DEBT WALL 2013: The Death of Socialism

[Aman A.K.A. Ahamburger]

Oct 30, 2018 0:11:25 GMT -5 Aman A.K.A. Ahamburger said:

This pretty much sums it up. Socalist/Islamic propeganda has been pushed everywhere, and due to the unnatural nature of the system it's broke; literally and figuratively. Ran out of other ppls money and now: Brazil, right, Germany, further right and Merkel quits (things are going poorly for Islam), Quebec, right... etc.. Why Marxism Shifted from Economics to Culture

Hitler's Economics

For today's generation, Hitler is the most hated man in history, and his regime the archetype of political evil. This view does not extend to his economic policies, however. Far from it. They are embraced by governments all around the world. The Glenview State Bank of Chicago, for example, recently praised Hitler's economics in its monthly newsletter. In doing so, the bank discovered the hazards of praising Keynesian policies in the wrong context.

The issue of the newsletter (July 2003) is not online, but the content can be discerned via the letter of protest from the Anti-Defamation League. "Regardless of the economic arguments" the letter said, "Hitler's economic policies cannot be divorced from his great policies of virulent anti-Semitism, racism and genocide.… Analyzing his actions through any other lens severely misses the point."....

...In the 1930s, Hitler was widely viewed as just another protectionist central planner who recognized the supposed failure of the free market and the need for nationally guided economic development. Proto-Keynesian socialist economist Joan Robinson wrote that "Hitler found a cure against unemployment before Keynes was finished explaining it."

What were those economic policies? He suspended the gold standard, embarked on huge public-works programs like autobahns, protected industry from foreign competition, expanded credit, instituted jobs programs, bullied the private sector on prices and production decisions, vastly expanded the military, enforced capital controls, instituted family planning, penalized smoking, brought about national healthcare and unemployment insurance, imposed education standards, and eventually ran huge deficits. The Nazi interventionist program was essential to the regime's rejection of the market economy and its embrace of socialism in one country.

Such programs remain widely praised today, even given their failures. They are features of every "capitalist" democracy. Keynes himself admired the Nazi economic program, writing in the foreword to the German edition to the General Theory: "[T]he theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under the conditions of free competition and a large measure of laissez-faire."

Keynes's comment, which may shock many, did not come out of the blue. Hitler's economists rejected laissez-faire, and admired Keynes, even foreshadowing him in many ways. Similarly, the Keynesians admired Hitler (see George Garvy, "Keynes and the Economic Activists of Pre-Hitler Germany," The Journal of Political Economy, Volume 83, Issue 2, April 1975, pp. 391–405).

Even as late as 1962, in a report written for President Kennedy, Paul Samuelson had implicit praise for Hitler: "History reminds us that even in the worst days of the great depression there was never a shortage of experts to warn against all curative public actions.…

..On one level, this is not surprising. Hitler instituted a New Deal for Germany, different from FDR and Mussolini only in the details.

[Aman A.K.A. Ahamburger]

Debt jubilee, guarantee!!

A Worldwide Debt Default Is A Real Possibility
Debt Doesn’t Fuel Growth Anymore

Central banks enable debt because they think it will generate economic growth. Sometimes it does. The problem is they create debt with little regard for how it will be used.

That’s how we get artificial booms and subsequent busts. We are told not to worry about absolute debt levels so long as the economy is growing in line with them....

....China’s debt productivity dropped 42.9% between 2007 and 2017. That was the worst among major economies, but others lost ground, too. All the developed world is pushing on the same string and hoping for results.

Now, if you are used to using debt to stimulate growth, and debt loses its capacity to do so, what happens next? You guessed it: The brilliant powers-that-be add even more debt....

....Notably, the combined debt of the US, Eurozone, Japan, and China has increased more than ten times as much as their combined GDP [growth] over the past year.

Yes, you read that right. In the last year, the world’s largest economies are generating debt 10X faster than economic growth. Adding debt at that pace, if it continues, will boost the debt-to-GDP ratio at an alarming rate...

