This Economy Is Ruined for Many Americans

(Before It’s News)

This Economy Is Ruined for Many Americans

Wednesday, April 5, 2017 8:45

This article was written by Wolf Richter and originally published at Wolf Street / Alt-Market.com

Here’s a mystery: Has this “wealth-effect” economy that the Fed so beautifully engineered since the Financial Crisis gotten a lot riskier, scarier, and uglier in some profound ways for lower-income Americans, those making $30,000 or less a year?

One of the questions that Gallup posed was this:

Next, I’m going to read a list of problems facing the country. For each one, please tell me if you personally worry about this problem a great deal, a fair amount, only a little, or not at all? First, how much do you personally worry about –

Then came 13 issues, including “hunger and homelessness.”

Turns out, among Americans making $30,000 or less a year, 67% worry “a great deal” about hunger and homelessness! Food and shelter, two of the most basic human needs. That’s the highest percentage ever in Gallup’s data series on this question going back to 2001.

It’s up from 52% in 2001/2004; up from 56% in 2007/2008; and up from 51% in 2010/2011.

Median annual household income in February was $58,714, according to Sentier Research. On an inflation-adjusted basis, this was about flat with February 2016 and below February 2000. Median income means 50% make more and 50% make less. Other studies have shown that incomes have risen sharply at the upper end of the spectrum, but have fallen at the lower end, with the gap widening. Thus the median might have stagnated, but for many of those below the median, things haven’t turned out so well. And there are a lot of them!

With the prices of stocks, homes, art, classic cars, commercial real estate, and the like inflated to dizzying heights after eight years of radical monetary policies, why would these folks, making $30,000 or less – worry more than ever about such basic and dreadful conditions?

More on that in a moment. There are other elements in this mystery: Even among people making $30,000 to $75,000, a record 47% worry “a great deal” about hunger and homelessness, up from 40% in 2010-2011. And even among high-income Americans, the percentage, though small, has risen (chart by Gallup):

Rising worries about hunger and homelessness can have a number of causes, including media coverage of those topics, or coverage of rising income and wealth inequality in America. In its survey report, Gallup points out that occasionally, when something terrible happens, such as 9/11, it might be “dominating the national consciousness,” and hunger and homelessness recede as primary concerns.

We get that. But Gallup goes on:

Since 2001, worry has been highest among those residing in lower-income households, likely because those with limited financial resources are more at risk of going hungry or becoming homeless. A consistent majority of lower-income adults worried about the problem before 2012, but that has only increased in the past five years.

Lower-income Americans worry about basic problems, in this order:

    1. Hunger/homelessness
    2. Crime/violence
    3. Healthcare
    4. Drug use
    5. Terrorism
    6. Social Security
    7. Economy

At the upper section of the spectrum, at incomes over $75,000, things look different, in that order:

    1. Healthcare
    2. Budget deficit
    3. Economy
    4. Social Security
    5. Environment
    6. Race relations
    7. Hunger/homelessness

Lower-income Americans worry more in general than those with higher incomes. Everything is riskier and tougher for them. But nothing compares to the worries about hunger and homelessness. Gallup:

On average, across the 13 issues, the percentage of lower-income adults who worry a great deal is seven percentage points higher than among middle-income Americans, and 17 points higher than among upper-income Americans.

But differences in concern about hunger and homelessness far exceed those norms. In fact, the 20-point difference in worry about hunger and homelessness between lower-income and middle-income Americans is higher than for any of the other issues. Similarly, the 30-point difference in worry about hunger and homelessness between lower-income and upper-income Americans ties for the highest, along with concern about crime and violence.

In the dazzling glitter and excitement of soaring asset prices that central banks around the world, and particularly the Fed, have tried so hard to engineer, it’s easy to forget that not everyone has those assets, that a lot of people can’t get “rich” just sitting on inflated assets, that they have to work long hours in measly jobs just to stay one paycheck ahead of hunger and homelessness.

These Americans are paying the price for the Fed’s efforts to “heal” the housing market. The Fed has implemented elaborate strategies since 2008, among them: cutting its policy rate to near zero, embarking on QE, and bailing out banks and their richest investors, including Warren Buffett and his financial and insurance empire. In 2011, the Fed began encouraging and enabling Wall Street’s biggest private equity firms and other investors to buy up hundreds of thousands of homes out of foreclosure to push up home prices.

This has led to soaring housing costs that have by far outpaced wage growth, if any. And it made it that much harder for these Americans to stay that one paycheck ahead of hunger and homelessness. There are a lot of them. They’re consumers too. And this could be why the economy, which has been ruined for them, has since then not been able to grow at a reasonable pace.

