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Saturday, November 4, 2017

PROPHECY CHURCH THIS WEEK WHAT TRUMP CAN DO TO SUPERCHARGE THE US ECONOMY RIGHT NOW BY USING US TREASURIES SAUDIS HAVE BEEN HOLDING TO GIVE PEOPLE ON MAIN STREET SOME CASH!



Trump can supercharge the economy and destroy deflation, AT LEAST TEMPORARILY.   MODERATE INFLATION CAN BRING AN ECONOMIC BOOM BEFORE BUST= THE 7 GOOD YEARS BEFORE THE 7 BAD YEARS (Genesis 41).  The Saudis hold over $500 Billion in US Treasuries.  Businesses and organizations on Main Street can use $500 Billion.  That would be just a jump start, because that's how broke many of the businesses and franchisees are in America.  $2 Trillion of the $10 Trillion in US Treasuries China holds on top of that $500 Billion the Saudis hold would heat the economy up.   




What's wrong with deflation? 

A. Problems of Deflation

  1. Discourages consumer spending. When there are falling prices, this often encourages people to delay purchases because they will be cheaper in the future. In particular, it can discourage consumers from buying luxury goods / non-essential items, e.g. flatscreen TV) because you could save money by waiting for it to be cheaper. Therefore, periods of deflation often lead to lower consumer spending and lower economic growth; (this, in turn, creates more deflationary pressure in the economy. Certainly, this fall in consumer spending was a feature of the Japanese experience of deflation (Japanese financial crisis).
  2. Increase real value of debt. Deflation increases the real value of money and the real value of debt. Deflation makes it more difficult for debtors to pay off their debts. Therefore, consumers and firms have to spend a bigger percentage of disposable income on meeting debt repayments. (in a period of deflation, firms will also be getting lower revenue, and consumers will likely to get lower wages). Therefore, this leaves less money for spending and investment. This is particularly a problem in a balance sheet recession where firms and consumers are trying to reduce their exposure to debt. Europe has a big burden of government debt; deflation will make it more difficult to reduce debt to GDP ratios.
  3. Increased real interest rates. Interest rates can’t fall below zero. If there is deflation of 2%, this means we have a real interest rate of + 2%. In other words saving money gives a reasonable return. Therefore, deflation can contribute to an unwanted tightening of monetary policy. This is particularly a problem for Eurozone countries which don’t have recourse to any other monetary policies like quantitative easing. This is another factor that can lead to lower growth and higher unemployment.
  4. Real wage unemployment. Labour markets often exhibit ‘sticky wages’. In particular, workers resist nominal wage cuts (no one likes to see their wages actually cut, especially when you are used to annual pay increases. Therefore, in periods of deflation, real wages rise. This could cause real-wage unemploymentUnemployment in Europe is a major problem – and low inflation is one reason.
    EU unemployment
  5. More difficult for relative prices and wages to adjust. If the average prices or wages are increasing by 3%, it is easier for some goods to rise by 0% and some to rise by 6%. With inflation of 0%, it is harder to get this relative change in prices or wages.
  6. Deflation can become entrenched and difficult to end. The experience of Japan in the late 90s and 00s was that when deflation became the new norm, it was very hard to change inflation expectations and regain normal growth.
deflation-spiralDeflation tends to cause more deflation (without injection/intervention)
  • Falling prices – lower confidence – leads to lower spending – falling prices
  • Falling prices – leads to lower wages – leads to less spending and lower costs
  • Falling prices – changes inflation expectations – people delay purchases until price falls.
Doesn’t deflation make us better off because things are cheaper?
Remember deflation usually means falling wages (or at least stagnant wages). It also means higher unemployment. People with debts, e.g., mortgages, credit cards are likely to feel the squeeze more. Prices may be falling, but the amount of money you have to spend is also likely to be falling.
Deflation is only good if prices are falling and your disposable income is rising.
It is true that some people, especially net savers, may feel better off during a period of deflation. But, the problem is the wider macro-economic consequences of recession and unemployment.