....The best I can conceive is a decade-long (and possibly more) stagnation while the debt gets liquidated.

But still, ignoring the war!

[Aman A.K.A. Ahamburger]

more and more it's popping up. Only a matter of time before the mainstream starts picking it up...It's all about equity as we move into the next cycle, as bonds have become nothing but NPL on a global scale. Stay

Italy, the EU, and the Fall of the Roman Empire

It was Carl Schmitt – the political philosopher – however, who warned strongly against the possibility of what he called a negative katechon accelerator. This would seem to apply – exactly – to the situation in which the EU presently finds itself. This was a notion, held by the ancients, that historical events often have a ‘backstage’ contrarian dimension...

...“In ancient Mesopotamian societies, it was understood that freedom was preserved by protecting debtors. A corrective model actually existed and flourished in the economic functioning of Mesopotamian societies, during the third and second millennia B.C. It can be termed the Clean Slate amnesty....

....“The combined debt of US, the Eurozone, Japan and China has increased more than ten times as much as their combined GDP, over the past year. It’s remarkable that the global economy – slowing in sync, despite soaring debt – finds itself in a situation reminiscent of the Red Queen Effect. As the Red Queen says to Alice in Lewis Carroll’s Through the Looking Glass, “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”.
But that – running faster, taking on more debt – can only, in the end, be resolved with a major default (or through inflating the debt away). Look at the US: its GDP is growing at 2.5%; the US Federal debt is at 105% of GDP; the US Treasury is spending $1.5 billion on interest per day, and debt is growing at 5-6% of GDP. It is not sustainable....

...continued below

[Aman A.K.A. Ahamburger]

Hudson notes, “the Greeks and the Romans replaced the cyclical idea of time and societal renewal, with that of linear time” [with convergence toward an ‘End Time’]: “Economic polarization became irreversible, not merely temporary” – as the idea of renewal became lost. Hudson might have added that linear time, and the loss of the imperative of dismemberment and renewal, has played a major role in underpinning all of Europe’s universalist projects of a linear itinerary towards human transformation (or, Utopianism).

This is the essential contradiction: that ineluctable economic divarication and polarization is transforming Europe into a continent torn by unresolved internal contradiction. On the one hand it castigates Italy for its debts, and on the other, it has been the ECB which has pursued interest rate ‘repression’ into negative territory, and has monetized debt to the equivalence of one-third of Europe’s global output. How can the EU not have expected banks and businesses not to have loaded up on ‘positive-carry’ debt? How can they have expected Banks not to have inflated their balance sheets with ‘free debt’ to the point of becoming ‘too big to fail’?

The global explosion of debt is a macro problem that vastly transcends the microcosm of Italy. Like the ancient Roman Empire, the EU has atrophied in its ‘order’ to become an obstacle to change, and, with no alternative, but to hold tight to a ‘braking action’ that will ultimately produce effects, completely at odds to the original intent (i.e. involuntary, negative Katechon).

[Aman A.K.A. Ahamburger]

Along with not even beginning to understand the magnitude of debt on the books; the authors and supporters of this "Green New Deal" are so out of touch to what has transpired currently and historically.....it's truly fitting that "Democratic Socialism" will be on the biggest stage of all for 2020...

Finland Will End Its Experiment With Universal Basic Income After a Two-Year Trial

(CAPS by me)

"Progressive" Attacks on Capitalism Were Key to Hitler's Success

Hitler, Stalin, and Mussolini constantly proclaim that they are chosen by destiny to bring salvation to this world. They claim they are the leaders of the creative youth who fight against their outlived elders. They bring from the East the new culture which is to replace the dying Western civilization. They want to give the coup de grace to liberalism and capitalism; they want to overcome immoral egoism by altruism; they plan to replace the anarchic democracy by order and organization, the society of “classes” by the total state, the market economy by socialism. Their war is not a war for territorial expansion, for loot and hegemony like the imperialistic wars of the past, but a holy crusade for a better world to live in. And they feel certain of their victory because they are convinced that they are borne by “the wave of the future.”.....

