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Discussion in 'The Kruse Longevity Center' started by Jack Kruse, Sep 4, 2021.

  1. Jack Kruse

    Jack Kruse Administrator

    Jeremy Fox likes this.
  2. Jack Kruse

    Jack Kruse Administrator

    I said in El Salvador =BTC buys time & freedom. In 1971, at the avg hourly rate of $4, it took 625 hrs of your life to buy the standard Ford F-150 truck. Today, the avg hourly rate is $26 but now takes 1,154 hours to get a standard F-150. That is 529 hours freed up for your use https://pic.twitter.com/DXy9R930IQ
    Brent Patrick likes this.
  3. caroline

    caroline New Member

    How is it politically in El Salvador?

    What happens if the current president can't get another term? Who is in the wings waiting?
    ACP1717 and Laudy Cincotta like this.
  4. Tarun

    Tarun Silver

    Did you at any time travel alone? If so, how safe is it to travel alone?

    How was the transit from airport to El Zonte, and from El Zonte to San Salvador?

    I'm sad to say I chickened out visiting you a couple of weeks ago, reading an El Zonte hotel review containing youngsters with machetes was what did it.
  5. Jack Kruse

    Jack Kruse Administrator

    I will cover it during the Q & A next Sat.

    Strong rec that our whole community buy 30 bucks worth of Bitcoin at 3 PM on September 7th. It is BTC Independence day.
    EWO, caroline, Sean Waters and 2 others like this.
  6. Jack Kruse

    Jack Kruse Administrator

    Why you still have a chance to sell your real estate and buy your Citadel elsewhere.
    Freader likes this.
  7. Last edited: Sep 6, 2021
    ACP1717, John Schumacher and caroline like this.
  8. Jack Kruse

    Jack Kruse Administrator

    Why do you need to view El Salvador as a Financial Citadel?

    Current events dictate this view.

    A year and a half after the arrival of Virus, some may have started wondering why the usually unscrupulous ruling elites decided to freeze the global profit-making machine in the face of a pathogen that targets almost exclusively the unproductive (over 80s). Why all the humanitarian zeal? Cui bono? Only those who are unfamiliar with the wondrous adventures of GloboCap can delude themselves into thinking that the system chose to shut down out of compassion. Let us be clear from the start: the big predators of oil, arms, and vaccines could not care less about humanity.

    Follow the money
    In pre-Covid times, the world economy was on the verge of another colossal meltdown. Here is a brief chronicle of how the pressure was building up:

    June 2019: In its Annual Economic Report, the Swiss-based Bank of International Settlements (BIS), the ‘Central Bank of all central banks’, sets the international alarm bells ringing. The document highlights “overheating […] in the leveraged loan market”, where “credit standards have been deteriorating” and “collateralized loan obligations (CLOs) have surged – reminiscent of the steep rise in collateralized debt obligations [CDOs] that amplified the subprime crisis [in 2008].” Simply stated, the belly of the financial industry is once again full of junk.

    9 August 2019: The BIS issues a working paper calling for “unconventional monetary policy measures” to “insulate the real economy from further deterioration in financial conditions”. The paper indicates that, by offering “direct credit to the economy” during a crisis, central bank lending “can replace commercial banks in providing loans to firms.”

    15 August 2019: Blackrock Inc., the world’s most powerful investment fund (managing around $7 trillion in stock and bond funds), issues a white paper titled Dealing with the next downturn. Essentially, the paper instructs the US Federal Reserve to inject liquidity directly into the financial system to prevent “a dramatic downturn.” Again, the message is unequivocal: “An unprecedented response is needed when monetary policy is exhausted and fiscal policy alone is not enough. That response will likely involve ‘going direct’”: “finding ways to get central bank money directly in the hands of public and private sector spenders” while avoiding “hyperinflation. Examples include the Weimar Republic in the 1920s as well as Argentina and Zimbabwe more recently.”

    22-24 August 2019: G7 central bankers meet in Jackson Hole, Wyoming, to discuss BlackRock’s paper along with urgent measures to prevent the looming meltdown. In the prescient words of James Bullard, President of the St Louis Federal Reserve: “We just have to stop thinking that next year things are going to be normal.”

    15-16 September 2019: The downturn is officially inaugurated by a sudden spike in the repo rates (from 2% to 10.5%). ‘Repo’ is shorthand for ‘repurchase agreement’, a contract where investment funds lend money against collateral assets (normally Treasury securities). At the time of the exchange, financial operators (banks) undertake to buy back the assets at a higher price, typically overnight. In brief, repos are short-term collateralized loans. They are the main source of funding for traders in most markets, especially the derivatives galaxy. A lack of liquidity in the repo market can have a devastating domino effect on all major financial sectors.

