“Complexity Theory: the Avalanche and the Snowflake”

“Complexity Theory: the Avalanche and the Snowflake”

by James Rickards

“One of my favorites is what I call ‘the avalanche and the snowflake’. It’s a metaphor for the way the science actually works, but I should be clear: it’s not just a metaphor. The science, the mathematics and the dynamics are actually the same as those that exist in financial markets.

Imagine you’re on a mountainside. You can see a snowpack building up on the ridgeline while it continues snowing. You can tell just by looking at the scene that there’s danger of an avalanche. It’s windswept… it’s unstable… and if you’re an expert, you know it’s going to collapse and kill skiers and wipe out the village below. You see a snowflake fall from the sky onto the snowpack. It disturbs a few other snowflakes that lie there. Then, the snow starts to spread… then it starts to slide… then it gains momentum until, finally, it comes loose and the whole mountain comes down and buries the village.

Question: What do you blame? Do you blame the snowflake, or do you blame the unstable pack of snow? I say the snowflake’s irrelevant. If it wasn’t the one snowflake that caused the avalanche, it could have been the one before, or the one after, or the one tomorrow. The instability of the system as a whole was the problem. So when I think about the risks in the financial system, I don’t focus on the ‘snowflake’ that will cause problems. The trigger doesn’t matter.

A snowflake that falls harmlessly – the vast majority of all snowflakes – technically fails to start a chain reaction. Once a chain reaction begins, it expands exponentially, can ‘go critical’ (as in an atomic bomb) and release enough energy to destroy a city. However, most neutrons do not start nuclear chain reactions, just as most snowflakes do not start avalanches.

In the end, it’s not about the snowflakes or neutrons. It’s about the initial critical state conditions that allow the possibility of a chain reaction or an avalanche. These can be hypothesized and observed at large scale, but the exact moment the chain reaction begins cannot be observed. That’s because it happens on a minute scale relative to the system. This is why some people refer to these snowflakes as ‘black swans’, because they are unexpected and come by surprise. But they’re actually not a surprise if you understand the system’s dynamics and can estimate the system scale.

It’s a metaphor, but really the mathematics behind it are the same. Financial markets today are huge, unstable mountains of snow waiting to collapse. You see it in the gross notional value of derivatives. There is $700 trillion worth of swaps. ($2.5 Quadrillion by other reputable estimates. – CP) These are derivatives off balance sheet, hidden liabilities in the banking system of the world. These numbers are not made up. Just go to the IS annual report and it’s right there in the footnote.

Well, how do you put $700 trillion into perspective? It’s ten times global GDP. Take all the goods and services in the entire world for an entire year. That’s about $70 trillion when you add it all up. Well, take ten times that, and that’s how big the snow pile is. And that’s the avalanche that’s waiting to come down.”

- https://caperebel.com/

Gregory Mannarino, PM 5/7/21: "Be Ready! The FED Is About To Unleash The Debt Flood Gates From Hell!"

Gregory Mannarino, PM 5/7/21:

"Be Ready! The FED Is About To Unleash

 The Debt Flood Gates From Hell!"

- https://traderschoice.net/"

○

"The Fed has created a bubble – with perhaps $30-$50 trillion in bad, or merely overpriced, “investments.” The bubble threatens to pop. But the Fed dasn’t raise interest rates – or it will bring itself under fire and trigger the very disaster it has sworn to avoid. The only way to keep the bubble world from popping now is to blow in more air. Then, the bubble gets bigger… and investors become even more deranged. Any dope – even a Federal Reserve governor – can see that this will end badly. But the damage will be much deeper and longer-lasting than most people realize."

- Bill Bonner,

- www.rogueeconomics.com

The Poet: Carl Sandburg, "Four Preludes on Playthings of the Wind "

"Four Preludes on Playthings of the Wind"

 The past is a bucket of ashes.

1

 "The woman named Tomorrow

sits with a hairpin in her teeth,

and takes her time,

and does her hair the way she wants it,

and fastens at last the last braid and coil,

and puts the hairpin where it belongs

and turns and drawls: Well, what of it?

My grandmother, Yesterday, is gone.

What of it? Let the dead be dead.

2

The doors were cedar,

and the panels strips of gold

and the girls were golden girls

and the panels read and the girls chanted:

We are the greatest city,

the greatest nation:

nothing like us ever was.

The doors are twisted on broken hinges.

Sheets of rain swish through on the wind

where the golden girls ran and the panels read:

We are the greatest city,

the greatest nation,

nothing like us ever was.

3

It has happened before.

Strong men put up a city and got

a nation together,

And paid singers to sing and women

to warble: We are the greatest city,

the greatest nation,

nothing like us ever was.

And while the singers sang

and the strong men listened

and paid the singers well

and felt good about it all,

there were rats and lizards who listened

and the only listeners left now

are the rats and the lizards.

And there are black crows

crying, Caw, caw,

bringing mud and sticks

building a nest

over the words carved

on the doors where the panels were cedar

and the strips on the panels were gold

and the golden girls came singing:

We are the greatest city,

the greatest nation:

nothing like us ever was.

The only singers now are crows crying, Caw, caw,

And the sheets of rain whine in the wind and doorways.

And the only listeners now are the rats and the lizards.

4

The feet of the rats

scribble on the door sills;

the hieroglyphs of the rat footprints

chatter the pedigrees of the rats

and babble of the blood

and gabble of the breed

of the grandfathers and the great-grandfathers

of the rats.

And the wind shifts

and the dust on a door sill shifts

and even the writing of the rat footprints

tells us nothing, nothing at all

about the greatest city, the greatest nation

where the strong men listened

and the women warbled: Nothing like us ever was."

- Carl Sandburg, 1878 - 1967

The Daily "Near You?"

 
League City, Texas, USA. Thanks for stopping by!

"Are They Purposely Trying To Make The Streets Of America 'Abnormally Violent' In The Summer Of 2021?"

