When I was growing up in the 60s and 70s, I watched a detective show called Dragnet. If you are older like me, you may remember Joe Friday, played by actor Jack Webb. As he questioned a new witness in a case he was working on, he would repeatedly say, “The facts, Ma’am”. Just the facts.”
This statement seems quite appropriate as the world continues to watch the Hamas – Israeli War that began on October 7th, and the continued push for a 2-state solution by Arab and World leaders.
In this short piece, I will ask a question like Joe Friday, and provide information for you to consider. Some things are current, and some are centuries if not more than a millennium old. I am uncertain if it will change any opinions, but I would like to share information for everyone to consider.
Q1: What happened on October 7, 2023?
This one is easy. As we can see,across a wide variety of media; Hamas attacked civilians in Israel.
To answer this question I will present 4 points for you to consider; from present to ancient past.
1) It has been widely known for years that Hamas is a terrorist group.
“Hamas’ Record of War Crimes:
Terrorist groups use human shields to cause Western militaries, such as Israel’s, to refrain from lawful attacks or risk being blamed from civilian casualties that are in fact the fault of the terrorist group. This time, Hamas is using not only Gazan civilians as human shields but also the more than 150(highest number is 240) people it has kidnapped from Israel. Hamas has a long history of using human shields as a tactic of war, storing weapons, hiding terrorists, and launching rockets amid densely populated civilian areas, including schools, mosques, and hospitals. ” Hamas Acts to Prevent Northern Gazans from Fleeing South, Foundation for Defense of Democracies, Oct 15, 2023
2) Hamas has proven that they have no respect for human life, no matter what race is involved. This includes civilians who were Chinese, Thai, Russian, French, Turkish, and Arab, as well as Jews.
3) The 1988 Covenant of Islamic Resistance Movement by Hamas reveals that one of the goals of this organization is to kill Jews. The following is found in Article Seven of this covenant.
4) Because the Jews, or more accurately the sons of Israel, did not accept Muhammad’s teachings in the 7th century, he attacked 3 Jewish tribes. One must remember, by the 600s the Tanakh, Old Testament, had been completed for 1,000 years, and the New Testament (all books by Jewish authors other than Luke and Acts) was completed by the end of the 1st century. For this reason, to be faithful to GOD, they would not follow other religions.
The following is an account of the massacre of the men of the Qurayzah tribe in 627 AD. The account is taken from Dr. Mark Gabriel’s work, The Unfinished Battle: Islam and the Jews. Dr. Gabriel was born in Egypt and earned his doctorate degree in Islamic history from Al-Azhar University in Cairo.
“Muhammad and his military put the village under siege for twenty-five days. The Jews were tired and afraid that Muhammad would kill them all. They realized that he would not leave until they surrendered, so they asked to surrender under the same terms as the people of Nadir, who were permitted to leave the village and take along the necessities of life.
However, after the Jews surrendered, Muhammad asked the leader of the pagan converts in Medina what he should do with the Jewish people. This man answered, ‘My judgment is to kill the men and divide the money, women and children among the soldiers.’
Muhammad agreed and told his friends, ‘You judged them with the judgement of Allah.’
Muhammad went to Medina’s marketplace and commanded his people dig trenches. Then they told all the Jewish men to march into these trenches.
As they were going, the Jewish people said to the leader of their tribe, ‘Look at what Muhammad is doing to us. Where do you think they are going to take us, and what do you think they are going to do to us?’
Their leader replied, ‘He is taking us to our deaths.’
Indeed he was. Muhammad and his people killed between eight hundred and nine hundred Jewish men that day. Their form of death was to cut the men’s necks with swords and let them bleed to death quickly. Then they buried the bodies in the trenches. The first part of the advice from Muhammad’s friend had been accomplished. Now the second part.”
After this horrible sight for the woman and children, Muhammad kept 20% of the money, women, and children for himself, giving the rest to his soldiers.
In 628, after he and his men drove the Jewish out of the village of Khaybar, he made a statement that has been practiced right up to the current Gaza War. He declared: “There will never be two religions in Arabia”.
Part 2 and 3
In Part 2 and 3, we will address more questions.
Is there a connection between Hamas and the Al-Shifa Hospital? Has Hamas, since the war they started on October 7th, actually used their own people as human shields? Was the attack on October 7th fostered by a fight for land or was this attack fostered by Muhammad’s words; “There will never be two religions in Arabia”? What has been the history of Jews living in other Arab countries in modern history, or across the Middle East for centuries before WWI?
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The last time I posted a blog on living2024 was at the end of 2017. I know, a long gap between posts. However, 2022 is proving to be unlike the last 4 years.
These were the comments from the opening of that 2017 post:
“By 2024, global risks from flagrant financial bubbles in 2017 will have been recognized. For today, one can only seek to influence those willing to think outside the conventional, “‘they’ will take care the big problems” view.
We have just completed the first half of 2022. With consumer confidence hitting its lowest reading since the 1970s in June, it is a good time to review where history has taken us all through the lens of debt growth and stock levels once more. I believe there is a growing understanding that what is taking place across the world is more than just our own stories; it is a major point in history.
There are 3 things not seen since 2009: 1) the longest bull market in the NASDAQ on record, AND 2) the US national debt over 5 times the amount seen in the 1990s, AND 3) a 6-month period where the NASDAQ 100 has traded below its 200-day moving average.
At this point you are either saying, “NOT AGAIN””, or “It always comes back”. But this is not just about the world’s stock markets since most people around the world have no financial interest in stocks. Yet the rise and fall of markets is part of the global economy, and that impacts the lives of almost everyone around the globe.
No matter what your race, nationality, or economic status, for the last half century, the world has been living through the myth of “with more debt and state assistance, we can get back to normal”. Looking at comments coming from those sitting in their globalist chairs, there is no solution that does not include increased control over the lives of billions influenced by their decisions.
If you have read this far, don’t stop. Keep reading!
