COMMENTARY & OPINION - CLXXXVII

From the desk of

Bill Ramey

1/11/16

COMMENTARY & OPINION

CLXXXVII

Greetings friends around the world:

We know the world situation is bad and getting worse --- this edition begins to show how much worse. 

“Nothing Is Moving,” Baltic Dry Crashes As Insiders Warn “Commerce Has Come To A Halt”

 

(Zero Hedge)  The continued collapse of The Baltic Dry Index remains ignored by most – besides we still have Netflix, right? But, as Dollar Vigilante’s Jeff Berwick details, it appears the worldwide ‘real’ economy has ground to a halt!!

Last week, I received news from a contact who is friends with one of the biggest billionaire shipping families in the world.  He told me they had no ships at sea right now, because operating them meant running at a loss.

This weekend, reports are circulating saying much the same thing: The North Atlantic has little or no cargo ships traveling in its waters. Instead, they are anchored. Unmoving. Empty.

You can see one such report here.  According to it,

Commerce between Europe and North America has literally come to a halt. For the first time in known history, not one cargo ship is in-transit in the North Atlantic between Europe and North America. All of them (hundreds) are either anchored offshore or in-port. NOTHING is moving.

This has never happened before. It is a horrific economic sign; proof that commerce is literally stopped.

We checked VesselFinder.com and it appears to show no ships in transit anywhere in the world.  We aren’t experts on shipping, however, so if you have a better site or source to track this apparent phenomenon, please let us know.

We also checked MarineTraffic.com, and it seemed to show the same thing.  Not a ship in transit…

If true, this would be catastrophic for world trade. Even if it’s not true, shipping is still nearly dead in the water according to other indices.  The Baltic Dry Index, an assessment of the price of moving major raw materials by sea, was already at record all-time lows a month ago… and in the last month it has dropped even more, especially in the last week. Today BDIY hit 415…

Factories aren’t buying and retailers aren’t stocking.  The ratio of inventory to sales in the US is an indicator of this. The last time that ratio was this high was during the “great recession” in 2008.

Hey, Ms. Yellen, what recovery? The economy is taking on water at a rapid rate.

The storm has been building for some time, actually. Not so long ago, there was a spate of reports that the world’s automobile manufacturers were in trouble because cars were not selling and shipments were backing up around the world.

ZeroHedge reported on it this way:

In the past several years, one of the topics covered in detail on these pages has been the surge in such gimmicks designed to disguise lack of demand and end customer sales, used extensively by US automotive manufacturers, better known as “channel stuffing”, of which General Motors is particularly guilty and whose inventory at dealer lots just hit a new record high.

Here is a photo of unsold cars in the United Kingdom from that article.

The world’s economy seems in serious trouble. You can’t print your way to prosperity. All you are doing is hollowing out your economy. Draining it. And sooner or later it’s empty and you have to start over after a good deal of crisis and chaos.

It’s no coincidence that China is struggling desperately to contain a stock implosion.  Reportedly, banks have been told they are forbidden to buy US dollars and numerous Chinese billionaires have gone missing.  And the markets have just opened on Monday and are again deeply in the red.

Here at The Dollar Vigilante we’ve specialized in explaining the reality of the global faux-economy and why it’s important that you not believe mainstream media lies.

In the meantime, keep your eye on this shipping story!  If it is true and worldwide shipping is disastrously foundering, it’ll only be a matter of days before grocery store shelves will reflect that with increasingly bare shelves.

Are people upset now? Just wait. Interruptions in goods and services, most critically food, almost happened in 2008 during the Great Financial Crisis.  For three days worldwide shipping was stranded due to shipping companies not knowing whether or not the receiver’s bank credit was good.

That crisis was staved off due to a massive amount of money printing.  It was a temporary stay of execution, like bailing out the Titanic with coffee cups, however, and one that may reach much larger proportions in 2016.

Sailors watch the weather to see if it is safe to set sail.  Investors should be watching the economic climate with the same intensity.

We are already sailing through very stormy waters.

1/11/16

Federal Reserve’s “net worth” collapses 33% in two weeks

(Simon Black)  In case it weren’t completely obvious how completely screwed up the financial system is, please allow me to introduce Exhibit A: the Federal Reserve’s own balance sheet.

First we need a quick accounting background. And, stay with me, because this is important.

Think about your own finances. You, me, everyone… we all have assets and liabilities.

Your assets might be things like cash, your house, car, baseball card collection, etc.

And your liabilities are loans, credit card debt, etc.

The difference between the two can be thought of as your ‘net worth’. And hopefully it’s positive, i.e. your assets exceed your liabilities.

In accounting, this concept of net worth is known as ‘equity’. A company like Apple that has a lot of assets but not a lot of debt has substantial equity.

(As an investor, I typically look for opportunities where I can buy a great business or its shares for less than its equity. But we’ll save that for another time.)

Banks, too, have assets and liabilities.

But while the balance of your savings account may be an asset for you, or the mortgage balance you owe to the bank is your liability, for the bank it’s actually reversed.

Your savings account balance is actually money that they OWE you.