And so, America becomes “Landlord Land.”

http://alt-market.com/articles/3164-this-economy-is-ruined-for-many-americans

More great articles here: http://alt-market.com

http://beforeitsnews.com/economy/2017/04/this-economy-is-ruined-for-many-americans-2885391.html

26(f) Program – This 100% Legal Tax Haven is Transforming Everyday Americans Into Millionaires!

This 100% Legal Tax Haven is Transforming Everyday Americans Into Millionaires!

By MONEY MORNING STAFF REPORTS

Death and taxes. They’re both unavoidable, right?

Not so fast.

While nobody has cracked the code to eternal life, a small but growing number of Americans may have uncovered a way to avoid cutting a big tax check to Uncle Sam.

It’s 100% legal.  And for many, it’s helping them become millionaires.

 

“I call this the 26(f) Program,” Money Morning Chief Investment Strategist Keith Fitz-Gerald said in a recent interview. “In my 30+ years in the business, I’ve never seen anything as powerful as this.”


RELATED STORY:
President Reagan once fought Congress to keep this little-known tax loophole. Today it’s part of something much bigger that’s worth $80 billion to Americans.  Are you using it? (Full story…)


The 26(f) Program was championed after the Great Depression by President Roosevelt’s team behind Social Security and the FDIC.

And for decades it’s been used by politicians and famous billionaires to build unimaginable fortunes.

It’s also one of the most effective tax havens ever created.

“Presidents Reagan and Bush Jr., Governor Romney, and President Trump, they’ve all capitalized on the 26(f) Program. And you can add famous investors Peter Lynch and Sir John Templeton to that list too.” Fitz-Gerald explained.

While few details of the 26(f) Program are known to the public, that hasn’t prevented some fortunate Americans from tapping into it.

Mark Peltz spent 27 years as a cop.  The 26(f) Program helped him grab a $920,000 lump sum payout. All in a single day.

Even better, he’s going to be paid $17,000 every month for the rest of his life.

Then there’s Terrence Morgan. He worked various office jobs throughout his career.  But thanks in large part to his 26(f) Program, he has a net worth of $2 million.

And Roy Nair was once a natural gas distributor in Missouri, now he’s a retired millionaire.

“If someone is retired or hoping to retire someday the 26(f) Program is their ticket,” Keith Fitz-Gerald declared in this must-see interview.

Fitz-Gerald has been an analyst, consultant and quantitative trader for 34 years and cut his teeth at some of Wall Street’s biggest firms, including Wilshire Associates, which oversees more than $8 trillion for over 600 institutional investors.

“Think about making an extra $68,870.  What would you do with that extra cash?  Now multiply that by 10X or 20X,” Fitz-Gerald said.

“Now imagine on top of that also getting paid an extra $5,000 or $10,000 a month in income.  And then still being able to slash your taxes in half.  That’s a retirement gamechanger!

So what is the 26(f) Program? And how can you take advantage of it?

Continue reading…

Page << 1 / 2 >>

 

Revolutionary Material From Graphite – These are just 15 ways in which graphene could reshape the world,the one-atom-thick sheets of carbon that aren’t just super flexible, harder than diamond, and stronger than steel, but conduct electricity better than copper…

26(f) Program – This 100% Legal Tax Haven is Transforming Everyday Americans Into Millionaires!

Revolutionary Material From Graphite – These are just 15 ways in which graphene could reshape the world,the one-atom-thick sheets of carbon that aren’t just super flexible, harder than diamond, and stronger than steel, but conduct electricity better than copper…

These are just 15 ways in which graphene could reshape the world…

http://www.mining.com/these-are-just-15-ways-in-which-graphene-could-reshape-the-world/

Everybody seems to love Graphene, the one-atom-thick sheets of carbon that aren’t just super flexible, harder than diamond, and stronger than steel, but are also able to conduct electricity better than copper.

It’s said the revolutionary material could be used for super-efficient batteries, solar panels, soak nuclear waste and even to detect cancer cells.

But after 13 years since researchers first created the revolutionary material from graphite, consumers is still waiting to see some of the touted applications in the market.

When they actually come, they could change the world as we know it and in this new infographic the folks at 911Metallurgist explain how:

Revolutionary Material From Graphite

These are just 15 ways in which Graphene could reshape the world26(f) Program – This 100% Legal Tax Haven is Transforming Everyday Americans Into Millionaires!

Revolutionary Material From Graphite – These are just 15 ways in which graphene could reshape the world,the one-atom-thick sheets of carbon that aren’t just super flexible, harder than diamond, and stronger than steel, but conduct electricity better than copper…

 

 

New report shows over 60% of all New Yorkers are just a paycheck away from being homeless! Saturday, December 03, 2016

New report shows over 60% of all New Yorkers are just a paycheck away from being homeless!

