2019 predictions

[emordnilap]

Russia is now effectively out of US treasury holdings; China and Japan are dumping them at the current rate of around $100 billion per annum. Meanwhile, US debt continues to rise.

Where is this leading?

[raspberry-blower]

Russia is now effectively out of US treasury holdings; China and Japan are dumping them at the current rate of around $100 billion per annum. Meanwhile, US debt continues to rise.

Where is this leading?

Wolf Richter discussed that very topic here

These are the entities who were net buyers or net sellers:

Foreign holders (official and private-sector), net seller, shed $105 billion — to $6.2 trillion, or to 28.4% of total US debt.

Federal Reserve, net seller, shed $204 billion — to $2.25 trillion through November 30, or to 10.3% of the total US national debt.

US government entities (pension funds, Social Security, etc.), net buyers, increased holdings by $20 billion — to 5.87 trillion, or 26.9% of the total US national debt. This “debt held internally� is owed the beneficiaries of those funds.

And who holds the Rest? The only entities left:

American banks (very large holders), hedge funds, pension funds, mutual funds, and other institutions along with individual investors in their brokerage accounts or at their accounts with the US Treasury were huge net buyers, while nearly everyone else was selling, increasing their holdings by $1.36 trillion over the 12-month period. These American entities combined owned the remainder of the US gross national debt, $7.5 trillion, or 34.4% of the total!

As one of comments below mentioned, a Zero Hedge article saying that 63 out of 75 of US largest cities are technically insolvent this can only end badly

[Lord Beria3]

https://medium.com/insurge-intelligence ... 0aadff7786

US shale oil and gas production is forecast to peak in around a decade — or in as little as four years. It’s not just the US. Europe as a continent is already well into the post-peak phase, and Russian oil ministry officials privately anticipate an imminent peak within the next few years. As China, India and other Asian powers experience further demand growth, everyone will be looking increasingly for a viable energy supply, whether from the Middle East or Latin America.

Interesting article on how Venezuela is a classic case of how countries will implode in the twilight era of post-peak oil.

[kenneal - lagger]

Thanks for that LB. The article shows the many factors that are working against us. It doesn't say much about the increasing share of wealth that is being extracted under the auspices of IMF backed austerity by super rich, psychopathic Kleptomaniacs, although has more effect on this country and the West than in a country like Venezuela.

[emordnilap]

The article shows the many factors that are working against us.

Trump does not understand this. His handlers may but even then I wonder...

Anyways, in the short term, Trump is no help whatsoever to the Venezuelans.

[Lord Beria3]

Nobody understands that, apart from us! Energy is the blind spot of our industrial civilisation.

[kenneal - lagger]

Nobody understands that, apart from us! Energy is the blind spot of our industrial civilisation.

I think that most politicians know that energy is essential as is shown by their concern over energy security but they, and the economists who advise them, have no concept of the importance of the cost of that energy or, more importantly, the Energy Return On Energy Invested of that fuel.

The government support for drilling and fracking in the UK show the concerns over energy security.

[raspberry-blower]

I think that most politicians know that energy is essential as is shown by their concern over energy security but they, and the economists who advise them, have no concept of the importance of the cost of that energy or, more importantly, the Energy Return On Energy Invested of that fuel.

Did you see Tim Morgan's two-part 2019 forecast, Ken? He refers to Energy Cost of Energy rather than EROEI but is the same thing.

Some snippets from the first part:

The harsh reality is that, because prosperity has deteriorated right across the advanced economies of the West, we’re facing an upswell of popular resentment, at the same time as having to grapple with huge debt and monetary risk.

If you wanted to go anywhere encouraging, you wouldn’t start from here.

And..

This at least sets an agenda, whether for 2019 or beyond. The current economic paradigm is on borrowed time, whilst public support can be expected to swing behind parties promoting redistribution, economic nationalism and curtailment of migration. Politicians who insist on clinging on to ‘globalised liberalism’ are likely to sink with it. The tax base is shrinking, requiring new priorities in public expenditure.

If you had to tackle this at all, you wouldn’t choose to do it with the “everything bubble� likely to burst, bringing in its wake both debt defaults and currency crises. But this process looks inescapable. With its modest incremental rate rises, so derided by Wall Street and the White House, the Fed may be trying to manage a gradual deflation of bubbles. If so, its intentions are worthy, but its chances of success are poor.

On the second part - of particular interest to Ken:

Even if we confine ourselves to QE and borrowing, however, stimulus since 2008 can be put pretty conservatively at $140tn.

That’s roughly 140% of where world PPP GDP was back in 2008. You might think of it as the injection of 12-14% of GDP each year for a decade.

That’s an unprecedentedly gigantic exercise in stimulus.

And the result? In contrast to at least $140tn of stimulus, world GDP is perhaps $34tn higher now than it was ten years previously. Price and wage inflation is subdued, and the prices of sensitive commodities have sagged. The prices of assets such as stocks, bonds and property have indeed soared – but one or more crashes will take care of that.

By now – indeed, long before now – anyone in government ought to have been asking his or her expert advisers to explain what on earth is going on. Assuming that Keynes wasn’t mistaken (and simple mathematics proves that he wasn’t), the only frank answer those advisers can give is that they just don’t understand what’s been happening.

And..

