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We are on the Verge of Economic Catastrophe

 
 
 
So I have an investment I'm keeping a close eye on. Then I see it drop suddenly... but relieved as it was in line with the DOW. Wait... WTF?

Oh... Trump... again...

article said:
"Some very strange things are happening in China! They are becoming very hostile, and sending letters to Countries throughout the World, that they want to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they can think of, even if it’s not manufactured in China," Trump wrote on Friday.

"I have not spoken to President Xi because there was no reason to do so. This was a real surprise, not only to me, but to all the Leaders of the Free World. I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so," he added.

"One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America," he said in the post.
Click to expand...
 
Jimmy Higgins said:
So I have an investment I'm keeping a close eye on. Then I see it drop suddenly... but relieved as it was in line with the DOW. Wait... WTF?

Oh... Trump... again...

article said:
"Some very strange things are happening in China! They are becoming very hostile, and sending letters to Countries throughout the World, that they want to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they can think of, even if it’s not manufactured in China," Trump wrote on Friday.

"I have not spoken to President Xi because there was no reason to do so. This was a real surprise, not only to me, but to all the Leaders of the Free World. I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so," he added.

"One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America," he said in the post.
Click to expand...
Click to expand...
Right after he said that, the DOW dropped by 500 points, but no worries, it's only down 495 as of this minute.
 
Down over 1100 as of now. I wonder if this article had anything to do with it.


So half the country is in a recession basically. California and New York are keeping us afloat but the contagion could spread. Given China’s decision on rare earths it likely will, and significantly. Note the dumb ass response from Trump. “Gee, they’re going to cut us over for me trying to cut them over. I wasn’t expecting that.” Moron.
 
One more additional article.


The government shutdown is impacting the economy already and creating a huge wave of uncertainty - especially for farmers, a key republican constituency. The rising health insurance premium letters start arriving this month. It’s going to have a hugely negative impact. Even MTG is on the dem side of that issue. Air traffic delays are also going to hit the economy. Additionally the failure to pay federal workers and the military will likely also create downstream pressure on the economy. I expect Trump will cave on the shut down over the long weekend. He just won’t call it that.
 
María Corina Machado was awarded the Nobel Peace Prize yesterday and dedicated her Prize to the Incomparable Donald Trump. But apparently she didn't actually present the precious-medal medallion as a gift to Der Heilige Führer. Naturally this threw the Great One into a tantrum. The on-again off-again 100% tariffs against China are on again. (One can hope D.H.F. Truthed a coded message to loyal American insiders first.) Reacting to the Holy Tantrum, the stock market plunged to levels not seen since September. Thank God this ferocious carnage happened on a Friday: Will the Truths and Tweets become sweeter by Tuesday?

What will the future hold? Nvidia plummeted to $179 in after-hours trading -- a price also not seen since September -- but clawed back a few pennies. (Nvidia still has a price-to-sales ratio near 30, compared with, say 2.3 for Pfizer. Nvidia's market cap exceeds the total market cap of the entire pharmaceutical industry.) The indices SPY and QQQ, and even the Holy Bitcoin have also plummeted to levels not seen since September. VIX has soared to 22 -- is it too late for me to buy Puts?

The price of gold has collapsed. After briefly touching the record $130½ per gram the metal nose-dived down to $127, a price not seen since Wednesday! (It has since recovered to $129: A "dead-cat bounce"?) (Thai gold shops are still quoting the Gold Baht at ฿62050 but that's because Thai's paper baht, like other assets, is falling. Silver has also plummeted. Realizing that the record $51 per ounce was exuberant, the bulls have become bears and are desperately liquidating their silver at the bargain-basement price of $50. Paper Benjamins remain the Refuge of Fear.

For perspective on the plunge in gold price from $130½ to just $127, note that this is a 500% fall when calibrated against the statutory price of 66½¢ per gram. (Yes, 66½ CENTS per gram, the price set in stone by Sir Isaac Newton Master of the Mint and which prevailed for over two centuries until the Crime of the Millennium when FDR and the other Demoncrats stole all of American's gold at gunpoint in 1933.) [/sarcasm]
 
2025

Dow Jones up 8% since start of year.
Gold up 58% since the start of the year.
Bitcoin up 23%, though flat since July (also when Trump's DJT bought into it, which means Bitcoin is doomed).

Investments, hedges on investments, fake money. What isn't making money right now?

Well, the US Dollar is down 15% to the Euro. But i'm certain that isn't important.
 
So last week, TACO, Trump Always Chickens Out, managed to do so again in response to China’s rare earth clamp down. A lot of people are having trouble figuring out Trump’s moves, but in reality they’re based on his own financials. First, he called China evil, said they were planning this for a long time, and promised 100% tariffs on them. A day later, he was sucking up to Xi. Actually called him “highly respected” Xi. Why the change of heart? Was it because he realized such a trade war would be bad for the economy? No. He’s not that smart. The real reason is in the chart below.