    17 September 2019: The Fed begins the emergency monetary programme, pumping hundreds of billions of dollars per week into Wall Street, effectively executing BlackRock’s “going direct” plan. (Unsurprisingly, in March 2020 the Fed will hire BlackRock to manage the bailout package in response to the ‘COVID-19 crisis’).

    19 September 2019: Donald Trump signs Executive Order 13887, establishing a National Influenza Vaccine Task Force whose aim is to develop a “5-year national plan (Plan) to promote the use of more agile and scalable vaccine manufacturing technologies and to accelerate development of vaccines that protect against many or all influenza viruses.” This is to counteract “an influenza pandemic”, which, “unlike seasonal influenza […] has the potential to spread rapidly around the globe, infect higher numbers of people, and cause high rates of illness and death in populations that lack prior immunity”. As someone guessed, the pandemic was imminent, while in Europe too preparations were underway (see here and here).

    18 October 2019: In New York, a global zoonotic pandemic is simulated during Event 201, a strategic exercise coordinated by the Johns Hopkins Biosecurity Center and the Bill and Melinda Gates Foundation.

    21-24 January 2020: The World Economic Forum’s annual meeting takes place in Davos, Switzerland, where both the economy and vaccinations are discussed.

    23 January 2020: China puts Wuhan and other cities of the Hubei province in lockdown.

    11 March 2020: The WHO’s director general calls Covid-19 a pandemic. The rest is history.

    Joining the dots is a simple enough exercise. If we do so, we might see a well-defined narrative outline emerge, whose succinct summary reads as follows: lockdowns and the global suspension of economic transactions were intended to 1) Allow the Fed to flood the ailing financial markets with freshly printed money while deferring hyperinflation; and 2) Introduce mass vaccination programmes and health passports as pillars of a neo-feudal regime of capitalist accumulation. As we shall see, the two aims merge into one.

    In 2019, world economy was plagued by the same sickness that had caused the 2008 credit crunch. It was suffocating under an unsustainable mountain of debt. Many public companies could not generate enough profit to cover interest payments on their own debts and were staying afloat only by taking on new loans. ‘Zombie companies’ (with year-on-year low profitability, falling turnover, squeezed margins, limited cashflow, and highly leveraged balance sheet) were rising everywhere. The repo market meltdown of September 2019 must be placed within this fragile economic context.

    When the air is saturated with flammable materials, any spark can cause the explosion. And in the magical world of finance, tout se tient: one flap of a butterfly’s wings in a certain sector can send the whole house of cards tumbling down. In financial markets powered by cheap loans, any increase in interest rates is potentially cataclysmic for banks, hedge funds, pension funds and the entire government bond market, because the cost of borrowing increases and liquidity dries up. This is what happened with the ‘repocalypse’ of September 2019: interest rates spiked to 10.5% in a matter of hours, panic broke out affecting futures, options, currencies, and other markets where traders bet by borrowing from repos. The only way to defuse the contagion was by throwing as much liquidity as necessary into the system – like helicopters dropping thousands of gallons of water on a wildfire. Between September 2019 and March 2020, the Fed injected more than $9 trillion into the banking system, equivalent to more than 40% of US GDP.
    John Warner, GavinH and ND Hauf like this.
  9. Jack Kruse

    Jack Kruse Administrator

    Last week, in his Jackson Hole speech Jay Powell grudgingly admitted that prices might rise a bit more than the FOMC previously thought. But it was too early to conclude that policies should be adjusted immediately. With prices rising at over double the 2% target, there’s nothing to worry about. But be reassured, the Fed is on the case, according to Powell. In other words Powell says, because inflation is always 2 per cent and Humpty-Dumpty insists it is so, markets will return to the 2 per cent target.
    Incidentally, when someone invokes belief, it is either the product of faith or lack of knowledge. This is why politicians cite faith a lot, and we should be wary when it is a justification for monetary policy.

    There is, of course, one glaring problem with all this as Powell admits before dismissing it: “businesses and consumers widely report upward pressure on prices and wages”. There is an associated problem, an enormous elephant in the room that no official seems to be aware of, which independent analysts such as John Williams at Shadowstats.com points out, and that is if you strip out all the changes in statistical method that have deliberately reduced headline price rises since 1980, you find that according to an unadjusted CPI(U), prices are now rising at over 13% annualized.

