2016 – U.S. Total All Sectors Debt: $64 trillion and counting

The St. Louis Fed reports that “All Sectors: Debt, Securities and Loans: Liability, Level” or total public and private debt outstanding, had risen to $64 trillion.

Our government has no credible plan on the table, anywhere, to address this crushing debt burden.We are on a currency ‘crash trajectory ‘ and we need a dynamic, ‘outside-the-box’ plan to get America back on track.  And we need to move now.

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ZeroHedge –  July 28, 2016                                                                                           Former OMB Director, David Stockman:

So the U.S. economy is now stuck in the ditch because it has leveraged itself to the hilt over the past three decades. The vast majority of Americans are no longer living the dream because Wall Street speculators and Washington politicians alike have led them into a debt-fueled fantasy world that is coming to a dead end.

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As shown in the chart below, since 1971 total public and private debt outstanding soared from $1.6 trillion to $64 trillion or by 40X. By contrast, nominal GDP expanded by only 16X. The very visage of the chart tells you that the former is crushing the latter.

Debt vs. GDP - Click to enlarge

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There is one economic plan with the raw power to pull America out of this ‘crash trajectory.’

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                   The Leviticus 25 Plan 2017 (1592)

Minimum wage laws – perpetuating poverty. There is a legitimate economic acceleration plan for lifting Americans out of poverty.

The minimum wage issue is a political football with fervent support from members of both political parties.

For all the feel-good intentions involved, government-mandated minimum wage increases generally usher in unintended consequences and perverse effects for the very people they were intended to help.

A November 2014 UCSD study, The Minimum Wage and the Great Recession: Evidence and Effects on the Employment and Income Trajectories of Low-Skilled Workers, determined that minimum wage hikes have negatively impacted both income growth and employment status for low-skilled workers.

Artificial wage push mandates do indeed lead to higher hourly wages for many workers, but those benefits are more than counter balanced by lay-offs and cuts in hours worked.
Overall, minimum wage increases during the period studied (Dec 2006 – Dec 2012) led to a 0.7 percent decrease in the “national employment-to-population ratio.”

What’s more, government-mandated minimum wage increases do little, if anything, improve “real” (inflation-adjusted) income status for those targeted for benefits.
And minimum wage hikes do nothing to relieve dependence on government by financially distressed American families. These mandates do nothing to help people escape poverty.

Minimum wage mandates do nothing to reduce dependence on government.  They do nothing to materially benefit American families over the longer run.

Minimum wage mandates do nothing but perpetuate poverty and the ‘dependency class’ in America.
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There is a legitimate economic plan for lifting people out of poverty, rather than perpetuating poverty for millions of Americans.

There is one bold, new, comprehensive economic plan that treats all Americans equally, restores financial health at the family level, reduces dependence on government, and does not involve wage/labor mandates and social engineering incentives.

The Leviticus 25 Plan does what minimum wage increases and massive social welfare programs do not. It offers a fresh, new start for families everywhere.  It offers an opportunity to escape the social welfare dependency treadmill – and government control over their lives.

It is an economic acceleration program that restores positive work incentives and unleashes the power of decentralization and economic liberty.

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                   The Leviticus 25 Plan 2017 (1590)

America ‘lost in the black hole of entitlements?’

So says globe-trotting billionaire, Thomas Barrack…

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ZeroHedge – Jul 19, 2016                                                                                                Trump ‘Close Friend’ Unleashes Economic Reality Check: America Is “Lost In The Black Hole Of Entitlement”

Citizens everywhere are unhappy with their governments and angry with their leaders. They are no longer interested in a political rhetoric that they do not understand and that has no value in their lives. Monetary policy, trade policy technological disruption and the array of issues that make up globalization are simply a parade of unintelligible horribles to the average working class citizen.”    

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Barrack’s ‘black hole’ reference implies that there is ‘no way out.’

That is not true.

America is not ‘lost’ at all. America has simply not ‘unleashed’ the most powerful, decentralizing, economic acceleration plan in the world – the only plan on the horizon that grants U.S. citizens the same access to liquidity that was provided to Wall Street’s financial sector during the global financial crisis of 2008-2010.

America has not ‘unleashed’ the only plan in the world with the raw power to lift people people up out of poverty and its dead-end ‘entitlement’ traps, and restore financial health for millions of American families..

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                   The Leviticus 25 Plan 2017 (1585)

July 2016: Deutsche Bank faltering in wake of $66 billion liquidity ‘tap’ from Fed

The U.S. Federal Reserve transfused Wall Street’s financial sector with hundreds of billions of dollars in liquidity through its ‘secret liquidity lifelines.’ 

