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  1. Ten weeks is a LONG TIME when economic, financial and social arrangements are collapsing at the current rate. And when the rate of collapse is accelerating, as is the case, ten weeks is a VERY LONG TIME.

    It is scary when we see grossly uninformed commentators on ‘Breakfast’ pushing barrows of BAU when BAU is over. Although Covid-19 appears to be the major setback to BAU, the reality is, the inherent fundamental flaws and inconsistencies of the system itself are what are demolishing the system, and the presence of criminals and clowns in positions of high office -most notably Trump and Bolsonaro- exacerbate those inherent flaws and inconsistencies into a ‘tsunami’ of mayhem.

    Pardon me for repeating what I wrote on another thread but we are ‘on the Titanic’ and we have collided with ‘the iceberg’ and we are sinking at an ever faster rate. The ‘pumps’ that have kept us afloat for the more than a decade are about to get overwhelmed.

    On the matter of ‘the case for Fortress Aotearoa’ and ‘We won’t return to normality because normality was the problem’, I first used the analogy of the Titanic in the year 2000, when I commenced writing my first book highlighting the ‘terrifying truth about the global economy’. I likened our predicament to being on board the Titanic, headed at full speed towards the iceberg, with the steering firmly locked in position and the captain determined to not change course or reduce speed.

    Well, we hit the iceberg in 2008, (arguably in 2001) and since then the ship’s pumps have been working hard to keep the Titanic afloat.

    It was around 2014 that I realised the futility of trying to alert the captain, crew and passengers to the need have lifejackets and to launch lifeboats: they all firmly believed the ship was unsinkable, and there was no need for lifejackets or lifeboats. Even as water was entering the hull, they remained firmly locked into denial of reality and believed the watertight bulkheads would prevent sinking.

    Around 9 months ago, when the US repo market ‘blew up’ the pumps were set to a higher speed. And since the coronavirus started to really bite (around 2 months ago) the pumps have been set on full speed. But they are losing the battle.

    And so now, as the Titanic starts to seriously list and passengers on the lower decks start to drown (being Third Class), I find it fascinating that the Titanic analogy is becoming widely used.

    …’The glancing blow that ruptured the Titanic’s hull over a distance of roughly 250 feet (out of a full length of 882 feet) and admitted water into six of her compartments sealed her fate.
    Considerable hullabaloo attended the attempt in the summer of 1996 to raise a piece of the hull from the debris field, but far more interesting was the ultrasound investigation of the area of the bow damaged by the iceberg. These images revealed six small tears or openings affecting the first six compartments. Just as we had surmised in 1986, the great gash was a myth and the actual openings into the ship seem to have been the result of rivets popping and hull plates separating.
    This offers a very powerful analogy to the fatal damage inflicted on our financial system by an apparently “glancing blow” with the pandemic shutdown. Just as the Titanic was mortally wounded not by great tears in its hull but by the buckling of steel hull plates, so the U.S. (and thus global) financial system is sinking from similarly “glancing” blows.

    The actual damage could have been contained–do you sense another analogy about to surface?– had the fifth watertight bulwark–shall we call it “the bulwark against systemic failure”?– extended a few decks higher. But inexplicably, this watertight barrier did not extend as high as the other watertight bulkheads.

    Though the water gushing through a three-foot gash in the forward engine room was held back by the ship’s great pumps, as the bow sank lower then water seeped over the fifth watertight bulkhead and gushed into the boiler room, extinguishing the fires that powered the pumps.
    This generated a feedback loop: the higher the water rose, the more boilers were extinguished and the less power was available to the pumps.

    And so against all “rational odds,” the ship’s apparently minor structural design flaw led to its inevitable loss as the mighty pumps lost their battle against the rising water.
    To all the “experts,” the risk of collision with an iceberg were considered low, while the risk of catastrophic damage were considered essentially zero. Hmm, does that remind you of our financial system circa September 2019, just as the great U.S. economy’s hull was buckling?

    Now we have the Great Pumps of Federal Reserve money-printing and Stimulus, which in a close analogy are pumping trillions of dollars into the sinking U.S. economy. But just as the engines of the Titanic lost power as the water extinguished the boilers supplying steam to the engines, so the stimulus is only keeping the rising water temporarily at bay– it is not actually saving the “engines” of the economy from sputtering.