....They maintain one should not overlook the glory of the new gospel because of ill-placed pity for Jews and Masons, Poles and Czechs, Finns and Greeks, the decadent English aristocracy and the corrupt French bourgeoisie.(JUST AS GLOBALIST DECRY NATIONALISM NOW) Such softness and such blindness for the new standards of morality prove only the decadence of the dying capitalistic pseudo-culture. The whining and crying of impotent old men, they say, is futile; it will not stop the victorious advance of youth.(JUST AS DYING OLD WHITE MEN ARE APPARENTLY HOLDING US BACK NOW) No one can stop the wheel of history, or turn back the clock of time.

The success of this propaganda is overwhelming. People do not consider the content of alleged new gospel; they merely understand that it is new and believe to see in this fact its justification.(SJW and CLIMATE SCIENCE)...People hasten to exchange their “old” ideas for “new” ones, because they fear to appear old-fashioned and reactionary. They join the chorus decrying the shortcomings of the capitalistic civilization and speak in elated enthusiasm of the achievements of the autocrats. Nothing is today more fashionable than slandering Western civilization.(AS IT IS NOW)......

......An ideological struggle cannot be fought successfully with constant concessions to the principles of the enemy. Those who refute capitalism because it supposedly is inimical to the interest of the masses, those who proclaim “as a matter of course” that after the victory over Hitler the market economy will have to be replaced by a better system and, therefore, everything should be done now to make the government control of business as complete as possible, are actually fighting for totalitarianism. The “progressives” who today masquerade as “liberals” may rant against “fascism”; yet it is their policy that paves the way for Hitlerism.(WHICH IS THE EXACT PATH TAKEN; AKA, WHY WE ARE TALKING SJWnEWgREENdEAL). Nothing could have been more helpful to the success of the National-Socialist (Nazi) movement (DEMOCRATIC SOCIALISTS) than the methods used by the “progressives,”....

.....The workers in the Anglo-Saxon countries, too, knew that the socialist parties competing for their favor usually accused each other of favoring capitalism. Communists of all shades advance this accusation against socialists. And within the Communist groups the Trotskyites used this same argument against Stalin and his men. And vice versa. The fact that the “progressives” bring the same accusation against Nazism and Fascism will not prevent labor some day from following another gang wearing shirts of a different color (LEFT WING AMERICAN FACISM AKA DEMOCRATIC SOCIALISM).....

....What would have happened to Western civilization if its peoples had always shown such liking for the “new”? Suppose they had welcomed as “the wave of the future” Attila and his Huns, the creed of Mohammed, or the Tartars? They, too, were totalitarian and had military successes to their credit which made the weak hesitate and ready to capitulate. What mankind needs today is liberation from the rule of nonsensical slogans and a return to sound reasoning.(AS TRUE IN 1940 as TODAY)

[djAdvocate]

$22T.  how is Trump doing -vs- Obama?

[Aman A.K.A. Ahamburger]

For so long the well to dos thought they could fool everyone with "free" money!!! Then once done, all that was said was inequality is as high as it's ever been!!!!

The Investor Seth Klarman, in a Rare Interview, Offers a Warning. Davos Should Listen

Every winter, attendance at the World Economic Forum, in the Swiss Alps, provides an informal checkup on the health of global capitalism. China has posted its slowest growth in twenty-eight years, and President Xi Jinping is staying home; France is beset by protests, and President Emmanuel Macron has sent his regrets; and America is slogging through the longest government shutdown in its history, forcing President Donald Trump to cancel his trip. So it’s fitting that one of the most talked-about people at Davos this year is also not in attendance: Seth Klarman, a low-key but highly influential investor based in Boston, whose recent annual letter to investors represents what Andrew Ross Sorkin, of the Times, calls “a huge red flag about global social tensions, rising debt levels...

