Tuesday, December 7, 2021

"A Look to the Heavens"

"Sweeping through northern predawn skies, on November 24 Comet Leonard (C/2021 A1) was caught between two galaxies in this composite telescopic image. Sporting a greenish coma the comet's dusty tail seems to harpoon the heart of NGC 4631 (top) also known as the Whale Galaxy. Of course NGC 4631 and NGC 4656 (bottom, aka the Hockey Stick) are background galaxies some 25 million light-years away. 
On that date the comet was about 6 light-minutes from our fair planet. Its closest approach to Earth (and even closer approach to Venus) still to come, Comet Leonard will grow brighter in December. Already a good object for binoculars and small telescopes, this comet will likely not return to the inner Solar System. Its perihelion, or closest approach to the Sun, will be on January 3, 2022."

"Man's Nature..."

"Man has one name, and many more than two natures. 
But the essential two are these:
that he shall strive to impose order on chaos, 
and that he shall strive to take advantage of chaos…
A third element of man's nature is this: 
that he shall not understand what he is doing."
- John Brunner

"Lessons From Pearl Harbor"

"Lessons From Pearl Harbor"
by Jim Rickards

"Today’s the 80th anniversary of the Japanese attack on Pearl Harbor, which thrust the U.S. into World War II. While the actual attack was a shock to many Americans, it was the culmination of a series of policy decisions years in the making.

The most immediate catalyst came when the U.S. froze Japanese assets and imposed an embargo on oil shipments to Japan in the summer of 1941, after Japan rejected U.S. demands that it withdraw from China. Japan received over 80% of its oil from the U.S., so the embargo backed Japan into a corner. It could either submit to the U.S. demands, or it could launch an attack to secure the oil-rich territories of the Dutch East Indies (presently Indonesia).

It chose the latter. But a move against the Dutch East Indies would be vulnerable to attack from the Philippines, which was a U.S. commonwealth with a U.S. military presence. That threat would have to be neutralized, so a Japanese invasion of the Dutch East Indies would inevitably mean war with the U.S. Most policy experts expected any Japanese attack on U.S. forces would take place in the Philippines. But they first attacked the naval base and airfields at Pearl Harbor.

Japan didn’t just wake up one day and decide it was a good idea to attack the U.S. It was faced with a limited set of policy options in the face of the U.S. embargo, and took what it believed was a necessary action. The point being, wars are the end result of policy decisions that take place long before the first shot is fired. If a nation believes its vital interests are severely threatened, it will often choose war, not necessarily because it wants war, but because it believes it has no recourse. Now fast forward to today…

Russia is massing troops and offensive mobility capabilities on its border with Eastern Ukraine. The U.S. is concerned that Russia will invade Ukraine to annex the Donbass region, which is populated with Russian ethnic citizens and pro-Russian militias.

The U.S. policy makers seem to forget that the entire fiasco in Ukraine began in 2014 when CIA and MI6 operatives launched a “color revolution” that led to the overthrow of a duly elected pro-Russian president. This was part of a larger effort to include Ukraine in NATO and the EU. It was also done in support of a lucrative kickback racket that supported Democratic politicians, including the Clintons and the Bidens.

The result was a de facto split of Ukraine into a pro-Western half centered in Kiev and a pro-Russian half in the Donbass and Luhansk regions. Western intervention in what was a somewhat neutral status quo ignored the fact that Ukraine is like a dagger aimed at the heart of Russia, and forms part of an arc from Ukraine to Estonia (which is a NATO member). This arc surrounds Moscow: parts of it lie east of Moscow. A NATO-member or even pro-Western Ukraine is an existential threat to Russia. Ukraine is a red line as far as Russia is concerned.

The U.S. should have realized this and left the status quo. Instead, people like Secretary of State Anthony Blinken and National Security Advisor Jake Sullivan went too far under Obama. Now they’re back making the same mistake under Biden. Blinken says that if Russia intervenes, they will suffer enormous economic sanctions. But proposed sanctions include cutting off natural gas from Russia to Germany, which will hurt Germany worst of all. Besides, Russia has been under sanctions for over ten years, and it has not changed their behavior. Russia is not about to let Ukraine fall into the Western orbit over the threat of sanctions.

If a war breaks out, don’t just blame the Russians. Also blame Biden officials like Blinken and Sullivan, who should have left well enough alone. Don’t poke a bear in its own den. Below, I show you how elites derailed U.S.-Russian relations at a time when the U.S. needs Russia to help contain China. Let’s just hope it doesn’t lead to war. Read on."
"Elites Have Destroyed a Possible
U.S. - Russia Alliance to Contain China"
By Jim Rickards

"There’s no need to rehash the sordid politics of the U.S.-Russia relationship since 2014. That relationship became collateral damage to gross corruption in Ukraine. The U.S. and its allies, especially the UK under globalists like David Cameron, wanted to peel off Ukraine from the Russian orbit and make it part of the EU and eventually NATO.

From Russia’s perspective, this was unacceptable. It may be true that most Americans cannot find Ukraine on a map, but a simple glance at a map reveals that much of Ukraine lies East of Moscow.

Putting Ukraine in a Western alliance such as NATO would create a crescent stretching from Luhansk in the South through Poland in the West and back around to Estonia in the North. There are almost no natural obstacles between that arc and Moscow; it’s mostly open steppe. Completion of this “NATO Crescent” would leave Moscow open to invasion in ways that Napoleon and Hitler could only dream. Of course, this situation was and is unacceptable to Moscow.

Ukraine itself is culturally divided along geographic lines. The Eastern and Southern provinces (Luhansk, Donetsk, Crimea and Dnipro) are ethnically Russian, follow the Orthodox Church and the Patriarch of Moscow, and welcome commercial relations with Russia. The Western provinces (Kiev, Lviv) are Slavic, adhere to the Catholic Church and the Pope in Rome, and look to the EU and U.S. for investment and aid.

