Why We Won’t Have a “Lehman Moment” in the 2016 Crash

One way to lose a war is to focus on preparing to fight the last war. Preparing to fight the last war is a characteristic of losing generals, militaries and nations. The same is true of finance and economies.

General Grant’s difficulties in breaking the trench warfare around Petersburg, VA in the last year of the American Civil War (1864 to early 1865) telegraphed the future of trench warfare to astute observers. Few took heed of the lessons of the “first modern war,” and many of the same strategies of 1864 (digging a tunnel under enemy lines and filling the tunnel with explosives to blow a hole through their defenses, for example) were repeated in the Great War of 1914-1918 fifty years later.

When a weapon system capable of breaking the stalemate emerged–the tank–its potential for massed attack escaped planners on both sides, and the new weapon was squandered in piecemeal assaults.

“The last war” in 2008-09 was a battle to save heavily leveraged centralized financial institutions from default and liquidation–commercial and investment banks, insurance companies, etc. The concentration of capital, leverage and risk in these behemoths rendered the entire system vulnerable to their collapse (or so we were told).

Saving imploding private-sector banks was no problem for central banks that could create $1 trillion in new money with the push of a button and offer essentially unlimited lines of credit to banks facing a liquidity crunch.

But the current financial meltdown is not like the last war. Central banks are ready to extend unlimited credit again to private-sector financial institutions, but this time around, the problem won’t be a lack of liquidity.

By refusing to allow a house-cleaning of risk, leverage and mal-investment, central planners have simply pushed the risk into systems they don’t control: foreign-exchange (FX) currency markets, shadow banking and the economy that depends not just on available credit but the willingness of qualified borrowers to take on the risks and costs of more debt.

Central banks have created abundant credit and liquidity, but no productive places to invest that ocean of nearly free money Creating abundant credit works to spur growth when growth has been restrained by a lack of credit.

But when credit has been abundant for decades, what’s scarce isn’t credit–it’s productive investments that are scarce. Central banks are powerless to create productive uses for the credit they create.

The inevitable consequence of this failed strategic error is defeat. Central banks issued trillions of dollars, yuan, euros and yen in new credit to stave off defeat in the last war (the Global Financial Meltdown of 2008-09), but the problem wasn’t a lack of credit. Now, seven years into the strategy of flooding the global economy with credit,the problem is a scarcity of productive uses for all that money sloshing around the global economy.

There won’t be a “Lehman Moment” in the 2016 meltdown, because central banks can prop up or “save” any new Lehman with a few keystrokes. What the central banks cannot do is create productive places to invest the credit they’ve generated in such excess, or force qualified borrowers to swallow more unproductive debt.

The global economy is choking not just on an excess of debt, it’s also choking on the consequences of an unprecedented mal-investment of the credit central banks have issued in such over-abundance.

Issuing more credit will only make the 2016 crash worse. Trying to stop the current crash with more credit and lower interest rates is like sending the cavalry on suicide charges against entrenched machine guns, artillery and tanks. The coming financial slaughter will be as senseless, wasteful and ineffective as any suicide attack in the Great War.

My new book A Radically Beneficial World: Automation, Technology and Creating Jobs for All is being published in China later this year.

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Former Pentagon official: F-35 (JSF) less capable than Russian fighter jets

Despite being the most expensive weapons project in history, the highly advanced F-35, JSF, American fighter jet is less capable than some of Russia’s warplanes…

The F-35 is the highest costing weapon in history, with an estimated overall cost of $1.3 trillion. The Pentagon plans to purchase a total of 2,443 of the jets.

Nine other countries, including Britain, Canada, Italy, The Netherlands and Turkey are helping pay for the jet’s development and are buying hundreds of the jets.

Read more: Former Pentagon official: F-35 (JSF) less capable than Russian fighter jets

Real Time Analysis as Gold and Silver Market EXPLODES!

An epic phase of the ongoing gold and silver bull market is awakening right before our eyes.  While the cartel can manage price appreciation from time to time, they can’t do much to kill this new bull phase.
It’s too late.
  Read more ›

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Why Maxcoin?

There is a lot of uncertainty about of Bitcoin, so many turn to the altcoin market to diversity their crypto holdings, only to find more uncertainty. CoinMarketCap lists over 500 coins, and there are probably more. In this brief post, Joshua offer Maxcoin’s qualifications as a worthy investment and trade currency.

Read more: Why Maxcoin?

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Still fucking reigning by Sketchaganda


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Fund Manager Warns: Something Just Blow A Hole In The Fed’s Balance Sheet!