    And what are those engines?

    1. Debt, which must increase to fuel spending, income and thus taxes

    2. Rising assets, which provide the basis for ever-more borrowing

    3. Government borrowing, which enables government spending to keep rising without regard to actual tax revenues or the health of those being taxed

    4. Rising employment as vast borrowing and spending creates new jobs

    The ice-cold water is splashing into each of these engines. As assets fall then there is simply no foundation (collateral) to support more borrowing. As debt is paid down rather than expanded, then spending falls. As spending falls, so do revenues, profits and employment, all of which crimp tax revenues.

    The last engine is government borrowing. To those still standing on the sloping deck, cheering the “good news” of Big Tech’s meteoric ascent to the heavens of bubble overvaluation, this seems like the engine which can never be extinguished. Through thick and thin the Federal government and the state and local governments (via muni bonds) have been able to borrow and spend stupendous sums seemingly without consequence.

    The demise of this last great engine will surprise as many as the sinking of the Titanic did, but it is as inevitable as the sinking of the great ship. The pumps can only hold the water back for a while, but the Stimulus magic will expire sooner than anyone imagines.

    As the government scrambles to find buyers for endless trillions in new U.S. bonds (and trillions more in new corporate debt, new mortgages, new consumer debt, student loans, new muni debt, etc.) then interest rates will rise and the great engine of ever-greater debt will hiss and sigh as the water rises and then go silent and cold.’…

    Full article here:

    http://charleshughsmith.blogspot.com/2020/07/the-sinking-titanics-great-pumps.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+google%2FRzFQ+%28oftwominds%29

    The Zero Hedge link has a nice cartoon.

    https://www.zerohedge.com/markets/sinking-titanics-great-pumps-finally-fail

    1. I have read somewhere that if all the bulkheads in the Titanic had been left open then she would have kept level until swamped and that all her pumps throughout the hull would have come into play and delayed the sinking for several hours enabling the rescue of most of the victims of the sinking.
      Perhaps this could add to your analogy the concept that if the rescue money printing going on were spread throughout the economy; ie. QE for the people, the sinking of the world economy could be delayed long enough to work out and implement a more sustainable monetary system.
      The trouble with that is that those who are becoming ever richer in the status quo are in control , and they would be comparatively disadvantaged by sharing the stimulus packages , so it is going to be taken to the point of unworkability . But just what that is going to look like it is hard to be sure. I think there might be terrible misery for the vast proportion of humanity while those with ever increasing wealth and control remain unaffected , and the “economy” by the arbitrary measures it is assessed by stays buoyant . It might take the violent revolution that the Marxists believe necessary to right the situation for the masses.
      How do you see the breakdown evolving AFKTT ?
      D J S

      1. Remember how the Americans overlooked not-to -be-trusted warmonger Bill Clinton because the economy was supposedly booming. It was Clinton who promoted the overturning of regulations put in place at the time of the Great Depression to prevent financial shenanigans. So, under Bill, the shenanigans that have always been a component of finance went into ‘hyperdrive’, spurring the phony ‘derivatives’ market, collateralization and bundling -which led the MBS crisis that resulted in the 2008 meltdown- and hypothecation. All are fancy names for fraud. But since the vast majority of people are clueless, the scammers were able to get away with it for quite a long time.

        Some say that the root of the problem goes back to Tricky Dicky decoupling the US dollar from gold in 1971 to pay for the Vietnam War. But the real root of the problem is Fractional Reserve Banking and the charging of interest on money created out of thin air, on the assumption that there can be infinite growth [of resource extraction and generation of pollution] on a finite planet -the faux notion that every year the economy will be bigger than the previous year, forever.

        The Americans were able to circumvent the declining conventional oil extraction peak by promoting fracking, on the [false] assumption that junk bonds at close-to-zero interest could always be rolled over, and that at some stage the frackers would actually start to become profitable. Well, Saudi Arabia had other ideas, and fracking is in rapid retreat, like most other components of the American economy.

