Monday, 11 February 2019

Black Sabbath - Paranoid (Full Album)

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Saturday, 9 February 2019

Cortez the Killer - Podcast - Socialism the Road to Communism

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Ocean Shipping Rates Plunge: Just A Blip Or The End Of Globalization?

Authored by John Rubino via,
The Baltic Dry Index represents the cost of renting an ocean-going container ship to move goods from, say, Chinese factories to the Port of Los Angeles. The more stuff being made and sold, the higher the demand for such ships, and thus the higher the price to rent one. And vice versa.
This is definitely one of the vice versa times. After rising to robust levels in mid-2018 the Baltic Dry Index has since plunged by about two-thirds.

[ZH: we are well aware of the seasonality within the global shipping markets but even adjusted for that, this is the worst collapse in shipping rates since 2012 (which prompted Bernanke to unleash Operation Twist and QE3)...]

Here’s a brief article on the subject from today’s Wall Street Journal:

Free-Falling Freight Rates Spell Trouble For Shipping

Dry bulk shipowners face a long period of uncertainty as spot prices collapse and China shipments shrink.
A slowing global economy, coupled with weak demand from China over the Lunar New Year and from Brazil after Vale SA’s iron ore disaster, is dragging shipping rates to near record lows, and few in the industry expect things to improve any time soon.
Brokers in Singapore and London said capesize vessels, the largest ships that move bulk commodities like iron ore, coal and aluminum, were chartered in the spot market for as low as $8,200 a day on Thursday, a $500 decline from Wednesday. Break-even costs for carriers can be as high as $15,000 a day, and daily rates in the capesize market hovered above $20,000 last year.
“Everyone is looking for a catalyst to push the market up, but it’s not there,” said a Singapore broker.
The Baltic Dry Index, which tracks the cost of moving bulk commodities and is considered a leading indicator of global trade, is down more than 50% since the start of the year.
The long Lunar New Year holiday in early February is one of the slowest periods in commodities trading as factories in China, the world’s biggest importer of raw materials, shut down. But ship executives say the bulk seaborne freight business is more broadly suffering from the lowest demand in two years, while China’s trade tussle with the U.S. is making the market more volatile.
“A long slowdown in the Chinese economy will hurt commodity demand and send shipping rates sharply lower,” Bloomberg Intelligence industry analyst Rahul Kapoor said.
The Vale iron ore disaster in Brazil in January, in which a mining dam burst, triggering a flood that killed at least 150 people and left close to 200 more missing and feared dead, created a new source of uncertainty.
Vale has suspended production at a number of sites, removing 40 million tons of annual output, or 11% of the giant miner’s total production in 2017.
The reduced sailings could affect dry bulk owners, including China Cosco Bulk Shipping Co. Ltd, Norway’s Golden Ocean Group and Greece’s Diana Shipping Inc.
“The Vale void will be largely covered by iron ore shipments out of Australia,” the Singapore broker said, “but Brazil generally commands higher freight rates so there is no good news.”
China has resumed importing soybeans from the U.S., a sign of progress in talks between Washington and Beijing. But the 540,000 metric tons of shipments from the U.S. in January were less than half the monthly average last year.
“If you are a bulk owner, you can no longer depend solely on China to make money, and that’s a seismic shift,” said a London broker.
So there are some specific, possibly temporary things going on here. The US/China trade war is slowing shipments between those countries while a Brazilian iron ore mine disaster is cutting shipments of that commodity for the time being.
Assuming the trade war ends and Vale’s Brazilian mine recovers, it’s reasonable to see this as the bottom for shipping rates – a forecast that shippers who need to double current prices just to break even fervently hope is true.
But there are also broader forces at work. The trade war isn’t just a piece of political theater for the US. We really do need factories to come back home if we want to avoid a populist and/or socialist revolution. And next generation manufacturing tech like 3D printers will in any event move production closer to end users, lowering the need for at least some of today’s shipping.
It’s possible, in other words, that the whole free trade/mobile capital/cheap labor/long supply chain Age of Globalization, with its assumption of unlimited rich-country demand and plentiful cheap energy for transport was just an artifact of a very specific time. It was so cheap and easy to move things around that building toys or TVs wherever labor was cheapest and shipping them to wherever the money resided made financial sense.
That might not be a permanent state of affairs, and if it’s not, those giant ships won’t be the only stranded capital out there.

10 NEW Signs Of China Imminent Economic Collapse 2019 China's Yuan CRASH! = War

Forget the Trade War. China Is Already in Crisis - China a Shooting Star

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Friday, 8 February 2019

The U.S. Faces A Catastrophic Food Supply Crisis In America As Farmers Struggle - Control the Food Control the People

Authored by Mac Slavo via,
American farmers are battling several issues when it comes to producing our food.  Regulated low prices, tariffs, and the inability to export have all cut into the salaries of farmers.  They are officially in crisis mode, just like the United States’ food supply.

“The farm economy’s in pretty tough shape,” said John Newton, chief economist at the American Farm Bureau Federation.
“When you look out on the horizon of things to come, you start to see some cracks.”
Average farm income has fallen to near 15-year lows under president Donald Trump’s policies, and in some areas of the country, farm bankruptcies are soaring.  And with slightly higher interest rates, many don’t see borrowing more money as an option.  “A lot of farmers are going to give the president the benefit of the doubt, and have to date. But the longer the trade war goes on, the more that dynamic changes,” said Brian Kuehl, executive director of Farmers for Free Trade, according to Politico.
With no end to the disastrous trade war in sight, many farmers have traveled to Washington to share their plights with the president himself hoping that he’ll end the trade war that’s exacerbating an already precarious food crisis.  Farmers make up a fairly large chunk of president Trump’s base, and an unwillingness to put food production in the United States first could be detrimental for Trump reelection chances in 2020. It could also be the beginning of a catastrophic food shortage.

