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Daily Digest 5/12 - The American Debt Crisis, If OPEC Is Dead, What's Next?

Thursday, May 12, 2016, 10:46 AM

Economy

Five Charts That Show Americans Families’ Debt Crisis (jdargis)

With mortgage debt creeping back up and student debt ballooning, American families are in the midst of a debt crisis. While we needlessly fret about overconsumption and hyperconsumerism, we miss a bigger picture: rising housing, medical, and education costs. Here are five charts that show the extent of the country’s debt problem.

Trouble In Saudi Arabia (Aaron M.)

Political instability is rising in Saudi Arabia. The Saudi king has fired his longtime Secretary of Energy and the head of the central bank has been replaced. The royal family is now fighting to sustain power.

Fed Worries About Deflation but Pays Banks Billions Not to Lend QE Proceeds!?! (Chris H.)

In the US, bank reserves are held as FRB (Federal Reserve Bank) credit in FRB accounts, regardless whether the reserves are required or excess reserves beyond the Federal Reserve requirement. The definition of reserves (and by extension excess reserves) are monies not lent out to customers to satisfy Federal Reserve set requirements. One would think holding $2.4 trillion in excess reserves at 0.25% interest during one of the greatest bull market periods in history would be an opportunity cost as higher risk-adjusted interest could have been earned by putting these funds to use elsewhere. Strange banks were seemingly disinterested in the misallocation of their funds? Are there new or different requirements placed on the banks regarding reserves?

Don't Make The Great Estate Mistake (Tiffany D.)

If you have more than a bank account, a home and a few personal possessions, a will is critical to ensure some control over how those assets are handled after you’re gone. For example, if you own a business and your heirs can’t agree on whether to keep it running or cash it in, a probate judge may order it sold so it can be divided according to state law.

In my case, ownership of properties in more than one country, various investments and a collection of valuable musical instruments makes a will a no-brainer.

Manipulation, the "Free Market", & What of Gold & Silver? (Chris H.)

Once upon a time, the Fed's balance sheet and banks Excess Reserves were used as a means to artificially manage (manipulate) interest rates. The Fed would typically hold short term bills and notes (though relatively little long term bonds) and use this capability to remove or introduce more or less excess reserves...in this manner, banks overnight lending rates were affected and the whole chain of interest rates whipped up or down.

Catherine Austin Fitts: Painful Process Coming for America Not Going to Be Pretty (Herman J.)

“We’ve got to go to transparency, and it’s going to be a very painful process for the American people. It’s not going to be pretty. The game of musical chairs is upon us. It’s not coming, it’s here.”

Nigerian President Buhari 'not demanding' Cameron apology (jdargis)

Asked if Nigeria was "fantastically corrupt", in an echo of the prime minister's comments, Mr Buhari responded: "Yes."

Speaking to the BBC, Mr Buhari said what the new Nigerian government found when it came to power proved Mr Cameron was right.

"He was telling the truth. He was talking about what he knew," Mr Buhari said.

OPEC Is Dead, What’s Next? (Josh O.)

The Saudis have all but said outright that their national priorities in energy would always trump OPEC priorities. The country has repeatedly used its influence as the largest producer in the organization to dictate the energy policies of smaller producers, which has been harmful for the latter. And these policies, which can be summed up as “pump as much as you can, don’t let the shale boomers get a breather” have not led to a clear victory. They have not led to a sharp rise in prices, which was expected to take place after the shale producers throw in the towel. But U.S. shale companies have lasted much longer than expected.

Global Warming Cited as Wildfires Increase in Fragile Boreal Forest (jdargis)

The weather pattern known as El Niño has been pumping a huge amount of heat from the ocean and into the atmosphere for more than a year, and scientists say that could also have played a role in setting the conditions for this year’s fires. Temperatures in parts of Alberta were as much as 30 degrees Fahrenheit above normal in the weeks before the fires began, desiccating the landscape.

Depth Of Field (jdargis)

From 1958 to 2001, there were major changes in the vegetation growing near the Boreal Mountains. While the more recent photo may look more verdant, it shows that shrub tundra is being overtaken by white spruce forest, signifying the ecosystem is changing from a sub-alpine environment to a boreal one. Such drastic and rapid changes in ecosystems can be harmful to biodiversity.