Prior to 2014, an uneasy truce existed between Washington and Moscow that allowed a pro-Russian President while at the same time permitting increasing contact with the EU. Then the U.S. and UK overreached by allowing the CIA and MI6 to foment a “color revolution” in Kiev called the “Euromaidan Revolution.” Ukrainian President Viktor Yanukovych resigned and fled to Moscow. Pro-EU protestors took over the government and signed an EU Association Agreement. In response, Putin annexed Crimea and declared it part of Russia. He also infiltrated Donetsk and Luhansk and helped establish de facto pro-Russian regional governments. The U.S. and EU responded with harsh economic sanctions on Russia.

Ukraine has been in turmoil (with increasing corruption) ever since. U.S.-Russia relations have been ice-cold, exactly as the globalists intended. The U.S- induced fiasco in Ukraine not only upset U.S.-Russia relations, it derailed a cozy money laundering operation involving Ukrainian oligarchs and Democratic politicians. The Obama administration flooded Ukraine with non-lethal financial assistance.

This aid was amplified by a four-year, $17.5 billion loan program to Ukraine from the IMF, approved in March 2015. Interestingly, this loan program was pushed by Obama at a time when Ukraine did not meet the IMF’s usual borrowing criteria. Some of this money was used for intended purposes, some was skimmed by the oligarchs, and the rest was recycled to Democratic politicians in the form of consulting contracts, advisory fees, director’s fees, contributions to foundations and NGOs and other channels.

Hunter Biden and the Clinton Foundations were major recipients of this corrupt recycling. Other beneficiaries included George Soros-backed “open society” organizations, which further directed the money to progressive left-wing groups in the U.S. This cozy wheel-of-fortune was threatened when Donald Trump became president. Trump genuinely desired improved relations with Russia and was not on the receiving end of laundered aid to Ukraine.

Hillary Clinton was supposed to continue the Obama policies, but she failed in the general election. Trump was a threat to everything the globalists, Democrats and pro-NATO elites had constructed in the 2010s. The globalists wanted China and the U.S. to team up against Russia. Trump understood correctly that China was the main enemy and therefore a closer union between the U.S. and Russia was essential.

The elites’ efforts to derail Trump gave rise to the “Russia collusion” hoax. While no one disputes that Russia sought to sow confusion in the U.S. election in 2016, that’s something the Russians and their Soviet predecessors had been doing since 1917. By itself, little harm was done. Yet, the elites seized on this to concoct a story of collusion between Russia and the Trump campaign. The real collusion was among Democrats, Ukrainians and Russians to discredit Trump.

It took the Robert Mueller investigation two years finally to conclude there was no collusion between Trump and the Russians. By then, the damage was done. It was politically toxic for Trump to reach out to the Russians. That would be spun by the media as more evidence of “collusion.”

It represents an enormous lost opportunity. When future historians look back on the 2010s, they will be baffled by the lost opportunity for the U.S. to mend fences with Russia, develop economic relations and create a win-win relationship between the world’s greatest technology innovator and the world’s greatest natural resources provider.

It will seem a great loss for the world. Here’s the reality: Russia, China and the U.S. are the only true superpowers and the only three countries that ultimately matter in geopolitics. That’s not a slight against any other power. But all others are secondary powers (the U.K., France, Germany, Japan, Israel, etc.) or tertiary powers (Iran, Turkey, India, Pakistan, Saudi Arabia, etc.). This means that the ideal posture for the U.S. is to ally with Russia (to marginalize China) or ally with China (to marginalize Russia), depending on overall geopolitical conditions. The U.S. conducted this kind of triangulation successfully from the 1970s until the early 2000s.

One of the keys to U.S. foreign policy in the last 50 or 60 years has been to make sure that Russia and China never form an alliance. Keeping them separated was key. In 1972, Nixon pivoted to China to put pressure on Russia. In 1991, the U.S. pivoted to Russia to put pressure on China after the Tiananmen Square massacre. Unfortunately, the U.S. has lost sight of this basic rule of international relations. It is now Russia and China that have formed a strong alliance, to the disadvantage of the United States.

Ultimately, this two-against-one strategic alignment of China and Russia against the U.S. is a strategic blunder by the U.S. Russia is the nation that the U.S. should have tried to court and should still be courting. That’s because China is the greatest geopolitical threat to the U.S. because of its economic and technological advances and its ambition to push the U.S. out of the Western Pacific sphere of influence.

Russia may be a threat to some of its neighbors, but it is far less of a threat to U.S. strategic interests. Therefore, a logical balance of power in the world would be for the U.S. and Russia to find common ground in the containment of China and to jointly pursue the reduction of Chinese power. But thanks to the elites’ political games, it hasn’t happened. Let’s just hope their malfeasance doesn’t drag us into an unnecessary war."

"I Am That..."

 

Free Download: Henry Miller, "Tropic of Cancer"

“The monstrous thing is not that men have created roses out of this dung heap, but that, for some reason or other, they should want roses. For some reason or other man looks for the miracle, and to accomplish it he will wade through blood. He will debauch himself with ideas, he will reduce himself to a shadow if for only one second of his life he can close his eyes to the hideousness of reality. Everything is endured – disgrace, humiliation, poverty, war, crime, ennui – in the belief that overnight something will occur, a miracle, which will render life tolerable. And all the while a meter is running inside and there is no hand that can reach in there and shut it off.

All the while someone is eating the bread of life and drinking the wine, some dirty fat cockroach of a priest who hides away in the cellar guzzling it, while up above in the light of the street a phantom host touches the lips and the blood is pale as water. And out of the endless torment and misery no miracle comes forth, no microscopic vestige of relief. Only ideas, pale, attenuated ideas which have to be fattened by slaughter; ideas which come forth like bile, like the guts of a pig when the carcass is ripped open.

Somehow the realization that nothing was to be hoped for had a salutary effect upon me. For weeks and months, for years, in fact, all my life I had been looking forward to something happening, some intrinsic event that would alter my life, and now suddenly, inspired by the absolute hopelessness of everything, I felt relieved, felt as though a great burden had been lifted from my shoulders. At dawn I parted company with the young Hindu, after touching him for a few francs, enough for a room. Walking toward Montparnasse I decided to let myself drift with the tide, to make not the least resistance to fate, no matter in what form it presented itself. 