IMG_8235.webp

Trump has something like $850 million in Trump coin. As you can see its value plummeted on Friday, and Trump initially stood to lose almost $300 million +/- . Now he’s down only maybe $100 million. That’s why he punted. Trump coin is tied to him. His popularity goes up, so does his coin. It’s utter corruption of the highest order.
 
SLD said:
I expect Trump will cave on the shut down over the long weekend. He just won’t call it that.
Click to expand...

state-of.gif

Edit: Yes this is a dig at Chuck for his major fuckup on the previous shutdown.
 
SLD said:
Gospel said:
SLD said:
I expect Trump will cave on the shut down over the long weekend. He just won’t call it that.
Click to expand...

View attachment 52398

Edit: Yes this is a dig at Chuck for his major fuckup on the previous shutdown.
Click to expand...
Well. I was wrong. Polls though still show that people consider the Republicans mostly to blame.
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Polls seem to imply a broader sense of blame. One thing is certain, the GOP isn't not being blamed. At best, they can say the public might hold the Democrats close to as much to blame.

For the Democrats they were getting less than nothing, so this isn't much of a risk. For the GOP is seems mutually assured destruction at best.
 
The stock market has fallen a tiny bit today, but is still near record levels. Nvidia's P/E is 52; Tesla's is 252. (TWO Fifty-two with a T and a W) The German and Japanese markets have soared 45+% since their recent April lows. The Euro and Pound are still trading at levels near their 2021 highs.

Bitcoin lost a little luster and is barely above its 2024 high. Did the news that one crypto company "accidentally" minted 300 trillion dollars of "stable" coins erode some confidence in such electronic magic? (I read that the extra $300 trillion was burned -- that would be 300 million tons of banknotes, if the "coins" were converted to Benjamins. Another slightly more intelligent report showed the $300 trillion diverted to an "inaccessible" account rather than "burned.")

The average 30-year fixed mortgage rate has come down a bit over the last two years, but is still near its peak during the 2006-2008 bubble.
But Gold seems to travel a one-way road. Just minutes ago it was a record-setting $138.9 per gram. Silver's run has been even more spectacular nd more monotone; now $54 per ounce. As recently as 1941 you could buy Twelve ounces of sterling silver in London for a single British pound-note.

Stagflation is coming. This was brought under control circa 1980 when Paul Volcker hiked interest rates up to 21%. A Fed Governor that tries that now will be taken on a perp walk, or bludgeoned to death by MAGA goons.
 
Inflation rose from 1.9% to 2.4% in Canada in September. The numbers are supposed to come out for the US on Friday. The inflation numbers can't be great as we are seeing revenue pops in the qtrly reports. As well as price increases across the board. With tens of billions being collected in tariffs things aren't looking to be trending in the right direction.
 
This 34-minute video by "UNFTR Media" is too long and covers some familiar territory. But I watched the whole thing, and it filled in some of the gaps in my understanding of the complex financial system. Among the points he makes are
  • He mentions a number of the usual worries: debt crises, loss of confidence, poor governance, the idea that WITHOUT Covid the economy was headed for a mild recession but instead there was massive credit injection.
  • A "shadow banking" system has grown up and is now large and powerful. It is unregulated: Regulated banks make regulated loans to these "shadow banks" -- typically venture capitalists and hedge funds -- which then deploy that money however they want, and in secret. Thus the Dodd-Frank Reform protections are circumvented. UNFTR doesn't make this connection, but the whole "stable-coin" system is also unregulated and growing rapidly. Perhaps it should be included as part of this new "shadow banking" sector.
  • The Federal Reserve has been injecting liquidity into the banking sector ferociously ever since the 2008 crisis. Reserve requirements have been eliminated, while high interest is paid on excess reserves. Some of this ferocious injection has occurred AFTER the Covid recovery. The Fed looks to be resuming QE again.
  • I have previously mentioned several different ways in which the yields on long-term Treasury bonds are being kept low.
  • UNFTR mentions Overnight Reverse Repurchase Agreements. As the name sort of implies, FedRes sells a security to a member bank while agreeing to buy it back the next day. The fact that they need to do this at all demonstrates sudden liquidity snarls. A suspicion is that the shadow banking system "might be bleeding money" and that illiquidity then propagates into regulated banks. UNFTR asserts that this may explain recent surges in demand for ORRA's. (A graph of ORRA sales peaked in 2023 at about $2½ Trillion and is now almost zero. UNFTR considers this a problem; I'm just confused.)
  • UNFTR asserts that a rational Administration would give high priority to understanding what's happening with the Trillions in the shadow banking system. Instead the entire Administration is neglecting this duty.
  • In July the FSB (Financial Stability Board) warned of severe over-leveraging (100X or more) in markets -- especially "shadow" markets -- all around the world. In this inter-connected "house of cards", collapse anywhere would likely lead to collapse everywhere.
  • (I've been bemused(!) by the financial stats of some tax havens, especially the Cayman Islands. The wealth represented is beyond any sensible multiple of the Islands' population.) On October 15 FedRes issued a report with the sentence "The puzzling disconnect between the TIC and Form PF data on Cayman Islands' holdings of U.S. Treasuries is under active investigation." UNFTR considers this very important -- it may have motivated the whole video!
  • Briefly, according to UNFTR, foreign central banks have lost their appetite for U.S. bonds in the wake of Trump's policies, and hedge funds (often based in the Cayman Islands) have picked up the gap. Hedge Funds were already HUGE buyers and sellers of Treasuries, exploiting arbitrage opportuniities with leverage of 100X or so. The quote from FedRes above refers to the puzzle that C.I. hold only $0.4T of Treasuries according to TIC data but $1.9T according to Form PF data. With 100X leverage a trillion dollars of bonds is controlled by just $10 billion (and even that sum might be in illiquid form?). Failure to meet a margin call could cause panic.
It's a long video, and I certainly do not vouch for his opinions. But it certainly adds support to thread title: We are on the verge of ecoonomic catastrophe.
 