"Are They Purposely Trying To Make The Streets

 Of America 'Abnormally Violent' In The Summer Of 2021?"

by Michael Snyder

"Have you noticed that the corporate media has been repeatedly using the word “violent” to describe what the summer of 2021 is going to be like? Many Americans believed that once Joe Biden was in the White House that all of the civil unrest that we have been witnessing would magically disappear and that violent crime rates would go back to normal. Of course neither of those things has happened. We continue to see civil unrest erupt in major U.S. cities such as Portland, and murder rates are even higher in 2021 than they were in 2020. This is a fact that was highlighted in a recent Axios article entitled “It’s set to be a hot, violent summer”…

"A sample of 37 cities with data available for the first three months of 2021 collected by the crime analyst Jeff Asher indicates murders are up 18% over the same period in 2020. The continued increase comes after a year in which major U.S. cities experienced a 33% rise in homicides, and 63 of the 66 largest police jurisdictions saw an increase in at least one category of violent crime, according to a report from the Major Cities Chiefs Association."

In this instance, Axios is right on the money. Murder rates were way, way up all over the nation last year, and this year murder rates are shooting even higher. It is also true that we tend to see a spike in violence over the summer, and one expert that was interviewed by Axios is warning that this upcoming summer will be “abnormally violent”… “Summer 2021 is going to be abnormally violent,” John Roman, a senior fellow at the economics, justice and society group at NORC at the University of Chicago, wrote this year. “It is the new normal.”

There is that word “violent” again. It is almost as if they are trying to mentally condition us for something. Once you are alert to it, you will start noticing the corporate media using it constantly. And actually this is one point in which I am in full agreement with the corporate media. There will be tremendous violence during the summer of 2021, and certain decisions that our political leaders are now making will contribute to that violence.

For example, it was just announced that 76,000 inmates could soon be permanently released in California, and we are being told that 63,000 of those inmates have actually been “convicted of violent crimes”… "California is set to release at least 63,000 inmates convicted of violent crimes in an effort to create “safer prisons.” Yes, the prisons will most definitely be safer if all of those criminals are released. But the mean streets of California will become even more dangerous.

I have no idea why California Governor Gavin Newsom would do such a thing. Releasing tens of thousands of violent criminals just in time for the summer is incredibly foolish, and he is being strongly criticized by Republicans for choosing to do this… "A number of Republican lawmakers in the state have opposed the move and criticized Gov. Gavin Newsom for acting “on his own authority, instead of the will of the people.” “This is what I call Newsom’s time off for bad behavior. He’s putting us all at greater risk, and there seems to be no end to the degree to which he wants to do that,” Republican state Sen. Jim Nielsen said."

Murder rates in California are already threatening to spiral out of control. Is Governor Newsom purposely trying to make things even worse?

On a national level, it has been announced that there are no plans to bring the federal inmates that were released during the COVID pandemic back to prison… "The U.S. Bureau of Prisons has no immediate plans to send thousands of inmates released during the COVID-19 pandemic back to prison, but to prevent that from happening in the future, Congress needs to change the law, its head said Thursday. “We’re going to use good judgment and common sense and work within the law,” said BOP Director Michael Carvajal in testimony before the Senate Judiciary Committee, noting the agency has no desire to “arbitrarily” disrupt peoples’ lives by forcing them to return to prison.

I have an idea. Let’s just release all of the inmates in all of the prisons and see what happens. Doesn’t that sound like fun?

For a long time I have been warning that crime rates would spike dramatically and that we would see tremendous civil unrest in our cities, and now it is happening right in front of our eyes. The elite can see what is happening too, and they have been purchasing very large chunks of real estate in very remote areas.

For instance, billionaire Mark Walter recently bought up large sections of a very small town in Colorado called “Crested Butte”… "But Walter’s activity in Crested Butte has drawn lots of local attention among its population of about 4,700. This year alone, Walter purchased six commercial properties, including several historic buildings downtown and a family resort called the Almont, which sits at the intersection of the East and Taylor rivers. Walter closed the deals under limited liability companies registered to his work address in Chicago. “He’s been very - I wouldn’t say ‘secretive’ - but certainly not forthcoming with what he’s going to be doing with the buildings,” Crested Butte Mayor Jim Schmidt told The Daily Beast. Realtor Eric Roemer echoed the uneasy feeling: “Nobody really knows what his game plan is.”

And Facebook CEO Mark Zuckerberg made headlines when he gobbled up another 600 acres in Hawaii for 53 million dollars… "Mark Zuckerberg and Priscilla Chan have nearly doubled their controversial land holdings in Hawaii, after buying almost 600 acres on Kauai from a non-profit for $53 million. The deal, which closed on March 19, according to deeds first reported by Pacific Business News, comprises three parcels, including the remote northern waterfront known as Larsen’s Beach."

It must be nice to have an extra 53 million dollars lying around. Do you ever wonder what Mark Zuckerberg would be doing today if Facebook had not worked out? Of course Facebook and the other major social media platforms are also helping to fuel the civil unrest and violence that we have been witnessing. There is so much anger and frustration in our society today, and all of that anger and frustration is constantly being magnified by the corporate media and the major social media platforms.

Yes, this will be a long, hot summer filled with violence, but that won’t be the end of it. Because the truth is that this party is just getting started, and it is going to rip this country to shreds."

- https://www.zerohedge.com/

- https://themostimportantnews.com/

○

Related:

"If We Are Experiencing Severe Shortages Now, 

How Bad Will Things Get When The Economy Starts Tanking Again?"

"The Truth Is Surely Baseless"

"The Truth Is Surely Baseless"

by Jim Kunstler

MADDOW: … "I think we should see this as the Justice Department putting these whack jobs in Arizona, forgive me, on notice, that what they`re doing is something they`re not going to be allowed to do for very much longer."

O`DONNELL: "I think ‘whack jobs’ is now in The New York Times style sheet for describing what`s happening in Arizona."

- MSNBC 5/5/21

"What you’re seeing now with the DC establishment are desperate moves to keep the suspicious and yet more pissed-off public from understanding the government crime spree of the past five years that started with the Obama gang using the Department of Justice to disable and terminate Donald Trump and the threat he represented to the network of special privilege and money known as the Swamp, which has managed to put a deep-fake president in office as a last resort to protect itself.