        Bearing in mind that the service sector (which includes the bloated and ineffective health system that delivers poor health outcomes at great expense to the purchaser) makes up 70% of the US economy, and bearing in mind that retail stores and shopping malls are closing at a record pace whilst the food processing sector is in dire straits because of Covid-19, I cannot see how the US can remain afloat for more t0han a few more months.

        As the saying goes, bullshit can get you to the top but it won’t keep you there. And most of what comes out of America has been bullshit.

        Sure, one American can outwit and outshoot a dozen or more well armed Vietnamese, Koreans, Russians, Chinese, Iranians, Iraqis etc. in the fantasy world of Hollywood movies.

        In the real world the average American is an overfed clown, to borrow from Kunstler.

          1. I’m not sure that was a serious question. Maybe just rhetorical. But if you are looking for an answer, here’s my opinion on the matter.

            Kiwisaver is a component of the international financial Ponzi scheme. And when the international financial Ponzi scheme collapses -as it most certainly will- funds in Kiwisaver will be found to have the same value as all other phony assets, i.e. zero.

            Just when and how the Kiwisaver funds will reach zero in purchasing power is open to debate. It could be via falling property prices, whereby an apartment in a major city become valueless because no one wants to live in a major city; it could be because large corporations go bankrupt (as is already happening) because they can no longer juggle the finances or take out loans or be bailed out by governments; it could be because so-called inflation (the continuous devaluation of money by central banks results in a loaf of bread costing $5, then $10, then $20…; it could be because there is panic in the markets and everyone tries to sell when no one wants to buy, resulting in shares reaching to their true value -close to nothing (bearing in mind the markets have been morphed into something akin to a casino, where everyone bluffs and bids higher in the hope that they can out-gamble the competitors.

            Most likely a combination of all of the above. And very likely we will see a major shift in confidence in the system by the end of this year. But maybe the spivs and money-lenders and professional liars can stretch the game out for another year or two.

          2. Thanks…it was a serious question….imo the only safe place to put money, if you have enough of it, is in land or a house( pay off the mortgage)…at least if their value falls you still have the comforts of a home and land which you can sort of subsist and grow turnips…or if you dont have much money then another option is KiwiBank ( with almost no interest)which should be govt guearanteed…(my KiwiSaver does not have much in it but I would prefer not to lose it)

            Maybe this Labour led government ( hopefully also the next one after the Election), needs to buy up land for collective food growing for those who can not afford it, to work it ….I do not want to see homeless people /swagger men desperate as in the Sugarbag years of the 1930s Depression

            https://www.artybees.co.nz/simpson-tony/sugarbag-years-oral-history-1930s-depression-new-zealand

        1. I have a book by Greenspan wherein he says his mistake was to recommend to Clinton (I think) that the head bankers knew as much about banking as anyone and the level of “reserve” under the fractional reserve system in operation could reasonably be left to them. He saw that he was wrong. The reason apart from greed that he was wrong that he does not say is not just greed , but it threw all the banks into competition with each other to reduce that reserve to meet their competitors or loose market share as they leapfrogged each other in reducing it to almost nothing.
          But the BOE has stated that they have not recognised or operated a fractional reserve for a long time, that deposits and loans are not connected at all. That is the same effect as a FRS with no imposed reserve.Otherwise though a sovereign banking system as Social Credit recommended way back in the 30’s and for which the BNZ was purchased by the then Labour government but hamstrung by the bankers in operation would be the ideal, I think that while the banks were under the govt through the control of the reserve bank under a properly run FR.
          The banks perform a legitimate service in managing storage and transfer of value to facilitate commerce, and in making the decisions on what enterprises are worthy of putting investment into , whoever is supplying the funds. And some remuneration is necessary by some route .
          Figuring out a completely different system for making these decisions and creating money, and managing the supply of it is not easy. A situation where some elected or non elected board decides would be fraught with opportunity for fraud and corruption . And the next step would be a completely managed economy from the top down which no population will ever vote for.
          Cheers D J S

        2. just to add to America’s largely self-induced woes, the forecast is for hot, very hot and sizzlingly hot across much of the US, not just for a few days but for several weeks.

