carry little weight. When Republicans were in control of the White House and Senate in 2020, they passed over $3 trillion in deficit spending programs to deal with the pandemic.

Right now, there is no fiscal discipline. COVID has become an all-purpose excuse for practically unlimited spending. What it will not do is stimulate the economy or end the no-growth and slow-growth depression we are now in. Obviously, the policy response to the pandemic caused the new depression.

The Worst Decline Since 1946: The final numbers on the economy for 2020 are in (subject to the usual adjustment processes). GDP growth in the U.S. for 2020 was negative 3.5%. How bad is that? It is worse than in 2009 when growth collapsed by about 2.4%. It is worse than the 2000 and 1990 recessions, which were both quite mild. It is worse than the severe recession of 1982 when growth fell about 2%. In fact, it is the worst decline since 1946 in the midst of the demobilization after World War II.

Before that, you have to go back to the Great Depression years of 1930, 1931 and 1932 to find a worse collapse. In a $22 trillion economy, a 3.5% collapse equates to about $770 billion in lost output. The actual damage was far greater because output figures and GDP do not capture lost wealth in the form of failed businesses, lost skills, and declining asset values in commercial real estate, airlines, resorts, cruise ships and many other endeavors.

The 2020 collapse was bad enough, but where do we go from here? How will the Biden policy plans play out in the real economy regarding growth, jobs, inflation or deflation? Most analysts and TV commentators say that growth will come roaring back in 2021, and we’ll be back to 2019 levels of output by mid-year. Don’t believe it.

The Biden plan will hurt growth, destroy jobs and produce a new recession as early as the first half of 2021. The overall effect will be deflationary (although inflation will follow in 2022 and later as the effects of deflation become unsustainable due to debt burdens and reduced consumption). The pillars of Biden's program boil down to two things. One is his monetary policy, which consists of zero rates and money printing. The second is his fiscal policy, which includes deficit spending and a higher debt-to-GDP ratio. This will be exacerbated by higher taxes, lower wages (due to more immigration) and more regulation. It’s a recipe for economic disaster.

No Velocity: Monetary policy will fail because velocity is falling faster than money can be printed. Velocity measures turnover, the rate at which money changes hands. Velocity peaked in 2008, just ahead of the global financial crisis, and it has continued to plunge until it took a total cliff dive in 2020 during the pandemic. This is why the Fed has been printing so much money. It takes more money just to keep GDP constant when velocity is collapsing. When velocity drops, you get less “bang for the buck” in terms of economic growth.

The Fed has very little control over velocity. That’s because velocity is driven by psychology and inflationary expectations. Right now, expectations of inflation are low. People don’t want to spend; they want to save or pay down debt. The result is that velocity continues to drop, which is a major headwind to growth.

The Fed’s solution (now endorsed by Janet Yellen, former Fed Chair and new Secretary of the Treasury) is more deficit spending by the Congress. The idea is that if citizens won’t spend, Congress will. The goal is to accelerate money velocity. That might work when you have little debt. But that’s obviously not the case today.

Like Greece, Lebanon, Italy and Japan: The debt-to-GDP ratio is the total amount of U.S. government debt divided by GDP. The U.S. debt-to-GDP ratio is about 125% today. That ratio will get worse once the new Biden spending bills pass, pushing the debt-to-GDP ratio to 130%. The only other developed countries with debt ratios that high are Greece, Lebanon, Italy and Japan.

This debt-to-GDP ratio is highly significant. The research shows that at debt-to-GDP ratios of 90% or less, there is a Keynesian multiplier from government borrowing and spending. You can borrow a dollar, spend a dollar and get, say, $1.25 of GDP. The multiplier drops as the ratio gets higher, but as long as you do not surpass a 90% ratio, there is still some bang for the buck. Once you hit 90%, the multiplier is less than one. The U.S. crossed this critical threshold in 2011.

This means if you borrow a dollar and spend a dollar, you get less than $1.00 of GDP. You’re now in a debt death spiral. When the debt is that high, you can’t borrow your way out of it. Each dollar of additional borrowing adds a dollar to the debt but adds less than a dollar to GDP.