More Here




B. Deflation is a false balance (Proverbs 11:1), which makes the rich richer and the poor poorer, as Jay Taylor says about inflation


"Anthony Wile: How has it worked in Japan?
Jay Taylor: Worse than bad. The statistics speak for themselves. The BOJ has now had decades of QE with bigger and bigger doses coming faster and faster. Japan is a basket case. Why would anyone invest in a country that is destroying its currency and economy with zero interest rates and an impending hyper inflation as its currency is now accelerating toward a total state of worthlessness – as all Western currencies are doing? Clearly, the G7 is coordinating efforts among the various central banks of the G7 to take turns debasing their currencies so that as long as people accept these debt-based fiat currencies, they continue to appear viable. But, of course, collectively all of them are in a race to the bottom. The only currency that is stable and has existed over centuries, and that since mid-December is now gaining against all other currencies – even the "strong" U.S. dollar – is gold.
Anthony Wile: What is the point of debasing the currency?
Jay Taylor: To fool the people into thinking they can get something for nothing and to reallocate wealth from those who create it – the miners, manufacturers, farmers and inventor – to those who control it – those being the bankers and government."


Proverbs 22:16





He who oppresses the poor to make more for himself Or who gives to the rich, will only come to poverty.





You give your money to companies charities, government, etc..


c. Why the Rich Hate Inflation: Because They’re Creditors?

Paul Krugman and assorted others have been puzzling at this question recently, one that I’ve been grinding an axe about for some years. For the first time, I think, Krugman’s highlighted the explanation that I keep going on about:
Inflation helps debtors and hurts creditors, deflation does the reverse. And the wealthy are much more likely than workers and the poor to be creditors, to have money in the bank and bonds in their portfolio rather than mortgages and credit-card balances outstanding.
Higher inflation means debtors pay off their loans in less-valuable dollars. So given an outstanding stock of trillions of dollars in fixed-interest loans/bonds, an extra point of inflation should transfer tens of or hundreds of billions of dollars a year in real buying power from creditors to debtors (without a single account transfer happening). Instantly and permanently.

I got some judicious pushback on this thinking in comments from JKH over at Interfluidity, where I had emphasized that rich households own the banks. (The top 20% actual own more like 85% of corporate equity.) While the 20% certainly have debts, they owe them mostly to themselves as bank shareholders, so The-20%-As-Debtors don’t benefit from the cheaper payback caused by inflation; it’s a wash. The 80% do get that benefit (and the 20% suffer), because the 80% owes money, on net, to the 20%.

I tried to simplify the situation with this:
Isolating one component that bank shareholders can be sure of, in a sea of complex and uncertain effects.
Imagine a bank (owned by shareholders, all in the top 20%) that owns a bunch of 30-year fixed-rate loans (borrowed by 80%ers) that won’t expire for 15 years. No ongoing lending by the bank. It just holds these loans and collects interest.
All interest is paid at the end of the year.
The banks’ interest revenues on those loans this year were $1 billion. Expenses were $100 million. $900 million in profit, all distributed as dividends.
Inflation over the next year (and ensuing) is 1%/year.
The bank again makes $900 million in profits, and distributes it to shareholders.
But the 80%er borrowers only pay $891 million in real buying power, and the 20%er shareholders only receive $891 million.
The next year, $882 million in buying power. Etc.
JKH pointed out out again that this only addresses inflation’s effect on the banks’ assets, not their liabilities. Very good point. Here’s an effort to address it, starting with the Balance Sheet account for Financial Business in the International Macroeconomic Accounts. (I averaged the balance sheets for 2003-2012 to get a big overall picture.) Click for larger image.

Screen shot 2014-09-18 at 8.08.15 AM
Now to ask: from the perspective of the 20%er shareholders/bank-owners, what effect will inflation have on these various assets and liabilities?

In many cases it’s quite uncertain (the whole point of the Interfluidity post linked above). They may presume that “Equities and investment fund shares” will go up along with inflation, for instance, so that’ll be a wash. What about “Insurance, pension, and standardized guaranteed schemes”? (I love “schemes” here.) Inflation should help them there, perhaps a lot, but how much and how will those schemes transform over future years and decades? Again, pretty uncertain.

But debt and debt securities are predictable, at least to the extent that they’re fixed-rate loans. Inflation hurts creditors. Period. Let’s just look at those assets and liabilities (click for larger):
Screen shot 2014-09-18 at 8.38.24 AM
Not all of these are fixed-rate, but we can assume that most of them are. (Estimates welcome.)
Here, banks’/20%ers’ assets (what others owe them) exceed their liabilities (what they owe others) by 12 trillion dollars. They’re net creditors. No duh.

To the extent that this stock of outstanding obligations is fixed-rate, an extra point of inflation will decrease 20%ers’ buying power by $120 billion a year.

Now you may suggest that that’s actually small change. It’s roughly 3% of the 20%ers annual income from capital,* and only $6,000 a year for each of the 20 million households in the top 20%. But you can be quite sure that that number is at least one order of magnitude larger for households in the top 1, .1, or .01%.