The urgent problem: how to squash the Arizona vote audit by branding it as an outlaw action, even though it was ordered under law by the Arizona State Senate. Having failed to stop it so far using the Swamp’s Lawfare cadres in the Arizona courts, the DOJ has called in its Civil Rights Division to get’er done, pretending that it will be an offense against people-of-color if auditors seek to know whether write-in votes correspond to actual addresses, and other particulars of election procedure that may have been violated.

Of course, the Arizona business is only one leak in a giant dike of official deceit built-up over the years to keep any truth from deluging the DC lowlands. Other leaks are springing in New Hampshire and Michigan, with a wormhole opening up in Georgia. It will be interesting to see if cable TV news can keep painting the truth as something against the public interest. As many times as they style election fraud “a conspiracy theory” and “baseless,” the public relations arm of the Democratic Party still has a hard slog convincing at least 80-million Americans that a detailed review of a contested vote is bad thing.

Meanwhile, other breaches in the dike threaten to flood the low-lying Swamp zone with existential threats. The DOJ, the FBI, and other agencies are so saturated in crime that the only feasible damage control they can do is to haplessly commit more crimes against the common decency of the republic to cover up their old crimes. Hence, the seizure of Rudy Giuliani’s phones and computers in a 6 a.m. raid last week, leading to the incriminating disclosure that the FBI secretly accessed Giuliani’s iCloud account to spy on his correspondence with Mr. Trump in the fall of 2019 during the first impeachment preliminaries. Are you kidding me? Who gave the order for that? To violate basic attorney-client privilege during a legal proceeding of the highest order? And what was behind the Giuliani raid?

Among other things, the horror show of corruption in Ukraine, starring (but not limited to) Joe and Hunter Biden in their ceaseless quest for grift, but also featuring many of the origins of the RussiaGate hoax and its spin-offs, plus the involvement of State Department personnel such as Ambassador Marie Yovanovitch and deputy George Kent, double-plus the shady activities of George Soros and his Atlantic Council in seditious activity working hand-in-hand with the CIA’s “whistleblower” (Eric Ciaramella) to damage Mr. Trump - who was impeached for simply inquiring about what was going on in Ukraine.

Mr. Giuliani had to conduct his own investigation into all that for the obvious reason that the usual US agencies who would ordinarily investigate official misconduct were actually perpetrating it: the DOJ, FBI, CIA, and State Department. And who, at the DOJ now, might be behind the current effort to neutralize Mr. Giuliani? Try Lisa Monaco, the new Deputy Attorney General, formerly one of Barack Obama’s chief White House fixers - i.e., an attorney detailed to shutting down investigations and covering the tracks left by questionable operations - and a protégé of former CIA Director John Brennan. Is the weak and pliable AG Merrick Garland fronting for her running the DOJ now? Joe Biden is going to need a whole lot of fixin’. And, is Lisa Monaco actually still reporting to Barack Obama? He can also probably use a fix or two. Who knows what’s coming down pike? Just maybe a loaded semi driven by the nearly forgotten John Durham?

MSNBC might have made an unforced error on Wednesday scripting 10 o’clock troll Lawrence O’Donnell to diss former AG William Barr - some jive about Mr. Barr trying to mess with Special Counsel Robert Mueller’s efforts back in 2018 to nail Mr. Trump on an obstruction of justice rap. Is this the time to piss-off Mr. Barr? You have to wonder. Is it possible that the FBI concealed its possession of the Hunter Biden laptop from Mr. Barr during those 2019 days of impeachment, when Mr. Trump was attempting to mount a defense for making a phone call to Ukraine? Who might be responsible for hiding that, if it were so? By the way, it was Mr. Barr who, just before resigning in late 2020, made John Durham a Special Counsel, whose work - whatever that might be, maybe nothing at all, maybe something consequential, nobody knows - can’t be blocked by Merrick Garland (or Lisa Monaco)."

- https://kunstler.com/

"How It Really Is"

 

Greg Hunter, “Weekly News Wrap-Up 5/7/21

“Weekly News Wrap-Up 5/7/21

by Greg Hunter’s USAWatchdog.com

"President Trump is now calling the fraud of the 2020 Election “The Big Lie.” It’s much bigger than the Russia collusion hoax, impeachment #1 and #2 combined. It’s all in the process of being unraveled in the ongoing audit in Arizona. The Democrats are frantically trying to stop the audit. If they cannot stop it, they will simply discredit it. Even the DOJ is threatening to get involved as it might break federal election laws in a pre-crime kind of move. This is the biggest story out there because if the Maricopa County Arizona audit uncovers fraud, it will be just the first election audit domino to fall. The Democrats are watching all their power slip away as the audit progresses. Keep your eyes on Arizona.

Montana is the first state to cancel unemployment benefits. It is in response to the very tight labor market as the economy opens back up to an unprecedented worker shortage. 16 million people are still on some form of unemployment at the state or federal level. Will other states follow Montana’s move?

Inflation is roaring back, but the Federal Reserve and the Treasury Department seem to be at war with each other. Fed Head Jay Powell says inflation will be “transitory.” Powell does not seem to be worried about inflation. Meanwhile, Treasury Secretary Janet Yellen says rates are going to have to rise to keep the economy from “overheating.” In other words, Yellen is worried about inflation. Which is it? Well, check prices, and you will see just about everything is going up in price, especially commodities. Gold, silver, lumber, steel, iron ore, corn, wheat and soy beans are all going up - way up. That is inflation. Many in the investment community do not believe it is “transitory” but here to stay and getting worse - much worse.”

- https://usawatchdog.com/

Join Greg Hunter on Rumble as he talks about these

stories and more in the Weekly News Wrap-Up for 5.7.21.

- https://rumble.com/

(Correction: The Fed is supporting the repo market with

$125 billion a month and NOT $1.25 trillion.)

"What Will You Do When Inflation Forces U.S. Households To Spend 40 Percent Of Their Incomes On Food?"

Full screen recommended.