..His 1991 book, “Margin of Safety,” which argues for resisting the fads of Wall Street, is long out of print, but regularly sells on Amazon for more than a thousand dollars...

...Among business leaders, he told me, “I think people realize that we’re not where we should be.” He added, “It’s maybe not an inappropriate ask to say, ‘Let’s all look at just where we were taking things for granted, and where maybe we were shortchanging.’ We took the game we were playing for granted—whether that’s investing, or business, or politics.”....

.....“It’s a choice to do things that ‘maximize profits,’ to pay people as little as you can, or work them as hard as you can,” he said. “It’s a choice to maintain pleasant working conditions or, alternatively, particularly harsh ones, to offer good benefits or paltry ones.” Also, without naming specific cases, he criticized the kind of buyouts in which private-equity investors saddled a troubled company with so much debt that it helped push the company into bankruptcy. (The collapse of Toys R Us is a recent example.) He said, “It’s a choice to leverage up your company to the hilt, to pile on non-recourse debt to pay special dividends to the owners, and then walk away if the business falters and the debt comes due. Just because you can do something definitely doesn’t mean that you should.”.....

.....The shock of Trump’s victory was, to Klarman, an urgent warning. “When I’m confronted with some world event that I don’t understand, like when 9/11 happened,” he said, he thinks, “Oh, my god, the world has been evolving while I wasn’t paying enough attention, and I’d better pay attention.”

Two Large Chinese Borrowers Miss Bond Payments, Sources Say

[Aman A.K.A. Ahamburger]

ECB pushes back rate hike plans, announces fresh funding for banks

The TLTROs are loans that the ECB provides at cheap rates to banks in the euro area. As a result, lenders are able to provide better credit conditions to customers, which in turn stimulates the real economy.

TLTRO III is the third injection of stimulus of this kind from the ECB. If commercial banks lend this money onto the real economy, they then receive cash rather than having to pay interest on the loans.....

...The bank also kept interest rates unchanged Thursday but updated its guidance for a rate hike. Interest rates on its marginal lending facility and deposit facility will remain unchanged at 0, 0.25 and -0.40 percent, respectively. These have been at record lows for years following the euro sovereign debt crisis of 2011 in an effort to boost inflation and stimulate growth....

....The Frankfurt-based institution is in a tricky situation, having ended its massive bond buying purchase program. Growth seems to be stalling this year and core inflation is still below the bank’s target.

[Aman A.K.A. Ahamburger]

But if we just raised the minimum wage it would solve so many problems!!

As Expected $15 Minimum Wage Hurting Workers

A recent report by the New York City Hospitality Alliance warns about the loss of wages and jobs. It interviewed 574 establishments — 324 full-service restaurants and 250 limited-service restaurants — and published the following results:

“76.50% of full service restaurant respondents reduced employee hours, and 36.30% eliminated jobs in 2018, in response to mandated wage increases. 75% of limited service restaurant respondents report that they will reduce employee hours, and 53.10% will eliminate jobs in 2019 as a result of mandated wage increases that took effect on December 31, 2018.”.....

....The Same Old Pandering
In 1987, believe it or not, The New York Times ran a scandalous headline, The Right Minimum Wage: $0.00, and opined:

“Raising the minimum wage by a substantial amount would price working poor people out of the job market. A far better way to help them would be to subsidize their wages or — better yet — help them acquire the skills needed to earn more on their own.”....

....Famed economist Ludwig von Mises said it best when he mused about the matter in his 1962 masterpiece, The Ultimate Foundation of Economic Science: “No politician is any longer interested in the question whether a measure is fit to produce the ends aimed at. What alone counts for him is whether the majority of the voters favor or reject it.”

[Aman A.K.A. Ahamburger]

Gotta luv it!!