Nothing that had happened to me thus far had been sufficient to destroy me; nothing had been destroyed except my illusions. I myself was intact. The world was intact. Tomorrow there might be a revolution, a plague, an earthquake; tomorrow there might not be left a single soul to whom one could turn for sympathy, for aid, for faith. It seemed to me that the great calamity had already manifested itself, that I could be no more truly alone than at this very moment. I made up my mind that I would hold on to nothing, that I would expect nothing, that henceforth I would live as an animal, a beast of prey, a rover, a plunderer. Even if war were declared, and it were my lot to go, I would grab the bayonet and plunge it, plunge it up to the hilt. And if rape were the order of the day then rape I would, and with a vengeance.

At this very moment, in the quiet dawn of a new day, was not the earth giddy with crime and distress? Had one single element of man’s nature been altered, vitally, fundamentally altered, by the incessant march of history? By what he calls the better part of his nature, man has been betrayed, that is all. At the extreme limits of his spiritual being man finds himself again naked as a savage. When he finds God, as it were, he has been picked clean: he is a skeleton. One must burrow into life again in order to put on flesh. The word must become flesh; the soul thirsts. 

On whatever crumb my eye fastens, I will pounce and devour. If to live is the paramount thing, then I will live, even if I must become a cannibal. Heretofore I have been trying to save my precious hide, trying to preserve the few pieces of meat that hid my bones. I am done with that. I have reached the limits of endurance. My back is to the wall; I can retreat no further. As far as history goes I am dead. If there is something beyond I shall have to bounce back. I have found God, but he is insufficient. I am only spiritually dead. Physically I am alive. Morally I am free. The world which I have departed is a menagerie. The dawn is breaking on a new world, a jungle world in which the lean spirits roam with sharp claws. If I am a hyena I am a lean and hungry one: I go forth to fatten myself.”
- Henry Miller, "Tropic of Cancer"

Freely download "Tropic of Cancer", by Henry Miller, here:

The Poet: Arthur O’Shaughnessy, "Music and Moonlight"

"Music and Moonlight"

"We are the music makers,
And we are the dreamers of dreams,
Wandering by lone seabreakers,
And sitting by desolate streams;
World-losers and world-forsakers,
On whom the pale moon gleams:
Yet we are the movers and shakers
Of the world forever, it seems…
We, in the ages lying
In the buried past of the earth,
Built Ninevah with our sighing,
And Babel itself in our mirth;
And o’erthrew them with prophesying
To the old of the new world’s worth;
For each age is a dream that is dying,
Or one that is coming to birth."

- Arthur O’Shaughnessy
"The Dreamers Of Dreams..."
"The division of one day from the next must be one of the most profound peculiarities of life on this planet. We are not condemned to sustained flights of being, but are constantly refreshed by little holidays from ourselves. We are intermittent creatures, always falling to little ends and rising to new beginnings. Our soon-tired consciousness is meted out in chapters, and that the world will look quite different tomorrow is, both for our comfort and our discomfort, usually true. How marvelously too night matches sleep, sweet image of it, so nearly apportioned to our need. Angels must wonder at these beings who fall so regularly out of awareness into a fantasm-infested dark. How our frail identities survive these chasms no philosopher has ever been able to explain."
- Iris Murdoch

Gregory Mannarino, "ShOcKeR! US 3rd Quarter Production Craters As Inflation Rips Higher"

Gregory Mannarino, PM 12/7/21:
"ShOcKeR! US 3rd Quarter Production
 Craters As Inflation Rips Higher"

"Mainstream Economists Are Struggling To Hide The Incoming Economic Collapse"

"Mainstream Economists Are Struggling 
To Hide The Incoming Economic Collapse"
by Brandon Smith

"For many years now there has been a contingent of alternative economists working diligently within the liberty movement to combat disinformation being spread by the mainstream media regarding America’s true economic condition. Our efforts have focused primarily on the continued devaluation of the dollar and the forced dependence on globalism that has outsourced and eliminated most U.S. manufacturing and production of raw materials.

The problems of devaluation and stagflation have been present since 1916 when the Federal Reserve was officially formed and given power, but the true impetus for a currency collapse and the destruction of American buying power began in 2007-2008 when the Financial Crisis was used as an excuse to allow the Fed to create trillions upon trillions in stimulus dollars for well over a decade.

The mainstream media’s claim has always been that the Fed “saved” the U.S. from imminent collapse and that the central bankers are “heroes.” After all, stock markets have mostly skyrocketed since quantitative easing (QE) was introduced during the credit crash, and stock markets are a measure of economic health, right?

The devil’s bargain: Reality isn’t a mainstream media story. The U.S. economy isn’t the stock market. All the Federal Reserve really accomplished was to forge a devil’s bargain: Trading one manageable deflationary crisis for at least one (possibly more) highly unmanageable inflationary crises down the road. Central banks kicked the can on the collapse, making it far worse in the process.

The U.S. economy in particular is extremely vulnerable now. Money created from thin air by the Fed was used to support failing banks and corporations, not just here in America but also banks and companies around the world. Because the dollar has been the world reserve currency for the better part of the past century, the Fed has been able to print cash with wild abandon and mostly avoid inflationary consequences. This was especially true in the decade after the derivatives crunch of 2008.

Why? The dollar’s global reserve status means dollars are likely to be held overseas in foreign banks and corporate coffers to be used in global trade. However, there is no such thing as a party that goes on forever. Eventually the punch runs out and the lights shut off. If the dollar is devalued too much, whether by endless printing of new money or by relentless inflationary pressures at home, all those overseas dollars will come flooding back into the U.S. The result is an inflationary avalanche, a massive injection of liquidity exactly when it will cause the most trouble. We are now close to this point of no return.

The difference between a crisis and a real crisis: As I have said for some time, when inflation becomes visible to the public and their pocketbooks take a hit, this is when the real crisis begins. A Catch-22 situation arises and the Fed must make a choice:

• To continue with inflationary programs and risk taking the blame for extreme price increases.
• Taper these programs and risk an implosion of stock markets which have long been artificially inflated by stimulus. Without Fed support, stock markets will die. We had a taste of this the last time the Fed flirted with tapering in 2018.