Even foreign banking interests, with U.S. subsidiaries, enjoyed massive liquidity infusions to help them deal with their faltering financial conditions and debt burdens. And a hefty $66 billion of that transfusion went to Deutsche Bank.

Excerpts fromBloomberg  Nov 28, 2011:                                                         Deutsche Bank AG, Germany’s biggest bank, navigated the financial crisis without capital injections from the German government. The Frankfurt-based bank, which in 2008 reported its first annual loss since World War II, wasn’t so shy about getting liquidity in secret from the U.S. Federal Reserve. The lender tapped the Fed for $66 billion on Nov. 6, 2008 — $28.2 billion from the Term Securities Lending Facility, $21.8 billion from single-tranche open market operations and $16 billion from the Term Auction Facility. John Gallagher, a Deutsche Bank spokesman, declined to say whether the bank took emergency loans during the crisis from other central banks, such as Germany’s Bundesbank.”                                                                                                                    Peak amount of debt held on 11-6-2008:  $66B                                     ……………………………………    

Fast forward eight years, and how did that $66 billion liquidity ‘tap’ work out?  Evidently, not so well. S&P just cut Deutsche Bank’s Outlook to “negative.”

Deutsche Bank Outlook Revised To Negative As Operating Conditions May Challenge Strategy Execution; Ratings Affirmed   – ZeroHedge July 19, 2016

  • We believe the difficult operating environment may challenge Deutsche Bank as it undertakes a material restructuring of its business model and balance sheet.
  • We are revising our outlook on Deutsche Bank to negative from stable.
  • We are affirming our ‘BBB+/A-2’ issuer credit ratings on Deutsche Bank.
  • The negative outlook reflects the possibility that we may lower the long-term issuer credit rating if market conditions challenge Deutsche Bank’s ability to preserve its capital and maintain its franchise while implementing its restructuring plans.

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Global economies are in dire need of liquidity, and Central Banks need to re-target their strategies to provide it.

It is now time for U.S. citizens to be granted the same access to liquidity (their own money)  that was provided to Wall Street’s major banking conglomerates – including foreign banks like Deutsche Bank, during the global financial crisis.

It is time for the Fed to provide U.S. citizens with direct access to liquidity through a Citizens Credit Facility – for citizens to successfully manage their own financial challenges and reduce debt at the family level.

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                  The Leviticus 25 Plan 2017 (1584)

The Leviticus 25 Plan vs ‘helicopter money’: The right way for targeting ‘ground level’ liquidity infusions vs the ‘wrong way’…

The Bank of Japan (BOJ) is rumored to ‘loading up’ policy cannons with a new $130 billion stimulus plan – that would incorporate some form of a ‘helicopter money’ liquidity option. Goldman Sachs is suggesting that the BOJ options may involve either direct purchases of Japanese Government Bonds or ‘retiring’ JGBs by rolling them into zero coupon bonds of perpetual maturity.

And now, Fed ‘hawk’ Dr. Loretta Mester is suggesting that “direct payments to households” in the U.S. may be necessary to jump-start the U.S. economy if all other options fail.

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ZeroHedge – July 23, 2016:                                                                                                 As Australia’s ABC reports, Mester, president of the Federal Reserve Bank of Cleveland and a member of the rate-setting Federal Open Market Committee (FOMC), signaled direct payments to households and  businesses to stoke spending was an option if interest rate cuts and quantitative easing fail.

“We’re always assessing tools that we could use,” Mester told the ABC’s AM program. “In the US we’ve done quantitative easing and I think that’s proven to be useful.

So it’s my view that [helicopter money] would be sort of the next step if we ever found ourselves in a situation where we wanted to be more accommodative.”

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The Switzerland and Finland ‘helicopter money’ plans proposed over the past year have provided several key details into how the Fed and other Central Banks would likely design a similar basic distribution plan.

Primary details :  A monthly stipend, or guaranteed basic income payment, paid to each citizen (or ‘household’).  Amount may vary according to age of recipients.  May be means-tested.  May include a social welfare ‘offset’ of some type.

Benefits: U.S. households are having an increasingly difficult time of discharging their monthly debt obligations.  A ‘guaranteed basic income’ stipend would at least marginally relieve ‘debt stress’  burdens faced by a majority of U.S. households and provide additional discretionary income for millions of households to better manage week-to-week living expenses and other discretionary financial decisions.

Severe shortcomings:

A ‘helicopter money’ plan would have no appreciable long term effect on reducing either the national debt or the fiscal gap.

A monthly stipend would invariably keep citizens dependent upon government, and would almost certainly ‘add’ to the numbers of people dependent on government for their monthly subsistence.