About 20 years ago, I heard about a book from Dr. James Dobson, founder of Focus on the Family. He stated that outside of the Bible, the best book he ever read was Endurance: Shackleton’s Incredible Voyage. [Short timeline of key dates during the expedition]
When I started the book, I continued to read until I reached the part where they had to depart from the ship because the ice was breaking it apart. With no way of contacting the outside world in 1915 and winter setting in on these men, you knew the story could only get much worse. I stopped reading it. I went to the final chapter. I had to see the end of the story before I could go on.
Reading the final days of triumph over some of the roughest seas on earth in one of the lifeboats, to then climb 32 miles over a steep alpine terrain, revealed that they reached a whaling station at South Georgia Island. Knowing the crew was rescued, I returned to read what was one of the greatest stories of determination and survival.
It is now 2022. We have lived through the growth of the US debt levels by $277 BILLION a year between the ’87 bottom and the ’00 top (12.25 years). We have seen these numbers leap over $7.2 TRILLION ($3600 BILLION per year) between Q1 ’20 and Q1’22. The speed of “money printing” has exploded the US debt in the last 2 years to a level that has been THIRTEEN TIMES that of the 1990s.
How could anyone believe this is the path toward, “sustainability”??!!
No matter what you hear from the world’s largest central banks and global elite forums, the reality is we are all facing historical cycle and historic changes that no bureaucrat can stop. The myth is being crushed, even as it is being promoted even louder.
“Okay Doug, but when do we get to the good part of this story?”
If you need to, jump to my closing remarks and read the extra sources. Then come back and continue reading and thinking. This is not intended to be a quick read.
We press on.
The Present and the Past: Any Connection?
At this point, I want to share with you some of my thoughts about this period from a deeper level. This comes from the last 2 decades of my life and many hours thinking of the period of history I find myself.
Anyone who has been watching the global historical view for the last 25-50 years certainly understands that our world is changing, and some things, not for the better. These changes are also coming faster, as we have seen since the start of 2020.
“Many of us are pondering when things will return to normal. The short response is: never. Nothing will ever return to the ‘broken’ sense of normalcy that prevailed prior to the crisis because the coronavirus pandemic marks a fundamental inflection point in our global trajectory”Covid-19: The Great Reset, Klaus Schwab, 2020
I would agree with Mr. Schwab’s statement. However, I would NOT agree with his solutions.
When studying financial markets, traders and investors look for patterns. As we live in a world of rapid change, is there anything from history past, that help us understand the history unfolding around us?
The following are 3 major trends that have been developing for decades. They seem to relate to the writings of Jewish men from the 1st century AD and prior. Let’s consider them together.
1) Today: At the start of the 20th century there was no United Nations, Federal Reserve, International Monetary Fund, Bank of International Settlements or World Economic Forum. When one considers the planning and actions taken from the UN’s 1992 document, Agenda 21, and more recently, Agenda 30, as well as “The Great Reset” (WEF short video and post in June 2020, and Klaus Schwab’s book (July 2020), it is clear that at the global level of governance, history is not “just one damned thing after another”. [Actually, Arnold J. Toynbee believed there were grand patterns in history.].
Someone is always planning for the future, whether at the individual level or global.
Do you believe we are moving toward a world that protects national sovereignty and the rights of the individual, or a global governing structure that supersedes national sovereignty and human rights decided by small unelected global committees? How could that change our lives?
1st century AD: John, the author of the book of John and Revelations in the New Testament, a disciple of Jesus.
“And the dragon stood on the sand of the seashore. Then I saw a beast coming up out of the sea, having ten horns and seven heads, and on his horns were ten crowns, and on his heads were blasphemous names.” Revelation 13:1
While I have seen maps allegedly developed by the Club of Rome demonstrating how nation states have been grouped into 10 regions, the interesting thing is that the term, “ten horns”, is described 3 times in the book of Daniel (6th century BC), and 4 times in Revelation (1st century AD). From the notes in the John McArthur Study Bible about Revelation 13:1 we find:
“Ten is a number that symbolizes the totality of human military and political power assisting the beast (Antichrist) as he controls the world. Horns always represent power, as in the animal kingdom…”
The Jewish writers of the Old and New Testament produced their writings while living under 6 world empires. I know of no other book that is a collection of writings spanning 1500 years and during 6 world empires. Could this be of value to understanding our world today?
2) Today: If you have every watched the British archaeology show Time Team (1994-2014), you have probably seen a dig where they found Roman coins from the 1st-3rd century. The United States minted its first coin in 1793. We even find Abraham paying 400 shekels of silver for a piece of land to bury his wife Sarah in Genesis 23. This would have taken place around 2,000 years before Christ. Money in the form of a metal coin has a very long history. However, fiat currency is what most of us know as money today.
With the advent of debit cards and apps for smartphones, money has become an electronic swipe. This is the first time in history for societies to ever see this behavior. As such, we are becoming more and more disconnected from the reality of HOW money is formed and what that could mean to our futures.
Away from the smartphone and debit card level, is the top of the global level. The next “tool” to help “stabilize the financial world”…how’s that going…is a digital currency by the world’s most powerful central bankers. What is this? It is an experiment by central bankers. Consider these headlines:
Tie this into the 5 currencies that make up the only international monetary unit, the Special Drawing Rights (launched in 1969). If these banks continue gaining more control through digital currencies and the Special Drawing Rights, they will have even more power over transactions globally.
“A basket of currencies defines the Special Drawing Rights: the US Dollar, Euro, Chinese Yuan, Japanese Yen, and the British Pound.”
Add to these developments ideas discussed in this interview with Catherine Austin Fitts, and this becomes even more disturbing. Fitts has a long history of watching and informing the public regarding changes at the global level of money. Big point: We are moving toward global control of all financial transactions.
1st century AD: John, the author of the book of John and Revelation in the New Testament, a disciple of Jesus.
These are probably the most widely known verses from the book of Revelation. Is it possible these words have anything to do with the current historic trends we see unfolding around us?
“And he causes all, the small and the great, and the rich and the poor, and the free men and the slaves, to be given a mark on their right hand or on their forehead, and he provides that no one will be able to buy or sell, except the one who has the mark, either the name of the beast or the number of his name.” Revelations 13:16-17
3) Today: If there is one thing felt by almost everyone across the world, it is the reality of inflation and the impact on their lives from the devaluation of their money.