Gold & Silver

Click to read the PM Daily Market Commentary: 5/11/16

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

16 Comments

saxplayer00o1's picture
saxplayer00o1
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Negative interest rates spark record gold rush as demand for sa

Negative interest rates spark record gold rush as demand for safe deposit boxes jumps

Telegraph.co.uk - ‎10 hours ago‎
Investors snapped up gold at a record pace in the first three months of 2016 as global growth fears intensified and central banks slashed interest rates deeper into negative territory. Concerns that Britain could leave the EU also triggered a spike in ...

Investors fleeing $9 Trillion of negative yields fuel bond binge

Pensions & Investments-37 minutes ago
There's no shortage of demand in the $100 trillion market for global debt, as investors crowd into corporate and long-term sovereign obligations to steer clear of ...
 

Italy must choose between the euro and its own economic survival

Telegraph.co.uk-19 hours ago
Each year Rome hopefully pencils in a fall in the ratio of public debt to GDP, and each .... It cannot take normal sovereign action to stabilize the banking system ...

Kuroda says BOJ could ease policy 'substantially'

MarketWatch-17 hours ago
Mr. Kuroda said the effects of quantitative and qualitative easing, or QQE, along with a negative interest rate are "already very clear" in financial markets, but "we ...

Norway needs weak exchange rate, central bank chief says

Reuters-5 hours ago
OSLO May 12 The Norwegian economy depends on currency weakness to regain competitiveness following the plunge in oil prices since mid-2014, central ...

China's non-performing loans hit 11-year high - regulator

Reuters - ‎4 hours ago‎
Bad debts have increased 18 consecutive quarters. * Some analysts think level of NPLs much higher than reported (Adds details, milestone). BEIJING, May 12 Troubled lending at China's commercial banks reached 4.6 trillion yuan ($706 billion) at end ...

China's smaller companies face credit crisis as bond market funding ...

South China Morning Post-1 hour ago
... of defaults on the country's 14.3 trillion yuan bond (HK$17.03 trillion) market recently and expectations of a credit crisis have undermined the junk debt market.

China eyes $724 billion of transport investment over next three years

Reuters - ‎12 hours ago‎
SHANGHAI China will invest around 4.7 trillion yuan ($724 billion) in transport infrastructure projects over the next three years, the country's transport ministry said in an article posted on its website late on Wednesday. The 2016-2018 plan from ...

Greeks Leery of Debt-Relief Talks as They Brace for New Tax Wave

Bloomberg-12 hours ago
While the IMF sees debt relief as key to bringing down the primary surplus targets, ... by a record 3.4 trillion yuan in January, People's Bank of China data show.

CBO Head: Deep Spending Cuts or Steep Tax Hikes Required to ...

The Fiscal Times-21 hours ago
The effects of a much higher level of debt as a share of GDP, Hall said, would ... For example, he said that cutting $2 trillion from the federal deficit over the next ...

WA state budget deficit to surge to almost $4b

ABC Online-9 hours ago
At the same time, state debt will continue to climb, reaching $33 billion next year and ... But he also revealed the deficit would jump by $2 billion in 2016–17.

Big-ticket assets would be sold to slash soaring debt

The West Australian - ‎9 hours ago‎
Amid projections WA's debt was set to soar to more than $40 billion within three years, Dr Nahan said the proceeds would be used to repay $11 billion – or about a third of the State's current debt level. A special “infrastructure fund” would be set up ...

India's Bad Loans Could Be Bigger Than New Zealand's $170 Billion Economy

NDTV - ‎5 hours ago‎
Mumbai: India's bad-loans problem looks much worse than lenders have been willing to acknowledge, heaping pressure on banks' profits and further tightening the screws on distressed debt that could be bigger than New Zealand's $170 billion economy.

US Budget Deficit Expanded in April

Wall Street Journal - ‎19 hours ago‎
The U.S. budget deficit widened in April, a trend expected to continue in the coming years as federal spending outpaces revenue growth. Over the 12-month period ended in April, the federal budget gap totaled $511 billion, around 2.8% of total gross ...

Moody's downgrades Fort Worth debt on pension liability concerns

Pensions & Investments-19 hours ago

Moody's Investors Service downgraded the rating on Fort Worth's roughly $680.8 million of outstanding parity limited tax debt to Aa2 from Aa1 on Tuesday, citing ..