Image: New report shows over 60% of all New Yorkers are just a paycheck away from being homeless

(NaturalNews) The Obama economy has been anything but stellar, and in fact, there has not been a single quarter’s worth of growth at or above 3 percent since he took office. While a few years could be blamed on the historic collapse of the housing market and other financial institutions, Obama’s last term should have seen real recovery, but it hasn’t.

In fact, according to a recent report, nearly 60 percent of New Yorkers are just a single paycheck away from being out on the street.

As The Gothamist notes, more than half of New Yorkers do not have enough money stashed away to pay for housing even for a month in the event they lose their jobs or have some medical emergency (the latter of which wasn’t supposed to be an issue anymore, we were promised, under Obamacare!).

The Association for Neighborhood & Housing report further claimed that, based on the organization’s findings, some six in 10 New Yorkers also did not have the emergency savings to cover three months’ worth of household bills – including food, housing and rent – though the percentage is not evenly spread throughout the five boroughs of the city.

Remember, this is a Democrat-run city trying to get by in a lousy economy run by a Democrat president

The Bronx has the highest percentage of families absent emergency savings. In fact, in Mott Haven, Hunts Point, Melrose, Longwood, East Tremont, Highbridge, University Heights, Fordham, South Concourse and Belmost, three-quarters of families don’t have adequate emergency savings.

Meanwhile, the Staten Island neighborhoods of Great Kills and Tottenville have the lowest rate of families without adequate financial reserves – just 41 percent lack the funds necessary to cover three months’ worth of home expenses.

That means, essentially, that most New Yorkers are a paycheck away from being homeless.

The Gothamist noted:

Without these savings, families who face emergencies could be at risk of eviction, foreclosure, damaged credit, and even homelessness.

The most at-risk families, meanwhile are in the Brooklyn communities of Brownsville (70 percent); Bedford-Stuy (67 percent); Bushwick, (68 percent); East New York (67 percent); and South Crown Heights/Prospect Heights (67 percent). And in Manhattan, some 67 percent, on average, of families in Harlem, Inwood and Washington Heights do not have adequate savings.

In Queens, neighborhoods with the highest percentage of households lacking adequate savings were Elmhurst/Corona (64 percent); Rockaway/Broad Channel (60 percent); Sunnyside/Woodside (59 percent); and Jackson Heights (59 percent).

According to DNAInfo, rental assistance advocates – taxpayer-subsidized housing, in other words – say that is vital to prevent a rash of homelessness citywide (as opposed to, say, better jobs and opportunities) where rents are rising faster than are incomes in most of the affected neighborhoods.

The plan? One offered by Queens Assemblyman Andrew Hevesi would cost federal and state taxpayers another $450 million a year. The justification? Well, it would be cheaper than having more families enter the city’s shelter system, which of course is chronically underfunded.

Without proriding opportunities for New Yorkers to get by on their own, this problem will never be solved

In the meantime, the administration of socialist Mayor Bill de Blasio is expanding the city’s budget for homelessness prevention services, like legal services and emergency rental assistance (subsidies!) to help keep families in their homes (we’re still waiting on de Blasio’s plan to increase jobs, lower costs for businesses so they can hire more people and pay them better, and expand economic opportunities, rather than find new and creative ways to throw more money at the problem like his political soulmate, Hevesi, a Democrat).

In Fiscal Year 2015, the city spent nearly 180 million in emergency rent assistance to help some 53,000 households, according to city officials. That was nearly $3,400 per family – granted, far less than the $41,000 per family annually to stay in a shelter.

But homelessness is at an all-time high in the Big Apple, with more than 60,500 adults and children staying in shelters every night, according to the most recent data from the city’s Department of Homeless Services (that NYC even has to have an agency like that ought to tell you something).

There is an old saying that goes, “If you catch a fish for a man, you feed him for one day, but if you teach that man to fish, you feed him for a lifetime.”

New Yorkers are going to continue to subsist on government handouts until de Blasio and the other Left-wing socialist Democrats running that city and the state provide opportunities for residents to get by on their own.

Sources:

TheDailySheeple.com

ANHD.org

Gothamist.com

DNAInfo.com

NYDailyNews.com

 

HANJIN SHIPPING CRISIS! Jim Willie: US T-Bill Rejection at Ports in Progress!