"What Will You Do When Inflation Forces U.S. Households

 To Spend 40 Percent Of Their Incomes On Food?"

by Epic Economist

"Over the past 12 months, US consumers have been seeing shocking price increases at grocery stores. Some staples shot up by almost 150 percent and several others are still facing shortages due to the latest supply chain disruptions. But experts are warning that this is just the beginning. The real problem actually goes much deeper than supply and demand imbalances. Rising prices are likely to persist throughout the whole year and well into 2022, as the U.S. economy starts to feel the impacts of inflation. So if you think things are already complicated at this point, get ready to see prices go on meteoric rises because from now on it is only going to get worse.

As food becomes increasingly expensive, Americans are forced to spend a larger share of their income just to ensure the same essentials. Before the health crisis began, consumers used to spend nearly 10 percent of their disposable personal incomes on groceries. According to data released by the USDA, in 2019, Americans spent 9.5 percent of their income on food, divided between food at home, representing 4.9 percent; and food away from home, 4.6 percent. However, data shows that when economic divisions are considered, Americans at the very bottom of the economic food chain spent significantly more than those at the top.

In 2019, low-income households spent an average of $4,400 on food, which accounts for 36 percent of their income, while the highest-income households spent an average of $13,987 on food, but that only represents 8 percent of their income. It is safe to say that those numbers are notably higher today. Economists are predicting that the percentage of disposable personal income that the average U.S. household spent on food in 2020 will near 40 percent, but official numbers from 2020 haven't been released yet. In any case, that would imply that for poor households, that percentage could be well over 50% - which means that millions of Americans are spending more than half of their income just to feed themselves.

And now that inflation has been on an upward climb, rising food costs will likely slice an even larger share of people's budgets. A recent Bloomberg article reported that over the past 12 months, the price of corn jumped roughly 142 percent to $7.56 per bushel, the highest price seen in eight years for the crop. Additionally, new shortages of chicken, dairy products and pork, have resulted in a price increase of 10 percent just in March for pork chops and chicken breasts, while eggs and cheese went up by 6 percent last month alone.

In other sectors of the economy, inflation levels may not appear as alarming to consumers just yet, but the truth is that by looking at all consumer goods as a whole, the latest inflation data in the Consumer Price Index from the U.S. Bureau of Labor Statistics indicates the largest month-to-month increase in almost nine years. And, of course, rising commodity prices go way beyond corn. At the gas pump, prices have surged over $1.20 compared to the same period in 2020, but that was when demand was dwindling because of stay-at-home mandates.

Meanwhile, the costs of lumber continue to skyrocket. Last week, lumber prices have pushed the price of an average new single-family home $35,000 higher, but this week, there was an increase of almost one thousand dollars in that figure. According to an analysis by the National Association of Home Builders, lumber is adding $35,872 to the cost of a new home.

That's what happens when the beginning stages of hyperinflation start to appear in the economy. The spending plan that was supposed to help the population to make it through the worse economic recession in decades, ended up deteriorating people's purchasing power to the point of snatching up half of the income of millions of US households so that they can buy food. Our leaders have let inflation run out of control so that they can continue to print, borrow and spend money recklessly, without considering how this is affecting our living standards. As the cost of everything continues to climb, soon we will see a major national crisis emerging because it won't take long for people to start to loudly complain about how nightmarish inflation has become and how the American Dream has been ruthlessly taken away from our hands."

- https://www.epiceconomist.com

"Stagflation; Costco Raises Prices Gives You Less; US Real Debt $163 Trillion"

Jeremiah Babe, PM 5/6/21:

"Stagflation; Costco Raises Prices Gives You Less;

 US Real Debt $163 Trillion"

Gerald Celente, "Trends in The News Live"

Gerald Celente,

"Trends in The News Live"

- https://trendsresearch.com/

"Janet Yellen Panics the Market"

"Janet Yellen Panics the Market"

by Brian Maher

"Like a squall out of a clear sky… Janet Yellen sent investors under the awnings Tuesday: "It may be that interest rates will have to rise somewhat to make sure that our economy doesn't overheat." In reminder: Falling rates generally equal rising stocks. Rising rates generally equal falling stocks. Ms. Yellen’s rains gave the Nasdaq a quick 300-point drenching. That is because many technology stocks are “growth” stocks. These stocks have grown the stock market into a towering oak.

Growth stocks are uniquely sensitive to rising interest rates. Explains Mr. Peter Tchir of Academy Securities: "Companies relying on future cash flow growth experience much greater risk as rates rise, and that has been the part of the market that has really driven returns in the stock market. That is why some parts of the market, like the Nasdaq 100, which is heavy in technology stocks, is getting hit much more than the Dow Jones Industrial Average, which has less companies expecting outsized growth."

“I Didn’t Mean It!” But like a chronic liar who mistakenly mumbles a truth… Ms. Yellen hedged, hemmed, hawed… and rotated 180 degrees around. Late Tuesday - as the water came sheeting down - she insisted she did not “think there’s going to be an inflationary problem.” Why the turnabout? Perhaps someone took her by the ear? Perhaps she stole a glance at her plunging portfolio?

But what happens to the stock market when growth stocks finally cease to grow… when the nourishing saps run dry… when interest rates rise? Can trees truly scrape the sky? The market cap-to-GDP ratio informs us whether the market is undervalued, overvalued, or fairly valued against its historical average. It is Warren Buffett’s preferred yardstick.

Significantly Overvalued: If market cap ranges between 50% and 75% of GDP, the market is considered undervalued. Between 75% and 90%, it is considered fairly valued. Between 90% and 115%, overvalued. What is today’s market cap-to-GDP ratio? 198%. That is, stocks are obscenely overvalued - against historical averages. Only a $40 trillion economy would justify today’s gargantuan valuations. The United States does not run a $40 trillion economy. It runs perhaps a $21 trillion economy. The stock market has far outgrown its roots in the real economy. It is overextended mightily.

The Lumberjacks Are Getting Ready: The market cap-to-GDP ratio scaled 100% in the deliriums of 1929. Prior to the 2000 “dot.com” devastation, the ratio came in at 175%. At today’s 198%... we must assume the lumberjacks are readying the saws.

