CRASH2, CORRECTION 4: the as yet invisible preface to a global duopoly

bust20416

The Big Fight: the old overborrowed versus the new underinvested

SQUARE.JW.01The markets are waking up this morning to a Shanghai index going rapidly south, a Japanese Yen going in exactly the wrong direction, Italy’s banking system in deep crisis,  the price of oil dropping again….but the prices of both gold and silver “falling”. The Slog offers a view on why, and what it all means.

WHY ARE BULLS & BEARS BEHAVING LIKE BURRS & BEALLS?

Because, as I posted last night, there are far too many crises on the horizon, far too many promises remaining unfulfilled, far too many counterintuitive….and far too many imponderables surrounding the subject of selling credit/being in debt.

Everything is too complex and contradictory, nothing offers any clarity. But I believe it is all about to get a lot clearer.

The Correction4 that didn’t dare speak its name is gaining visibility: but with both metal safe havens illogically falling (so far) the set as a whole is inexplicable. These are some background factors to make you think about what may well be taking shape here.

  • In 1990, the total currency in circulation in the world passed $1 trillion. By 2002, this had grown to $2 trillion: six years later it had doubled to give a 2008 figure of $4 trillion….crisis time. Since 2008, the number has been static
  • However, if you add the money deposited in savings or checking accounts, the total is somewhere around $80.9 trillion. The banks thus have 95% of the variously liquid money in the world in their grasp
  • The money they have for which we are merely creditors is worth more than the entire value of the world’s bourses at $70 trillion, and ten times what our properties are worth at $7.6 trillion
  • Worse still, if you think we just stand to lose 95% of our liquidity, think again: the grand total we owe the banks in borrowing is 2.5 times bigger at $200 trillion…and a staggering 30% of it has been borrowed since 2008

Learning 1: The banks have us by the balls. And it’s all about credit/debt…especially since 2008.

Learning 2: The conversion to cashless societies in the First World is in relative terms an easy operation that could vastly increase sovereign access to taxes/cash flow.

  • The property and gold markets are a drop in the ocean compared to these numbers – $7.6 and $7.8 trillion respectively.
  • But the biggest gold buyer in the world is China…and it owes just 6% of the world debt total. (The US owes 50%, the EU 30%)

Learning 3: Safe havens are limited in number, and the banks don’t have their hands on anything like as much of them as ‘money’. Also they’re more difficult to steal confiscate.

Learning 4: China’s low debt and manic gold buying/digging continues to suggest an eventually gold-backed Yuan. For China, going cashless would present much greater difficulties than in the First World.

  • Money laundering may seem to you like something only Nick Wilson is interested in, but the facts suggest everyone should be: new estimates out this year from the Money Project suggest that around 5% of global GDP is concerned with money laundering. By definition, banks ( eg HSBC) are heavily involved in it.

Learning 5: Central Banks and their Sovereign partners would like to get at that money. David Cameron is, as usual, running with both hare and hounds.

WHAT HAS ALL THIS GOT TO DO WITH THE PRICE OF FISH?

30% of all personal, corporate and global debt has been borrowed in just eight years, mainly by the First World and EMs. China, considering its size, is the big exception.

What’s happening is the emergence of two trading blocs and colonial styles.

CHINA…

….is putting together an alternative system of investment, transmission and currency convertibility: the AIIB, a gold backed Yuan, and a Brics trading area to rival that controlled by the US.

It hopes to control colonies by making them investment dependent without rancour.

It needs to invest, develop an internal market, and control new markets.

China’s problem is how to reach the fulfilment of that goal without (a) being stopped by the US/NATO and (b) adopting too many of the failings of First world globalist bourse capitalism.

The second of these primarily involves uncontrolled banking/corporate debt and asset/bourse bubbles. That’s why – whatever Wall Street tries to say – Chinese reality woes and confusion are a big issue: their products are cheap to import, and their raw material needs impact massively on several suppliers.

The West’s problem is very different

THE US & EU ‘WEST’….

….need to maximise their control of all those things they lack now – primarily, ways to inflate away and pay off debt, get at tax income, repair bank balance sheets, produce goods affordably, control access to fossil energy resources, rebuild confidence in the bourses, and overall, regain selling power by snuffing out the development of bloc, national or local/entrepreneurial alternatives to their economic (rather than investment) colonialism.

So we see:

An unprecedented halt in the expansion of narrow, fully-liquid cash

The introduction of bank bailins

Attempted destruction of precious metal value, in the hope of first confiscating and then revaluing it for bank balance sheet/sovereign debt repair

Trials in the destruction of sovereignty (Greece, Ukraine, Syria) to establish the precedent of supra-national corporate power

Smearing of all those – Hungary, Poland, Russia, Brexiters – with other ideas

Loading inviduals, SMEs and political systems with enormous debt very quickly (and withdrawing physical cash) in order to make corporate banking control of wealth universal

Reducing private savings income, electronically printing ‘stimulation’ money, and deregulating labour rights: all to eventually produce poorer citizens alongside inflating currencies…a 21st century version or confection of hyperinflation. The twin-win here is desperate employee ‘slaves’ to keep exports cheap, and radical reduction on real terms of Dollar and euro-denominated debt.

GLOBALISM IS MORPHING INTO DUOPOLISM

What we’re witnessing is the beginning of the end of globalist mercantilism.

