good evening c2,
(1) am on sunday morning. outside is steaming up per usual hong kong summer, lovely 90+ % humidity, etc etc, all i like
(1-i) this day's program is me working at home. been up since 4:00am and desk, after falling asleep at 8:30pm whilst watching halo cartoon w/ the jack, he who likes anything to do with space and bang bang shoot-them-up - am forbidden to get any computer games platform ;0/
(1-ii) eventually deliver the coconut to her ballet lesson w/ her teacher, an ex-ballerina of joffrey ballet
(1-iii) lunch w/ the family somewhere, and then the delicious part, read nero wolfe and nap
(1-iv) ruminate about the state of the world, macro, and deliberate on how best to get from here to there at the micro level, or just goof off w/ the jack on some lego project before the rest of the week impacts
(1-v) take the extended family to dinner
(2) at the moment am in the camp that says something-is-wrong as far as the macro / markets are concerned. am interested in a semi academic way as whatever i wish to exchange for cash cannot be readily done, and whatever i wish to exchange cash for is priced wrong. nothing to do except to watch & brief, much as perhaps a hunter would stalk something that moves, and am not in any particular hurry
(3) the latest armstrong blurb notes
armstrongeconomics.com
Illinois In Deep Financial Trouble
Illinois Comptroller Susana Mendoza was ordered to make a “substantial” dent in a $2 billion backlog of bills owed to Medicaid providers. The courts ruled that according to the State Constitution, it cannot reduce the pension payments to state employees. What is happening in Illinois is indicative of how governments are imploding and why I am warning get out of all State and Muni-debt before it is too late. Since State and local governments cannot “print” (create) money, they are forced to borrow and raise taxes. Consequently, they have hit the ceiling in tax resistance. What is happening is people are gradually migrating because there is absolutely no hope for states like Illinois. The only way out will have to be bankruptcy and a default on all the pension promises.
A federal judge has now intervened ordering the Comptroller to now prioritize who it pays. This is turning into the clash of titans – the epic battle between medical expenses that constantly rise regardless of the business cycle and state employees demanding pensions. Caught in the middle are the average middle class American who is being exploited from both sides. The judge now ordered the state to pay up towards Medicaid to keep doctors and hospitals from cutting off care for the low-income families that rely on the program.
I have often pointed out the fate of the city of Mainz. They had their technological boom with the invention of the printing press there. The politicians couldn’t wait to spend tax money assuming the business cycle would never end. So they spend the money before the taxes were due and borrowed against future tax revenues. The debt quickly became a Ponzi scheme issuing new debt to pay off the old as we are doing today. The interest kept rising so they just raised taxes. The rich began to leave and the city was quickly left with the people who didn’t really pay taxes. The bubble burst when they could not sell the next new issue of debt to pay off the last one. The city defaulted. The Pope excommunicated the politicians. And eventually the city was simply sacked and burned to the ground.
Politicians are the scourge of human society. They are the great destroyers of civilization and the instruments of war. People champion gold standards as if this would solve anything. The common fault is not what we call money, it is always, and without exception, those who we put in charge of it.
Meanwhile, Moody’s and S&P have both downgraded the general obligation debt of the state of Illinois as of June 1, on a combination of a state government budget impasse and a seemingly unstoppable unfunded pension obligation that has now ballooned into at least a $130 billion shortfall. You better get out of the State before it is too late. Property values will decline further because of the tax burden.
Welcome to the Sovereign Debt Crisis. This one is going to be a-real–doozy.