My position has always been that the Federal Reserve is not a banking institution on a mission to protect American financial interests. Rather, I believe the Fed is an ideological suicide bomber waiting to blow itself up and deliberately derail or destroy the American economy at the right moment. My position has also long been that the bankers would need a cover event to hide their calculated economic attack, otherwise they would take full blame for the resulting disaster. The Covid pandemic, subsequent lockdowns and supply chain snarls have now provided that cover event.

Two years after the pandemic started and the Fed has pumped out approximately $6 trillion more in stimulus (officially) and helicopter money through PPP loans and Covid checks. On top of that, Biden is ready to drop another $1 trillion in the span of the next couple years through his recently passed infrastructure bill. In my article ‘Infrastructure Bills Do Not Lead To Recovery, Only Increased Federal Control‘, published in April, I noted that:

“Production of fiat money is not the same as real production within the economy… Trillions of dollars in public works programs might create more jobs, but it will also inflate prices as the dollar goes into decline. So, unless wages are adjusted constantly according to price increases, people will have jobs, but still won’t be able to afford a comfortable standard of living. This leads to stagflation, in which prices continue to rise while wages and consumption stagnate.

Another Catch-22 to consider is that if inflation becomes rampant, the Federal Reserve may be compelled (or claim they are compelled) to raise interest rates significantly in a short span of time. This means an immediate slowdown in the flow of overnight loans to major banks, an immediate slowdown in loans to large and small businesses, an immediate crash in credit options for consumers, and an overall crash in consumer spending. You might recognize this as the recipe that created the 1981-1982 recession, the third-worst in the 20th century.

In other words, the choice is stagflation, or deflationary depression.” It would appear that the Fed has chosen stagflation. We have now reached the stage of the game in which stagflation is becoming a household term, and it’s only going to get worse from here on.

Lies, damned lies and statistics: According to official consumer price index (CPI) calculations and Fed data, we are now witnessing the largest inflation surge in over 30 years, but the real story is much more concerning. CPI numbers are manipulated and have been since the 1990’s when calculation methods were changed and certain unsavory factors were removed. If we look at inflation according to the original way of calculation, it is actually double that reported by the government today. In particular, necessities like food, housing and energy have exploded in price, but we are only at the beginning.

To be clear, Biden’s infrastructure bill and the pandemic stimulus are not the only culprits behind the stagflation event. This has been a long time coming; it is the culmination of many years of central bank stimulus sabotage and multiple presidents supporting multiple dollar devaluation schemes. Biden simply appears to be the president to put the final nail in the coffin of the U.S. economy (or perhaps Kamala Harris, we’ll see how long Biden maintains his mental health facade). But how bad will the situation get?

“Collapse” is not too strong a word: I think most alternative economists have called the situation correctly in predicting a “collapse.” This is often treated as a loaded term, but I don’t know what else you could call the scenario we are facing. The covid lockdowns and the battle over the vax mandates have perhaps distracted Americans from an even larger danger of financial instability. That fight is important and must continue, but stopping the mandates does not mean the overarching threat of economic chaos goes away, and both serve the interest of central bankers and globalists.

Some of the key policies within the literature for the “Great Reset” and what the World Economic Forum calls “The 4th Industrial Revolution” includes Universal Basic Income (UBI), the “Sharing Economy” and eventually a global digital currency system using the IMF’s Special Drawing Rights basket as a foundation. Essentially, it would be a form of global technocratic communism, and if you enjoy individual freedom, being forced into total reliance on the government for your very survival does not sound appealing.

To obtain such a system would require a catastrophe of epic proportions. The Covid pandemic gets the globalists part of the way there, but it’s obviously not enough. Covid has not convinced many hundreds of millions of people around the world to give up their freedoms for the sake of security. But maybe a stagflationary collapse will accomplish what Covid has not?

Accelerated price spikes in necessities including housing and food will generate mass poverty and homelessness. There is no chance that wages will keep up with costs. The government might step in with more stimulus to help major corporations and businesses increase wages, but this would basically be the beginning of a universal basic income (UBI, or free money for everyone) and it would only cause more dollar devaluation and more inflation. They could try to freeze prices as many communist regimes have in the past, but this only leads to increased manufacturing shut downs because the costs of production are too high and the profit incentives too low.

I suspect that the establishment will bring back regular checks (like the Covid checks) for the public now struggling to deal with ever increasing expenses and uncertainty, but with strings attached. Don’t expect a UBI check, for example, if you refuse to comply with the vax mandates. If you run a business, don’t expect stimulus aid if you hire non-compliant workers. UBI gives the government ultimate control over everything, and a stagflationary crisis gives them the perfect opportunity to introduce permanent UBI.

The mainstream can no longer deny the fact that stagflation is happening and it is a threat, so hopefully those people that have not been educated on the situation will learn quickly enough to complete the preparations necessary to survive. Countering stagflation will require localized production, decentralization and a move away from reliance on the global supply chain, the institution of local currency systems, perhaps using state banks like the one in North Dakota as a model, barter markets and physical precious metals that rise in value along with inflationary pressures. There is a lot that needs to be done, and very little time to do it.

At bottom, the fight against economic collapse and the “Great Reset” starts with each individual and how they prepare. Each person caught by surprise and stricken with poverty is just another person added to the hungry mob begging the establishment for draconian solutions like UBI. Each properly-prepared individual is, as always, an obstacle to authoritarianism. It’s time to choose which one you will be."

The Daily "Near You?"

Brunswick, Georgia, USA. Thanks for stopping by!

"Winter Ends; the Nightmare Continues"

"Winter Ends; the Nightmare Continues"
by Bill Bonner

YOUGHAL, IRELAND –" News from home: “Baltimore is suffering another crime wave… with 600 people shot so far this year. In many neighborhoods, you’re more likely to get shot than to get COVID. A reporter interviewed a citizen on the street. ‘What do you think of the mayor’s Five-Year Crime Plan?’ he asked. ‘Five years from now, everybody be dead,’ replied the street-sage.”