Even one of the most studied economists of the 20th century, John Maynard Keynes, gives us insight into the ROOT of the trouble with monetary instability in his book, The Economic Consequences of Peace (1920):
“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some…. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency…” [Pgs 235-236]
Central bankers, as shown from their actions, have yet to address the problem they are creating by always solving a financial crisis with MORE DEBT (or up next… digital money or CBDC).
“It might thus provoke changes that would have seemed inconceivable before the pandemic struck, such as new forms of helicopter money (already a given), the reconsideration/recalibration of some of our social priorities and an augmented search for the common good as a policy objective…” [Covid 19: The Great Reset, Klaus Schwab & Thierry Mallaret, Introduction, July 2020, highlighted text mine]
1st century AD: John, the author of the book of John and Revelations in the New Testament, a disciple of Jesus.
In the spring of 2007, I met with Dr. Dwight Pentecost, an author and professor who taught at Dallas Seminary for 58 years. He was in his early 90s when we met. We talked for about an hour and a half. It was like talking with a young person, yet with someone who had spoken with people all over the world who was constantly learning.
Since the two books of the Bible most known for their eschatological content are Daniel and Revelation, he told me that he believed that Revelations 6: 5-6 implied a period of hyperinflation.
“When He broke the third seal, I heard the third living creature saying, ‘Come’. I looked, and behold, a black horse; and he who sat on it had a pair of scales in his hand. And I heard something like a voice in the center of the hour living creatures saying, ‘A quart of wheat for a denarius and three quarts of barley for a denarius; and do not damage the oil and the wine.’” Revelation 6:5-6
The John McArthur Study Bible provides commentary that parallels Pentecost’s comments:
“quart of wheat. The approximate amount necessary to sustain one person for one day. denarius. One day’s normal wage. One day’s work will provide enough food for only one person. three quarts of wheat. Usually fed to animals, this grain was low in nutrients and cheaper than wheat. A day’s wage provides enough for only a small family’s daily supply.”
“In Augustus’ time, one denarius was the daily wage of a Roman citizen.”
Closing:
In the first section of this post, I spoke about the book, Endurance: Shackleton’s Incredible Voyage. When the story came to the point where the men had to abandon ship as winter was coming in Antarctica, I had to read the end of the story. Only then, did I return to see how they made it.
To me, the answers to God size problems, is GOD. I know some of you will disagree with me. This is fine and is the basis of free speech and thought. We can have a discussion. We can help each other.
However, it is clear to more and more people that the freedom to have a thought or comment apart from “the information” continues to only be seen as “disinformation”. This is not freedom. This is an Orwellian pathway. This is NOT the right road!
I will continue to write and seek to impact the thinking of others. I will continue to listen to the ideas of others and seek to learn.
To me, it is the only path forward and away from tyranny. To me, the only source powerful enough to deal with a world run by those pushing for more power and control, is a GOD size solution. To me, this is the only way we ever arrive at true lasting peace and respect for all.
The sources listed in the Extra below, are ones I have read many times over decades. I encourage you to read them all if you are unfamiliar with them.
Thank you for taking the time to consider this material.
Extra:Pieces of a GOD size story of hope
Why did Jesus come? John 3:16
Why do we need GOD? Romans 3:23
Is there a price for rejecting GOD? Romans 6:23
Is there a bridge that allows man to connect with the Divine? Romans 10:9-10
Where can one find hope of a GOD size rescue? I Thessalonians 1:9-10, 4:13-18, 5:9-10, I Corinthians 15:51-52
Are there any words about a future time of global peace and rest? Revelation 20:1-3, 21:3-5
Feel free to leave comments about this post, whether pro or con.
By 2024, global risks from flagrant financial bubbles in 2017 will have been recognized. For today, one can only seek to influence those willing to think outside the conventional, “‘they’ will take care the big problems” view.
As 2017 comes to an end, the “perfect” stock market has been drilled into the minds of the American investor like none that has existed in the 121-year history of the Dow Jones Industrials. The chart below, developed by Deutsche Bank, is yet one more example of how 2017 has not only been bullish for stocks but has been at a level of “perfection” not seen before.
Is this a good thing? I think not if one considers the long history of cycles and credit in history. Let me illustrate.
In 1981, I began work on my Master’s degree. Americans would see the national debt top $1 trillion for the first time. If your money market was not paying double digits, you moved your money.
Yields on 10 Year US Treasuries reached 15.84% in October 1981. In January 1983 the Dow closed above 1,000 for an entire month, a first in its history after reaching 995 for the first time in February 1966.
Yes, the money world of the early 1980s differed greatly from 2017.
If someone told us that 36 years later we would see the US national debt climb $1 trillion in a year to cross $20 trillion, money markets at the biggest banks paying less than 0.50% for deposits under 100,000 (a trend since 2014), and the Dow leap 7,000 points over 14 months to almost 25,000…. would we have believed them? Not based on the experience from 1966 to 1981.
So is it hard for us to believe the period ahead might not produce an additional $19 trillion in debt alongside another 24,000 increase in the Dow, WHILE interest rates plunge even LOWER than their LOWEST in American history as seen in 2016?
Cycles have come and gone in history. Bubbles and come and gone in history.
One thing history has taught investors willing to learn from world events since the Dutch Tulip Bulb in the early 1600s is that the more “perfect” any investment theme has captured the minds of the public, the more disastrous the period following when money flowing from the herd changes directions.
The panic to keep from missing out stopped. The panic to get out began.
In the fall of 1981, the cost to borrow money for US government reached its highest in American history.
In the summer of 2016, the cost to borrow money for the US government reached its lowest in American history.
Has this 35-year bond market bull (interest rates coming down, bond prices moving higher) ended?
Could investors learn from the 35-year period leading up to 1981 as we start through 2018?