    Perhaps we should give Powell one out of ten for courage for participating at Jackson Hole, while zero points must be awarded to Christine Lagarde and Andrew Bailey, both having refused to take part in the symposium when at other times they would surely have welcomed the chance to be in the limelight on the global monetary stage. We are left wondering why they preferred not to justify their monetary policies in such a forum.

    But if Powell gets one point for at least appearing, he gets at least nine out of ten for evasion. A word-search of his speech reveals why. It is headlined about monetary policy. But money was only mentioned once, and that was in the title of one of the references at the end. Not even when discussing longer-term inflation expectations was money mentioned. And word searches for M1 and M2 show nothing. The Fed’s monetary policy does not appear to involve money.

    It links to a political event = COVID LOCKDOWNS to facilitate the economic reset at the end of a debt cycle.

    Figure 1 shows narrow money supply before it was amended to include former categories of broader M2 money last February, rendering it useless for comparative analysis. Narrow money supply is going off the scales. Yet at Jackson Hole it was never mentioned, except in a footnote. Equally incredible is the gullibility of the investment establishment knowing that money does matter yet was drawn into the Fed’s non-monetary narrative.

    The Fly in the annointment is political. The DEBT CEILING HAS TO BE RAISED AND RIGHT NOW THE GOP WON'T DO IT. They will use it as the dirty bomb to the midterms elections.

    Like the child in the fable who observed the emperor had been conned into wearing no clothes, a child today with an elementary grasp of arithmetic will understand that if you increase the quantity of something, each unit will be worth less. Today’s masters of the monetary universe seem unaware of the fact. They have written many erudite books and articles, made speeches as we saw last week, in ignorance of or wishing away monetary facts.

    The consequences of debasement are therefore ducked. Interventionists dismiss the Cantillon effect, whereby prices increase in the wake of the new money being spent into circulation. Have they even heard of it? As an unarguable fact, it should be indisputable. And clearly, rising prices are a consequence of the massive increase in circulating currency evidenced in Figure 1 above, and not due solely to an imbalance between production and consumer demand which will correct in time, as Powell claimed at Jackson Hole.

    Economic dislocation is part of and at the same time an additional factor to monetary expansion behind price increases. It arises from monetary inflation distorting markets, which continue to be disrupted by the covid pandemic. Covid-related disruption will continue into the foreseeable future, most noticeably due to logistical foul-ups, trading nations going in and out of lockdowns and other related restrictions on commerce. But at base, increases in the general level of prices occur as newly issued currency enters circulation.

    The Fed overseas two separate mechanisms for currency expansion. Quantitative easing is targeted at providing investing institutions with cash in return for low-risk assets, specifically US Treasury and agency bonds to the tune of $120bn every month. This QE has the effect of keeping bond yields suppressed and equity markets inflated because of the targeted institutions’ reinvestments. In addition — and it is separate from QE — there is the government’s budget deficit, theoretically financed out of private sector savings, but in the absence of an increase in the savings ratio, financed through the expansion of currency and credit.

    Fund raising for the government is about to become chaotic
    We can see that the Fed’s non-monetary approach to monetary policy begs important questions, but there are usually reasons behind it which we must consider. They give us a steer to the Fed’s real mission; its twin objectives of 2% price inflation and full employment having become secondary. It is to keep the Federal government financed by suppressing the interest cost and encouraging the expansion of bank credit to subscribe for government debt. The latter task was made easier during covid lockdowns, since unspent income temporarily accumulated in the financial system, which together with currency and credit expansion led to the government being awash with funds. But that has now changed, as the balance on the government’s general account at the Fed in Figure 2 shows.
    Since March 2020, when the balance was $380bn, the government accumulated a further $1.437 trillion to a balance of $1.817 trillion in a little over four months, funded by a mixture of currency and credit inflation to fund extra government debt. Since August last year, all that accumulation and a little more has been spent into general circulation, leading to liquidity flooding the economy. This liquidity has been absorbed by the Fed’s reverse repo (RRP) balances expanding to over a trillion dollars. The increase in RRPs had been necessary to prevent bank deposit and money market rates from going negative due to excessive liquidity.