Such an ongoing dependency would permit government to maintain a steady ‘control’ over the populace and would be a dangerous threat to freedom over the long run.

This type of plan does very little to effect a wholesale elimination of household debt.

A ‘helicopter money’ plan would do little, if anything, to scale back government-centered health care and provide a comprehensive, citizen-driven health care track for American families.

‘Helicopter money’ would do almost nothing to restore economic liberty for all American families.

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The Leviticus 25 Plan would manifestly reduce dependence on government. It would provide for massive debt elimination at the family level.

The Leviticus 25 Plan would generate a $1.135 trillion budget surplus for the federal government each of the first five years and would would pay for itself entirely over a 10-15 year period.  It would also provide substantive, bottom-line benefits to state and local budgets.

The Leviticus 25 Plan’s U.S. Health Care Freedom track would revitalize health care in America, by allowing citizens an opportunity for wholesale allocation of resources for their week-to-week health care needs.

The Leviticus 25 Plan would restore true financial health and economic liberty at the family level for all Americans.

The Leviticus 25 Plan is the most powerful, dynamic, freedom-centered economic acceleration plan in the world. Nothing else compares…

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                  The Leviticus 25 Plan 2017 (1578)

 

 

 

BIS: Productivity growth in decline, global debt marching higher

Central planning and ‘managed’ economics are not playing out well.

In fact, the eventual results are likely to be disastrous, as indicated by the twin curses of sinking labor productivity growth and relentlessly rising global debt.

There is one, and only one, economic acceleration plan with the power to obliterate these unhealthy trends.                                                                                  ………………………………..

“He who will not apply new remedies must expect new evils.” – Sir Francis Bacon

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                   The Leviticus 25 Plan 2017 (1576)

July 2016: Central Banks have done nothing to stabilize global banking – it is time to change course and re-target liquidity injections: The Leviticus 25 Plan

Trouble is brewing for global banks.

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This recent chart from the St. Louis Fed shows “Net Charge-Off on All Loans and Leases” (red line) spiking up to the 160% mark, a level last seen in 2008, just prior to the Global Financial Crisis. The 1997 spike up near the 160% mark presaged the credit excesses that roiled the financial markets with the collapse of Long Term Capital Management (LTCM) and the plunge  of the Russian ruble in 1998.  

These spikes have proven to be harbingers of trouble brewing for the global financial system.  We are once again in the ‘danger zone.’

US yield curve July 16

h/t –  DollarCollapse.com

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There will be another round of ‘financial carnage’ for U.S. citizens when the next storm blows in. Millions of jobs evaporated during 2008 – 2012, and 4.1 million American families lost their homes to completed foreclosure actions.

Make no mistake – those storm clouds are gathering on the horizon right now.

It is time to re-target liquidity infusions, eliminate debt – and ‘power up’ the economy.

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen

The Leviticus 25 Plan 2017 (1570)

 

 

GMO: “Outlook for U.S. stocks is terrible”

July 2016 – Are we setting up for another hard fall in the markets?

Investors Intelligence Stock Market Advisors‘ sentiment reading have been running well up in the ‘hot zone,” signaling excessive optimism, over the past two months.             Bulls / Bulls + Bears readings have been running consistently at or above the magic ’65’ level over the past two months, reaching as high as 71.8% in the June. These levels have strong ‘negative’ correlations  future stock market performance.

The Boston-based hedge fund heavyweight GMO is also predicting trouble ahead…

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ZeroHedge 7-11-20162007 All Over Again…

 MarketWatch:

Investment firm that called the 2008-09 crash doesn’t like most stocks or bonds

Excerpts:

Boston-based money management firm GMO… is famous for predicting the last two financial crashes ahead of time, and firm chairman Jeremy Grantham is a legendary figure on Wall Street. His quarterly letters are required reading by anyone managing other people’s money.

GMO is usually seen as too bearish, but in an industry that is generally far too bullish that’s no bad thing.  And often forgotten is that the firm has made some terrific contrarian buy recommendations too — such as emerging markets and value stocks at the start of the last decade, and of stocks generally in the wake of the 2008-09 crash.

Matt Kadnar, a member of the firm’s asset allocation committee [said this] … about how GMO perceives the current global investing environment:

1. The overall investment outlook is really, really dismal. “There is no asset out there that is cheap,” Kadnar says. None.

2. The outlook for U.S. stocks is terrible. GMO’s central forecast — which is a directional estimate more than a precise prediction — warns that U.S. large- and small-cap stock indices are now both so overpriced compared to history that they will probably lose value, compared to inflation, over the next seven or so years.