An economic time bomb is ticking. Velocity is dropping. Debt is growing. Growth is slowing. The explosion will come in the form of asset bubbles bursting, stocks crashing and soaring gold prices. It’s a debt death trap."

"The Devil’s Work"

"The Devil’s Work"
by The Zman

"There is an old expression that has fallen out of favor in the post-scarcity age, but it may be the key to understanding the current crisis. That expression is, “Idle hands do the Devil’s work.” When people do not have anything productive and useful to do with their time, they are more likely to get involved in trouble and criminality. A variant of this is “The Devil makes work for idle hands.” The idea there is if you want to avoid Old Scratch, then make sure you keep yourself useful to God.

The source of these proverbs is unknown, but variations of them go back to the early middle ages, so it is probable they evolved with Christianity. It is not unreasonable to think the idea is universal to civilization. After all, every human society has had to deal with the idle, lazy, and troublesome. Making sure these people are kept too busy to cause trouble is one of those primary challenges of civilization. Every ruler has known that too many idle young men is bad for his rule.

Even in the smaller context, this is something we instinctively know. In the workplace, people with too much free time get into trouble. If the IT staff has too much free time, they start tinkering around with the stuff that is working and before long that stuff stops working and the system goes down. A big part of what goes on inside the schools is to keep the kids and the teachers busy. Home schoolers have known for years that the learning content is just a few hours a day. The rest is busy work.

The point here is that people of all ages need a purpose, something that occupies their mind and their time. If something useful and productive is not filling that need, then something useless or unproductive will fill the void. For most people this may be a hobby or leisure activity. For others, it often means a useless activity is turned into something important. Elevating the mundane to the level of the critical and then creating drama around the performance of the mundane activity.

This is what we see in our political class. The ruling class of every society has a ceremonial role, a procedural role, and a practical role. Outside of a crisis like a war or natural disaster, the political class is performing its duties in the same way a line worker in a factory preforms his role. In popular government this means the pol shows up at public events. He performs the tasks his office requires like signing papers and casting votes. He helps grease the wheels when they need grease.

Into the 20th century, most of our political offices were part-time jobs. State legislatures met for a short period during the year. Otherwise, the legislators were back home doing their jobs. Executive positions like governor and president were fulltime jobs, as they were in charge of the civil service and in the case of president, commander-in-chief of the military. Within living memory, Washington DC would empty out in the spring and remain empty until the fall when Congress returned.

What we see today is politics at all levels has become a full-time job, but one with less to do when it was considered a part-time job. Congress, for example, is something close to a 24-hour drama now. The politicians and their retinues are now doing politics as a full-time obsession. Yet almost all of what they do is unnecessary. In fact, much of what they do is harmful. Very few things passed by Congress enjoy the support of the majority of the people or even a large plurality.

It is not just that these part-time jobs have been made into full-time obsessions. It is that much of what we used to need from government is now filled by individuals, ad hoc networks, and the private sector. Much of what government does is actually done by private contractors on government contracts. One of the ironies of the post-Cold War world is that the federal workforce has declined relative to the population, while the number of people employed in politics has gone up.

Then there is the fact that much of what government does could be automated or simply eliminated entirely. The services that are required like renewing licenses and paying fees can all be automated. In many cases they have been, but that did not result in fewer people, as we see in the dreaded private sector. Instead, it resulted in more idle hands looking for a purpose. On the political side, much of what Congress does could also be eliminated or automated.

What has happened in the last 30 years is we have grown the idle class at the top of our society and while decreasing their necessity. Much of what goes on in our politics is make work designed to get public attention. Think about it. If the cable news channels were shuttered and the social media platforms run by the oligarchs were closed, what would change in America? Nothing of practical importance. Our world would get quieter and there would be a boom in forgotten hobbies.

American political culture evolved during the Cold War to fight communism and prevent a nuclear war. Those were important tasks that occupied the minds and hands of the political class. Once those things went away, those idle hands searched about for a new crisis. Health care, Gaia worship, Islam and now invisible Nazis have been used to keep the idle hands of the political class busy. In the process, the political class has been driven mad and is threatening the rest of society."