“The great bear market lasted some thirty-five years, by far the longest duration for a bear bond market in U.S. history. If a constant maturity thirty year 2 ½% bond had been available throughout this second bear market of the century, its price would have declined from 101 in 1946 to 17 in 1981, or 83%. In contrast, in the first bear bond market of the century, 1809 to 1920, the same bond would have declined 35% in price. The recent bear bond market seemed to have much more social and economic significance than that of all earlier bear bond markets. In all the others, bond yields stayed within the traditional band that had prevailed for centuries. This time they broke decisively out of that band.” [A History of Interest Rates, Third Edition Revised (1996), Sidney Homer and Richard Sylla, page 367]
“An entirely new and revolutionary phase of bond market history began in 1965. The Great Society program was underway, and business was assured that never again would even the smallest recession be permitted. Many believed just this. There seemed to be no more risk…..Then suddenly the (bond) market collapsed, led by a sharp decline in the bellwether, the recently issued 4 1/4s of 1987-1992…Market psychology, which had clung to traditional benchmarks was shattered, and the stage was set for a major bear market.” [Ibid, pg 379]
“Greater love has no one than this, than to lay down one’s life for his friends” – Jesus Christ, 1st century AD, John 15:13 [NKJV]
It has been a month now since Hurricane Harvey hit the southern part of Texas, dropping more rain than any storm on record in the U.S. The size and scope are unfathomable when we consider so much change in such a brief time.
Yet in the midst of such devastation, we saw acts of kindness, courage, and sacrifice from average Americans.
Yet another storm has been building for years. The numbers it has produced are staggering. Many have benefited; many have not. However, this storm differs from Harvey and Irma. As this storm has grown, we have been told that we were in recovery, yet like a Hurricane, if we track the storm, we see it has been building in strength, not diminishing.
Let me take one factor in this storm.
Since the $700 billion bailout announced 9 years ago in September 2008 to solve the worst crisis since the Great Depression, we have watched an ongoing deluge of “financial rain” (or debt to buy up financial assets). As I write this in September 2017, the global total of this ongoing “temporary assistance” for financial markets is already over 15 times the original US bailout the world heard in September 2008.
One side effect from the storm that has been building over the last decade, is that it has produced the widest financial inequalities between the top 1% and bottom 90% of any decade in American history.
According to an NY Times article, Our Broken Economy in One Simple Chart (Aug 7 ’17), when I was leaving college in the early 1980s, the middle class and poor were seeing their take home paychecks rise faster than those in the top 1%. By 2014, the torrent of debt to inflate financial assets had flipped income growth on its head; the bottom 90% were declining while only the tiniest of percentages at the top saw their incomes leaping.
In the last decade, the huge gap has not between the upper middle class and the middle class, but between the middle class and the group that make up less than 1/100th of the population.
Has history always shown that the number at the top is small and the number at the bottom is large? Yes. However, never has the wealth of the world depended on so much debt created in this short of a period!
The chart below from the Wall Street Journal is another view of the enormous income disparity that has developed since the “recovery”….and as the chart states, these numbers are now 5 years old, so the widening is even greater in 2017.
So I ask you, have the financial policies followed by the major central banks since 2008 encouraged the idea that all men are created equal?
This short post should not lead one to label the writer as a Democrat or Republican or a Liberal or Conservative, but merely a human being looking at his nation and world and asking questions from the data.
The most powerful force that has elevated the super rich far beyond the rest of the population, whether national or global, has been the Quantitative Easing model followed by central banks. Repeatedly since 2008 we were told this explosion of debt out of thin air, was an attempt to push inflation (prices) higher.
Central banks contributed $7 trillion to BUY ASSETS (chief recipient of the inflation) across the world between 2011 and 2016. YTD an additional $2 trillion has poured into the global financial system to continue this scheme. Keynesian central planning economists call this “the wealth effect”.
But has all this debt, funneled into financial markets producing the second longest bull market in US history, produced rising wages, leading to more spending, or have debt levels increased as wages have declined since 2009?
Yes millions are retired, but with 97 million Americans living paycheck to paycheck, and adults between the working ages of 15 and 64 at 205 million, one can not conclude that overall, the American society is fiscally better off today than when we were lead to believe a $700 billion bailout was enough.
Five years after the S&P 500 bottom in October 2002, the public saw that $8 trillion in stock market wealth had been created. 13 months later, the entire $8 trillion was gone.
Since March 2009, we have seen US stock wealth climb $19.2 trillion as of September 20, 2017. We can see from the chart below, 5 of the central banks in the world have grown their balance sheets over $11 trillion since the summer of 2008. This had never happened until the 2008 crisis. The debt used to buy these assets and “assist” market prices for 9 years has not gone away.
Are tens of millions of Americans, whether rich, poor, or middle class preparing for the next major financial storm? Will we talk, listen, and work together as this storm sets in, or place our hope in more debt and more “assistance” from our government, who itself sees debt as “unlimited” and the Federal Reserve as the force to calm the financial wind and waves.
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” – The Declaration of Independence, 1776
In the fall of 2013 I released a public article called “Who Needs God, We Have Bankers”. Over the last 2 years I have often thought of changing the title and releasing it again, but the power of the eternal snooze button from financial reality has stopped me.
After recent events, it seemed time to review the idea of “unlimited debt brings ‘stability’’; go back to sleep”.
The Snooze Button
The one thing about time, is like gravity, there are rules everyone plays by and always will.
Yes, debts had piled up in the trillions since 2013. Yes, it has produced the “wealth effect” assisted by various repetitious algorithmic suppression games, thus creating an even more powerful nirvana in the minds of people.
But the rules of markets and life have not changed since 2013. Thus, the value of asking questions instead of accepting the status quo become even more valuable with each passing year in this central bank/ state promoted mania.
First, let’s review the snooze button from the Oct ’13 article….
“The snooze button; what a great invention. When you have awakened from a deep sleep, and know you can get ready in less time, just hit the snooze button. You know it will still awaken you for your test or to get ready for your 8:00 flight, but in the meantime, you can enjoy a few more moments of precious sleep.
However, if you keep hitting snooze and fail to look at the time, you can also awaken to find that the extra sleep has now placed you in a position where you missed the final exam or your flight. The rewards for a few extra moments of sleep have suddenly become very costly.”