But we’ve left Baltimore behind. After sufficient testing… certifying to the Irish authorities that your editor was not carrying the Plague… we’ve arrived back in Ireland. And we wrap up our history of America’s Nightmare Winter of 2033… or 2028… or 2025?

Recall that the feds are trying to do two dangerous things at once. First, they aim to reach net-zero carbon dioxide emissions by 2035. Second, they expect to pay for the “transition” to green energy – along with routine federal budget deficits and trillion-dollar boondoggles – with printing-press money. This was never going to end well.

So, we’ve been looking at what the end might look like. When we left you yesterday, the power grid had failed and mobs were looting stores for food. Thousands died in a few horrible weeks of sub-zero temperatures.

The Straw That Breaks the Camel’s Back: But now, after a thaw, the sun has come out and the juice is on. Can we return to normal? The answer is probably “no.” We remind readers that the “Great Freeze” is only one of many different possibilities. Already, the camel sags and staggers. We don’t know what the final straw will look like. It could be a breakdown in the power system on the 4th of July. Or a trial verdict that goes the “wrong” way… followed by rioting all over the country.

Or maybe just another crash in the housing market. Houses are rising in price three times as fast as the cost of living. People are once again “taking out” equity. As we reported last week, the median house price is now above $400,000. If you are aged under 30, the average down payment is only about 6%. That leaves the average young buyer under 30 with a $376,000 mortgage. As prices rise, so will mortgage rates. And each 1% increase in the mortgage rate adds $3,760 to the annual cost. How long before that camel’s back gives way?

Hell Breaks Loose: We remind dear readers, too, that things don’t “just happen.” The #7 ball hits the #3 ball… and drives the #10 ball into the side pocket. If you only see part of the scene, you might think that the #10 ball went in by itself. But there is always more to the story. How do you see it? Here’s a good place to start: Follow the money.

In the U.S. today, money is created by the banking system, which is run by the Federal Reserve, which is run by the government. “Printing” new money boosts up asset prices, which are owned primarily by the rich. The more dollars the Fed creates, the richer the rich get. And the more the movers and shakers think they have unlimited funds to do whatever they want, the more jackass programs they undertake… and the more real wealth they squander.

Investors back zombie businesses… and buy meme stocks and NFTs. Corporations borrow to do mergers and acquisitions… and buy back their own stock. The government spends on wars, “social infrastructure,” and climate control. Deficits and debts rise… the rich get richer and richer… and the elite becomes more and more corrupt… Prices go up… inflation gets worse and worse… and people get angrier and angrier…And then, the trigger – a cold winter… a hot July… a Lehman-style bankruptcy. Something suddenly snaps. And all Hell breaks loose.

Full-Scale Catastrophe: People lose faith – in their leaders… their neighbors… their money… their laws… their system of government and their institutions… And then, you don’t just have a financial problem on your hands. Not just a stock market crash, either. Nor just a recession/depression. You have a full-scale social and political catastrophe… chaos… and a Winter Nightmare. Like Russia in the winter of 1917… Germany in the winter of 1921… Argentina in the 1970s and 1980s… Zimbabwe 2005-present…and like Venezuela right now. Already, differences of opinion are barely tolerated. People are “gunning up” in anticipation of a showdown.

Imagine what it might be like when food disappears from the supermarket shelves… when people “shiver in the dark” and the gas pumps run dry… and when prices rise at a 50% rate. And that is where our “history” ends… The stage has been set. The actors have learned their parts. The orchestra is ready to play. The bar is closing. And the show must go on."
Related:

"Empty Shelves Everywhere At Dollar Tree! What's Next?"

Full screen recommended.
by Adventures with Danno, AM 12/7/21:
"Empty Shelves Everywhere At Dollar Tree! What's Next?"
"In today's vlog we are shopping at Dollar Tree only to find lots of empty shelves! Items are missing everywhere! It's getting rough out here as stores seem to be struggling with getting products. I have never seen Dollar Tree so empty! "

"Everything is Great in the Economy - There is Nothing to Worry About"

Full screen recommended.
Dan, iAllegedly, AM 12/7/21:
"Everything is Great in the Economy - 
There is Nothing to Worry About"
"Everything in the Economy is great. You would have to be delusional to think that. Everything is precarious and teetering on complete and total collapse. People say that some are just too negative and don’t see the good. That’s foolish."

Gregory Mannarino, "AGAIN! Another Wall Street Superbank Warns On The Market"

Gregory Mannarino, AM 12/7/21:
"AGAIN! Another Wall Street Superbank Warns On The Market...
 And Gregory Mannarino Says Ignore It"

"How It Really Is"

 

Monday, December 6, 2021

"The Bottom Is Far Lower Than Anyone Believes Possible"

"The Bottom Is Far Lower Than Anyone Believes Possible"
by Charles Hugh Smith

"All bubbles share common characteristics: during the euphoric expansion, participants are richly rewarded for buying every dip and for confidently embracing the belief that this time it's different. (Exactly how it's different changes from bubble to bubble, but the core mechanism is identical: for these entirely rational and "mathy" reasons, this time is truly different.)

The common characteristic when bubbles pop is the eventual bottom is far lower than anyone believes possible. This confidence in the bubble's permanence permeates the entire financial system and encourages a faith that buying every dip will continue to be the road to easy wealth. When euphoric risk-on switches polarity to risk-off, buying every dip becomes the road to ruin as the eventual bottom is incomprehensibly lower than the first stairstep down.

Here's a composite of what happened during the dot-com bubble burst. An Internet company that hit $90 per share has slipped to $60, and investment banks are recommending it at $60 based on "the Internet has endless growth ahead" and the loss of a third of its valuation makes it a relative bargain. The I>buy the dip crowd has already lost money buying every stairstep down, but a 30% decline must near the bottom, right?