    The flower pot analogy is this......The Fed is puring in 150 billion a month into the housing market while losing close to 1Trillion per night in the reverse repo. Eventually this will catch up to Yellen. It will drain the General Account of the Treasury and then Congress will be asked to raise the debt ceiling. Tommey already put a poison pill in the infrastructure bill meaning the Fed or Treasury cannot get any more money without Congress increasing the debt ceiling. McConnell is playing hard ball now. The chance of a subjective default of the USA is now very real in October. This is why I have been calling for a 4th Q collapse.

    The RRP makes the dollar stronger which moves us from hyper inflation failure to deflationary spiral failure. The increasing RRP is a form of tightening and the market does not realize this yet. They will soon because it exlains why the dollars is strong yet the economy is falling apart. Yellen's Treasury has emptied its coffers and they cannot be refilled without the 47 GOP senators.

    The effect on the dollar of the RRP level increasing has been to stabilize it on the foreign exchanges and to pause the headlong increase in commodity and raw material prices for the last few months. But this will almost certainly turn out to be a temporary effect. Hence why I have called an inflationary collapse. Assuming the debt ceiling will be raised in the coming weeks (it is inconceivable that either it will not or it will be suspended) the US Government will resume selling US Treasuries and T-bills into the market to top up its general account and fund its ongoing deficit.

    I don't believe the debt ceiling will be extended because of what Toomey has put in the infrastructure bill. This ramped up my belief that having an exit plan out of the USA might be wise if needed. Why did I choose El Salvador? The Q & A will cover that next Saturday.

    No doubt Yellen thinks the GOP will cave, the plan initially is for the Fed to accommodate this demand by reducing its outstanding RRP balances, thereby keeping its funds rate at the zero bound, and therefore yields on US Treasury stock suppressed. If this happens Money market fund adjustments will have to be made.

    The likely case is the infrastructure bill passes but the 3.5 Trillion stimulus Biden wants tied to this bill will never see the light of day = the domino that leads to the collapse.

    The best laid plans need numbers to add up, and immediately we can see a problem. The Fed may have a trillion up its sleeve in the form of RRPs which can be wound down. But the Biden administration is planning $6 trillion spending in fiscal 2022, rising to $8.2 trillion by 2031. Combined with a structural deficit, the government deficit next year will almost certainly be substantially higher than the Congressional Budget Office’s current forecasts. Furthermore, the CBO assumes the annual average growth of “real” GDP will average 2.8% during fiscal 2021—2025, an assumption that is looking optimistic, given the unexpected increase in the price deflator.

    In recent years the CBO’s forecasts have turned out to be overly optimistic. Furthermore, disruption of global logistics is an ongoing problem, so the supply of products to satisfy the increase in consumer spending assumed in the forecasts will continue to be restricted well into 2022. Covid disruptions have not ended and increases in infections are likely in the coming months. It all adds up to a recovery in tax revenues being postponed again, and government spending being increased more than budgeted, even before taking Biden’s proposed extra spending into account.

    The afghanistan fiasco further cost the government money no one is accounting for now in the coming debt crisis.

    The CBO’s optimistic assessment of the government deficit for next year is $1.153 trillion, reducing from over $3 trillion in the current year. Allowing for all the factors listed above, more realistically, another $3 trillion deficit is likely to be the minimum for fiscal 2022, which commences at the end of September 2021. Hence my call for the collapse in October and why I see Bitcoin going higher because of a poltiical error by Yellen and Powell. I beleive the GOP will force Biden hand and it will ultimately be his ticket out of office via impeachment for mismanagement or the 25th Amendement.

    Therefore, the simple problem is one of the Fed only being able to release one trillion of RRP liquidity into a market that will face demands for three trillion or more, being the likely fiscal deficit for 2022. We are back to where we were in March 2020, when the CBO forecast the deficit at $1.073 trillion, but the outturn was $3.13 trillion.

    In October - Dec 2021 I expect the RRP to be north if 2 Trillion per night. Monitor this closely to see if I am correct.

    The problem for the US Treasury is it cannot close the fiscal gap, even if it wanted to — which it doesn’t. Putting record budget deficits to one side, the neo-Keynesian script demands yet more stimulus. But consumer prices are rising and are continuing to do so as the economy falters. Raising the general level of taxation, as Biden says he will do, would obviously be counterproductive and cutting government spending is politically impossible — not least because spending $6 trillion is Biden’s committed plan. This will lead to his ouster one way or another. No wonder he is looking for ways to tax the rich to fund his planned spending, but even his economic advisers must realize the numbers simply don’t stack up based upon things he did not account for in 2021.