(4) and so we watch & brief on this scenario
http://www.siliconinvestor.com/readmsg.aspx?msgid=31132995
To: dalroi who wrote (134038)6/3/2017 6:52:32 PMFrom: TobagoJack2 Recommendations of 134136
hello dalroi,
(1) like the choice of careful words <<... when and if ...>>
(2) i had decreased my attention to the market since 2012 due to bandwidth constraints.
my recent attendance in the armstrong conference in preparation for anticipated re-engagement w/ the world of paper and our dialogue during your visit to hk on what could be and what we must deliberate and might decide to do, i took reading of my allocation gauge:
22% cash (almost all of it in HKD, that which is close to home)
15.5% physical & paper metals (~75/25 @ current spot)
48.5% r.e. (valued at mix of historical and recent trade benchmarks depending intentions)
14% direct investment (valued @ significantly below cost given illiquidity and any number of risks,
but cannot psychologically write to zero)
realize that at the sorry end perhaps all except the metals in hand must be written down to zero, after which 'they' would make metals ownership illegal and shutdown all exchanges.
given that i had devoted much of my bandwidth since 2012 to the last item, direct investment where i try to do some good, the rest of the allocations were more rather than less on auto-pilot. am looking at the cards i am thus dealt through my own lack of attention, and pondering.
(3) the armstrong script plays true to me, however / and / but prolonged officialdom intervention / manipulation / obfuscation would just make the armstrong scenario play out with greater albeit delayed kick, below are some elements of the arena in which we find ourselves, ready or not
(3-i) increasing loss of confidence in governments
(3-ii) increased revenue grab by same governments, via taxation, printing, pilfering and outright confiscation
(3-iii) w/ intervention-generated near-zero / below-zero interest rates, bonds are priced at mathematical near-pinnacle
(3-iv) the largest markets are bond and currency markets, way larger than the tradable real estate market (especially w/i fiscally positive domains under rule-of-true-law protocol populated by folks w/ strong personal balance sheet) and stock market of necessary-liquidity / needed-depth
(3-v) continued essentially-free flow of capital is an assumption we cannot afford to hold, especially as CRS (Common Reporting Standard) are being implemented and so few are aware or even care that everything financial and much real estate shall fall under its tyranny
(3-vi) continued free-enough travel is another assumption we may have to give up
(3-v) the shut-down of some exchanges be possibility we have to take account
(3-vi) cashless would mean something possibly awful, and certainly nothing brilliant
(3-vii) the at-first-gradual fund flows from public asset (sovereign bond and dragging along corp bonds) allocation to private asset (r.e. / stocks), and from weaker towards stronger currencies dictates a ramping of stocks w/i USD / USD-pegged domains, and real estate of places where folks feel comfortable that it would hold some smattering of value
(3-viii) in the midst of all the movements, weirder and stranger-still machinations of leverage (i.e. certain ETFs) and fascinating objects of speculation (i.e. crypto tokens, weed farming, etc) would gain popularity until one fateful day triggered by either government intervention, or just a very large case of fraud
(3-ix) penultimate episode, ramp of stocks and USD, and collapse of EU and emerging markets, possibly cratering of gold (to 600)
(3-x) ultimate episode of the playbook, absolute loss of confidence in public asset and easy-to-sieze assets, and the rise of the eternal crypto currency we call gold
(3-xi) the playbook is not promising until change of global leadership, and subsequent rise from the ashes of collapse here there everywhere
(3-xii) the next play would mirror much of this play, but starting at zero-reset beginning
(4) computer voice-over:
players, the market game is rigged to f*ck folks up in the worst ways, where one is not allowed to know the rules, except that it would be continuously amended, always at a time inconvenient and in a manner against most of the remaining players, including but not limited to sudden subtraction or unexpected division of ammo supply, as most must lose, many shall not be permitted to keep gains, all must pay, and then the winners also get to die. you are not allowed to quit, and there is no neutral position / null stance. enjoy.
following the guy w/ the map likely will be fatal. conviction would definitely be fatal.
ready or not, on 3, 2, play
(5) 2018 - 2026, TeoTwawKi, and 2032 Darkest Interregnum, the later the worse, and the less convenient
(6) with family in toll, elders and young ones, we in truth are all metaphysical refugees, except most do not realise the truth, and do not play accordingly
cheers, tj
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