So while your savings is an asset for you, for the bank it’s a liability.

Similarly, your loan balance might be your liability.

But for banks, the loans they make to customers are actually assets because they’re on the receiving end of the loan payments.

For a bank, net worth (known as a bank’s ‘capital’) is a massively important indication of its financial health.

Think about it– if a bank has a negative net worth, this means that it doesn’t have enough assets to repay its customer deposits.

This is how banking crises start. It’s precisely why Lehman Brothers (and a whole lot of other banks) went bust in 2008/2009. The banks’ liabilities exceeded their assets.

Conservative banks hold vast amounts of capital, i.e. have substantial net worth where the value of their assets drastically exceeds liabilities and customer deposits.

One way of looking at this is by measuring a bank’s capital as a percentage of its total assets. (Conservative banks have a high percentage.)

Let’s say a bank has $1000 in assets like cash and loans, and $200 in liabilities (customer deposits).

This means that the bank has $800 in capital, which constitutes 80% of its total assets.

In other words, the value of the bank’s assets can fall by 80%, and the bank would still be able to repay its depositors.

This is a huge margin of safety that is unfortunately almost unheard of in banking.

Right before the crisis, in fact, Lehman Brother’s capital was just 3% of its total assets.

And that leads me to central banks.

Just like regular banks and businesses, central banks also have assets and liabilities.

In the US, the Federal Reserve’s assets total $4.486 trillion, including more than $2 TRILLION in US government debt.

The Fed also has total capital (i.e. net worth) of $39.5 billion.

That sounds like a lot. Until you realize that it constitutes just 0.88% of its total assets. Not even 1%!

This is a tiny, almost nonexistent level of capital at the Federal Reserve.

Put another way, the issuer of the United States dollar, the most widely used currency on the planet, and the central bank of the largest economy in the world, has almost no margin of safety.

This puts the entire global financial system at a tremendous level of risk.

Central banks can and do go bankrupt. It happened most notably in Iceland back in 2008, causing an epic currency crisis in that country.

So running the Fed’s balance sheet down to the nub like this is not exactly a consequence-free course of action.

But what’s really astonishing about all of this is how quickly the Fed’s balance sheet deteriorated. And why.

Just two weeks ago, the Fed’s total capital was nearly $59 billion. And even that wasn’t very much given the size of its balance sheet.

Today it’s $39.5. This is an incredible 33% drop in just two weeks!

Imagine your net worth collapsing by 33% in two weeks; it would probably be a huge personal crisis. Yet the Fed seems completely cool about it.

I did some digging and found out why this happened.

It turns out that Congress and the President passed a law last month called the Fixing America’s Surface Transportation (FAST) Act.

We’ve talked about this one before– the FAST Act is supposed to provide funding for America’s highway system.

But one of the provisions is that a US citizen can have his passport revoked if the government believes in its sole discretion that he owes too much tax. Crazy.

And, buried deep within the nearly 500 pages of legislation is a neat little section demanding that Federal Reserve bank surpluses above a certain amount must be turned over to the United States Department of Treasury.

In other words, the US government is so broke that they’re now confiscating assets from the Fed, putting the entire global financial system at even more risk.

It’s genius!

You just can’t make this stuff up. It’s so absurd it would be comical if it weren’t true.

So, yes, it should be completely obvious by now that there is a tremendous amount of risk in the system.

Governments are completely bankrupt. And even central banks now are being pushed into insolvency by the bankrupt governments they support.

This is not a story that has a happy ending. And whether the consequences arise today, tomorrow, or five years from now is irrelevant.

This is a major risk. And for any thinking, rational person paying attention, it’s imperative to have a Plan B.

22,000 Nurses Refuse *Mandatory* Vaccinations

 

Fighting for the right to choose

 

by Christina Sarich

Posted on January 9, 2016

If you are a nurse in the US and refuse the flu vaccine (one the CDC has even admitted doesn’t always work, largely due to fast mutations and too slow of production) then you have to wear a face mask while on duty. Despite the fact that multiple studies have also shown that flu vaccinations are ineffective and do not offer any extra protection for hospital patients, hospitals are forcing the issue on some of their most prized employees.

Some nurses are choosing to lose their jobs instead of being forced into receiving a vaccine. Others are fighting back by suing the hospital, state, and federal governments for $100,000,000 for trying to take away their constitutional rights.

Dr. Karen Sullivan Sibert, herself a pro-vaccine doctor, wrote an opinion piece explaining how requiring nurses to wear masks for refusing the flu vaccination violates HIPAA law for patient privacy. More importantly, it forces our front lines in the healthcare industry to take a concoction with numerous questionable ingredients, including known neurotoxins like aluminum, foreign proteins derived from GM ingredients, and more.

There are in fact, more than 22,000 nurses, part of Nurses against Mandatory Vaccines (NAMV), who are refusing mandatory vaccines. NAMV was founded when mandatory vaccines were introduced in the workplace, and though it is not pro-vaccine OR anti-vaccine, it is certainly pro-CHOICE. NAMV members believe that all people should have the right to choose and refuse medical treatment, including nurses and healthcare workers.