Today’s valuations suggest stocks will return negative 2.9% per year - dividends included. Here we speak of averages. Whether stocks turn in greater than negative 2.9%... or lesser than 2.9%... we can offer no answer. It is in the lap of the gods. And there it shall remain.

‘We Can Borrow All We Want Because Borrowing Costs Are So Low’: Total United States debt - public and private - runs to some $82 trillion. The debt mongers among us argue that the United States can plunge deeper into debt because interest rates are so fantastically low. Borrowing costs are historically low, it is true - though they have inched higher.

But if the price of hemlock was historically low… should you store in a heavy inventory? Are historically low rates - that is - a warrant to plunge deeper into debt?

By our lights… they are not. Here is a question: Would you rather service a $100,000 debt at 5% - or a $1 million debt at 1%? The $100,000 debt at 5% will burden you $5,000 per year. The $1,000,000 debt at 1% will throw a $10,000 shackle upon you. You are doubly bound in debt. You can take the load if your income rises with it. But if it does not?

Three Times More Debt Than Growth: Since 2007 total United States debt… public and private… has ballooned an impossible $30 trillion. Meantime, the gross domestic product has expanded only $7 trillion. Today’s rates fall substantially beneath 2007’s rates. Yet due to today’s dizzyingly greater debt volume… each incremental rate increase weighs further upon the shoulders.

How much heavier? Mr. Larry McDonald, publisher of the Bear Traps Report: "A 50 basis point move today in yields relative to 10 years ago wipes out literally the entire budget of the marines, the navy and the army. In other words, because there's so much debt today relative to 10, 15 years ago… a small move in yields, 50 basis points in yields today is equivalent to 2% 15 years ago."

For emphasis: A 50-basis point jump in yields today equals a 2% jump in 2006. That is, a jump from 1% to 1.50%... equals a jump from 1% to 3% in 2006.

“You Just Can't Afford a Big Move up in Yields”: What happens if yields rise 100 basis points - 1%? Old McDonald: "You just have... a ton of wealth that... a 1% move up in yields, number one, it bankrupts the U.S. in terms of your budget right now…. 70% of the budget in the United States is entitlements and interest, so you just can't afford a big move up in yields."

Here is Mr. Michael Kosares, founder of USAGOLD, in 2017: "As interest rates have declined over the last several years, the interest paid by the federal government has increased markedly due to the rapid growth in size of the accumulated debt…

In 2008 when the national debt stood at $10 trillion, the federal government paid $336 billion in interest. For a measuring stick, the 10-year Treasury bill drew an average interest rate at the time of around 3.66%.

In 2012 when the debt crossed the $16 trillion threshold, the interest payment was almost $456 billion. The 10-year Treasury bill drew an average interest rate of 1.80%.

In 2016 with the national debt approaching the $20 trillion mark, the interest payment was $497 billion. The 10-year Treasury bill drew an average interest rate of 1.84%. It is difficult to overlook the fact that 2016’s interest payment was an all-time record at the second-lowest rate [in 46 years]."

Doomed: The present year is 2021. The national debt does not approach $20 trillion… but $28.3 trillion. At today’s levels, each percentage-point rate increase heaps some $225 billion upon existing debt service. Recall, a 0.50% bump in 2021 equals a 2% leap in 2006. If rates return to historical averages - 3-5% - debt service could wash out the entire budget. Can the Federal Reserve keep its finger in the dyke? The market’s fate depends upon it. That is, the market is doomed..."

- dailyreckoning.com

Gregory Mannarino, PM 5/6/21: "Be Prepared For A Debt Market Hyper-Bubble IMPLOSION And MASSIVE Inflation!"

 

Gregory Mannarino, PM 5/6/21:

"Be Prepared For A Debt Market Hyper-Bubble

IMPLOSION And MASSIVE Inflation!"

- https://traderschoice.net/

"What Will You Do When Inflation Forces U.S. Households To Spend 40 Percent Of Their Incomes On Food?"

"What Will You Do When Inflation Forces U.S. Households 

To Spend 40 Percent Of Their Incomes On Food?"

by Michael Snyder

"Did you know that the price of corn has risen 142 percent in the last 12 months? Of course corn is used in hundreds of different products we buy at the grocery store, and so everyone is going to feel the pain of this price increase. But it isn’t just the price of corn that is going crazy. We are seeing food prices shoot up dramatically all across the industry, and experts are warning that this is just the very beginning. So if you think that food prices are bad now, just wait, because they are going to get a whole lot worse.

Typically, Americans spend approximately 10 percent of their disposable personal incomes on food. The following comes directly from the USDA website… "In 2019, Americans spent an average of 9.5 percent of their disposable personal incomes on food - divided between food at home (4.9 percent) and food away from home (4.6 percent). Between 1960 and 1998, the average share of disposable personal income spent on total food by Americans, on average, fell from 17.0 to 10.1 percent, driven by a declining share of income spent on food at home."

Needless to say, the poorest Americans spend more of their incomes on food than the richest Americans. According to the USDA, the poorest households spent an average of 36 percent of their disposable personal incomes on food in 2019… "As their incomes rise, households spend more money on food, but it represents a smaller overall budget share. In 2019, households in the lowest income quintile spent an average of $4,400 on food (representing 36.0 percent of income), while households in the highest income quintile spent an average of $13,987 on food (representing 8.0 percent of income)."

Needless to say, the final numbers for 2020 will be quite a bit higher, and many believe that eventually the percentage of disposable personal income that the average U.S. household spends on food will reach 40 percent. That would mean that many poor households would end up spending well over 50 percent of their personal disposable incomes just on food.

At one time that would have been unimaginable, but now everything is changing. As I noted above, the price of corn his increased 142 percent since this time last year… "Corn prices have jumped roughly 142% over the past year to $7.56 per bushel, the highest price seen in eight years for the crop. A drought in Brazil and increased demand in China have put pressure on global suppliers."