State retiree health care could cost California $6.6 billion a year

Sacramento Bee-20 hours ago
California is spending more than $2 billion a year on health care for retired state employees – up more than 80 percent in the last decade, according to Gov.

California projects 8% increase in 2017 ACA premiums

Healthcare Dive-2 hours ago
... after two years of more modest 4% increases, Kaiser Health News reported. ... first years, as well as the continued rise in healthcare costs and specialty drugs.

Obamacare Premiums In California May Rise 8% Next Year, State ...
KPBS-15 hours ago

Tall's picture
Tall
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Posts: 564
Series of videos- climate stories

Anglers, farmers, beekeepers, etc.

http://www.dailyclimate.org/tdc-newsroom/2016/april/climate-videos-north...

 

 

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sand_puppy
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CHS Interview: The current system is broken and beyond reform

An idea that Charles has discussed here with Chris several times.  (If you're like me, we need to hear new ideas many times before they take.)

sand_puppy's picture
sand_puppy
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The Battle of Good versus Evil in the Garden

As a suburban gardener in Virginia I have come to know the face of evil

It is this:

And the battle, where the forces of Good must preserve the garden's bounty, is waged with the ultimate mythical weapons:  PVC pipe, wildlife netting and zip ties.

The potatoes and strawberries are liking the protection.

May The Force be with us all.

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blackeagle
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Posts: 223
Evil????

PVC? Nah... too much work...

Get a cat...

Pros: All natural, loyal friend

Cons: A small one. My wife calls me at work so I know I have to collect one tail and a ton of feathers from the living room floor when I get back home...

sand_puppy's picture
sand_puppy
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AmeriGEDDON: Anybody planning on seeing this?
The preview:
 
 

Director Mike Norris, son of Chuck Norris, is bringing a drama to screen ripped from the headlines of America’s real-life looming catastrophes. In AmeriGEDDON, an EMP attack brings down the grid and initiates the collapse scenario that preppers are all too familiar with: civil unrest and chaos as a result of the loss of food and services, followed by a heavy-handed attempt to impose martial law and confiscate the firearms of American patriots.

What follows is basically the beginning of the next civil war against the agents of world government and global control.

Synopsis from the filmmakers:

AMERIGEDDON, coming to theaters nationwide May 13, 2016, has been described as “the movie the establishment doesn’t want you to see.” Showing what happens when a not-so-future U.S. government conspires with the United Nations to stage an attack on the energy grid, AMERIGEDDON depicts a country ruled by martial law in which citizens are stripped of their constitutional rights and their guns. A group of patriots fight back and rescue the country from slipping into irreversible chaos.

AMERIGEDDON’s release in an election year is not coincidental. The film illustrates a dystopian future all patriots must guard against and is a call to action to preserve the Second Amendment and stop executive rule by fiat. Director Mike Norris, son of Chuck Norris, asks for like-minded Americans to support the film.

“The fact that a recent poll showed a majority of Americans are enraged with the federal government points to a frenzy of unrest with the dictatorial way in which our country has been run,” said Norris. “My family has long been involved in protecting the rights of Americans. We are concerned about the future and and see this film as a call to action. We urge people to join us in theaters and show Hollywood and politicians that true patriots will fight for their rights and want to see their values represented on-screen.”

A collaboration between Norris and entrepreneur and writer Gary Heavin, AMERIGEDDON seizes on fact-based threats and asks the ultimate question, “What happens when government turns on the people it’s supposed to protect?”

Executive Producer Gary Heavin believes the film’s message warning is timely. “We made a movie that is fun to watch but it is based in reality. In AMERIGEDDON, survivors of an EMP attack on the United States must live in a state of martial law led by the United Nations. American soldiers must decide whom they serve, second amendment rights are curtailed and food, water and survival become our primary concerns—unfortunately, these are all likely scenarios resulting from a very real threat,” said Heavin.  “I believe if we can entertain while we inform, more people will wake up; and if we hope to restore our freedom we must share the truth with as many people as possible.”