Your second worry, perhaps even bigger than your list of risks, is that you don’t really understand any of this. Your economic advisers can’t explain why stimulus, though carried to (and far beyond) the point of danger, hasn’t worked as the textbooks (and all prior experience) say it should. If there’s anything worse than a string of serious problems and challenges, it’s a complete lack of understanding.

Without understanding, the policy cupboard is bare. You don’t know what to do next, because anything you do might have results that don’t match expectations, making matters worse rather than better.

It might be better to do nothing.

In short, you feel as though you’re making it up as you go along, in the virtual certainty that something horribly unpleasant is going to hit you, with little or no prior warning.

Welcome to “the juggernaut effect

Fire and Ice Part 1: Trauma for the Taxman

Fire and Ice Part 2: The Juggernaut Effect

[kenneal - lagger]

The problem with the QE post 2008 is that the money was injected into the money markets from where it has fueled bubbles in the stock and property markets. To anyone but an economist or politician it's bloody obvious really. Perhaps it is also obvious to the politician and economist but they were only interested in giving their mates in the city a pay rise to compensate them for the cockups that they made in precipitating the crash.

If a fraction of that money had been invested in social housing, a national insulation scheme and in renewable energy schemes we would be on our way to a much better place than we are now using far less imported energy, with a much lower cost housing market and more money circulating in the general economy.

Instead we have very high property prices which are diverting money into the financial economy via mortgage interest, high home rentals which take money out of people's pockets and put it into property owners pockets and thence into the money markets or back into property fueling the inflationary spiral, high property rentals which are helping to put retailers and industry out of business and again taking that money out of the general economy.

The government should have nationalised the retail banks that needed rescuing and left their gambling functions to go broke or be picked up by other gamblers in the city. Instead we taxpayers are now lumbered with retail banks being run by gamblers for their benefit and not for the benefit of the shareholders, which is us taxpayers if you hadn't noticed.

The only people to have benefited from QE are *ankers and billionaires and we taxpayers are paying through the nose for it.

[slackercruster]

Another major financial crash.

Several 'once-in-a-hundred years' record-breaking weather disasters.

Half the world's wealth owned by 5 people.

Well, the crash is still imminent, just a digit out. It’s overdue.

Plenty horrific weather-related events occurred.

And my last prediction is coming true:

In comparison to the previous year, when 43 people owned about the same as the poorer half of the world, in 2018 it took only 26 billionaires to match the wealth of 3.8 billion people.

And it’s working the opposite way too: the poorest half got poorer. What a fücked-up species we are.

Source.

It’ll be down to around 16 by the year end.

Well, if we were ants or bees we could be good communists. But humans can't do it. Greed always seems to bring the party down when it comes to humans.

[slackercruster]

From my American point of view I will predict that the UK ends up with a no-deal Brexit. Not because it is the best option but because the principals couldn't cobble together a majority. Not to worry though as the no-deal Brexit lets all the willing buyers and willing sellers come to agreeable terms at least as good as the EU rules. This will really P!$$ the EU off but they had it coming. Back at the USA I think the Dems rethink impeaching Trump with Pence in the wings opting for defeating both in 2020.

Yes, concur, but am no expert on it. Just seems like too little time. Maybe if England sucks up to the EU and pays a big fine, the EU will forgive all and take them back in.

[slackercruster]

......Any predictions on the Dems presidential candidate?

I saw something earlier today which said that Bernie Sanders is doing well in the running order.

I don't think so. He is old and white. Dems want young and of color or female or even a homosexual. Anything but old and white.

https://archive.org/search.php?query=do ... te%20teoli

[Vortex2]

The quiet but very significant onward much of AI will continue.

Maybe 2019 will be the year that we notice multiple overlapped domain specific AI solutions changing the world / our lives?

The IOT will also continue to expand quietly into our lives.

Voice activated services via the Echo and the like will continue to expand until they are ubiquitous.

Example: A year ago I had only just had heard of the A*mazon Echo. Today I now have four of them, with one adapted (by me) to work in my car as a hands free factotum. All my family, from young to old also have Echoes

Smartphone abilities & market penetration will also increase.
(Because I used to be a Smartphone designer, and overdosed on the things, I have only recently obtained a Smartphone - and I now can't function without it)

The net effect of all the above will matter more than Brexit, Trump etc.

Technophobes and holdouts may take the moral high ground ... but they won't have access to many services.

In five years time the world will be a different place , if technology isn't derailed.

By that time those who can't or won't play the technology game will essentially be outcasts, with no means to use, acquire or pay for services ranging from utilities, transport or healthcare.

[kenneal - lagger]

We have parking payment machines locally that will only take payment by smartphone; no cash. I though that legally if cash is offered in payment the seller has to take that as payment. Anyone know whether that is true before I park there and claim that the council refused my cash payment when they take me to court for non payment?

[kenneal - lagger]

..............Example: A year ago I had only just had heard of the A*mazon Echo. Today I now have four of them, with one adapted (by me) to work in my car as a hands free factotum. All my family, from young to old also have Echoes ....

I heard that that disgusting company collects data, or can collect data, from listening in on conversations in the house. GCHQ would find it useful in some cases just as your phone data can be collected for use by the intelligence agencies as well as advertisers.

I get enough adverts for places that I have already been to or for things that I have already bought as it is without having an audio spy in my house. I wouldn't trust one of those things farther than I could throw it.