The Israel Deception

Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?

Showing posts with label borrowing. Show all posts
Showing posts with label borrowing. Show all posts

Saturday, December 10, 2016

30 years later the Dow is at the same ratio to debt as it was in late 1987

Following the 1987 stock market crash, the Federal Reserve began a new course of monetary policy in which they would use a combination of debt and manipulated interest rates... not to protect the bond markets or inflation, but to boost up the stock markets.  And in the just over 29 years since this policy started under Alan Greenspan, an interesting parallel has occurred.

The ratio of the national debt is virtually the same as the increase in the Dow Jones average.

National Debt

Dow

In 1987 the United States ended the year with a national debt of $2.35 trillion, and the Dow ended the year at 1927.31.  However, before the Oct. 19 crash it was at 2246.73, or a ratio of 1:.956 Debt to Dow.  This ratio of nearly 1:1 is significant because it is the starting point for a trend where the Dow would begin to rise either in tandem, or in the same multiples as the debt.

When Bill Clinton took office in January of 1993, the debt was at $4.064 trillion and the Dow was at 3301.  And the increase of debt from 1987 to 1993 was virtually the exact same increase the Dow experienced (42% vs. 41.6%) during the same period.

Most mainstream pundits and economic analysts love to tout how Bill Clinton 'balanced the budget' and added few deficits that led to increases in the national debt.  But what they willingly or unwillingly fail to mention is how the Clinton administration raided the Social Security Trust of over $3 trillion and replaced the cash with Treasuries (debt).  And instead of borrowing the money from the Federal Reserve, which would have officially been added to the National debt number, he instead robbed Peter to pay Paul, and his total increase to the debt was over $4.6 trillion to finish out his term with the real debt between $8.6 and $9 trillion.

But there was a caveat that needs to be added to this era as it was also a time when Alan Greenspan lowered interest rates from 7.25% in late 1987 to a low of 3.25% when Clinton took office in 1993.  And because of this near doubling of overall debt coupled with the halving of interest rates, the Dow subsequently more than tripled during this era known as the Dot Com Boom.

Real debt increase from Jan. 1992 to Dec. 31 1999: 120%.  Dow increase from Jan. 1992 to Dec. 31 1999: 348%.  Interest rates halved from 7.25 to 3.25%.

Over the course of the fiscally irresponsible years from 2000 to 2016, where the national debt doubled first under George W. Bush to $9.5 trillion and again under Barack Obama to its current level of $19.8 trillion, the stock markets climbed nearly in tandem to the rise in debt outside the stock market crash and declines of 2008-2009.  And most astonishing is that as of Dec. 9, 2016, the ratio of Debt to the Dow is back where it began nearly 30 years ago at a virtual 1:1 equivalent.

Dec. 9:  Dow close:


Dec. 9: National Debt


$19.87 trillion to 19,756     Ratio 1:.994

Coincidence?  Now imagine what the stock markets would look like if the government had not borrowed so much money... or if they decide to finally shut off the spigot... or the spigot is shut off for them.

Are you willing to put your retirement trust in the hands of entities that will not grow or survive without more and more borrowed debt?

Friday, June 3, 2016

Payday loans: American workers can now owe their souls to the company store

A classic American song that originated in 1946, but was made famous by Tennessee Ernie Ford nine years later, speaks on American workers in the mining industry who were forced to use their wages in the mining company’s store, leaving them eternally in debt and eternally slaves to their jobs.  And while this song’s origins come from a real time in America’s history, as usual that same history is coming back today in a whole new rhyme.
That is because due to the decline in overall wages since the late 1970’s, more American workers are being forced to borrow from ‘payday’ lenders just to make it from check to check.  And rather than see their employees borrow money from a third party agency, companies are now giving workers their own version of ‘payday’ loans at a modicum interest of only 6-18%.
soul
Read more on this article here...

Tuesday, March 1, 2016

Stock bubble: It now takes more credit to hold up stock prices today than it did just before crashes of 2000 and 2007

Last year was the year of the buyback in the stock markets, where corporations borrowed and spent trillions just to prop up their companies because earnings and revenues were no longer growing.  And for awhile this program was able to take the Dow, S&P 500, and the Nasdaq to new all-time highs.

But in May of 2015 things began to fizzle out, and while there would be a few rally's to counter any major selling, especially during the tumultuous months of July and August, the markets had reached their apex and the trend was fully set for a bear market that began in earnest in January of this year.