Image result for pictures of HANJIN SHIPPING CRISIS

By: Jim Willie CB, GoldenJackass.com 

HANJIN SHIPPING CRISIS

The Hanjin crisis brings new headache to US-based importers. Trailers stack up, adding to client costs while trailer shortage looms. The idle containers are clogging the entire system. Confusion abounds, as emergency measures are being sought. A drop-off point system for the empties is being considered. Soon the used containers will become a newly created market for cargo owners. The bankruptcy of South Korea’s Hanjin Shipping Co Ltd is causing ripple effects for importers bringing goods from Asian factories to the US marketplace. Port facilities are being jammed, while a shortage of trailers is created to move ocean shipping containers on US roads and railways. The world’s seventh largest container carrier owns and transports more than half a million containers. They are in many cases clogging up ports and truck yards, tying up trailers that cannot be used to handle other cargo. The growing chaos is beginning to worry freight handlers at US ports on the West Coast. Witness the first sign of follow-on effects from the failure of Hanjin. The problem stems from Hanjin’s shortage of cash, which has stranded $14 billion of cargo owned by companies such as HP Inc, Home Shopping Network, and Samsung Electronics. Much of the cargo have been stuck on over 100 ships at sea because cargo handlers, tug operators, and ports are refusing to work with Hanjin unless they are paid upfront. They all are aware of the risk of not receiving payment.

In recent weeks, terminal operators in the California ports of Long Beach and Oakland are not taking back empty containers. Many in the industry doubt Hanjin will pay storage costs, which has led to a growing backlog of empty containers and the trailers they sit on. The containers are stranded. Thousands of Hanjin containers are on trailers kept out of circulation. The uncertainty surrounding Hanjin appears to be pushing truckers to lock in trailers from the local organization pool. Maybe the vast pile-up of containers can be fashioned into sleek condominiums like in Detorit, like lego communities.

Simply stated, if a container reads the Hanjin label, there is no place for it to go. One intermediate solution put forth is the creation of a Drop-Off Point for containers after their cargo is discharged. In Southern California, shipping industry executives are discussing a staging area where truckers could drop off empty containers to free up trailers.Another mid-term solution has been proposed. The cargo owners could resort to buying the containers they hold, which would clear up any legal uncertainty around them, thereby enabling the return of chassis. A new niche market is emerging.

Global supply chains are paralyzed after world’s seventh largest container shipper filed for bankruptcy, with its assets frozen within the system. Eastern (Asian) mega-corporations are not too big to fail, not coddled and bailed out (like in the West). Hyundai Merchant Marine might purchase some of Hanjin’s diverse assets. Shipping rates have been reduced amidst the glut, as the global economy is due for a large slam.

August 31st will be marked on the calendars. On that day, the largest casualty finally slammed global trade ports when South Korea’s Hanjin Shipping filed for court receivership after losing its bank support (credit lines), which left its assets frozen. Ports from China to Spain denied access to its vessels. Hanjin Shipping is SKorea’s largest shipping firm and the world’s seventh biggest container carrier. It is a truly huge player. It operates some 70 liner and tramper services around the globe, transporting over 100 million tons of cargo annually. Its fleet consists of some 150 containerships and bulk carriers. It commands four regional headquarters in the US, Europe, Asia, and South East & West Asia, with nearly 5000 people on global staffs. They run numerous major ports for their world class logistics network. Other shipping firms will go bust soon. Even leader Moller-Maersk is in deep trouble, now considering a restructure.

HIDDEN PROBLEM IN USDOLLAR AS PAYMENT

The shipping stalemate from Hanjin has suspicious elements and overtones. Perhaps the Asians generally are conspiring to throw a wrench into the Western Economy. The strong hint of a USDollar rejection at the ports is a major component in the financial angle, possibly the initial salvo in the global financial RESET. Dire challenges exist to shipping with respect to finance, threatening the Global Economy.

Be sure to know that what follows is speculation, but informed and backed by the last few years of events. The stage is set, during a trade war and a global visceral response to the QE monetary hyper inflation that undermines the USDollar. The East led by China want the RESET to be done, but the West delays interminably. The Western bankers and their controlled governments are printing money to cover their failed bonds and to finance their huge debt. THIS CANNOT STAND. Global finance has been turned on its ear. Numerous national banking systems are insolvent. The expected pull of the plug has been looming for many months. Consider some thoughts by EuroRaj, a brilliant analyst on the Jackass team. He wonders if the Asian producers have finally found a lever to pull with shipping and its related payments, to interrupt global trade with the West. It has been not only lopsided, but the payments have been in low quality printed paper and impaired debt. Refer to USTreasury Bills, which seem to be a problem, perhaps being rejected at ports as payment. Consider the theory by my brilliant colleague with 20 years of bank analyst experience, a savvy fellow who has contributed much to the Hat Trick Letter since 2013.

The Hanjin story sounds very shady for a number of reasons. The total debt involved is only at $5.6 billion. Nobody stops operations in a bankruptcy, since the situation worsens quickly and the creditor damage grows deeper. The banks or specialist funding companies step in quickly with an urgently needed service, to provide debtor in possession financing (DIP) funding. Imagine some potential motives at work here. First, perhaps Team Asia wishes to throw a monkey wrench for trade between China and Europe. Note how China and Spain are mentioned in the articles concerning the Hanjin debacle. Second, perhaps a plan is afoot to bring global trade and manufacturing to a halt, so that USFed can justify QE to Infinity in full bloom soon while the Western Economies are severely distracted.