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Swammerdami said:
This 34-minute video by "UNFTR Media" is too long and covers some familiar territory. But I watched the whole thing, and it filled in some of the gaps in my understanding of the complex financial system. Among the points he makes are
  • He mentions a number of the usual worries: debt crises, loss of confidence, poor governance, the idea that WITHOUT Covid the economy was headed for a mild recession but instead there was massive credit injection.
  • A "shadow banking" system has grown up and is now large and powerful. It is unregulated: Regulated banks make regulated loans to these "shadow banks" -- typically venture capitalists and hedge funds -- which then deploy that money however they want, and in secret. Thus the Dodd-Frank Reform protections are circumvented. UNFTR doesn't make this connection, but the whole "stable-coin" system is also unregulated and growing rapidly. Perhaps it should be included as part of this new "shadow banking" sector.
  • The Federal Reserve has been injecting liquidity into the banking sector ferociously ever since the 2008 crisis. Reserve requirements have been eliminated, while high interest is paid on excess reserves. Some of this ferocious injection has occurred AFTER the Covid recovery. The Fed looks to be resuming QE again.
  • I have previously mentioned several different ways in which the yields on long-term Treasury bonds are being kept low.
  • UNFTR mentions Overnight Reverse Repurchase Agreements. As the name sort of implies, FedRes sells a security to a member bank while agreeing to buy it back the next day. The fact that they need to do this at all demonstrates sudden liquidity snarls. A suspicion is that the shadow banking system "might be bleeding money" and that illiquidity then propagates into regulated banks. UNFTR asserts that this may explain recent surges in demand for ORRA's. (A graph of ORRA sales peaked in 2023 at about $2½ Trillion and is now almost zero. UNFTR considers this a problem; I'm just confused.)
  • UNFTR asserts that a rational Administration would give high priority to understanding what's happening with the Trillions in the shadow banking system. Instead the entire Administration is neglecting this duty.
  • In July the FSB (Financial Stability Board) warned of severe over-leveraging (100X or more) in markets -- especially "shadow" markets -- all around the world. In this inter-connected "house of cards", collapse anywhere would likely lead to collapse everywhere.
  • (I've been bemused(!) by the financial stats of some tax havens, especially the Cayman Islands. The wealth represented is beyond any sensible multiple of the Islands' population.) On October 15 FedRes issued a report with the sentence "The puzzling disconnect between the TIC and Form PF data on Cayman Islands' holdings of U.S. Treasuries is under active investigation." UNFTR considers this very important -- it may have motivated the whole video!
  • Briefly, according to UNFTR, foreign central banks have lost their appetite for U.S. bonds in the wake of Trump's policies, and hedge funds (often based in the Cayman Islands) have picked up the gap. Hedge Funds were already HUGE buyers and sellers of Treasuries, exploiting arbitrage opportuniities with leverage of 100X or so. The quote from FedRes above refers to the puzzle that C.I. hold only $0.4T of Treasuries according to TIC data but $1.9T according to Form PF data. With 100X leverage a trillion dollars of bonds is controlled by just $10 billion (and even that sum might be in illiquid form?). Failure to meet a margin call could cause panic.
It's a long video, and I certainly do not vouch for his opinions. But it certainly adds support to thread title: We are on the verge of ecoonomic catastrophe.
Click to expand...
Your last point is key. If US bonds can’t be sold we will be unable to finance our debt. This will indeed cause massive economic collapse along with a huge increase in inflation. The dollar will lose its status as a reserve currency. We will effectively cease to be a great power almost overnight. They’ll blame Biden.
 
What's all this fuss I keep hearing about spending a billion dollars on healthcare for ill eagls (sic)? Can't some private avian 501c3 charity fund this instead of MY tax dollars? :angryfist: [/Emily Litella]
 
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