The Daily "Near You?"

Woods Hole, Massachusetts, USA. Thanks for stopping by!

"There Arrives A Point..."

"When swimming into a dark tunnel, there arrives a point of 
no return when you no longer have enough breath to double back.
 Your only choice is to swim forward into the unknown and pray for an exit." 
- Dan Brown

"The Top 10% Is Doing Just Fine, The Middle Class Is Dying on the Vine"

"The Top 10% Is Doing Just Fine, 
The Middle Class Is Dying on the Vine"
by Charles Hugh Smith

"I've been covering the decline of America's middle class for over a decade with charts, data and commentary on the social depression that has accompanied the decline. While there are many mutually reinforcing dynamics in this 45-year decline - demographics, global energy costs, financialization and globalization, to name a few - one term describes the accelerating erosion of America's middle class: decapitalization.

To understand decapitalization, we need to start with the fundamentals of any economy between labor (wages) and capital and between investment and speculation. Although it's tempting to oversimplify and demonize one or the other of these basics (speculators bad! etc.), they each provide an essential role in a healthy economy, one which is in dynamic equilibrium, a state analogous to a healthy ecosystem with constantly changing interactions of numerous species, individuals and inputs (weather, etc.). This variability enables the order of fluctuations (to use Ilya Prigogine's profound phrase), a dynamic stability/equilibrium.

If labor's share of the economy drops too low, the workforce cannot consume enough to support their households and the economy as a whole. If capital can no longer earn an attractive return, investment dries up and production stagnates. If speculators are not allowed to take on risk, liquidity dries up and risk crushes investment. But if speculation becomes the foundation of the economy's "growth," then the inevitable collapse of speculative bubbles will crash the economy.

In modern social-capitalist systems, the core stabilizer of the system is the wage-earning middle class which provides the stable workforce driving production and the stable pool of consumers needed to borrow money and consume enough to soak up the production of goods and services at a profit to producers. Without a stable, dominant middle class, capital has few opportunities to invest in productive capacity. Without a stable, dominant middle class, the economy stagnates and is prone to collapse as it is far from equilibrium.

The process of middle class decline is best explained as decapitalization because the middle class is fundamentally a means of transforming labor into capital via savings and investment. The traditional ladder of social mobility from the working class to the middle class is one of capitalizing work: time and savings are invested in higher education, in effect capitalizing future labor by increasing productivity.

Capital isn't limited to cash, land or tools; in an information economy, knowledge and skills are also capital, as is the social capital of social networking and relationships formed with mentors, suppliers, lenders, colleagues, investors, etc. The second way to capitalize work is to save earnings and invest the savings in assets that produce income or gain value: a house, land, rental property, small business and income-producing financial assets such as bonds or dividend-paying stocks.

Thrift, investing, long-term planning and deferred consumption are all essential to capitalizing work by turning that labor into income-producing assets. As the household's ownership of these assets that yield unearned income rises, so does their income and wealth. These increase the financial security of the household and build a nest egg which can be passed down to the next generation, improving their security via inheritance of income-producing assets.

As long as productivity is increasing the value of their labor, the middle class can leverage future earnings into assets by borrowing money to invest in assets: to buy a house, a mortgage is borrowed against future earnings. As long as the mortgage is a fixed-interest loan and income can be expected to rise with productivity, then this is a win-win situation: capital earns a predictable, low-risk return from the mortgage and the middle class household has stake in a family home, an asset which acts as a savings mechanism as the mortgage slowly pays down the debt and increases the household's home equity - a form of savings.