The question has come to center stage. As a result of the bankruptcy process, the global supply chain stands at risk to endure an unexpected failure. The South Korean oceans ministry had been in negotiations for Hyundai Merchant Marine to take over some routes. The global implications from the bankruptcy are unknown, since without precedent due to enormous scale. The potential impact on global supply chains remains devastating, with a cascading waterfall effect, whose impact on global economies could be severe as a result of the worldwide logistics chaos. Both economists and corporations around the globe, the affected firms suffering deep impacted and others, will have yet another excuse on which to blame the radical slowdown in profits and economic growth in the third quarter. An official admission of a global recession, along with numerous individual national recessions, might come. Do not expect the USFed to hike interest rates with the shipping disaster in the background. They are all talk!

PRETEXT FOR USTBILL REJECTION

Here is the central point, perhaps a seminal event in progress with respect to the Global Financial RESET, an action done by angry Asian producers. We might be witnessing a pretext in action, to cover for the rejection of the USDollar, the refusal to accept USTreasury Bills at ports in return for cargo delivery. At risk is the stoppage of all goods shipped from Asia to the United States. The stakes have risen. The Asians are out of patience. The damage multiplies each month. They might be fed up with toilet paper spewn by the USGovt and USFed, a money laundering duo. We might be seeing a trade war salvo of high order, this round led by Asia, directed at the USEconomy, forcing the RESET that Washington and Wall Street refuse to permit, refuse to initiate. The American retailers and other clients who order the Asian ships loaded with cargo typically pay with USTreasury Bills. The Asians might be finally calling an end to payment in USD terms, rendered African toilet paper by QE and the massive hemorrhage of $1 trillion USGovt debt. Hyper monetary inflation has stern nasty consequences. The US trade deficit is a whopping $500 billion per year, which is financed by debt during a time of suspected debt default and full debt monetization.

The red flag could be telling us to that RESET is here. The urgent call would be to stock up on essential supplies and to buy physical gold & silver (then to hold it). Without any hesitation or equivocation, the hangup at ports implies something particularly foreboding about the state of global finance. The DIP Financing step has been short-circuited. It smells like a coordinated operation is being carried out by Team Asia, with Hanjin a sacrificial lamb, albeit a very big lamb.

Futhermore, more stench with signals. The goods carried as cargo have nothing to do with the troubles of the transportation company. They are separate. The suspicion is that the producers who load the ships with cargo from actual work are interested in higher quality payments, no longer finding the USTBill acceptable as payment. The USGovt officials would put a news blackout on the USD rejection. The real physical goods are there. Look beyond the stated news. It is the payment in USD terms which is the problem. The DIP Financing should be an easy issue to overcome. Such financing is standard operating system, and has been for 50 years. With each passing month that QE wrecks the financial platforms and undermines capital structures, the payment in USD terms is more assuredly to be refused. We might soon hear about payment in kind for the cargo, as in the form of any commodity or finished good being requested. Perhaps demands for barter on hard assets such as commodity swaps will be part of trade payments, a concept cited by The Voice on countless occasions in the last year or two. This could be accomplished with copper plates, iron ore, cement, oil & gas, even credits toward commercial building purchase, port facility purchase, bridge and toll road purchase, even more.

GOLD TRADE NOTE INTRODUCTION – READ FULL REPORT AT LINKS BELOW…

http://beforeitsnews.com/economy/2016/10/ustbill-rejection-at-ports-in-progress-jim-willie-2855830.html?currentSplittedPage=0

 Jim Willie: US T-Bill Rejection at Ports in Progress! As the West risks a fall into the Third World from a generation of outsourcing, asset bubbles, and financial fraud, as soon as the new currency regime is installed as part of the financial RESET.

August 31st will be marked on the calendars. On that day, the largest casualty finally slammed global trade ports when South Korea’s Hanjin Shipping filed for court receivership after losing its bank support (credit lines), which left its assets frozen. Ports from China to Spain denied access to its vessels. Hanjin Shipping is SKorea’s largest shipping firm and the world’s seventh biggest container carrier. It is a truly huge player. It operates some 70 liner and tramper services around the globe, transporting over 100 million tons of cargo annually. Its fleet consists of some 150 containerships and bulk carriers. It commands four regional headquarters in the US, Europe, Asia, and South East & West Asia, with nearly 5000 people on global staffs. They run numerous major ports for their world class logistics network. Other shipping firms will go bust soon. Even leader Moller-Maersk is in deep trouble, now considering a restructure.

 HANJIN SHIPPING CRISIS! Jim Willie: US T-Bill Rejection at Ports in Progress!