Capitalism Saved Sweden

By socialism, I mean a system that relies on state ownership and control of the means of production, state direction of production decisions, and direct state control of education and employment decisions of individuals. If one does not mean those things, then that would require a little more thinking about what “socialism” means. If by “socialism” you mean prosperity and rule of law, then you are confused.

are several important issues to discuss, to understand the differences between capitalism and socialism.....

As Marian Tupy wrote:

Historically speaking, environmental damage emanating from socialist production was vastly greater than environmental damage emanating from capitalist production. All and I repeat all academic studies done in the aftermath of the collapse of the Soviet empire found the quality of the environment in the formerly socialist countries to be inferior to those in capitalist countries....

...Scandinavia: A World Center of Capitalism

Now that I have discussed the differences between capitalism and socialism, let’s consider the question I started out with: is Sweden socialist? I often participate in debates on capitalism vs. socialism, and students often give Sweden as an example of how socialism “works.” Well, yes, Sweden works, that’s true. But it works because it is one of the most capitalist nations in the world! It became capitalist after trying socialism, and reaching the (correct) conclusion that socialism just doesn’t work.

Continued below....

[Aman A.K.A. Ahamburger]

Continued...

If you think Sweden is socialist, then you know something that just ain’t so. As has been documented repeatedly by popular treatments and more scholarly discussions, any use of the actual measures of economic freedom that constitute capitalism show Sweden is solidly in the camp of fully market-oriented economies. As Andreas Bergh points out in his 2016 book, Sweden and the Revival of the Capitalist Welfare State, it is inconceivable to think of the Sweden of the current decade as being anything other than a capitalist, and in fact libertarian, country.

It is fair to say that Sweden was socialist, at least in terms of temperament and the direction of public policy. In 1975, Sweden’s state owned well over half of the productive resources in the country, and directed prices in much of the rest. It subsidized debt, in part paradoxically by having enormously high tax rates with generous deductions for borrowers. Its attempts at “Keynesian” policy interventions were clumsy, were mistimed, and created disastrous uncertainty in investment returns even in the portions of the economy that were still market-oriented.

The state taxed successful industries heavily, and used the proceeds to subsidize industries that were inefficient, corrupt, and failing. This meant that interest rates on capital were prohibitive, especially when you tack on double-digit inflation.

To protect workers, the state required that wages could not be cut, and also enforced a panoply of restrictions on firing, layoffs, and other means of adjusting hours. Swedish products shot up in price, and the government was forced into a series of devaluations of the krona that made purchases of imported products beyond the reach of much of the middle class.

The electorate took a dim view of all of this. The tax system was a Rube Goldberg mechanism, with a level of complexity and arbitrary favoritism that encouraged distortion of investment into whatever happened to be taxed less, rather than whatever might produce useful products. Gunnar Myrdal, hardly a conservative, famously asked in 1978 whether Swedes “had turned into a people of swindlers.”

Fortunately for its citizens, but unfortunately for those who think Sweden is still socialist, the Swedish government, more or less by universal consensus, turned sharply back toward capitalism beginning in about 1995. It deregulated domestic industry, privatized its education and pension systems, and opened the economy to international trade and competition. The reason it did this is precisely because capitalism, wherever it is practiced seriously in a system with rule of law and protection for property rights, always creates prosperity.

[Aman A.K.A. Ahamburger]

The insanity feeds on itself and self-destructs.

The Slogan that Unleashed this Hell

In 1969, the salad days of New Left activism, a writer named Carol Hanisch penned an essay that the editor called “The Personal Is Political.” She was seeking to explain the ethos of the women’s therapy sessions she was running. The point was not to improve psychological well being. The point was “political therapy;” that is to motivate people to political action.....

.....Let's leave aside the case for or against her brand of politics. The slogan itself was fire. It spread to every cause, every group, every nook and cranny of life. If you experience dissatisfaction in your life, don’t look within for a personal solution; get active, join a collective, and demand a political solution.....