The Federal Reserve Bank of Minneapolis warned back in November of rising Chapter 12 bankruptcies used by family farmers to restructure massive amounts of debt. The Fed said that the strain of low commodity prices “is starting to show up not just in bottom-line profitability, but in simple viability.” The increase in bankruptcies was driven by woes in Wisconsin’s dairy sector, which shrunk by about 1,200 operations, or 13 percent, from 2016 to October 2018.
“You’ve had farms that have gone out of business, that have gone bankrupt because of this trade war,” said Kuehl of Farmers for Free Trade.
“There’s a lot of farmers going through tough conversations right now with their lenders.”
And so far, the government’s solution to the problem they created is to give more welfare to farmers, placing the burden on the backs of taxpayers.
As the government continues to pass the burden onto others while destroying the food industry, things could very well reach apocalyptic levels.  Nothing will see this country spiral into complete disarray like a lack of food. Alarmingly, scientists have already said that the global food supply system is broken.

To put it simply, government interference in the agriculture industry is responsible for the food crisis we all are about to face.
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The Big Government Show Must Go On

Authored by MN Gordon via,
Another week.  Another week of distractions.  On Tuesday, for instance, was the great State of the Union Address.  To this, many opinions and observations have been offered.  Here, we’ll contribute several of our own…
President Trump is a showman of stout ego.  How he must have relished the run-up to Tuesday’s primetime address with impatient anticipation.  What a disappointment it must have been to look out from the podium of the House of Representatives at the 116th Congress and see the greatest assemblage of political crooks, lowlifes, and losers in living memory staring back at him.
But the show must go on…disappointments and all.  For life’s full of disappointments.  The many botched opportunities.  The countless hours wasted on bids for ridiculous jobs.  Super Bowl Sunday.  Duds, dissatisfactions, and disappointments come a dime a dozen.
Words are also the source of many disappointments.  Words that shouldn’t have been said.  Words that should have been said.
So, too, words, and the absence of words, can be distractions.  And within a sequence of words there are sometimes obvious omissions.
For example, nowhere within the 82 minute State of the Union Address was there a single word of the country’s burgeoning $1 trillion budget deficit.  Nowhere was there a word of the great $22 trillion national debt default that’s bearing down upon us like a savage hurricane along the Gulf Coast.  Nowhere was there mention of the $122 trillion in unfunded liabilities, which includes the sacred cows of social security and Medicare.
What Gives?

No One Cares

The real State of the Union – the one President Trump omitted from his address – is a state of impending doom brought on by 50 years of relentless debt accumulation.  Day after day, week after week, month after month, year after year, the federal government has spent more than it takes in.  Now the debt has piled up past the point of no return; there’s no longer an expedient way to reverse course.
This is the real State of the Union.  This is the story that’s being entirely ignored by the President and Congress.  This is the story of America’s decline.  This is a story that’s too grim to mention.  And this obvious omission from Tuesday’s address is what makes the affair nothing more than a great big distraction.
So where do things stand?  Several of the ghastly numbers were presented above.  The present progression is presented below…
To begin, the temporary suspension of the debt limit will be reinstated on March 2.  At the moment, no one cares.  Come March 2nd, almost no one will care – save Treasury Secretary Steven Mnuchin.  That’s when he’ll have to execute “extraordinary measures” to keep the lights on in Washington.

Extraordinary measures, in Treasury Secretary parlance, involves suspending contributions to federal employee retirement and disability funds.  From what we gather, these shenanigans will likely stretch out the Treasury’s remaining funds until mid-to-late summer.
After that, the federal government will no longer be able to pay its bills – including interest payments on Treasury notes.  The full faith and credit of the U.S. government will fall into arrears.  In other words, the U.S. government will start defaulting on its debt obligations.
Of course, this would never happen in the land of the free, right?

The Big Government Show Must Go On

Mnuchin, if you didn’t know, is a bigtime movie buff.  He’s financed and produced countless movies through his various entertainment ventures.  American Sniper, Mad Max, Black Mass, and various superhero movies are just a few of the flicks he’s had a hand in.
Mnuchin, like the President, also knows a thing or two about bankruptcy.  Several years ago he was co-chairman of the movie company Relativity Media.  He exited his position stage left seven months before the company’s July 30, 2015 bankruptcy filing.
Apparently, Mnuchin and other investors lost $80 million.  But in the process, the company’s slate was wiped clean and free of obligations.  Several years later the company again filed for bankruptcy.  And today, the studio’s once again open for business.
By our estimation, the odds that the U.S. Treasury outright defaults on its debt ranges from slim to none.  An 11th hour deal to raise the debt ceiling will inevitably be made.  But this won’t solve the debt problem.  This won’t wipe the slate clean.
The populace still favors an expanding federal government that’s funded solely by greater and greater issuances of credit.  The populace still believes the promise that they can get something for nothing.  That, somehow, the rich can bail them out.
Yet this isn’t mathematically possible.  Not even the stinking rich have anywhere close to the $122 trillion needed to keep the show going.  But the big government show must go on.  Thus, you can already sense what’s coming…
When financial markets crack, and the economy collapses, and the populace pleads for someone to “do something,” the President and Congress will oblige with imprudent confidence.  QE for the people will be granted with money from nothing.  Debts will be paid in full.  The currency will go up in smoke...

After that, things will go completely mad.
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