I have long believed that in no way could all the regions of the world have mutually beneficial needs at the same time all the time.

This next is the stage of The OldWest Borrowers [EU/US] versus the NewWorld investors [CHINA/Russia]

A very dangerous time. And one I hope soon gives way to a localised entrepreneurial resurgence.

But for those with the balls and the Voyager gene, an excellent time to Brexit from the OldWest Borrowers, and sell high-margin quality to the NewWorld investors.

Connected at The Slog last night: Why the hermaphrodite investor is sane, not mad

23 thoughts on “CRASH2, CORRECTION 4: the as yet invisible preface to a global duopoly

  1. Watching Brazil’s problems with interest! is it a attack on American corporatism or an attack on Bric governance,one thing seems pretty sure the war you so eloquently describe above as chosen Brazil as the latest battlefield!

    Liked by 1 person

  2. Don’t worry, when the dusts settles Europe (Germany first) will pivot to Russia/China.

    Amerika will exists at the lastest failed Empire……

    Like

  3. When you look at people in the midst of a bubble – be it commodities or investment or anything else, the people never seem to give off any signals that their paradigm is fragile. When you look back with the benefit of hindsight and better information it all seems so obvious.

    Liked by 1 person

  4. The US is a failing Empire. China is the next rising Empire. The construction of the Chinese Silk Roads traversing Asia to Europe will open up a multi -polar world of trade, bypassing the US reserve dollar tollbooth charge.
    The US Empire is trying to prevent or delay this, by sowing chaos, by Hybrid and direct warfare, along these routes using proxies, as in Syria, Ukraine,Macedonia and other Balkan countries,
    The 90 day bombing of Belgrade and the disintegration of Yugoslavia,during Bill Clintons reign,was the opening salvo in the Empires war on the BRIC countries.
    South America has long been subject to the jackboot of US imperialism and the Hybrid war continues there against Venezuela, Brazil.
    Argentina has succumbed and a neo-liberal comprador President has been installed. to facilitate the looting of the economy.
    Hybrid war consists of so called Colour revolutions instigated by MSM propaganda, NGO agitation and political destabilisation, with controlled street demonstrations,sometimes armed. The Ukraine coup was a classic demonstration of this process.

    Liked by 1 person

  5. We are truly in topsy turvy times. Up is now down, war is peace. Left and right no longer matter – ending the wars is now a priority as we have – if you include the opening salvo of the New World Order as the 1991 Gulf War – been killing Arabs en masse 25 years. What matters now is if you are a globalist or a nationalist/localist, not whether you think hospitals and schools should be state or private funded.

    Media you might never have read is saying the Thatcher years were actually a disaster while “left” papers have merged with the Borg. (Hitchens in the Mail, the Guardian is a warmonger neolib scumrag))

    Banking and its control is our first priority. Then when we’ve stopped fractional reserve lending we can have stability.

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  6. @Danbuck2000: ‘ The construction of the Chinese Silk Roads traversing Asia to Europe will open up a multi -polar world of trade, bypassing the US reserve dollar tollbooth charge.
    The US Empire is trying to prevent or delay this.’
    If the US should fail to prevent this, then we are all in real trouble, as there are no limits to how far the US will to maintain its hegemony.

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  7. Dear All,

    Having read not just John’s article, but also all the comments, I’m thinking: if mainstream media, along with the experts they like to interview, had half the brains and wisdom and guts and spine demonstrated in the thoughts shared above – we would all be safe from the mayhem that we are all facing with the way things are. Color revolutions would not stand a chance.

    It’s wonderful to be in touch with you.

    Best regards from Hungary :-)

    Liked by 1 person

  8. I am very glad I left my teens in the 60’s. Back then we all had a golden future to look forward to! We have bequeathed a world to today’s teenagers that I for one am ashamed of. While on watch we have failed with a vengeance and allowed our ww2 saviours to morph into an evil empire that knows nothing but inflicting war on all who stand in it’s way.

    Liked by 2 people

  9. I dunno if there are many of you who end up pretty cash poor but there is a bloke in Illinois “Geek to Freak” who has inspired loads of guys to get out there and cut grass for a living. He stopped recently but loads of guys got out of poverty with his films.

    Like

  10. By cracky that made for sobering reading. Throw into the global bugger’s muddle social ‘unrest’ and the logical consequences are more than disturbing. But, and I think I have said this before, you cannot drink oil or eat gold. The global population is ever expanding, what pestilence will afflict us, drug resistant TB? some god-awful virus? ‘And what rough beast, its hour come round at last, Slouches towards Bethlehem to be born?’

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  11. mr McDuff, i live in the remote west of ireland, westport. a town near us , castlebar is trying to contain an outbreak of TB!!!!. about 70 people are being treated, a good friend of mine has just got over it, 3 courses of antibiotics over about 12 months . rough beast indeed. atb cc

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  12. Enjoyed this piece JW. Gold is the only constant which can absorb all debt at a sufficiently high price. Question is, do all players at the table want it to happen? I would suggest not as it would create a level playing field. The Yanks & Banks would not allow this outcome…..

    Like

  13. Hoodia unterdrückt Ihr Bedürfnis nach Essen und verhilft Ihnen zur Gewichtsreduzierung,
    ohne Sie dabei groß einschränken zu müssen.

    Like

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