... Fifty years later, I’ve been following the meltdown of a number of “social justice” organizations and causes over the past months, as they turn in on themselves, purge themselves of their own self-defined evil and ultimately crumble based on their own inner contradictions. This happened to the Women’s March. It has happened to the US Congress. It has happened to the most well-funded social justice activist organization in the country. It’s happened in Hollywood, which faces the problem that the more it complies with the identitarian code, the less profitable are its films.

There seems to be no end to the feeding frenzy caused by the politicization of every personal tick. A new entrant into the Democratic Party presidential race cannot even give a public speech without spending the week wailing mea maxima culpa for all the ways in which he violated the canon, however inadvertently.

‘Her heart is not in The Bronx’: Ocasio-Cortez’s constituents turn against her

[Aman A.K.A. Ahamburger]

Austrian Economics is No Longer the Unheard Music

Punk and alternative bands in the Tipper Gore era struggled to get record deals, radio airplay, or even hire venues for gigs at their own expense. "The Unheard Music," a song from X's 1980 album Los Angeles, captures this struggle with the lyrics "We're locked out/of the public eye/no hard chords/on the car radio."

So a DIY ("do it yourself") ethic emerged among bands like X and Black Flag. They bought dilapidated old vans and booked their own tours on the fly, using word of mouth and sleeping where they could. They bypassed radio station executives and snuck their cassette demos into late night rotation through sympathetic disc jockeys like Rodney on the ROQ. They built their own PA boxes and printed their own T shirts. They even created record labels like Dischord, SST, and Alternative Tentacles which would go on challenge the major studios.

Ultimately, over time, they earned grudging respect from the music industry. They paved the way for countless local garage bands and aspiring YouTube musicians to work outside of traditional institutions and channels.

There is a tortured analogy here. Austrian school economists in the US once faced similar obstacles, and similarly persevered to make their mark on a sclerotic profession badly in need of a shakeup.....

......Mainstream economists remain mired in mathematics and statistics, yet unlike mathematicians they fail to tell us much about the world. They view human action only in aggregates. They attempt to express economics in mathematical equations. They criticize Mises as a "literary economist." They force backward-looking data into forward-looking models. Yet perversely all of this data and empirical testing never seem to explain the booms or time the busts.

The dismal science is in trouble, and it deserves to be in trouble. Economic axioms cannot be flouted without consequences—which means the central insights of the Austrian school will prove correct over the coming decades.

•Political money will unravel; commodity money will reassert itself. Central bankers will force depositors into the bizarro-world of negative interest rates, destroying capital and dramatically hurting savers. Central bankers similarly will do everything they can to avoid a stock market crash. They will once again buy assets and prop up equities, while telling us their fiat currencies are healthy—even as they quietly buy more gold than they have in decades.

•Governments, businesses, investors, and individuals will respond to loose monetary policy rationally, by borrowing and spending instead of saving and investing. M&A, stock buybacks, and other forms of financial engineering will attempt to extract tiny amounts of value from moribund companies and industries.

•Federal Reserve officials will disavow outright monetization of government spending (i.e. Modern Monetary Theory), even as they partially practice it with an increasingly debt-financed federal budget. All of this new money and credit will not be neutral, but will primarily benefit political and economic elites.

•This monetary alchemy (h/t Nomi Prins) will not work. Consumption will not magically substitute for production. Demand-side stimulus, whether fiscal or monetary, will produce only ersatz and short-lived economic growth. Underlying incentives will continue to matter.

•Political movements in the US toward greater degrees of socialism and bigger entitlements (e.g. single payer government health care) will encourage the gross misallocation of resources, just as Austrians warn.
Bureaucrats, far more powerful than presidents or Congress, will steer the economy based on political expediency and without regard to market signals.

•"Capitalism" will be blamed for any economic crises, whether in jobs, housing, energy, stocks, or consumer prices.

•Positivist economists will explain everything after the fact, with no acknowledgement of their own complicity and lack of foresight.