Read: 21 Natural Alternatives to the Flu Shot

Why the big push for flu vaccines, anyhow? Publicly available information now shows that hospital systems are REQUIRED to have a 90% or higher flu shot reception rate among their staff, or they lose up to 2% of their funding of Medicare/Medicaid. Conflict of interest?

While the government itself does not require mandatory vaccination policies, many if not all are taking an “all or nothing” stance against their workers. Healthcare workers are now facing being fired if they refuse a flu vaccine. Not only is this a human rights violation, it is also an EEOC violation.

Furthermore, the response to skewed figures which show that about 30,000 people die from the flu every year are used to muddy the waters. This is only an estimation, with pneumonia and other diseases lumped in together with the flu – there is no vaccine for pneumonia, and most flu strains change before a new vaccine can be made to effectively treat them anyhow. What’s more, the most vulnerable victims are infants and the elderly.

Many more people die each year from medical errors, heart disease, diabetes, and other health complications.

NAMV argues that, though it has been suggested that mandatory flu vaccines are for “patient safety,” mandatory flu vaccine policies are to provide more funding and money for the vaccine companies who produce these drugs. Flu vaccines are argued to be just another money train for Big Pharma.

It is refreshing to see that nurses and other healthcare workers are standing up against forced medical procedures.

DONALD TRUMP CALLS THE CLINTONS LIARS AND ALL THE LIARS IN THE NATION CRAWL OUT OF THE HOLES THEY HAVE DUG FOR THEMSELVES TO RALLY TO THE CLINTONS' DEFENSE.  DO THEY REFUTE TRUMP'S CLAIM?  NO!  THERE IS NO REFUTING THE CLAIM.  BUT THEY COME UP WITH CUTESY SLOGANS LIKE "DON'T BE A CHUMP, DUMP THE TRUMP" IN HOPES THEIR ALLIES IN THE MEDIA CAN USE ONE OF THESE AND PARLAY IT INTO A CLINTON WIN

Donald Trump has put America's hypocrisy "...in your face" and we don't like it.  None of us are eager to accept the facts that our oval office occupant is a traitor, our congress is rotten to the core and our nation is a tissue of lies --- but what if it's true?

I recently published an article showing the deceptions in our courts right down to the local level.  It showed, quite succinctly, how our courts are not about justice but rather "judicial piracy".  They are corrupt from the supreme court right on down to the local level.  They still allude to the Constitution when if fits the spin they want to put on something but they know (and the public is becoming increasingly aware), that we haven't lived under the protection of the Constitution in my lifetime of 80 years.  It was set aside in the early years of the FDR administration when America declared bankruptcy to the world bank.  Our courts have become merely a contrived method of robbing the public.  This, also, is something we don't want to hear.  If we refuse to believe it, will it eventually "work itself out"?  Or will it proceed, as other empires that have rotted on the vine, to the point of self destruction?

Our nation/empire will not self destruct.  The beginnings of our destruction have already begun and definitely are the result of our own ignorance and idolatry but the final blow will be administered by the Creator and we can see this in Isaiah 13.  Yes, that Babylon that is to be destroyed totally is America. 

And when you look at the total corruption in America, you can begin to see there is no other way.  We have progressed far beyond the bounds of human decency.  We (our supreme court) have declared abortion to be legal.  And it is!  Hopefully, we know the distinction between legal and lawful.  Lawful means approved by the Creator.  Legal means approved by lawyers.  The next generation will not be plagued by lawyers. 

The world is at a crossroads --- we haven't been here before.  The Pacific has not been poisoned before to the point of not supporting marine life.  The Atlantic has never been abandoned for purposes of shipping.  The world has not possessed in recorded history, the means to destroy life on earth 50 times over.  It would truly seem that we are in the days alluded to by Christ in Matthew 24, Mark 13 and Luke 21.   Are we living in those days?

This world of Satan we live in is simply not sustainable.  If we have "...eyes to see and ears to hear" and the capacity to think, this should become obvious.  We have reached the time spoken of by the prophets when the world stands poised on the brink of self destruction by Satan's minions unless there is intervention from a power that is greater than his.  We are indeed living in those days. 

We live in the days when the 5th seal of Revelation 6 has been opened as evidenced by the work of ISIS.  We live in the time when the alliances are already formed up for the destruction of the end time Babylon as evidenced by Jeremiah 50-51.  We live in the time when the end time Babylon has already been judged and sentenced in the court of heaven --- (see Habakkuk).  We live in the time when the antichrist myth is being expounded from all of Satan's pulpits.  We live in the time when WW III is about to explode in all it's fury and it will be over before most Americans realize we are at war. 

It appears to me that the opening shot of WW III will be 3 U.S. Carriers being sunk within minutes of each other.  The outcome of the war will be decided "...in one hour".  America will be destroyed and 200 million will die in one month's time.  The surviving 100 million will be evacuated and sold worldwide as slaves.  This is more that we don't want to hear.  Can we handle it?  Have we received "... a love of truth"?   Are we capable of thinking for ourselves?  Are we ready for the jurisdictional change coming to planet earth?  (See Daniel 7:13-14).