In other areas we are seeing more moderate inflation, but overall we just witnessed the largest increase in food inflation “in almost nine years”… "The average prices in March of 2021 for pork chops and chicken breasts are both up more than 10% compared to March of 2020. Eggs and cheddar cheese are both up 6%. Looking at all consumer goods as a whole, the latest inflation data in the Consumer Price Index from the U.S. Bureau of Labor Statistics shows the largest month-to-month increase in almost nine years."

Meanwhile, the price of lumber just continues to shoot even higher. In New Jersey, one man says that the total cost of lumber used in building his new home will reach $70,000… "Tom McCarthy can’t finish building a home in Bergen County, New Jersey because of the lumber shortage. “There are pieces of wood that we can’t find,” said McCarthy, a real estate broker with the Chen Agency who also builds homes with his father on the side. McCarthy estimates the cost of lumber for the home will hit $70,000, nearly double the cost of building the exact same home in a nearby town just eight months ago."

Isn’t that nuts? Instead of building a new home, you could try buying an existing one instead, but real estate prices in many areas have gotten completely insane. In northern California, one house recently sold for more than a million dollars over listing price… "When a house in Berkeley sold for more than $1 million over its list price in late March 2021, it was covered in media outlets across the Bay Area, including this one."

While the Berkeley sale was particularly sensational - it sold for double its list price and received 29 offers - these individual stories are becoming more common in today’s real estate market, according to recent data and anecdotes from real estate professionals. I never imagined that I would see such a thing happen.

But one real estate agent says that such wild bidding wars are becoming increasingly common… "And that’s especially true in the East Bay. “People are not surprised when a home goes $1 million over,” said Josh Dickinson, the founder of real estate agency Zip Code East Bay. “When my clients see a house for $1.9 million they’re almost conditioned to think it’ll go over $3 million in Piedmont or North Berkeley.”

This is what the beginning stages of hyperinflation look like, but Federal Reserve officials insist that we have nothing to be concerned about. In fact, Eric Rosengren just told the press that the crazy inflation we are seeing now “is likely to prove temporary”… "Boston Federal Reserve President Eric Rosengren in an interview with MarketWatch on Wednesday dismissed talk of scaling back asset purchases as premature, and said temporary factors pushing up inflation this spring won’t last. “My view is that this acceleration in the rate of price increases is likely to prove temporary,” Rosengren said Wednesday."

Do you believe him? I don’t. As Simon Black has pointed out, the federal government is just going to continue to borrow and spend trillions upon trillions of dollars… "This is the big one. The US federal government is hoping to spend a whopping $11 TRILLION this year, between the regular budget, COVID stimulus already passed, and all the new legislation they’re proposing."

And it’s only May. Obviously Uncle Sam doesn’t have the money. So they have to borrow it. Almost everybody loved it when the federal government started sending out big, fat stimulus checks. But you aren’t going to love it when a cart of food costs you $400 at the grocery store.

Whenever the government hands out “free money”, someone has got to pay for it, and one way we are paying for it is through higher prices. If you do not believe that this is a major national crisis yet, you will soon, because it won’t be too long before most of the country is loudly complaining about how nightmarish inflation has become."

- http://theeconomiccollapseblog.com/

Musical Interlude: "Dance of Life • Relaxing Fantasy Music for Relaxation & Meditation"

Full screen a must for this beautiful video!

Peder B. Helland,

"Dance of Life • 

Relaxing Fantasy Music for Relaxation & Meditation"

"A Look to the Heavens"

"NGC 3199 lies about 12,000 light-years away, a glowing cosmic cloud in the nautical southern constellation of Carina. The nebula is about 75 light-years across in this narrowband, false-color view. Though the deep image reveals a more or less complete bubble shape, it does look very lopsided with a much brighter edge along the top. 

Near the center is a Wolf-Rayet star, a massive, hot, short-lived star that generates an intense stellar wind. In fact, Wolf-Rayet stars are known to create nebulae with interesting shapes as their powerful winds sweep up surrounding interstellar material. In this case, the bright edge was thought to indicate a bow shock produced as the star plowed through a uniform medium, like a boat through water. But measurements have shown the star is not really moving directly toward the bright edge. So a more likely explanation is that the material surrounding the star is not uniform, but clumped and denser near the bright edge of windblown NGC 3199."

- https://apod.nasa.gov/apod/astropix.html

Chet Raymo, “Life”

“Life”

by Chet Raymo

“ACCTCCTCTAATGTCA

 ACCTCCCCTAATGTCA

"The first string of letters above represents an actual sequence of amino acids on human chromosome 10. The second string is the corresponding sequence for an elephant. I copy the strings from a New Yorker article on Neanderthals by Elizabeth Kolbert. She tosses them in more or less at random just to show what a DNA sequence looks like. Still, they jump off the page. Humans and elephants. A four-letter code.

Four molecules called neucleotides, arranged in pairs along a spiraling ladder, the double-helix – adenine, thymine, guanine and cytosine, represented by the letters A, T, G and C. A always pairs with T, G with C. The complete human genome is a string of something like 3 billion As, Ts, Gs and Cs. Ditto for the elephant. Some 30,000 sequences, of variable length, are genes. Most of the strings are apparently non-functional; so-called “junk.” Give the sequence to a genomist and she can tell you if it belongs to a human or an elephant. Or, for that matter, to an Asian elephant, and African elephant, or an extinct woolly mammoth. Or a modern human or a Neanderthal.

There have been some pretty exciting discoveries in science in my lifetime – plate tectonics, for example, or the cosmic microwave background radiation – that have revolutionized our understanding of the Earth and the universe. But to my mind nothing has been more stunning than the recognition that we share with all of life an elegantly simple four-letter code that determines what we are as a species. And not only our species, but the color of our eyes and the dimples in our cheeks. An identical arm’s-length of DNA in every one of the trillions of cells of our bodies (except red blood cells). And somewhere in that sequence of 3 billion As, Ts, Cs and Gs is presumably the variation that let modern humans prosper at the expense of our Neanderthal neighbors.”

- http://blog.sciencemusings.com/

"The Psychology of Conformity"

Full screen recommended.