…and how Quantitative Easing (or hyper money printing to buy up assets) by central bankers has created the effect of a snooze button among investors worldwide. The higher the prices, the more the sleep, yet higher risk brings a greater need for an alarm to ring.
“Since the largest collapse of financial assets in history in 2008, the major central banks in the world, the Bank of Japan, The People’s Bank of China, the European Central Bank, the Federal Reserve, and the oldest of this group, the Bank of England, have worked together to create the largest asset bubbles ever seen while keeping the public in a perpetual state of blissful sleep. The method is actually quite simple.
Offer ultra-cheap credit to the global banks by which they can go promote even wilder speculation. Allow extreme levels of leverage in the system, something the general investor seems to never be aware of along the way. If things start looking weak, make certain the standards for collateral against those loans for speculation are LOWERED, allowing even more reckless behavior into the system.”
Now I ask you, were these statements from my October 2013 article correct at that time? If so, based on the actions of these central banks since 2013 it becomes even more important that we understand them in 2017.
If, so, then it must be true that we have more debt in the world today, higher asset values, more complacency, and greater risk not only our money, but our day-to-day use of it.
Let’s compare the stats.
Fall 2013, Summer 2017
December 1913 – Federal Reserve Act passed, establishing the Federal Reserve. US National Debt, $3 Billion
Fall 2013 – US National Debt – $17,000 billion (17 trillion)
Summer 2017 – US National Debt – $20,000 billion (20 tr.)
October 2013 – The combined balance sheet assets of the European Central Bank, the Federal Reserve, the Bank of Japan, the Bank of England, and the Swiss National Bank had reached $10 trillion. [Remember, this does not include the People’s Bank of China.]
May 2017 – The combined assets of these 5 major banks had reached $15 trillion.
The one thing that has become very clear in the summer of 2017, is that US equity markets since the fall of 2013 are substantially higher, the US national debt is more than twice what it was at the October 2007 top ($9 tr.), the NASDAQ 100 has climbed almost 5 times the level it stood 8.5 years ago, five of the major central banks have purchased 50% more in assets than they had in 2013 with debt they created out of thin air, and the global credit growth has contracted sharply since 2015.
Does this look like “financial stability”?
Is it time we should be asking, “Who Needs Bankers, We Need God”?
Time for Discussions on the Moral Ramification of “Unlimited Money”?
Have we placed our “faith” in global central bankers, global political meetings and think tanks to take care of the “big stuff” so we can go about our own lives and plans? If so, have we allowed these global groups to become our gods?
When will it be time to return to the past and question the moral ramifications of “unlimited debt” exchanged for artificially inflated “riches”?
Ponder these quotes. Are they not relevant to us today?
“We must not let our rulers load us with perpetual debt. We must make our election between economy [thrift] and liberty or profusion [abundance] and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds… our people must come [will have] to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their [the government’s] debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must [will] have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers.
If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them [the banks], will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.” – Thomas Jefferson
“He who oppresses the poor to make more for himself or who gives to the rich, will only come to poverty.” – Solomon, Proverbs 22:16
“Government printing press money distorts economic reality, dilutes morality and is the true source of “income inequality.” Financial speculation rises with the increase in paper money and the general work ethic deteriorates. The something-for-nothing mentality pervades society.” – Bob Livingston, Personal Liberty, The Immorality of Paper Money, July 14 ‘14
“The argument that money is apolitical and amoral is equivalent to saying: we are wealthy and powerful not because the system is designed to concentrate wealth in our hands but because we are lucky, talented and/or divinely deserving”. – Charles High Smith, Why Our Status Quo Failed and Is Beyond Reform (2016), Location 678, Kindle Edition
“ And He told them a parable, saying, “The land of a rich man was very productive. And he began reasoning to himself, saying, ‘What shall I do, since I have no place to store my crops?’ Then he said, ‘This is what I will do: I will tear down my barns and build larger ones, and there I will store all my grain and my goods. And I will say to my soul, “Soul, you have many goods laid up for many years to come; take your ease, eat, drink and be merry.”’ But God said to him, ‘You fool! This very night your soul is required of you; and now who will own what you have prepared?’ So is the man who stores up treasure for himself, and is not rich toward God.” – Jesus Christ, Luke 12:16-21
“In psychology, cognitive dissonance is the mental stress (discomfort) experienced by a person who simultaneously holds two or more contradictory beliefs, ideas, or values, when performing an action that contradicts those beliefs, ideas, and values; or when confronted with new information that contradicts existing beliefs, ideas, and values.” – Cognitive dissonance, Wikipedia
It is now February 2017. Everything continues in slow motion in US stocks, with the other global equity markets playing the same tune. It is though nothing could send stocks into a bear market again….at least that is the impression the markets are giving the public emotionally.
In other words, why worry or think? If we look at “negative” financial information, it can create stress.
Yet, headlines like these make us uncomfortable with our “never decline” stock market images as other financial bubbles are cracking around the globe. One every American with money in the Dow 20,000 bubble should consider is the China property bubble.
A couple of years ago I walked through a big home supply store where I live, seeking to see where items were made. I went down aisle after aisle. By far the largest country making products for this store was China. I looked at products in others stores and found similar results.
So when the Communist government in China seeks to deflate their property bubble followed a few weeks later by actions tightening credit and raising interest rates, I pay close attention.
The reason is simple. The two nations depend on each greatly.
If you create trillions in new debt across the nations of the world to levitate asset prices and stimulate your economy, eventually lending rates rise and those projects that came from that torrent of debt must be sustainable on its own. Otherwise prices must adjust downward as credit tightens, bad loans rise, and spending slows.
But this outlook is not happy. In fact, it’s sobering. We had rather seek information that fits the narrative we want to believe.
As long as the “felt wealthy” game continues, we come to trust in the “wealth effect”. And why shouldn’t we? These words were spoken by Chairman Bernanke in the fall of 2012.
The idea is for the Fed’s $40 billion-a-month in bond purchases to lower interest rates and cause stock and home prices to rise, creating a “wealth effect” that would boost the economy.
And “if people feel that their financial situation is better because their 401(k) looks better or for whatever reason — their house is worth more — they’re more willing to go out and spend,” Chairman Ben Bernanke told reporters. “That’s going to provide the demand that firms need in order to be willing to hire and to invest.”