3. In the wake of the emerging markets slump and now Brexit, investors are becoming almost as dangerously fixated on U.S. stocks as they were (disastrously) in 2000, according to GMO. Kadnar says that once again, clients are starting to ask why anyone needs to own anything other than the S&P 500.

4. Investors also are likely to end up losing — after inflation — over the next seven years or so on U.S. bonds, cash, and small-cap international stocks, GMO’s current central forecast predicts. The firm also sees minuscule post-inflation, or “real” returns, on both international large-cap stocks and emerging-market bonds.

Equity investors have been fooled twice in the last six months… is 3rd time the charm?

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Governments and Central Banks need a new strategy to create strength and financial stability at ground level. Pumping trillions of dollars in liquidity into the global banking system over the past eight years has done nothing to provide that.

It is time to infuse the system with new ‘ground level’ power:

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                   The Leviticus 25 Plan 2017 (1566)

Pension fund storm clouds on the horizon

Big government central planning has accomplished little, if anything, in the way of resolving the severe liquidity problems plaguing global economies. Central Banks have pumped enormous amounts of liquidity into the financial system over the past eight years, and we are left with:                                                                                                                1) massive government debt levels, 2) massive household debt burdens, 3) anemic economic growth, 4) growing dependence on government social welfare, and now            5) a pension fund ‘storm’ that will strip millions of citizens of their retirement savings.

There are dark clouds on the economic horizon.

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The Pension Bubble: How The Defaults Will Occur

ZeroHedge – Jun 10, 2016 / Submitted by Peter Diekmeyer via SprottMoney.com,

Excerpts:                                                                                                                      Experts worry about stock, bond and real estate market excesses. But a bubble is forming that dwarfs them all: in pension plans. Millions of Americans and Canadians who are counting on pension benefits to fund their retirements risk being severely disappointed.

The hard money community has, of course, been aware of this for some time. However in recent years, even the elites have been taking notice.

[According to the International Forum of the Americas, ]…  Pension funds, which have been issuing over-optimistic revenue forecasts for years, aren’t going to earn nearly enough money to pay the benefits recipients expect.

Much of this relates to secular stagnation in the economy.

Bonds, which form a major part of most plans’ holdings, earn next to nothing in interest.

Stocks, which are trading at record levels, despite falling corporate earnings, look to have more downside risk than upside potential.

Worse, if bond returns average 2%, balanced portfolios projecting 7% to 8% annual returns have to earn 12% to 14% on equities investments to make up the difference. That’s unlikely to happen.

At least private sector plans have some money in them – public sector plans are in even in worse shape.

Governments have almost nothing put aside to fund future retirees – and they don’t even fully list their debts.

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House prices up 12%, food prices 3.7%. Pensions up 1.3%

Another tactic used by government officials and pension fund managers to avoid paying out pensioners is to inflate away the problem. As John Maynard Keynes, the great economist, noted: inflation is an excellent way to extract wealth, because not one man in a hundred will understand how it was done.

Here is how it works: governments promise pensioners that their benefits will be indexed to protect beneficiaries against rising prices. But they then use selected or massaged statistics to back out.

In Canada, federal (CPP) pension plan recipients will see their benefits rise by 1.3% during 2016. But food prices, according to Statistics Canada, rose by 3.7% last year. House prices rose by 12% up to December 2015 according to the Canadian Real Estate Association.

The controversial John Williams of Shadow Statistics provides credible research about how the data massaging works in the United States.

The effects of prices rising faster than benefits, over time, can be dramatic. If prices rise by 2% faster than pensions each year, then by the 20th year of retirement, beneficiaries will be losing 40% of their purchasing power (I am calculating using a straight line basis for simplicity).

In short, most pensioners won’t have a clue what hit them.

Outright defaults

Seniors vote – and there are a lot of them. So outright defaults on pension obligations will be a last resort of politicians and private sector plan managers.

However, it is starting to happen.

The ongoing saga of the US Central States Pension Fund, whose 400,000 beneficiaries were recently offered cuts of up to 60% in the amounts they receive, provides an excellent warning.

Amazingly the Central States Pension Fund, which manages funds for retirees from a number of companies in 37 states, actually has $18 billion in funds. Managers from those companies simply over-promised worhttp://leviticus25plan.org/novlev/wp-admin/post-new.phpkers how much money they would get.

Pensioners in a variety of public plans including Detroit’s – which went bankrupt – and Illinois – which is insolvent – haven’t been much luckier. Many more will suffer the same fate.

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America, Canada, Europe, Asia – it is time to change course and re-target liquidity flows to support citizen-directed economies..

It is time to decentralize, eliminate debt, recharge economic growth, reduce dependence on government.

It is time to restore economic liberty.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                   The Leviticus 25 Plan 2017 (1563)