"The Psychology of Conformity"

by Academy of Ideas

"This video, building on the ideas of Ernest Becker, Kierkegaard, Nietzsche and Emerson, examines why we are so susceptible to conformity and looks at why nonconformity, or the cultivation of one’s uniqueness, is such an important ingredient in a life well-lived."

- http://academyofideas.com/

The Daily "Near You?"

Forest Lake, Minnesota, USA. Thanks for stopping by!

“You Want Rights? Well, Sunshine… Here’s What You’re Missing”

“You Want Rights? Well, Sunshine… Here’s What You’re Missing”

So Many Rights, So Little Understanding

by Chris

“Sometimes when I sit down to share my thoughts with you I know I’m going to piss off a bunch of people. Today is one of those days. So if you’re bitterly hostile, suffer from low self esteem, have nihilistic tendencies, and offer to the world a bag full of self contempt and not much else, then you need to read on. You’ll hate me for it but really… this is for you!

You’ve been fighting for all sorts of “rights” and sadly society is actually taking you seriously rather than treating you as they should, which is to say one with a mental illness. Instead, here we find ourselves in an environment where criminals are and will be made out of perfectly decent, honorable, good people.

For example, if you don’t get “affirmative consent” before getting jiggity with a partner, it’s considered rape on some university campuses. And the same goes if your partner has been drinking. By this criteria most every male in the world is a rapist, myself included. When you’re “in the moment”, nobody’s stopping, saying, “Hey, hang on a moment, sweetheart. Please, can you provide me with your affirmative consent to ravage you?” What the hell?  And if you and your partner had a glass of wine beforehand, you’re definitely a rapist.

Islamophobia is another. Listen, I could care less about your religious affiliation or lack thereof. If you’re not fearful of an ideological belief which champions ending your life if you’re not going to follow the doctrine, then you’re an idiot, and so it’s only idiots that campaign against common sense rational prudence.

As I mentioned talking about the virtues of discrimination: Do you discriminate when you steer clear of a group of young men with an aggressive swagger walking at night? I sure hope so. This is not prejudice it’s bloody prudence.

Now, you might ask yourself what on earth has this got to do with markets, Chris? This all matters a great deal, and I explained well before it happened (and shocked everyone). So yes, it matters and capital flows are affected. And it’s not just America or even North America. Because this is prevalent in Britain and Europe as I wrote about in what the silent majority is really saying: In a mad bid to prove “acceptance” and “tolerance” the West have gone entirely off the deep end ignoring and condoning comments and actions completely antithetical and incompatible with modern Western Civilization.

While we’re on the topic of insane political correctness we can’t leave out gender equality (a ludicrous term because, by our very nature, women and men are not equal). Our very unequal-ness is what allows us to interact on a mutual and agreeable basis. And yes, the liberation of and freedom of women is easily one of the most positive forces that any country could possibly move forward on. That doesn’t mean we’re equal. I sure as hell can’t give birth, and I’m nowhere near as organized as my wife, and studies have shown that women are unequivocally more organized while men for example are more industrious. It’s how we’re wired. Trying to make us the same is pathologically stupid.

The Washington Post ran an article on how you and I will become criminals by inadvertently calling a spade a spade… a woman and woman… and a man a man. You can be fined for not calling people “ze” or “hir,” if that’s the pronoun they demand that you use. In fact, apparently there are 56 pronouns now to be used including such beauties as “gender-fluid” and “two-spirit”. You can’t make this sh*t up!

Perhaps we should just keep safe and use “oy” for everyone. That ought to sort the problem out. As for myself, I think I’m going with “Milord”.

Look, I could care less if you’re a bloke who lopped your diddle off and now wants to be called Sally, but this shouldn’t govern society, for goodness sake. Freedom of expression is one thing but this incipient, creeping cancer (because that’s what it is) attempts to dictate what are trivialities and it’s dangerous. Very dangerous! It’s an ideology and ideologies are extremely dangerous.

The Flip Side to Rights… are responsibilities. The “right” to free healthcare entails someone to provide that healthcare. That’s a responsibility and it takes effort, capital, skill, intellect, and hard work.

The same is true of all rights, and I want to emphasize this with flushed cheeks, waving hands, and spittle. All rights are someone else’s responsibility. It can’t be any other way. Take away the responsibility and your “rights” are just words because they’re as useless as Mike Tyson in a spelling bee. I mean go into, say, Zimbabwe and legislate universal free healthcare. Well, since there’s nobody responsible that’ll actually make that happen, it’s a waste of time.

And here’s the problem that bleeding-heart liberals fail to understand. The West is educating and grooming generations of useless, bedwetting, irresponsible intellectually vapid children (because, despite their age, that’s what they are). And lacking from this tsunami of the cotton-wool-clad crowd is ANY responsibility. Try foist it on them and they screech “triggered” and retreat to a “safe space”.

So pray tell, what happens when a real crisis hits? When the sovereign debt bubble bursts and the socialist systems that have been built on this funding mechanism (sovereign debt markets) and which are completely expected to simply provide for these “children” rapidly run out of funding?

Try explaining to these “children” that a mere 1% rise in bond yields could trigger a bond crisis the likes of which we’ve never seen before in our lives. And try further explaining what this means to all their “rights…” and you may as well be talking to your dog because intellectual rigor is not something they’ve ever been exposed to. Instead, they’ve spent their lives ensuring they’re shielded from it. The inescapable logic that being “two-spirit” could (and will) be rapidly superseded by the need to fill one’s belly is indeed entirely missed.

What happens next? I’ll tell you what happens next. We’ve the most fertile grounds you could imagine for tyranny because you know what? There ain’t gonna be nobody strong enough to stop it happening. What’s a sane person to do? Probably best to simply position accordingly.”

“Dictatorship naturally arises out of democracy, and the most 
aggravated form of tyranny and slavery out of the most extreme liberty.” 

- Plato

- https://www.zerohedge.com/

◆

Personally, I’d agree with Christopher Hitchens…

"And That's Why..."