If you went out and borrowed money to buy a house, car, new clothes, and take a vacation, would you FEEL successful? Could you LOOK successful to others around you, many even doing the same? So what is the problem with such actions, especially if the state (i.e. Federal Reserve) creates trillions in debt out of thin air to alter our perceptions?
Easy. You are front running the economy with trillions in cheap debt that at some point, must be paid back, rolled into a new loan pushing out the debt further, or default.
A year ago, Richard Fisher, former President of the Federal Reserve Bank of Dallas, told the public the “wealth effect” was not a sustainable plan.
“What the Fed did, and I was part of it, was front-loaded an enormous market rally in order to create a wealth effect.” [‘We Front-Loaded an Enormous Stock Market Rally’, Seeking Alpha, Jan 7 ‘16]
But this story is not solely from the actions of the Federal Reserve; this story, fostered by the People’s Bank of China, created the largest expansion of debt of any nation in world history.
China’s total debt stock more than tripled between 2000 and 2007 and quadrupled from 2007 to 2014. This was a $26 trillion increase. As debt flooded the nation in projects that were totally unsustainable from the start, the drag from this debt and rising delinquent loans continues to slow their economy. When we consider that roughly a third of global debt growth between 2007 and 2014 came from China’s historic debt explosion, what happens in China will impact the rest of the world? For the United States and China to be so closely dependent on each other, the a collapse of their property bubble will impact Americans.
To have China front run their economy with massive sums of debt, while the Federal Reserve did the same through QE policies since 2009, severe consequences must come.
“Cities and districts built without demand or necessity resulted in what some Chinese scholars have termed, literally, ‘walls without markets’,” says William Hurst, political science professor at Northwestern University. …“Political exigency and investment hysteria trumped economic calculus or consideration of genuine human needs.”
Tighter credit conditions are coming everywhere we look. The Dow 20,000 is a way to keep investors and Americans living in the “wealth effect” until the “debt effect” from such policy cracks our complacency.
For now, we continue watching the biggest stock bubble on record, placing our “faith” in more corruption of markets through constant actions by global central banks.
Shhh, don’t wake us. Facing another bust only creates cognitive dissonance.
It is now November 2016. By 2024, we will wonder how we could ignore so many warnings. The way we receive our news as Americans, I doubt most individuals know anything about what has taken place since November 8th in India. Our focus, and it certainly is very important, has been on our national elections, especially the President. However, what has been going on in India is important to everyone seeking to understand historical trends in the world of money and their impact to our lives if these trends are not altered.
This is a major event in the continuing move toward a global cashless society.
I was alerted to this story by a colleague of mine who grew up in India.
For us in 2016 we certainly see the world around us becoming more cashless, but removing large amounts of cash from use? Maybe in the movies, but real life? For the world in 2024…well, looking back everyone could have a very different view by then.
Good Morning, Hand Us Your “Big” Bills
I started my day like any other, reviewing my emails and various news sites. When I opened the email from a member of one of my Austrian economics chat groups, I was immediately curious about two of his recent writings on what the people of India were experiencing with their own money since last week since he was Indian.
I have linked both of his articles in this post – contain videos as well – and would encourage anyone to read them and watch some of the videos. This is a huge deal, yet as is common in my country, America, the majority know nothing about these developments or how this could impact our lives in the future.
Last night (8th November 2016), India’s government banned the use of Rs (rupees) 500 (app. $7.50) and Rs 1,000 ($15) banknotes. This pretty much made most currency – in – use illegal. Banks and ATMs are closed today. The government believes that doing this will help eradicate corruption and push counterfeit money out of circulation. According to the Indian government, the counterfeit money tends to come from Pakistan and helps finance terrorism.
India being the second most populated nation behind China should tell the world that we should not take this is merely some random event that has no relevance to our own lives. India is also a member of BRICS, a group of nations that have been gaining financial clout as a group on the world stage for more than a decade. Collectively their populations make up over half the global population and 22% of global gross domestic product. In 2014, the group launched The New Development Bank.
We return now to recent events, where we see that corruption is increasing, not decreasing from the government’s actions.
Those who find themselves stuck with high denomination bills today, must accept as little as Rs 700 in usable currency for every Rs 1,000 of banned currency.
At least theoretically, people can still use the otherwise banned bills at hospitals, gas stations, pharmaceutical shops, and train stations. As one would expect in India, these places have been converted into corrupt currency-exchange shops as of today.
But for most legitimate uses, none of these organizations are accepting the otherwise banned instruments. Why should they, when they can force customers to pay in the still-legal currency and then buy the banned instruments for Rs 700 for every Rs 1000 in face value, making a neat 43% extra profit without doing anything?
So much for slowing down corruption. But it gets worse.
Today, there is utter chaos in the market, with only the spontaneously erupted black market available to bypass the ban – most people simply don’t have anything else but the banned currency bills. Some are booking train tickets for future rides and are subsequently canceling them – they can use the banned currency to buy the tickets and can then get legal currency back after ticket-cancellation charges. This is costing people a lot of time, but it is the only way they can stay afloat and buy food. Others are taking different measures, equally desperate.
By any sane person’s reckoning, corruption has skyrocketed for the moment. So has gold (in some places physical gold had reached US $2,294 per ounce). Those who run businesses have lost whatever remnant of trust in the government they still had. In recent months several businessmen have confessed to me that they are closing down because the state has become increasingly heavy-handed and bureaucratic. Contrary to what the World Bank and IMF are saying, India is suffering economically. Its institutions are crumbling.
The comments above by an Indian, were written the morning after their Prime Minister banned the 500 and 1000 bills from circulation, these two bills representing 86% of the nation’s cash in circulation.
The following news report from Bloomberg makes it clear that forcing the people to change their old bills for smaller bills when the larger ones were this widely used in daily business is having drastic effects on the people.
The shortage of cash has started to hit movement of goods as well. More than half of an estimated 9.3 million trucks under the All India Motor Transport Congress have been affected as drivers abandon vehicles mid-way into their trip after running out of cash, according to Naveen Gupta, secretary general of the group. India’s roads carry about 65 percent of the country’s freight.