While all eyes seem to be fixated on Deutsche Bank’s stock, it would seem to me that we should be focused on the financial meltdown occurring behind the Fed’s “curtain” that is clearly going on in the U.S. banking system based on the sudden plunge both in the credit quality of the Fed’s balance sheet and the recent cliff-dive in bank stocks.  
I would suggest the possibility that the fraudulent silver price fix on the LBMA last week was a last gasp attempt by the big bullion banks to grab as much physical silver as they can, as cheaply as possible, before the price of gold and silver are reset by the market.  

Click Here for Full Coverage From PM Fund Manager Dave Kranzler: 

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[KR872] Keiser Report: ‘Lunatics’ vs ‘Mass Murderers’ in US Pres Elex

We discuss the lunatics and mass murderers the citizens of a decaying empire inevitably choose to lead us not down the road to Rome, but to a volatile priced barrel of oil and a bad self-eating Apple. In the second half, Max continues his interview with Brenda Kelly, head analyst at London Capital Group, about oil prices, negative interest rates and the tapped out consumer unable to take advantage of either. They also discuss currency wars.

New Poll Shows Sanders Tied with Clinton Nationwide – Hillary’s 30 Point Lead Evaporates in 6 Weeks

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The more people see Hillary and Bernie head-to-head, the more people like Bernie. People are starting to get it. They understand the system has morphed into a rigged fraud, and they understand that Sanders really, desperately wants to change it. As much as I disagree with a lot of Sanders’ solutions (his economic statism for example), he clearly despises the status quo, and for many of the right reasons. Sanders is a revolutionary-type candidate, while Clinton is running to be just another placeholder for Wall Street and oligarchical interests.

Read the rest here.

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Sinn Fein’s Book Cooking Skills Don’t Cut It For Goldman Sachs

Kevin Daly, a senior European economist with Goldman Sachs directed a dire warning against the Irish people voting for Sinn Fein in the upcoming general election. Their opinion was again inserted into the debate on a recent Irish news show. The former European Chairman of Goldman Sachs , one Peter Sutherland, has been an Attorney General, an EU Commissioner and a constant advisor to both the Fine Gael and Fianna Fail ruling parties for decades. The EU has said Ireland can miss it’s fiscal compact deficit target by 1.5bn with their blessing.

As it turns out all three mainstream parties have projected incorrect figures in relation to the ‘fiscal space’ ( the amount of money left to play with after ‘balancing’ the books). The only one who got it right was Sinn Fein’s Pearse Doherty. Obviously Sinn Fein’s book cooking skills don’t cut it for Goldman Sachs. Funny I’ve never much considered the Shinners but they must have something going for them if they are shunned by that shower.

Pearse Doherty looking remarkably like Dr Spock-  Election message - Live Long and Prosper.

Pearse Doherty looking remarkably like Mr. Spock- Election message – Live Long and Prosper.

Sinn Féin biggest threat to economic growth, warns top economist

The phantom €2 billion: How everyone except Sinn Féin got the maths wrong

Gerry Adams applauded as he joins ANC Guard of Honor at Mandela funeral

James Turk: COMEX Bled DRY of Gold!

With gold and silver prices SURGING higher this week, we sat down with James Turk for an in-depth discussion on the markets and bullion:

  • James Weighs In On Silver Fix Manipulation: OTC Silver Derivatives Contracts Were Expiring- Somebody Wanted Out of An Option Position!
  • Physical Bars Vanishing: Swiss Refiners Have Bleed COMEX Dry of Gold!
  • Turk Explains Why the COMEX Physical Gold Bar Shortage is Setting Up a MASSIVE Short Squeeze
  • James Provides His Outlook For the Metals in 2016 and Beyond- Are MAJOR New Highs Ahead?
  • Central Banks Nearing the Point They Will Have to Throw in the Towel on Gold Manipulation!
  • Deutsche Bank Has Plunged to 2008 Levels… & the Financial Crisis of 2016 Has Not Even Begun Yet!

Click here for full MUST LISTEN SD Weekly Metals & Markets With The Money Bubble Author James Turk: 

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Former US congressional staffer: Russia unmasked ISIS as Western ‘pawn’ in Mideast

“Russia has been the major player in combating ISIL and has successfully unmasked ISIL as a Western element in Syria and throughout the Middle East. The only nations truly battling Daesh terrorists are Syria, Iran and Russia, and this unified effort scares the interests in the Pentagon and the State Department.”

Read more Former US congressional staffer: Russia unmasked ISIL as Western ‘pawn’ in Mideast

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Jon Matonis: Private blockchains are still a distraction. Bitcoin’s sole purpose is to remove the State from the production of money.