Jim Willie: US T-Bill Rejection at Ports in Progress! As the West risks a fall into the Third World from a generation of outsourcing, asset bubbles, and financial fraud, as soon as the new currency regime is installed as part of the financial RESET.

(Before It’s News)

Image result for pictures of HANJIN SHIPPING CRISIS

By: Jim Willie CB, GoldenJackass.com 

World trade has fallen for the second quarter in a row. The decade of stagnation of industrial production in the United States, Japan, and European Union can be blamed on financial engineering, housing bubbles, war, and recently on destructive monetary policy in QE bond purchase program. It is not stimulus, but rather a destroyer of capital. The West contains several nations with heavy industrial emphasis, hardly advanced economies anymore. They risk a fall into the Third World from a generation of outsourcing, asset bubbles, and financial fraud, as soon as the new currency regime is installed as part of the financial RESET.

The CPB Netherlands Bureau for Economic Policy Analysis, a division of the Ministry of Economic Affairs, just released its preliminary data of its Merchandise World Trade Monitor. Trade volumes rose 0.7% in June sequentially, after falling 0.5% in May. Trade was flat year-over-year, but below the volumes of December 2014. On a quarterly basis, world trade fell 0.8%, contracting for the second quarter in a row. Without a doubt the global economy is stuck in a powerful recession. No positive constructive remedies or proper reform policy have been put in place since the Lehman failure. Exactly none. To be sure, none have even been attempted.

Worse, the CPB recently adjusted its world trade data downward, going back several years. The newly updated data depicts a post-Financial Crisis recovery of global trade which is considerably weaker than their original data had indicated. These downward adjustments of 2% to 3% came in a climate of stalled economic growth, according to the IMF. Much of the Western national data is rubbish, forced positive by the common NeoCon fascist dictum. The chart of the CPB’s World Trade Monitor index shows the old data released as of July 2015 (blue line) and the newly adjusted data released (red line). Observe the horrendous 4.4% downard adjustment from the peak in global trade volumes in the original data for December 2014 and in the current data for June 2016. They confirm a broadbased global recession of about 1.0%, in full contradiction of the nonsensical constant Orwellian propaganda of sluggish recovery, spouted routinely in the drumbeat of mainstream news.

https://i2.wp.com/goldseek.com/news/2016/1013gj.jpg

World trade is a direct reflection of only the goods producing economy. Services are not shipped around the world. An airline flight of a group of consultants is not considered world trade, any more than tourism. Finished products, raw materials, and intermediate goods (like car parts for assembly) are shipped regularly. So industrial production, excluding construction, is key. The trend is terrible for advanced economies. Global industrial production, excluding construction, rose 0.6% in June, after a 0.3% decline in May. The index for industrial production in advanced economies rose to 102.5, below where it had been in January at 103.4, a level reached after the Financial Crisis in December 2012. The industrial output remains below from the glory days before the Financial Crisis when the index peaked at 107.8 in February 2008. The global economic recession is as painfully evident as it is denied.

The current level for the index has returned almost exactly to where it was in April 2006, right before the Lehman failure and ensuing crisis. The world has endured a full decade of stagnation, without any remote attempt at remedy or reform, while the bank syndicate remains in power. Remove rose colored glasses. Combine the abandoned austerity budget initiative for the USGovt with the ongoing big bank welfare (known as QE), the preserved insolvent big banks (in dire need of liquidation), the expanding welfare state, then sprinkle on Arab human garbage, and stir with the maintained constant war. Thus no economic recovery, just talk of such.

To varying degrees, the gripping recession has occurred in the United States, Japan, and the EuroZone. A few other so-called industrialized (advanced) economies have exceeded their pre-Financial Crisis levels. Industrial production has shifted to emerging economies, capitalizing on their cheap labor for many years, such as China. Decades ago the vast array of companies in the US, and eventually in Europe and Japan, began outsourcing production to emerging economies in foreign lands. Hence, industrial production in emerging economies has surged over this period. This was particularly the case after the Financial Crisis when companies in the US, Europe, and Japan redoubled their efforts to get production relocated offshore, using easy money from the USFed which moved the cost of money to near 0%, where it has remained for seven years. However, an extreme point of caution. The Emerging Market USD-based debt stands at over $5 to $9 trillion, depending on the definition of such nations. Some estimates are higher. The debt is on the verge of default, due to their currency declines and reduced commodity income, including from crude oil.Thanks to Wolf Street for the contribution.