Today India is on the verge of a major social-political crisis, unless either the government backs off from the decision of banning the currency or some real magic happens. There is chaos in the streets and daily life is slowly but surely coming to a full halt. …
That same afternoon (first day banks opened), I went to the post office with a friend who wanted to get his money converted. After waiting a long time there, we found out that the post office had run out of cash. Since then most ATMs have had limited amounts of cash available and banks keep running out of cash as well.
From Greece in July 2015 to India in November 2016.
New Delhi: People queue up at out side of banks ATM to get money in New Delhi on Sunday. PTI photo by Vijay Verma(PTI11_13_2016_000071A)
As human beings, may we never forget that terms like GDP, inflation, QE, and interest rates, remove us from the human drama of those hardest hit in the midst of such a financial hurricane. May we remember that this is a story about daily human life and seek to make a difference, even if we touch only a few lives in these growing financial storms around our world.
97% of the Indian economy is cash-based. With 88% of all outstanding currency no longer usable, the economy is coming to a standstill. The daily-wage laborer, who leads a hand – to – mouth existence in a country with the GDP per capita of a mere $1,600, no longer has work, as his employer has no cash to pay his wages.
Half of India’s citizens do not have a bank account and around 25% do not even have an ID card. These are the country’s poorest people, who have no way of converting their money – even if they learn how to do it, which is already a nigh insurmountable hurdle. Also, those who are old, disabled or sick have no choice but to suffer, for without personally visiting a bank branch office, one cannot convert one’s banknotes.
Like cages full of birds their houses are full of deceit; they have become rich and powerful and have grown fat and sleek. Their evil deeds have no limit; they do not plead the case of the fatherless to win it, they do not defend the rights of the poor. – Jeremiah 5:27-28
The righteous is concerned for the rights of the poor, the wicked does not understand such concern. – Proverbs 29:7
It would appear that our time in this maddening central banking experiment is ticking down. For that reason, I am going to post pictures with few comments until history gives us world headlines to post.
First is a picture from news service Zero Hedge, comparing the size of the derivatives book of banking giant Deutsche Bank in September 2016 with the Gross Domestic Product of the entire nation of Germany and the GDP of the entire European Union. [The Run Begins: Deutsche Bank Hedge Fund Clients Withdraw Excess Cash, 9/29/16]
Next, is a chart from Tom Fitzpatrick of Citigroup just released. Once again, the source was a post from Zero Hedge. [The Chart That Give Citi “The Chills”, Oct 10]
The third picture reveals that on August 12, 2016 world markets saw THE lowest yield on the 10 year British Gilt ever in history, records spanning more than three centuries. These yields have risen sharply (prices falling) since then.
My next chart shows that since reaching its all time high on August 15, 2016 (18,668), the Dow Jones Industrial Average has repeatedly stopped declining after falling to its 100 day moving average on September 9th. There is no way a worldwide crowd of investors could randomly repeat a pattern at a technical line this many times. This would make sense if powerful high speed computers halted the decline around this level repeatedly.
Are we looking at the final day the Dow was above its 100 day? Could price and experience change soon?
As you look at the pictures above and the postings since 2014 on this blog, you can see why I am so concerned about the world of price illusion from central banking intervention while the global economy we all live in daily continues to slow.
Alex Weber, Chairman of global banking giant UBS, also a former President of the German Bundesbank, made these comments recently. They once again remind us that a knowledge of the financial world and history is of value, even when an experience provided by constant intervention gives us the false sense of a world without risk.
“They (central banks) have taken on massive interventions in the market, you could almost say that central banks are now the central counterparties in many markets. They are the ultimate buyers…
Investors have been driven into investments where they have very little capability for dealing with what is on their plate and I think that is a sure reminder of where we were in a different asset class in 2007.”
Hang on. The pressure to our thinking and feelings is rising.
Today is September 21, 2016. Two of the largest central banks in the world gave press releases after their regularly scheduled two day meetings. It is not normal for two major central banks to do this on the same day, but this is what took place today.
The reason I am calling it a “holiday” is because the most common theme across investment markets at the management or trading level has become “central banks run the show”. Free markets? What’s that? We now are centrally planned with constant intervention by the state (i.e. major central banks) to make certain the public is happy with their 401k statements and rising real estate prices.
Will this grand illusion end very badly and powerfully? Could it be very soon?
Have we reached a place in history where more central planning, greater the debt levels, and more “assisted” markets become week by week, the MORE confident we can become that this is a much better path than when we had a more free market structure, far less debt, and “assistance” was occasional rather than constant?
Read on. Keep thinking.
The Sept 21st View Looking Back
Once again, the computer algos with some “assistance” kicked off another hard run back up. Will it last long? Go to a new all time high again? What is important is that we all remember that the image of central bankers bring happiness was issued on this new “holiday”.
Of course, all is not rosy for central bankers. The Bank of Japan continues having troubles getting the yen to go down according to their plans, and their stock market to climb much before stalling. Now yields on its debt have been climbing from their lowest levels in history.
Holiday Happiness?
As you look at the chart of the NASDAQ 100 above, ask yourself, “Are stocks reflecting the comments and data that brought us into this “holiday”? Do financial markets at all time high levels reflect the REAL economy? If not, should every investor have an exit plan?
Most of the comments and charts below were pulled today, Sept 21st.
The first two tweets are by Lawrence Summers, former US Treasury Secretary and Chief Economist at the World Bank.
I thought these bankers “always” had another scheme to fix the problem? With the NASDAQ producing its highest levels ever today, it would appear that “the crowd” is certainly not thinking about a “shock at a fragile moment”. This NASDAQ image is of extreme confidence.
On this “holiday”, are there any “gloom and doom” naysayers who just can’t understand all the optimism central bankers have brought stock investors?
But what does world trade have to do with a stock market?
If business investment has been slowing, why should that possibly impact our 401k statements and retirement plans?