If the top 1,000 or 10,000 households (who dominate policy) perceive themselves as losing, say, $600,000 a year in real buying power for each point of inflation, are you curious why they hate inflation?
* Rough calculation of 20%ers’ capital income: (National income of $15 trillion – 60% of income going to labor) * Top 20’s 85% share of capital ownership = $5.1 trillion


Virginia Credit Slave Family shows: Proverbs 22:7 

The rich rules over the poor, and the borrower is the slave of the lender.



Shoppers look at appliances at a Sears store in Schaumburg, Ill. At nearly $13 trillion, consumer debt has topped the previous record set during the financial crisis.
Scott Olson/Getty Images
Americans owe more than ever before, with household debt hitting a record of nearly $13 trillion. And auto loans, home loans and credit card debt are all still on the rise, according to the Federal Reserve Bank of New York.
That has some economists saying the lessons of the bubble of borrowing in the run-up to the Great Recession have already been forgotten.
The last time borrowing hit a record, the country was in the throes of the financial crisis. That might sound ominous. But the economy is in much better shape now. Home loans — by far the biggest debt category — are made to people who can actually afford them. And much of the borrowing is arguably responsible.
Sasha Gallagher, who lives outside Richmond, Va., says she and her husband have had several major changes in their lives in the past year. They had a baby in February and recently bought a house. They'd spent their savings on a down payment. So they used a zero percent credit card offer to buy things they wanted for their new home: a washing machine, refrigerator and a riding lawn mower.





"We're at roughly $6,000 and it will probably grow because at this point we've got appliances on there but we really haven't furnished the home yet," Gallagher says.
That might sound like quite the credit card buying spree. But, Gallagher says, "we're still driving both of our old beat-up cars basically into the ground, because a house in a good school district is more important than a new car," she says.
More importantly, Gallagher just finished pharmacy school and got a good job. She's gone from being a starving student to being the bigger breadwinner for the family. That means they'll be able to pay off that credit card pretty quickly, she says.

James 2:6
But you have dishonored the poor. Is it not the rich who oppress you and drag you into court?



BLACKS BEING FORCED TO MAKE BRICKS WITHOUT STRAW (Exodus 5:10-13) BY THE NEO EGYPTIANS WHO HAVE BECOME CASH STRAPPED VIA LESS TAX RECEIPTS- so they FINE BLACKS LIKE CRAZY.
The Economist




 Nearly a quarter of the city’s general revenues came from criminal fines, fees and court costs. Moreover, black residents paid a far greater portion of these expenses than either their share of the population or their share of total crimes committed in Ferguson would indicate. The investigators concluded that the police had displayed “unlawful bias” against blacks.

The city appears to have heeded the Department of Justice’s message: fines and fees are down 77% from their peak in 2013. However, Ferguson was unlikely to be a unique outlier, and other cities engaging in similar practices might well have continued outside of the national spotlight. A new paper by Michael Sances of the University of Memphis and Hye Young You of Vanderbilt University published this month in the Journal of Politicsfound that Ferguson was indeed more of a rule than an exception. After examining data on 9,000 American cities, they found that those with more black residents consistently collected unusually high amounts of fines and fees—even after controlling for differences in income, education and crime levels. Cities with the largest shares (98%) of black residents collected an average of $12-$19 more per person than those with the smallest (0%) did.

However, there was one subgroup of cities that bucked the trend: the relationship between race and fines was only half as strong in places whose city councils included at least one black member. This may be because black politicians are likelier than white ones are to respond to complaints from black constituents. Black councillors might also intervene to stop certain policies, like increasing court fees, from going into effect to begin with.

Part of the problem is that fines are a very effective method for cash-strapped governments to shore up their budgets without having to raise taxes or cut spending. As a result, the temptation to tell police departments to dredge up violations, no matter how petty, can be hard to resist. City judges tend to rubber-stamp these penalties. For example, in Peoria, Arizona, two people were jailed for not trimming weeds more than six inches tall. In Ferguson, a black man resting in his car after playing basketball in the public park was stopped by police and charged with, among other things, not wearing a seat belt in his (parked) car and making a false declaration after giving the officer a shortened name (like “Bob” instead of “Robert”). Such fines may fall disproportionately on the backs of black citizens, because they tend to be poorer and lack the resources to contest the penalties.