HANJIN SHIPPING CRISIS

The Hanjin crisis brings new headache to US-based importers. Trailers stack up, adding to client costs while trailer shortage looms. The idle containers are clogging the entire system. Confusion abounds, as emergency measures are being sought. A drop-off point system for the empties is being considered. Soon the used containers will become a newly created market for cargo owners. The bankruptcy of South Korea’s Hanjin Shipping Co Ltd is causing ripple effects for importers bringing goods from Asian factories to the US marketplace. Port facilities are being jammed, while a shortage of trailers is created to move ocean shipping containers on US roads and railways. The world’s seventh largest container carrier owns and transports more than half a million containers. They are in many cases clogging up ports and truck yards, tying up trailers that cannot be used to handle other cargo. The growing chaos is beginning to worry freight handlers at US ports on the West Coast. Witness the first sign of follow-on effects from the failure of Hanjin. The problem stems from Hanjin’s shortage of cash, which has stranded $14 billion of cargo owned by companies such as HP Inc, Home Shopping Network, and Samsung Electronics. Much of the cargo have been stuck on over 100 ships at sea because cargo handlers, tug operators, and ports are refusing to work with Hanjin unless they are paid upfront. They all are aware of the risk of not receiving payment.

In recent weeks, terminal operators in the California ports of Long Beach and Oakland are not taking back empty containers. Many in the industry doubt Hanjin will pay storage costs, which has led to a growing backlog of empty containers and the trailers they sit on. The containers are stranded. Thousands of Hanjin containers are on trailers kept out of circulation. The uncertainty surrounding Hanjin appears to be pushing truckers to lock in trailers from the local organization pool. Maybe the vast pile-up of containers can be fashioned into sleek condominiums like in Detorit, like lego communities.

Simply stated, if a container reads the Hanjin label, there is no place for it to go. One intermediate solution put forth is the creation of a Drop-Off Point for containers after their cargo is discharged. In Southern California, shipping industry executives are discussing a staging area where truckers could drop off empty containers to free up trailers.Another mid-term solution has been proposed. The cargo owners could resort to buying the containers they hold, which would clear up any legal uncertainty around them, thereby enabling the return of chassis. A new niche market is emerging.

Global supply chains are paralyzed after world’s seventh largest container shipper filed for bankruptcy, with its assets frozen within the system. Eastern (Asian) mega-corporations are not too big to fail, not coddled and bailed out (like in the West). Hyundai Merchant Marine might purchase some of Hanjin’s diverse assets. Shipping rates have been reduced amidst the glut, as the global economy is due for a large slam.

August 31st will be marked on the calendars. On that day, the largest casualty finally slammed global trade ports when South Korea’s Hanjin Shipping filed for court receivership after losing its bank support (credit lines), which left its assets frozen. Ports from China to Spain denied access to its vessels. Hanjin Shipping is SKorea’s largest shipping firm and the world’s seventh biggest container carrier. It is a truly huge player. It operates some 70 liner and tramper services around the globe, transporting over 100 million tons of cargo annually. Its fleet consists of some 150 containerships and bulk carriers. It commands four regional headquarters in the US, Europe, Asia, and South East & West Asia, with nearly 5000 people on global staffs. They run numerous major ports for their world class logistics network. Other shipping firms will go bust soon. Even leader Moller-Maersk is in deep trouble, now considering a restructure.

HIDDEN PROBLEM IN USDOLLAR AS PAYMENT

The shipping stalemate from Hanjin has suspicious elements and overtones. Perhaps the Asians generally are conspiring to throw a wrench into the Western Economy. The strong hint of a USDollar rejection at the ports is a major component in the financial angle, possibly the initial salvo in the global financial RESET. Dire challenges exist to shipping with respect to finance, threatening the Global Economy.

Be sure to know that what follows is speculation, but informed and backed by the last few years of events. The stage is set, during a trade war and a global visceral response to the QE monetary hyper inflation that undermines the USDollar. The East led by China want the RESET to be done, but the West delays interminably. The Western bankers and their controlled governments are printing money to cover their failed bonds and to finance their huge debt. THIS CANNOT STAND. Global finance has been turned on its ear. Numerous national banking systems are insolvent. The expected pull of the plug has been looming for many months. Consider some thoughts by EuroRaj, a brilliant analyst on the Jackass team. He wonders if the Asian producers have finally found a lever to pull with shipping and its related payments, to interrupt global trade with the West. It has been not only lopsided, but the payments have been in low quality printed paper and impaired debt. Refer to USTreasury Bills, which seem to be a problem, perhaps being rejected at ports as payment. Consider the theory by my brilliant colleague with 20 years of bank analyst experience, a savvy fellow who has contributed much to the Hat Trick Letter since 2013.

The Hanjin story sounds very shady for a number of reasons. The total debt involved is only at $5.6 billion. Nobody stops operations in a bankruptcy, since the situation worsens quickly and the creditor damage grows deeper. The banks or specialist funding companies step in quickly with an urgently needed service, to provide debtor in possession financing (DIP) funding. Imagine some potential motives at work here. First, perhaps Team Asia wishes to throw a monkey wrench for trade between China and Europe. Note how China and Spain are mentioned in the articles concerning the Hanjin debacle. Second, perhaps a plan is afoot to bring global trade and manufacturing to a halt, so that USFed can justify QE to Infinity in full bloom soon while the Western Economies are severely distracted.