Perhaps a 30% decline is the bottom in a risk-on market, but in a risk-off market, the eventual bottom isn't $60, it's $6 per share. In the optimistic, euphoric "this is permanent" risk-on phase, a $15 drop from $90 to $75 is a screaming buy. A decline to $60 is literally incomprehensible. The decline to $40 is a shock to the system because the rebound to $90 was the near-universal expectation. Those who could have sold at $85, $75, $65, $55 and $45 but did not are now so shell-shocked they cannot grasp that selling at $40 is the fantastic opportunity of a lifetime compared to selling at $9 or the eventual bottom at $6.

The mindset of decline is loss: those holding on for the "guaranteed" rebound to bubble highs can't bear to sell because that represents a loss of the profit that could have been reaped by selling at $90. Oh my, I've lost $50 per share of profit if I sell at $40. That's too painful to contemplate so instead the "diamond hands" punter holds on to the hope that the rebound from $40 to $90 is inevitable and merely a matter of patience (and yowza, I'll sell every share once it goes back up to $90).

But this isn't how risk-off markets function. Buy the dip rallies suck in true believers and then fade to new lows. Every new low is pronounced capitulation, i.e. the golden moment when every potential seller (weak hands) has sold and only strong hands are left. But only the oldest participants have experienced real capitulation and nobody listens to those old codgers because this time it's different and so the experience of ancient geezers doesn't apply.

Real capitulation is not an exciting flush and a soaring rebound. That's nothing but the late-stage euphoria of a risk-on market. Real risk-off capitulation is more like cleaning up after a giant party that ended badly. The unfortunate misadventures have been buried, the catatonic have been relegated to the funny farm, ahem, institutional care, and the walking wounded have gone back to the shattered shards of their pre-party lives or taken up residence in an RV just over the ridge from the Hotel California.

Those cleaning up the mess are tired and moving slowly. The clean-up and the drudgery seem endless. Nobody is in the mood to crack open a leftover bottle of champagne. They just want the pain to go away. The dream of the "guaranteed rebound" has dissipated, along with the confidence that this time it's different, easy wealth is one buy-the-dip away and strong hands are always rewarded with immense gains "because the Fed." Few players have the capital or desire to gamble in the casino that they mistakenly thought was rigged in their favor.

It was rigged in someone's favor, but not theirs. The smart hands were touting the stock at $80 and furiously (but oh so quietly) selling all the way down to those who had no experience in risk-off markets.

Nobody can fathom how low stocks can go at the eventual bottom. In a more recent example, consider the price action in a marijuana sector stock, Tilray (TLRY). Believers in the future prospects of the sector pushed the share price of TLRY to over $300. At the eventual capitulation low, shares traded hands in the $3 range-- a roughly 99% decline.

History is full of examples of 80% declines, 90%, 95% and yes, 99% declines. No one predicted the eventual capitulation low because such declines were inconceivable. Any decline could not possibly be more than three or four steps; a nightmarish fall into a chasm could not even be imagined.

And so here we are, witnessing the switch from risk-on to risk-off in real time. Retail investors are buying every dip with gusto, margin debt is at record highs and insiders are selling quietly but furiously as they race to dump all their over-valued shares on buy-the-dip believers in the permanence of risk-on euphoria and valuations.

From $900 to $90 is unimaginable. Yes, it is unimaginable now, but it will become conceivable as the risk-on bubble deflates, but too late for all those who clung on to the faith that risk-on euphoria is permanent. The final redoubt of risk-on markets is the confidence that I will get out at the top. The problem with this notion is there is no top in greed and hubris, and greed and hubris are the engines of risk-on markets. So please fall carefully into the chasm.

How do I know all this? Experience. Like most participants, I learned about risk-off markets and bubble pops the hard way, falling not-so carefully into the chasm."

"Confidence In The Bubble; Euphoric Investors; Easy Wealth; Buy The Dip Believers; Economic Ruin"

Jeremiah Babe, PM 12/6/21:
"Confidence In The Bubble; Euphoric Investors;
 Easy Wealth; Buy The Dip Believers; Economic Ruin"

"Supply Chain Crisis Is Starting To Get Really Crazy: Be Ready For The Coming Apocalyptic End Game"

Full screen recommended.
"Supply Chain Crisis Is Starting To Get Really Crazy: 
Be Ready For The Coming Apocalyptic End Game"
by Epic Economist

"The supply chain crisis is leaving hundreds of cargo ships stuck outside ports while more and more store shelves go empty around the nation as consumer demand intensifies amid the busy holiday shopping season. Truck and rail freight are also completely congested, falling victim to the slow-arriving cargo from international suppliers and a persistent labor shortage. But the crisis is also impacting supply chains on a local level, with many construction projects having to be put off across several U.S. cities, according to government officials.

Many big urban centers and small towns around the country are similarly struggling with the latest slowdown in the global supply chain, which has been leaving thousands of projects only halfway ready. Some key building materials cannot be found anywhere anymore, and even though companies have started ordering more supplies to fight local shortages, extended delivery delays mean that construction will remain halted for the foreseeable future.

“You’re having delays on any type of materials,” added Dothan Mayor Mark Saliba. “Any infrastructure work involving pipe is hard to get. Electrical supplies are hard to get. Paint has been put on backorders. And it ranges from three months to 1- 1/2 years. Nearly everything we have is delayed.”

Industry experts are warning that the combination of extreme weather this winter plus the emergence of a new virus variant are creating a "logistic nightmare” that will leave gaps on stores shelves until 2023. Even before the health crisis, transporting empty containers around the world significantly increased shipping costs. And the fast spread of a new virus strain is making everything a whole lot worse.

In China, new lockdowns and travel restrictions have sparked another surge in container demand, as manufacturers rush to export household goods before borders are effectively closed. That has set off a cascade effect, prompting intermittent and ongoing shocks across the global supply chain, draining spare shipping and port capacity. In short, if it was difficult meeting consumer demand before, now it has become almost impossible.

With the new port closures, logistics are severely compromised and maritime transportation services are in. And conditions are set to get worse, because another problem is raising concerns too. A devastating water shortage in China may be the factor that pushes U.S. supply chains over the edge.