          ‘Extreme “Heat Dome” To Fry US With Record Temperatures Up To 121F For Several Weeks’

          …’What this means is that over 80 percent of the U.S. population – encompassing 265 million people – can expect sweltering heat over the next week with highs exceeding 90. Another 45 million people will be facing highs in the triple digits.

          Additionally, we can expect a full season of lethal heat ranging from 90°F to 121°F, not to mention extreme tropical storms, wildfires, and extreme weather related to La Niña conditions, reports the Independent.

          On Friday, the National Weather Service issued excessive heat watch alerts for “dangerously hot conditions” and forecast that between Friday and Tuesday, over 75 record high temperatures would be reached or exceeded, with heat expected to increase in the following week.’…

          https://www.zerohedge.com/geopolitical/extreme-heat-dome-fry-us-record-temperatures-121f-several-weeks

  2. In 2017 Jacinda was new, she was a different beast than anyonehad dealt with previously and now we know, like know, know…, Jacinda is a Dragon. Know that you can not talk trash to Dragons. In 2020 in terms of support and momentum she is way way above her rookie season.

  3. I wish I could wrap our Queen up and catapult her into a better time, that is how much I love her, but she is in for bad times, just pray she always keeps her pulse on the people, it is what she is good at…

  4. No David Stone they won’t be needed (NZF) they only have themselves to blame, not because they put Labour in power but because they have been a handbrake to there coalition partners. It is now time to take the handbrake of and put ones foot on the accelerator.

    1. So without the hand brake Michelle , what do you see labour doing during their next term that they would not do with NZF interfering? What does putting thei foot on the accelerator actually mean to you?
      D J S

  5. Transformational change in AO/NZ

    – HTTP 404.

    Past:
    There was not transformational change with the existing party set-up.

    Present:
    There is no transformational change with the existing party set-up.

    Future:
    There will be no transformational change with the existing part set-up.

    This can only be revised by accident, or by civil society organizations through an alternative ecological-socialist platform.

    Under the present circumstances voting for the Greens remains the most reasonable option for the Left in AO/NZ.

    PS…..the HTTP 404, 404 Not Found, 404, Page Not Found, or Server Not Found error message is a Hypertext Transfer Protocol standard response code to indicate that the browser was able to communicate with a given server, but the server could not find what was requested.

    https://www.youtube.com/watch?v=n2oenzLuF80

  6. ‘Climate calamity’ is going to change the way we all vote now.

    As in the next five years we will reap what we sowed folks.

    We actually are already reached the 1.5 degree over the global average others say so this makes the case for catastrophe far worse than the forecasters said two days ago to the media!!!!

    The World Meteorological Organisation says there’s a growing chance that global temperatures will break the 1.5C threshold over the next five years, compared to pre-industrial levels.

    See full article (Below) released two days ago on the BBC news.

    https://www.bbc.com/news/science-environment-53342806

  7. Unfortunately The main stream media will decide the election..it is sickening to watch as they fall hook line and sinker for National commentators click bait. Watch Duncan Garners interview with Muller after the leaks (positivley kind and sympathetic) compared with Chris Hipkins this morning where he was like a rabid dog

  8. N.Z.First, seen in so our bye party electoral, structure, the structure has been the main mover in government construct, although how temperamental their swing can be to term lasting compromise, this term they have been stalwart although with some warts. It seems to some commentators that their man up north is their best chance as the elected winner, (eh), and a future leader of their party, what a night for Winston to surmise this may be their future another Maori male leader, when to the right sitting in the house of him are two, possible better co- leaders, of his beloved party, Ron and Tracy or Tracy and Ron, a joint leadership like the Greens.
    So Labours other possible and also scapegoat bed partner the Greens, why scapegoat, well like N.Z. First, compromise has to be had, and what a compromise for our present would be Mickey Savage Labour Socialist Government, or should that right be bourgeois.
    Possible the Labour, elete would rather not have a outright self governing election win, why their would be socialist agenda may lose their if self- governing term at the next election, for not delivering.

  9. Bomber, congratulations! Maybe your petition worked?

    Just found out we will have one less CCP spy in our parliament.

    Still gutted about Morricone though…

      1. typo…not the ONLY South Pacific country with a problem with Chinese spies

        (and other South Pacific countries have a big problem with bribery)

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