Yet perhaps most importantly for those hoping that Wall Street can calm the markets as we head into the 2nd quarter of 2016, an interesting piece of data was just compiled by Bill Holter that shows that corporations and central banks have reached their limit in being able to protect stocks from selling pressures as credit (debt borrowing) is now more costly than during the market peaks of 2000 (Dot Com) and 2007 (Housing Bubble, Credit Crisis) just prior to their collapses.
Just a short comment on a VERY BIG problem! The below chart shows “margin” balance on the NYSE with an inverted chart of the S+P 500 laid over it. 
NYSE-investor-credit-SPX-since-1995-inverted
Please notice the amount of credit being used to carry stocks now is significantly larger than it was at previous market tops in 2000 and 2007. Also, the amount of credit has begun to contract, this is a classic margin call being met …so far. The danger of course is as it always has been when margin builds like this. As the equity market pulls back, margin calls are issued and in some cases “forced sales” are done. This can, has in the past and most likely will occur and morph into a virtual loop where forced sales weaken prices, creating new margin calls and more forced sales in a negative feedback loop…otherwise known as a market panic. - Silver Doctors
What this all means in layman's terms is that when the market tilts completely downward, neither the Fed, nor the banks, will be able to provide liquidity to keep the markets propped up, with margin calls on their outstanding debt they already have causing stocks to unravel even more.

Wednesday, September 16, 2015

Next Democrat hopeful wants to follow in Obama’s footsteps by doubling national debt

Socialism works until you run out of other people’s money.  This is a famous quote that was attributed to the former Prime Minister of Britain during the final decade of the Cold War, and during the rise of socialism in what would become the European Union.  And since the 1980’s when capitalism flourished in its final decade of free markets, growth has been measured not by productivity, but by how much administrations around the world could increase their money supplies and national debts.
And while many Republican Presidents, including the well respected conservative Ronald Reagan, have used borrowing to facilitate their goals and agendas, it has been the current President, and the front runner from the Democratic Party for the 2016 election, that have placed any semblance of fiscal responsibility in the distant past, and could potentially be two back to back Presidents who would double the national debt during their times in office.

Read more on this article here...

Friday, March 30, 2012

Fed monetizing US debt is increasing

With the government in full debt mode by its borrowing close to $150 billion a month just to cover current obligations, the Federal Reserve has been forced to go full bore in buying that debt, and monetizing government spending.

Last year the Fed purchased a stunning 61% of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis.

This not only creates the false impression of limitless demand for U.S. debt but also blunts any sense of urgency to reduce supersized budget deficits.

What about Japan and China? Aren’t they the major purchasers of U.S. debt? Not any more, notes Goodman. Foreign purchases of U.S. debt dropped to less than 2 percent  of GDP (Gross Domestic Product) from almost 6 percent just three years ago. And private sector investors — banks, money market and bond mutual funds, individuals and corporations — have cut their buying way back as well, to less than 1 percent of GDP, down from 6 percent. This serves to hide the fact that the government can’t find outside buyers willing to accept rates of return that are below the inflation rate (“negative interest”) given the precarious financial condition of the government. - New American


Congress last year did not have the stomach to halt raising the debt ceiling, and it appears that they will not keep the debt from crossing $16 trillion by the time of the election.  As foreign entities such as China and Japan deal with their own economic downturns, and Europe is requiring bailouts not buyouts just to survive, the Fed will have no choice but to keep monetizing US debt to stave off collapse and default by the world's largest creditor nation.

Tuesday, January 10, 2012

The need for money is the root of many compromises

Hungary has become the latest Euro Zone nation to now be willing to compromise on sovereign rights to be eligible to get ECB bailout money in a change of course from prior defiance.

If there is any one more vivid confirmation of Mayer Rothschild words "Let me issue and control a nation's money and I care not who writes the laws" then we have yet to find it. Today Hungary, which had "valiantly" defied Europe and the IMF in ignoring pressure to make its central bank more "malleable" finally folded, following a recent explosion in its bond yields, a surge in CDS to records, and a collapse in its currency. And to think how easy it is to subjugate a state to slave status in our "globalized" days without shedding one drop of blood. Reuters reports: "Hungary's government is ready to consider modifying disputed legislation if the European Commission deems it necessary, Foreign Minister Janos Martonyi told the bloc's executive and European Union partners. - Zerohedge

The need for money many times outweighs the desire to be self-sufficent and rule your own people.  Or as the bible once pointed out, the borrower is slave to the lender.
Welcome to your new slavery Hungary.

Tuesday, September 20, 2011

The point of no return: US debt and borrowing since 2008

There have been many events and eras in American history where borrowing by the government was necessary to facilitate resolving an economic crisis, or to pay for necessary wars.  However, in every case but the current one, once the crisis was over, debt and borrowing ceased.

Thanks to inflation created by the FED since the 1980's, and the crisis of 2008 however, American no longer has the ability or the will to turn off the debt spigots, and as seen by this chart, we have crossed over the point of no return.

Thanks NAFTA (1994).  Your purpose in sucking the wealth of America out the door is almost complete.