STAG-DEFLATION IN CALIFORNIA HAS CREATED SUCH LITTLE TAX RECEIPTS VIA DEFLATIONARY LAYOFFS THAT TOWNS ARE PICKING ON LITTLE GIRLS WITH LEMONADE STANDS FORCING THEM TO PAY FINES FOR SELLING LEMONADE WITHOUT A VENDOR'S LICENSE AFTER THEY POSTED PHOTOS ON FACEBOOK ABOUT- YES YOUR TOWN IS GOING THROUGH FACEBOOK PAGES VIA THREAT FUSION CENTERS LOOKING FOR SO CALLED CRIMINAL ACTIVITIES INCLUDING PETTY FINES.

Good grief! A 5-year-old girl in Porterville, Calif., received a citation in late October for operating a lemonade stand without a license.
In June, Autumn Thomasson decided to operate the stand to raise money to pay for a new bike.
Gabby Dehaas, Autumn’s mother, got the word out on social media about her daughter’s idea, and in less than 24 hours the girl had enough money for a new ride.  
“It meant so much to know she earned her own money, that Mom and Dad didn't need to go buy her. She got to bring her own wallet and buy it herself and pay at the cash register," DeHaas told Fox26.
But four months later, DeHaas received a letter from Porterville’s Finance Department with an image of her Facebook post. Enclosed was a citation, ordering the mom to pay for a business license for her daughter’s stand, Fox26 reported.
"I was thrown back by that. I didn't appreciate a screenshot of my daughter sent back to me," DeHaas said.
More @ Fox News












Why Fiscal Money Is Better Than Helicopter Money And QEP At Beating Deflation And Austerity

Social Europe


Enrico Grazzini

A group of Italian scholars is proposing Tax Discount Bonds to the Italian government as a way to boost aggregate demand and increase GDP without increasing public debt. TDBs are euro-denominated bonds issued by the state and valid for tax discount: they mature 2/3 years from issuance, but they are negotiable on financial markets and so immediately convertible into legal currency. TDBs would be assigned free of charge and could swiftly increase spending power. They could become the oxygen required to exit the liquidity trap, increase income and create new wealth thanks to the Keynesian multiplier. In fact, we assume that the fiscal multiplier exceeds 1 (one) when capital and labour resources are greatly under-utilized and interest rates are close to zero (as now in the Eurozone).
Our project envisages issuing a large number of TDBs over three years: the total would be equal to 2-3% of national GDP so as to cause a (healthy) monetary shock, increase demand promptly and boost the economy. TDBs are not refundable in euro by the state: so, according to Eurostat criteria, they do not constitute any financial liability and must not be accounted for as debt. Thanks to the multiplier effect, the rapid GNP growth will produce more fiscal revenues so as to counterbalance the potential deficit occurring when the TDBs are utilized as a form of fiscal reduction two years after issuance.
In order to increase consumption, this “free money” would be allocated to families in inverse proportion to income while it would be assigned to companies in proportion to the number of their employees, so as to reduce the cost of labour, increase firms’ competitiveness and retain a balance in trade. The state can also use TDBs to pay for public works and increase employment and private investment.

The US Dollar coming home from Saudi Arabia is the debt that can delay depression

In both the 1920s and the post-1980s, to prevent economies seizing up, the demand gap was filled by an explosion of private debt. But pumping in debt didn't prevent recession: it merely delayed it.
Concentrating the proceeds of growth in the hands of a small global financial elite not only brings mass deflation – it also leads to asset bubbles. In 1920s America, a rapid process of enrichment at the top merely fed years of speculative activity in property and the stock market. In the build-up to 2008, rising corporate surpluses and burgeoning personal wealth led to a giant mountain of footloose global capital. The cash sums held by the world's rich (those with cash of more than $1m) doubled in the decade to 2008 to a massive $39 trillion.
Only a tiny proportion of this sum ended up in productive investment. In the decade to 2007, bank lending for property development and takeover activity surged while the share going to UK manufacturing shrank. While the contribution to the economy made by financial services more than doubled over this period, manufacturing fell by a quarter.
Far from creating new wealth, a tsunami of "hot money" raced around the world in search of faster and faster returns, creating bubbles – in property, commodities and business – lowering economic resilience and amplifying the risk of financial breakdown.
New Labour's leaders were right in arguing that the left needed to have a more coherent policy for wealth creation. That is the route to wider prosperity for all. But the central lesson of the last 30 years is that a widening income gap and a more productive economy do not go hand in hand.
An economic model that allows the richest members of society to accumulate a larger and larger share of the cake will eventually self-destruct. It is a lesson that is yet to be learned.