    With the Biden administration unable to reduce its budget deficit, a rising interest rate environment, reflecting price inflation, is bound to result in a funding crisis. I beleive this will lead to a credit crash or a housing bomb that takes it all down. These are the debt trap circumstances which not only deters foreign ownership of the currency but persuades foreigners to dump existing currency holdings in increasing amounts. It is the downside of the Triffin dilemma, when decades of irresponsible fiscal policy are encouraged to supply foreigners with a reserve currency. This is why El Salvadors president move to make Bitcoin a full currency by Sept 7th is incredibly brilliant. Inevitably, it ends with a currency crisis in the USA and El Salvador has protection because BTC is also now legal currency Tuesday.

    It is what led to the gold pool failure in the late 1960s and ended the Bretton Woods agreement in 1971. And according to the Treasury’s own TIC figures, foreign investment in dollar-denominated financial assets and cash now exceeds $32 trillion, roughly 150% of US GDP. The dollar has never been so over-owned by flaky foreign interests.

    Stap in folks. You'll soon see if I am right or wrong.
  10. Jack Kruse

    Jack Kruse Administrator

  11. Jack Kruse

    Jack Kruse Administrator

    The best news: El Salvador will exempt foreign investors from taxes on profits on bitcoin in the country. “If a person has assets in bitcoin and makes high profits, there will be no tax,” said Javier Argueta, legal adviser to President Nayib Bukele.
  12. Lisa Norton

    Lisa Norton New Member

    After listening to Saturday's PowWow, I'm super excited about the prospect of creating a health and livelihood forward-thinking black swan community in El Salvador. Is anyone else thinking of scouting in the near future? Please contact me here if you want to explore possibilities!
    EWO and Dr. Marcus Ettinger like this.
  13. Sean Waters

    Sean Waters New Member

    I got arrested today in put in a cell for 2 hours for not wearing a mask in the city - I genuinely had forgot it. This was on pacific coast of Mexico.

    Still bullish about Mex, but wondering how is El Salvador for Covid / Vaccine agendas?
    ACP1717, John Warner and GavinH like this.
  14. Dr. Marcus Ettinger

    Dr. Marcus Ettinger Platinum Member

    I just booked a trip for the family. We're arriving on the 21st of November and coming home on the 30th. We have a nice Airbnb in El Tunco. From there we'll see as much as we can see. I'll report when I get back.
  15. caroline

    caroline New Member

    Jack did say that the president of El Salvador wants 90% vax - or he may have said 100% ...can't remember exactly only that I was surprised.

    So how will all the grinkos get around that???
    Sean Waters likes this.
  16. Lisa Norton

    Lisa Norton New Member

    A crucial question for me and I'm looking into it!
    Sara S and caroline like this.
  17. Sean Waters

    Sean Waters New Member

    Oaxaca.... I've tried to find an actuall Law that i've broken, I even asked the police, but they had nothing for me.

    I think that's why it was only 2 hours detention... I also think they expected to find Weed or something on me, probably thought I was a hippie with drugs.

    The whole thing is a farce. The guy I was in the cell with was cool, Jose... lol... spoke to him about Covid, he said "PURA MENTIRA".... Pure Lies
    John Warner, Freebird, GavinH and 2 others like this.
  18. Sean Waters

    Sean Waters New Member

    That's why I prefer Mexico, even after those delinquents put me in a cell.... The President Andres Manuel Lopez Obradaor (AMLO) is the only 1 in the world to never close borders and has even stated that they won't do anymore restrictions unlike other countries "with a more authoritarian desire".

    The problem is, Mexico is a republic, so each State has it's own local power and can lockdown/ restrict despite the President saying it's unnecessary, which is why this state is a lot more Commie than the state of Quintana Roo which is fully open for tourism. I think it's the same in the US when Trump was in power, despite what he said, his opposition states went against him... NY, Cali, Oregano etc.

    But in terms of mandating Vaccinations, that's something that has to be proposed to the President and parliament. The Oaxacan Minister of Tourism have actually proposed it recently, but it will be ignored.

    I also don't have enough BTC to get the benefit from ES. It's a place to spend BTC, not to Stack. I'm spending in Fiat an saving in BTC.
  19. Jack Kruse

    Jack Kruse Administrator

    I did not wear it and did not go to jail
    John Warner, caroline and EWO like this.
  20. caroline

    caroline New Member

    That struck me like a thunderbolt this morning .......we could spend BTC there - we wouldn't have to wait 5 years!
    If only we were 10 years younger......

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