The country is dramatically short on the water it needs to maintain its economy. A recent report published by The Hill has exposed that China’s per capita water availability is one-quarter of the global average, and nearly 700 million of its citizens are currently living in regions considered highly water-stressed.

China’s water shortages are having a massive impact in electrical power generation, and the nation’s hydroelectric and coal power producers are facing severe hardships due to irregular water access. Chinese officials have responded to the widespread power outages by cutting down on industrial energy consumption, and as a consequence, the nation's manufacturers are facing another series of disruptions.

That's where things get tricky for America’s supply chains. The United States imports huge quantities of manufactured goods from China, including 70 percent of Walmart’s store merchandise, and 40 percent of all the clothing items sold around the country. China is also the main producer of key industrial products that we use to finish our domestic construction projects, such as steel, aluminum and

All of this is resulting in the aggravation of the global container shortage, and pushing shipping costs to levels never seen before in all history. Michelle Bockmann, the markets editor for Lloyd’s List, warned that supply costs are spiraling "out of control" due to the latest port closures. Bockmann revealed that spot rates for transporting a single container have rocketed by 366 percent in the past year while longer-term shipping contract rates shot up up by 465 percent.

Andrew Goodacre, the Chief Executive for the British Independent Retailers Association echoed Bockmann’s comments and alerted that costs will be passed onto U.S. consumers.“The inflation in the supply chain is much higher than the consumer inflation you are seeing at 5 percent,” Goodacre pointed out, outlining that the situation is becoming unsustainable and that businesses are likely to pass on a higher share of those increased shipping costs to consumers.

2022 will definitely be difficult year. With the economy slumping, markets crashing, and supply chains breaking apart, we should all brace for some serious challenges in the months ahead. Our country is rapidly collapsing into chaos, and all factors are aligning to change the course of our history."

"When Idiocy Becomes Hardwired"

"When Idiocy Becomes Hardwired"
by Jeff Thomas

"At this point, virtually all of us over the age of forty have encountered enough "snowflakes" (those Millennials who have a meltdown if anything they say or believe is challenged) to understand that, increasingly, young people are being systemically coddled to the point that they cannot cope with their "reality" being questioned.

The post-war baby boomers were the first "spoiled" generation, with tens of millions of children raised under the concept that, "I don’t want my children to have to experience the hardships that I faced growing up."

Those jurisdictions that prospered most (the EU, US, Canada, etc.) were, not coincidentally, the ones where this form of childrearing became most prevalent. The net result was the ’60s generation – young adults who could be praised for their idealism in pursuing the peace movement, the civil rights movement, and equal rights for women. But those same young adults were spoiled to the degree that many felt that it made perfect sense that they should attend expensive colleges but spend much of their study time pursuing sex, drugs, and rock and roll. Flunking out or dropping out was not seen as a major issue and very few of them felt any particular guilt about having squandered their parents’ life savings in the process.

The boomer generation then became the yuppies as they hit middle age, and not surprisingly, many coddled their own children even more than they themselves had been coddled. As a result of ever-greater indulgence with each new generation of children, tens of millions of Millennials now display the result of parents doing all they can to remove every possible hardship from their children’s experience, no matter how small.

Many in their generation never had to do chores, have a paper route, or get good grades in order to be given an exceptional reward, such as a cell phone. They grew to adulthood without any understanding of cause and effect, effort and reward.

Theoretically, the outcome was to be a generation that was free from troubles, free from stress, who would have only happy thoughts. The trouble with this ideal was that, by the time they reached adulthood, many of the critical life’s lessons had been missing from their upbringing. In the years during which their brains were biologically expanding and developing, they had been hardwired to expect continued indulgence throughout their lives. Any thought that they had was treated as valid, even if it was insupportable in logic.

And, today, we’re witnessing the fruits of this upbringing. Tens of millions of Millennials have never learned the concept of humility. They’re often unable to cope with their thoughts and perceptions being questioned and, in fact, often cannot think outside of themselves to understand the thoughts and perceptions of others.

They tend to be offended extremely easily and, worse, don’t know what to do when this occurs. They have such a high perception of their own self-importance that they can’t cope with being confronted, regardless of the validity of the other person’s reasoning. How they feel is far more important than logic or fact.

Hypersensitive vulnerability is a major consequence, but a greater casualty is Truth. Truth has gone from being fundamental to being something "optional" – subjective or relative and of lesser importance than someone being offended or hurt.

Of course, it would be easy to simply fob these young adults off as emotional mutants – spiteful narcissists – who cannot survive school without the school’s provision of safe spaces, cookies, puppies, and hug sessions. Previous generations of students (my own included) were often intimidated when presented with course books that had titles like Elements of Calculus and Analytic Geometry. But such books had their purpose. They were part of what had to be dealt with in order to be prepared for the adult world of ever-expanding technology.

In addition, it was expected that any student be prepared to learn (at university, if he had not already done so at home), to consider all points of view, including those less palatable. In debating classes, he’d be expected to take any side of any argument and argue it as best he could. In large measure, these requirements have disappeared from institutions of higher learning, and in their place, colleges provide coloring books, Play-Doh, and cry closets.

At the same time as a generation of "snowflakes" is being created, the same jurisdictions that are most prominently creating them (the above-mentioned EU, US, Canada, etc.) are facing, not just a generation of young adults who have a meltdown when challenged in some small way. They’re facing an international economic and political meltdown of epic proportions. Several generations of business and political leaders have created the greatest "kick the can" bubble that the world has ever witnessed.

We can’t pinpoint the day on which this bubble will pop, but it would appear that we may now be quite close, as those who have been kicking the can have been running out of the means to continue. The approach of a crisis is doubly concerning, as, historically, whenever generations of older people destroy their economy from within, it invariably falls to the younger generation to dig the country out of the resultant rubble.

Never in history has a crisis of such great proportions loomed and yet, never in history has the unfortunate generation that will inherit the damage been so unequivocally incapable of coping with that damage. As unpleasant as it may be to accept, there’s no solution for idiocy. Any society that has hardwired a generation of its children to be unable to cope will find that that generation will be a lost one. It will, in fact, be the following generation – the one that has grown up during the aftermath of the collapse – that will, of necessity, develop the skills needed to cope with an actual recovery.