Co-written by Norris and Heavin, the film features Marshall Teague (THE ROCK), Annalynn McCord (“Dallas”, “90210”), Dina Meyer (“Starship Troopers”), Spencer Neville (“Days of Our Lives”), Mike Norris (“Walker, Texas Ranger”), Diane Ladd (JOY) and India Eisley (“The Secret Life of the American Teenager”).

For more information, visit the film’s Facebook page: https://www.facebook.com/AmerigeddonMovie

 

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Uncletommy
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Fed Worries About Deflation but Pays Banks Billions Not to Lend

Could somebody tell how much of this $2.4 trillion dollars is really just the 2008 CDO mortgages reallocated to the Feds balance sheet?  To pay .25% on these reserves(money they can't loan out) seems like a bit of a sweetheart deal for the banks. Does that mean mortgage debt has become an asset under the heading of excess reserves? Did the banks write down the mortgages by about $1 trillion and transfer them over at the original value? From Hambone's article, I surmise liabilities have become an asset, or am I missing something. The rising graphs from 2008 to now seem to confirm this impression:

but no net demand was spurred and instead outstanding mortgage debt has fallen by nearly $1 trillion.  Liabilities have increased by almost $3 trillion of which $2.4 trillion (80%) are excess reserves held with the Fed.

Just asking. 

 

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AmeriGEDDON: Anybody planning on seeing this?

AmeriGEDDON: Anybody planning on seeing this?

No, but I expect it will happen via WW3 at some point. The World has a new arms race (China, Russia, EU, US, and the Middle East) are all pouring Billlions in military hardware. The Middle East is a powder keg ready to explode (Sunni vs Shia, Iran vs KSA). A major war in the ME will spread.

Of course , there is the chance of a Solar CME triggered EMP event. In either case, the issue is likely going to be the 440+ Nuclear reactors that will likely meltdown in a war or in a EMP event. Hope your not living near or downwind of any of the Nuclear Plants in VA.

I don't think there will be gov't induced EMP event (ie false flag). The US would completely collapse in less than a week as the entire "Just in time", "electronic infrastructure" economy fails and there will be no way to restart it. More than half of the US population would be dead in a matter of months, and large regions of the US would be completely uninhabitable cause by Meltdowns at US Nuclear Power Plants. An EMP event will be just as bad as a full nuclear war. 

cmartenson's picture
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That's very generous of you
sand_puppy wrote:

As a suburban gardener in Virginia I have come to know the face of evil

It is this:

 

I will note that I have also guarded my garden patch with a fence system for groundhogs and rabbits...but squirrels are another matter.

Accordingly, I happen to believe that no serious gardener should be without one of these:

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Sandpuppy

When to see Amerigeddon.  It's pretty formulaic but entertaining.  I don't subscribe to the idea that we're in danger of being occupied by United Nations troops but the ass kickin' blonde with the AR and the aviator glasses was a lot of fun.

John G.

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jgritter
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Squirrels

Are you guys eating the squirrels that you shoot?  Not a lot of meat, but tasty.

John G.

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Sigh...I will never be a respectable survivalist!

1st it was re-hiding the baby bunny nest (complete with baby bunny) I found in my garden a couple of years ago.

And a couple of weeks ago it was saving a baby squirrel (that looked just like a smaller version of Sand_Puppy's friend), who was hiding under our steps, from our dogs...  The dang thing started following me around like I was its mother!! 

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Time2help
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Yep
pinecarr wrote:

1st it was re-hiding the baby bunny nest (complete with baby bunny) I found in my garden a couple of years ago.

And a couple of weeks ago it was saving a baby squirrel (that looked just like a smaller version of Sand_Puppy's friend), who was hiding under our steps, from our dogs...  The dang thing started following me around like I was its mother!! 

You clearly have a bad case of empathy. Yer done fer! wink

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sand_puppy
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The "assassination of innocent squirrels"....

After some detailed family discussions, I have come to understand that the Crosman Air Rifle solution will not work at our house....

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As the notorious (in my

As the notorious (in my parts, anyway...) good ol' boy Harold Lamb commented after a particularly tasty meal served by my buddy's wife: "Bertha, that was gooder 'n squirrel".    Aloha, Steve.

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VeganDB12
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Gloria takes care of the dog

 

I am reminded of this scene from Modern Family....(sound quality poor). Yes I am an animal rights activist but humor has helped me through many a situation.....

 

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