Nobody wants, or hopes for, a severe economic contraction. Nobody wants to see people suffer from bad political and economic policies. But debt and entitlements are unsustainable. The Fed's swollen balance sheet in unsustainable. Moving toward socialism is unsustainable. Austrians will be vindicated, but will they be heard?

Of course they will be heard! The invisible hand is guiding this.

Ten companies that have committed to raising their minimum wage

[Aman A.K.A. Ahamburger]

I have called the Asian crisis a slow motion plane crash for years, in the following article the term slow motion train wreck is used. The point being is that even in slow motion, it's still happening. In fact, all the following articles should be posted in the Daxa banking thread.

However, it's all about stiching things together now!

-German factory orders slumped in May in the latest sign that global trade uncertainty is turning Europe’s temporary slowdown into a more serious downturn…
-From a distance, Deutsche Bank’s capitulation is bizarre. Lehman Brothers failed during a full-blown financial crisis, (the article author ignores the whole slow motion thing)
-RenTech Has Been Pulling Money From Deutsche Bank for Months

[Aman A.K.A. Ahamburger]

since the above conditions remain; with the addition of Hong Kong... is it really a debt trap that China has set? Nah!!!

The Countries Most in Debt to China
They found that debt by direct loans started to grow immensely only around 2010 and that loans by China often come at higher rates and with shorter grace periods for the receiving country than comparable loans from the OECD or the World Bank. The authors also caution that countries heavily in debt to China are at risk of defaulting. In the 1970s, a lending boom which consisted of similar contracts offered by U.S., European and Japanese banks had led to this outcome for a number of developing countries which were trying to improve their infrastructure, according to the research.


(Only so much bigger)

[Aman A.K.A. Ahamburger]

& a

Way to go Hong Kong! Kept the peace, long enough to vote.

That's why we talk about this here (die commies! Lol) and not the Asian Crisis:

China’s skyscraper boom comes down to earth

A subsidiary of China’s largest construction group has suspended work on one of the nation’s tallest skyscrapers after the developer became the latest in a string of companies to default on a payment.

The default highlights the growing challenges faced by China’s construction groups as the slowing economy trims credit supply, putting the once runaway mega-tower building boom under stress.

In an October 30 letter seen by the Financial Times, China Construction Third Engineering Bureau Co said it would halt construction on a 475m-high skyscraper in the central city of Wuhan. It said Greenland Group, one of the nation’s largest property companies, had failed to make “a significant” project payment.

Since watching out for 2013 because by 2015 things will be much different. We have seen rates - with could never be negative - go VERY negative. In 2012 they told us the US was going to be taken over by China and the YuRmbn... Now...hahaha. The chorus of China is the new Japan.

The map above is the FRAUD on full display. How do we know it's fraud? How the he'll is China,Japan, but yet those countries are in a debt trap? More like, the skyscraper boom that comes down to earth was build on a black hole of debt that is swallowing - basically the world - whole. Why? Liquidity trap!!! Debt wall? Wall of war. The unrest is palpable.

So, while being optimistic about Putin not screwing the world while posting in 2011, and overlooking China's hubris in their own control in thinking they wouldn't try to goose the world in 2015, has lead to a situation much more dire than I had hoped all those years ago. It's knowing the fundamentals of free enterprise are still in place that allows the pieces to keep falling as they may on the various threads around this place. And me to be thinking about making Kevlar from hemp. They always forget, they paid farmers to grow the stiff in WW2.

China needs to prepare for zero interest rates

For China, the demands for liquidity are growing, foreign capital keeps flowing in and the real economy continues to slow down, which all make the country seemingly approaching a zero rates monetary condition. It asks policymakers and market players to be prepared. Mounting debts and the financing problems in the real economy will promote China to a zero rate condition. In the first half of 2019, China's overall debts accounted for 306 percent of the GDP, up 2 percentage points from the 304 percent in the first quarter, according to a report from the Institute of International Finance (IIF). The number was just around 200 percent in 2009 and 130 percent in 1999.