“I don’t believe in ‘original sin.’ I don’t believe in ‘guilt.’ I don’t believe in villains or heroes – only right or wrong ways that individuals have taken, not by choice but by necessity or by certain still-uncomprehended influences in themselves, their circumstances, and their antecedents. This is so simple I’m ashamed to say it, but I’m sure it’s true. In fact, I would bet my life on it! And that’s why I don’t understand why our propaganda machines are always trying to teach us, to persuade us, to hate and fear other people on the same little world that we live in.”

- Tennessee Williams

"Time to Get Hosed!"

"Time to Get Hosed!"

by Bill Bonner

YOUGHAL, IRELAND – "Yesterday, we saw that some investments inevitably go bad. People make mistakes. The private world of win-win deals routinely corrects them. Death, divorce, default, destitution – many are the ways it sets things right. But the public world… the world backed by tanks and armed police… the world of wars and sanctions… regulations and money-printing… uses its considerable might to resist correction. No matter how stupid… no matter how wasteful or harmful to the public weal – government programs are rarely and reluctantly discarded.

The Definition of Eternity: Dear readers who doubt this is true are invited to recall the real nature of government. It is an organization that has only one real goal – to protect and promote the people who control it. And as we’ve seen, illuminated by the great Italian economist Vilfredo Pareto, it is always controlled by a small segment of the society – the elite.

We’ve seen also that the “investments” made on behalf of the public most often benefit only the elite. And, protected by their beneficiaries, errors persist and accumulate. Even the most temporary and woebegone government agency becomes eternal. Crises – forgotten by the public for decades – still trouble the sleep of well-paid agents of the federal government.

Programs that should have been a source of shame and embarrassment continue indefinitely, while the people who put them in place – who should have been bankrupted… run out of town on a rail… or at least had the good grace to resign from office, or like German general Erwin Rommel, to accept the cyanide pill – stay proudly at their posts year after year.

Elections are supposed to “throw the bums out.” But apart from a few headliner acts, the show remains little changed… with the same clowns, misallocating the same resources, over and over.

How It Ends: And yet, as American economist Herbert Stein remarked, things that can’t go on forever must come to an end. But how? When? Those are our questions for today. And we won’t beat around the bush. The answer is this: Deprived of regular hygiene, public life gets dirtier and dirtier… until finally, we all “take a bath” on the feds’ bad investments. We pause to back-fill…

Errors – even in public life – are usually limited by money. The feds may want to spend $2 trillion on infrastructure… or on climate control… but they lack the means. This forces them to make trade-offs… hard choices – cutting here to spend there… raising taxes… or borrowing. Raising taxes tends to upset those who pay them, imposing a barrier that politicians are reluctant to cross. And even when Congress passes a tax increase, it doesn’t mean that the feds will actually collect more tax revenue. People duck and dodge. Even without cheating, they change the way they do business and how they spend their money.

In the end, tax revenue, as a percentage of GDP, tends to stay fairly constant, as tax rates rise or fall. And borrowing brings its own problems. First, a dollar must be earned before it can be saved. Then, it must be saved before it can be borrowed.

This century, federal deficits have far outstripped GDP growth and savings rates, which is why the feds have had to resort to the printing press. Besides, even when there is money available from private lenders, borrowing by the feds will “crowd out” private borrowers, driving up interest rates, depressing the economy, and putting voters in a sour mood. It is only because our fake-money system permits the feds to spend so much, without depleting savings or raising taxes, that they can make so many bad “investments.”

(An important note: As prices begin to rise, the Federal Reserve will come under pressure to “taper” off its money-printing ways. Most likely, next month, as higher inflation rates are reported, we will see some fireworks at the Fed… and in the markets… Stay tuned.)

Extraordinary Scrubbing: In addition to the bad investments on existing wars – against terrorists, poverty, recessions, bear markets, and drugs – the Biden Administration has proposed an additional $4 trillion to do battle against temperature changes and viruses… as well as allegedly improving the nation’s families and its infrastructure. Some of these proposals will be adopted. Money will be misspent. Debt will increase. And the grime will grow thicker and greasier than ever. With no routine way of cleaning it off… an extraordinary scrubbing will be needed.

Wars, revolutions, economic collapse – the ways in which elites are finally punished… and their bamboozles eventually corrected… fill the history books. They’ve been explored by historians and catastrophists such as Edward Gibbon, Arnold Toynbee, Oswald Spengler, Joseph Tainter, Peter Turchin… and many others. Each has his own theory… his own “spin”… on the issue. Some emphasize foreign competition. Others focus on the degeneration of the elite themselves. Some lay the blame on economic mismanagement or resource depletion. Others insist the real problem is a moral failure.

Joseph Tainter put forward the idea that governed societies are fundamentally problem-solving organizations. Each problem requires a solution. Each solution adds costs… and increases the complexity of the organization. Eventually, the complexities and additional costs become unbearable; the society collapses.

Parasitic Living: Another way to look at it is that the elite is fundamentally parasitic, living off the labor of others. As time goes by, more and more people naturally wish to join the elite. They learn to speak the language of business schools and The New York Times. They send their children to college. And then… the college graduates feel entitled to an elite lifestyle, and take their places on Wall Street, in the government, a university, or a non-profit organization. Thus are more and more people turned into quasi-rentiers, contributing little to the real wealth of the society, while relatively fewer remain to make the plumbing work.

Here at the Diary, we pretend no precision. Our analysis is broad-brush… like a barn door painted by a blind man. During our own lifetimes, America’s elite has degenerated greatly. Funded with almost unlimited fake money, it has become arrogant, corrupt, and incompetent. And now… caught in an “inflate or die” trap… its “investments” become more desperate and less productive than ever… And since the elite controls both soap and water… the dirt builds up. And then, we all get hosed."

- www.rogueeconomics.com

"How It Really Is"

 

Gregory Mannarino, AM 5/6/21: "UPDATES: Economy, Inflation, Stocks, Crypto, DASH, Gold, Silver, Dollar, Crude"

Gregory Mannarino, AM 5/6/21:

"UPDATES: Economy, Inflation, Stocks, 

Crypto, DASH, Gold, Silver, Dollar, Crude"