So, does that mean that the world will be in chaos for more than a generation before the next batch of people can be raised to cope? Well, no. Actually, that’s already happening. In Europe, where the Millennial trend exists, western Europeans have been growing up coddled and incapable, whilst eastern Europeans, who have experienced war and hardship, are growing up to be quite capable of handling whatever hardships come their way. Likewise, in Asia, the percentage of young people who are being raised to understand that they must soon shoulder the responsibility of the future is quite high.

And elsewhere in the world – outside the sphere of the EU, US, Canada, etc. – the same is largely true. As has been forever true throughout history, civilization does not come to a halt. It’s a "movable feast" that merely changes geographic locations from one era to another. Always, as one star burns out, another takes its place. What’s of paramount importance is to read the tea leaves – to see the future coming and adjust for it."

Musical Interlude: Justin Hayward, "The Way of the World"

Full screen recommended.
Justin Hayward, "The Way of the World"

"A Look to the Heavens"

"Do you see the bat? It haunts this cosmic close-up of the eastern Veil Nebula. The Veil Nebula itself is a large supernova remnant, the expanding debris cloud from the death explosion of a massive star. While the Veil is roughly circular in shape and covers nearly 3 degrees on the sky toward the constellation of the Swan (Cygnus), NGC 6995, known informally as the Bat Nebula, spans only 1/2 degree, about the apparent size of the Moon. That translates to 12 light-years at the Veil's estimated distance, a reassuring 1,400 light-years from planet Earth.
In the composite of image data recorded through narrow band filters, emission from hydrogen atoms in the remnant is shown in red with strong emission from oxygen atoms shown in hues of blue. Of course, in the western part of the Veil lies another seasonal apparition: the Witch's Broom Nebula."

"I Don't Want..."

“I don’t want to pass through life like a smooth plane ride. All you do is get to breathe and copulate and finally die. I don’t want to go with the smooth skin and the calm brow. I hope I end up a blithering idiot cursing the sun- hallucinating, screaming, giving obscene and inane lectures on street corners and public parks. People will walk by and say, “Look at that drooling idiot. What a basket case.” I will turn and say to them, “It is you who are the basket case! For every moment you hated your job, cursed your wife and sold yourself to a dream that you didn’t even conceive. For the times your soul screamed yes and you said no. For all of that. For your self-torture, I see the glowing eyes of the sun! The air talks to me! I am at all times!” And maybe, the passersby will drop a coin into my cup.”
- Henry Rollins

Chet Raymo, “Not Known, Because Not Looked For”

“Not Known, Because Not Looked For”
by Chet Raymo

“A reader shared with us those well-known lines of T. S. Eliot (“Little Gidding”). It is not quite what Eliot is up to, but I was reminded of some lines of Pascal that I shared here several years ago: “Scientific learning is composed of two opposites which nonetheless meet each other. The first is the natural ignorance that is man’s lot at birth. The second is represented by those great minds that have investigated all knowledge accumulated by man only to discover at the end that in fact they know nothing. Thus they return to the same fundamental ignorance they had thought to leave. Yet this ignorance they have now discovered is an intellectual achievement. It is those who have departed from their original condition of ignorance but have been incapable of completing the full cycle of learning who offer us a smattering of scientific knowledge and pass sweeping judgments. These are the mischief makers, the false prophets.” (“Pensees” V:327)

It took almost three centuries for Pascal’s remarkable insight to become the common opinion of scientists. The 20th-century philosopher Karl Popper expressed it this way: “The more we learn about the world, and the deeper our learning, the more conscious, specific, and articulate will be our knowledge of what we do not know, our knowledge of our ignorance. For this, indeed, is the main source of our ignorance- the fact that our knowledge can be only finite, while our ignorance must necessarily be infinite.”

It is an odd, unsettling thought that the culmination of the scientific quest- the long slow gathering of reliable empirical knowledge of the world- should be confirmation of how little we understand about the universe we live in. A willingness to say “I don’t know” is a prerequisite of scientific discovery. Only in the silence of acknowledged ignorance can we hear - half hear - the thing that calls us to attend.

Gregory Mannarino, "BE WARNED: Central Banks Are Deliberately Trying To Break The Global Economy"

Gregory Mannarino, PM 12/6/21:
"BE WARNED: Central Banks Are Deliberately 
Trying To Break The Global Economy"

The Daily "Near You?"

Mukwonago, Wisconsin, USA. Thanks for stopping by!

"We Are Never Deceived..."

"We are never deceived; we deceive ourselves."
- Johann Wolfgang Von Goethe

The Poet: Mary Oliver, “October”

“October”

"There’s this shape, black as the entrance to a cave.
A longing wells up in its throat
like a blossom
as it breathes slowly.

What does the world
mean to you if you can’t trust it
to go on shining when you’re
not there? and there’s
a tree, long-fallen; once
the bees flew to it, like a procession
of messengers, and filled it
with honey.

I said to the chickadee, singing his heart out in the
green pine tree:
little dazzler
little song,
little mouthful.

The shape climbs up out of the curled grass. It
grunts into view. There is no measure
for the confidence at the bottom of its eyes-
there is no telling
the suppleness of its shoulders as it turns
and yawns.
Near the fallen tree
something - a leaf snapped loose
from the branch and fluttering down - tries to pull me
into its trap of attention.
It pulls me into its trap of attention,
And when I turn again, the bear is gone.

Look, hasn’t my body already felt
like the body of a flower?
Look, I want to love this world
as thought it’s the last chance I’m ever going to get
to be alive and know it.

Sometimes in late summer I won’t touch anything, not
the flowers, not the blackberries
brimming in the thickets; I won’t drink
from the pond; I won’t name the birds or the trees;
I won’t whisper my own name.

One morning
the fox came down the hill, glittering and confident,
and didn’t see me - and I thought:
so this is the world.
I’m not in it.
It is beautiful."

- Mary Oliver