The processes of decapitalization have upended this entire structure. In the systems context outlined above, our economy is out of balance and far from equilibrium and thus prone to collapse. For the bottom 90%, which of course includes the middle class however you define it, it's increasingly difficult to capitalize labor into capital. There are a number of factors driving this decapitalization:

1. Wages' share of the national income has continued a five-decade downtrend. (See chart below) National income since 1973 has shifted from labor (wages) to capital and more specifically, to debt and speculative gaming of the system, a.k.a. financialization.
Total household income in the U.S. in 2018 was $17.6 trillion. The decline in wages' share of the national income from 1973 to 2018 is about 8.5%, which equals $1.5 trillion, the sum shifted from labor to capital every year. (See chart below)(source:)
No, this is not a typo. As this RAND report documents, $50 trillion has been siphoned from labor (the lower 90% of the workforce) to the Financial Aristocracy and their technocrat lackeys (the top 10%) who own the vast majority of the capital (see charts below): Trends in Income From 1975 to 2018.

2. Within the workforce, wages have shifted to the top 10% who now earn 50% of all taxable income. (See RAND chart below) Financialization and globalization have decapitalized the skills of entire sectors of the workforce as automation and offshoring reduced the human capital of workers' skills and experience and the value of their social capital. When the entire industry is offshored, skills and professional relationships lose their market value.

In a fully globalized economy, every worker producing tradable goods/services is competing with the entire global workforce, a reality that reduces wages in high-cost developed nations such as the U.S. Financialization has heavily rewarded workers with specialized gaming the financial system skills and devalued every other skill as only the skills of financialization are highly profitable in a globalized, financialized economy.

3. As the high-wage jobs and capital shifted to coastal urban centers, middle class owners of homes and capital elsewhere saw the value of their assets decline. If a home valued at $100,000 in the late 1990s is now worth $150,000, the owners lost ground even with "official" inflation. In terms of real-world purchasing power, their home actually lost significant value in the past 23 years.

Meanwhile, middle class owners who bought their home in a coastal hot-spot for $100,000 23 years ago are now enjoying home valuations close to $1 million. Homes, along with every other asset, have been shifted into a casino where almost everyone is sorted into winners and losers, less often by skill and more often by luck. For those who were too young to buy in 1997, sorry - the opportunity to buy a home for three times average middle class income is gone. The lucky generation who bought in the late 1990s in booming coastal magnets for global capital joined the top 10% and their colleagues in less desirable regions lost ground.

4. As capital siphoned off income and appreciation from labor (human and social capital), the gains accruing to capital accelerated. Those who already owned income-producing assets reaped both income and asset appreciation gains as yields on savings collapsed to near-zero as the Federal Reserve and other central banks dropped yields to near-zero in 2009 and kept them low for the following 13 years.

This had two devastating effects on the middle class: hundreds of billions of dollars that once flowed to savers and money markets disappeared, swallowed by the banks as a direct (and intentional) effect of the Fed's ZIRP (zero-interest rate policy). Since the Fed destroyed low-risk yields, anyone seeking any real yield (i.e. above inflation) would have to enter the casino and compete with hedge funds, insiders and the Financial Aristocracy. Very few middle class workers have the skills and experience to beat the pros in the casino, and so income and wealth accrued to those who already owned capital. This is a key reason why the rich got richer and the poor got poorer. Those with capital accrued the majority of gains in income and wealth, leaving the bottom 90% in the dust.

A recent Foreign Affairs essay Monopoly Versus Democracy included these stunning statistics: "Ten percent of Americans now control 97 percent of all capital income in the country. Nearly half of the new income generated since the global financial crisis of 2008 has gone to the wealthiest one percent of U.S. citizens. The richest three Americans collectively have more wealth than the poorest 160 million Americans."
The 3% of income from capital collected by the bottom 90% - which includes the middle class-is basically signal noise: the middle class collects inconsequential crumbs of income from capital. (stimulus)

Prior to the Fed's ZIRP and financialization of the economy, the middle class could both collect income from capital they owned and they could afford to acquire assets that yielded low-risk solid returns. Now they can do neither. Even worse, the purchasing power of their labor continues to decline, leaving them less able to save and buy assets.

This is why The Top 10% Is Doing Just Fine, The Middle Class Is Dying on the Vine. Please study these charts as a means of understanding the inevitability of economic stagnation and a revolt of the decapitalized middle class."