MODERATE "PHILLIPS CURVE" TYPE INFLATION WOULD SUPER HEAT THE US ECONOMY- Record Low Unemployment, Rapid Business Creation, Hyper Business Growth: The Phillips Curve can work- as long as it's not 1970s levels of Hyperinflation, and Near Hyperinflation
Investopedia


Possible Benefits of Inflation


When the economy is not running at capacity, meaning there is unused labor or resources, inflation theoretically helps increase production. More dollars translates to more spending, which equates to more aggregated demand. More demand, in turn, triggers more production to meet that demand.

Famous British economist John Maynard Keynes believed that some inflation was necessary to prevent the "Paradox of Thrift." If consumer prices are allowed to fall consistently because the country is becoming too productive, consumers learn to hold off their purchases to wait for a better deal. The net effect of this paradox is to reduce aggregate demand, leading to less production, layoffs and a faltering economy.
Inflation also makes it easier on debtors, who repay their loans with money that is less valuable than the money they borrowed. This encourages borrowing and lending, which again increases spending on all levels. Perhaps most important to the Federal Reserve is that the U.S. government is the largest debtor in the world, and inflation helps soften the blow of its massive debt.



THE ANSWER:

Mark 10:17-23
As He was setting out on a journey, a man ran up to Him and knelt before Him, and asked Him, "Good Teacher, what shall I do to inherit eternal life?" And Jesus said to him, "Why do you call Me good? No one is good except God alone. "You know the commandments, 'DO NOT MURDER, DO NOT COMMIT ADULTERY, DO NOT STEAL, DO NOT BEAR FALSE WITNESS, Do not defraud, HONOR YOUR FATHER AND MOTHER.'"
And he said to Him, "Teacher, I have kept all these things from my youth up." Looking at him, Jesus felt a love for him and said to him, "One thing you lack: go and sell all you possess and give to the poor, and you will have treasure in heaven; and come, follow Me." But at these words he was saddened, and he went away grieving, for he was one who owned much property. And Jesus, looking around, said to His disciples, "How hard it will be for those who are wealthy to enter the kingdom of God!"

AMERICA NEEDS TO GIVE TO THE POOR
 THE SAUDI TREASURIES, AND IN FACT, 
FOR WALL STREET- THE POOR ARE 
THEIR "MARGIN OF SAFETY" TO STOP OR
AT LEAST SLOW DOWN THE 
"TREASURIES DOOMSDAY"
While the Fed’s quantitative easing suppressed yields and erased the margin of safetywhich investors have historically needed to own long-term Treasuries, the firms say it isn’t a foregone conclusion the opposite will happen as the central bank reverses course. If anything, that buffer, otherwise known as the term premium, may remain well below its long-run average for years to come.
There are a few key reasons. Fed officials have already signaled the unwind will be extremely slow and the central bank will ultimately keep a significant chunk of the trillions in debt securities it amassed during QE. At the same time, easy-money policies in Europe and Japan will continue to support foreign demand for Treasuries, particularly as the Fed raises interest rates.
“It’s not to say that the term premium can never get back to historic averages,” said Praveen Korapaty, Credit Suisse’s head of global interest-rate strategy. “But that’s not a next two-year or even five-year story.”
Sirach 29: 1-17
He that is merciful will lend unto his neighbour; and he that strengtheneth his hand keepeth the commandments.
2Lend to thy neighbour in time of his need, and pay thou thy neighbour again in due season.
3Keep thy word, and deal faithfully with him, and thou shalt always find the thing that is necessary for thee.
4Many, when a thing was lent them, reckoned it to be found, and put them to trouble that helped them.
5Till he hath received, he will kiss a man's hand; and for his neighbour's money he will speak submissly: but when he should repay, he will prolong the time, and return words of grief, and complain of the time.
6If he prevail, he shall hardly receive the half, and he will count as if he had found it: if not, he hath deprived him of his money, and he hath gotten him an enemy without cause: he payeth him with cursings and railings; and for honour he will pay him disgrace.
7Many therefore have refused to lend for other men's ill dealing, fearing to be defrauded.
8Yet have thou patience with a man in poor estate, and delay not to shew him mercy.
9Help the poor for the commandment's sake, and turn him not away because of his poverty.
10Lose thy money for thy brother and thy friend, and let it not rust under a stone to be lost.
11Lay up thy treasure according to the commandments of the most High, and it shall bring thee more profit than gold.
12Shut up alms in thy storehouses: and it shall deliver thee from all affliction.
13It shall fight for thee against thine enemies better than a mighty shield and strong spear.
14An honest man is surety for his neighbour: but he that is impudent will forsake him.
15Forget not the friendship of thy surety, for he hath given his life for thee.
16A sinner will overthrow the good estate of his surety:
17And he that is of an unthankful mind will leave him in danger that delivered him.

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