Yes, I know there are things called Credit Default Swaps which rise in price sharply if these big investors believe a company or country is on the verge of default, but why worry that one of the largest banks in Europe could be on the verge of default or nationalization by the German government? Besides, that only happens in times like September 2008 when Lehman’s filed bankruptcy and AIG was nationalized and stocks were getting clobbered.
Stocks certainly don’t seemed phased by such news today.
As we can see, central bankers have made sure at that millions of stocks investors sitting in stock funds at all time high levels will not impacted by something that happens in Europe…right?
The doubling of corporate debt since 2008? That doesn’t look good? What if corporate stock prices start falling, wouldn’t the company still have all this debt on its books?
If debt were climbing faster than earnings and had reached the highest levels since 2000 this seems like something that would impact all time high stock prices, doesn’t it?
Well, I am not going to worry or be concerned about this silly old data. My experience from trusting central bankers for the last few years has come out okay. The brokerage statement is fine. Besides, what could some manager who oversees a couple hundred billion in investments know that I don’t know? Why do I need to even think about making changes now, especially since today is a central banker’s “holiday”?
One things is for certain. Central bankers have been at this a very long time. They know what they are doing. This is certainly no “experiment”, and they would never artificially push up prices to trick us into thinking we were wealthy from trillions in new debt.
The six months under review have seen central bankers continuing what is surely the greatest experiment in monetary policy in the history of the world. We are therefore in uncharted waters and it is impossible to predict the unintended consequences of very low interest rates, with some 30 percent of global government debt at negative yields, combined with quantitative easing on a massive scale,” Rothschild writes in the company’s semi-annual financial report.
The Federal Reserve wasn’t just trying to drive down interest rates when it announced a third round of bond purchases Thursday.
It also wants to make people feel wealthier – and more willing to spend.
The idea is for the Fed’s $40 billion-a-month in bond purchases to lower interest rates and cause stock and home prices to rise, creating a ‘wealth effect’ that would boost the economy.
And “if people feel that their financial situation is better because their 401(k) looks better or for whatever reason – their house is worth more – they’re more willing to go out and spend,” Chairman Ben Bernanke told reporters. “That’s going to provide the demand that firms need in order to be willing to hire and to invest.”
Thank goodness we can have these holidays in celebration of our central bankers. Why would anyone be foolish enough to think these central planners of our financial markets and global economy would ever face limits in markets?
Now I am having doubts? Maybe having an “unlimited punch bowl” is not such a good idea? Maybe I should stop betting with an “all in” approach, never selling or reducing my junk bond and stock positions at these all time high levels?
The title of this post will sound strange to everyone living in 2024. How could people all over the world come to believe that a small group of powerful bankers, central banks, could use their “tools” so that the nations of the world could eventually reach a point where the public at large did not need to be concerned about a major change in prices? No matter what negative event shook global financial markets, these “money fireman” were always standing ready to pour on MORE debt and/or use various manipulative tools to “assist” investment markets until things “returned to normal”.
Let me illustrate with a recent event for us, which by 2024 will be studied as history. It is called the Brexit. This was a public referendum where the British people voted to leave the European Union on June 23rd. Friday the 24th produced big drops in stock markets around the world.
Yet the monetary fire hoses were ready, as demonstrated by comments from the big central banks listed in this article on that same Friday.
[US Federal Reserve, European Central Bank, Bank of England, Central Bank Governors and Finance Ministers from the G7, Swiss National Bank, Bank of Japan, People’s Bank of China, Reserve Bank of India, and the Central Bank of the Russian Federation]
Four weeks later, not only have the events of June 24th been quickly erased, but they and other high risk developments over this period as seen through “the markets” can be viewed as no big deal. Risk? What is that?
This global “rescue” did not take place during the Great Recession in 2008. This did not take place in 2009 when the Federal Reserve started “temporarily” buying up toxic assets (mortgage backed securities) from the banks in order to free up credit.
This is July 2016, the 89th month since the March 6, 2009 low. It is impossible to believe that “stability” was the goal of central bankers. If the objective was to calm markets, they failed. The view of risk has now become, “This is great. Central bankers will drive up my stock investments very quickly, and if U.S. stocks, push them to new all-time highs!
Declines? What is that? ‘They’ will always keep prices up.”
The problem, as you know, is that these major central banks have been “rescuing” the nations of the world with more debt since the Great Recession, than any time prior to 2008.
So why are there still millions of investors sitting in US stock funds at the highest prices ever recorded, when with each passing week there are myriads of reasons the dominoes should start falling?
The financial industry was taught, and thus passed on to Main Street investors, the idea that no matter what happens, the American stock market ALWAYS comes back. Why study lessons from 400 years of financial history? What’s wrong with US and world debt loads’ soaring?
We have seen interest rates drop since the 1980s. In the US, the highest levels ever seen were in 1981 when the yield on 10 year US Treasuries reached 15.84. Now this month, on July 5th, the yield on the 10 year hit a low of 1.37. This low was the lowest ever in American history.
If we can all look back and agree that it was obvious that rates would fall from the highest levels on record in 1981, can we not also agree that rates at some point would rise?
While this 36 period has rewarded bond investors who have seen prices rise as yields have fallen, are these same investors considering this piece of history?
“The greatest of all secular bear bond markets, which began in April of 1946, and probably ended in September 1981, carried prime long American corporate bond yields from their lowest recorded yields to their highest. The yield index rose from 2.46 to 15.49% for seasoned prime issues and up to 16.5% (industrials) and 18.0% (utilities) for high-quality new issues… If a constant maturity thirty-year 2 ½% bond had been available throughout this second bear market of the century, its prices could have declined from 101 in 1946 to 17 in 1981, or 83%.” – A History of Interest Rates, Third Edition Revised (1996), Sidney Homer and Richard Sylla, pg 366-367
Having become a world where our own experience supersedes the lessons from history, how should public perception change when stocks go down, and rates rise?
In 2024, the answer will be yet another story from the annals of financial manias. Everyone will understand that “the state” could never stop investment prices from deflating, since they were the very ones whose actions and polices over inflated them since 2008.
Sadly, this has created not only enormous financial problems across societies, but reduced the critical importance of ethics in a sound financial and economic system.