The question has come to center stage. As a result of the bankruptcy process, the global supply chain stands at risk to endure an unexpected failure. The South Korean oceans ministry had been in negotiations for Hyundai Merchant Marine to take over some routes. The global implications from the bankruptcy are unknown, since without precedent due to enormous scale. The potential impact on global supply chains remains devastating, with a cascading waterfall effect, whose impact on global economies could be severe as a result of the worldwide logistics chaos. Both economists and corporations around the globe, the affected firms suffering deep impacted and others, will have yet another excuse on which to blame the radical slowdown in profits and economic growth in the third quarter. An official admission of a global recession, along with numerous individual national recessions, might come. Do not expect the USFed to hike interest rates with the shipping disaster in the background. They are all talk!

PRETEXT FOR USTBILL REJECTION

Here is the central point, perhaps a seminal event in progress with respect to the Global Financial RESET, an action done by angry Asian producers. We might be witnessing a pretext in action, to cover for the rejection of the USDollar, the refusal to accept USTreasury Bills at ports in return for cargo delivery. At risk is the stoppage of all goods shipped from Asia to the United States. The stakes have risen. The Asians are out of patience. The damage multiplies each month. They might be fed up with toilet paper spewn by the USGovt and USFed, a money laundering duo. We might be seeing a trade war salvo of high order, this round led by Asia, directed at the USEconomy, forcing the RESET that Washington and Wall Street refuse to permit, refuse to initiate. The American retailers and other clients who order the Asian ships loaded with cargo typically pay with USTreasury Bills. The Asians might be finally calling an end to payment in USD terms, rendered African toilet paper by QE and the massive hemorrhage of $1 trillion USGovt debt. Hyper monetary inflation has stern nasty consequences. The US trade deficit is a whopping $500 billion per year, which is financed by debt during a time of suspected debt default and full debt monetization.

The red flag could be telling us to that RESET is here. The urgent call would be to stock up on essential supplies and to buy physical gold & silver (then to hold it). Without any hesitation or equivocation, the hangup at ports implies something particularly foreboding about the state of global finance. The DIP Financing step has been short-circuited. It smells like a coordinated operation is being carried out by Team Asia, with Hanjin a sacrificial lamb, albeit a very big lamb.

Futhermore, more stench with signals. The goods carried as cargo have nothing to do with the troubles of the transportation company. They are separate. The suspicion is that the producers who load the ships with cargo from actual work are interested in higher quality payments, no longer finding the USTBill acceptable as payment. The USGovt officials would put a news blackout on the USD rejection. The real physical goods are there. Look beyond the stated news. It is the payment in USD terms which is the problem. The DIP Financing should be an easy issue to overcome. Such financing is standard operating system, and has been for 50 years. With each passing month that QE wrecks the financial platforms and undermines capital structures, the payment in USD terms is more assuredly to be refused. We might soon hear about payment in kind for the cargo, as in the form of any commodity or finished good being requested. Perhaps demands for barter on hard assets such as commodity swaps will be part of trade payments, a concept cited by The Voice on countless occasions in the last year or two. This could be accomplished with copper plates, iron ore, cement, oil & gas, even credits toward commercial building purchase, port facility purchase, bridge and toll road purchase, even more.

GOLD TRADE NOTE INTRODUCTION

The Gold Trade Notes for trade payment might be coming into view, initially with commodity transfers, later swap contracts, and finally gold-backed short-term notes which supplant the USTBill. One might think of used newspapers on the floor, or of the dodo bird. The trade might be made in exchange for either goods delivered or USTBills held. Detect a growing connection to finished goods being withheld from delivery. This is probably another sign of refusal of USTBills as payment. As footnote, be sure to know that the preliminary steps to the Global Currency RESET will not be laid out in full disclosure for public benefit. It represents a tremendous investment opportunity for the elite, which they never tend to share. In fact, the RESET might be well along before it is even recognized. End to EuroRaj main thoughts and open analysis, for which much gratitude is given. The Jackass believes a few critical elements to the RESET are in place. More details on DIP Financing feature is included in the September Hat Trick Letter report.

***A major hitch obstacle can be inferred. Payment in USD terms might be the clot in the artery. Demands might be for hard asset swaps, and the contract security from large scale commitment of commodities, facilities, and property. The swap trade is coming into view, a presage of the Gold Trade Note.***

The Jackass concludes the USD rejection could be lifting its head within a gathering storm, without clear identification. It is indeed difficult to identify all the elements when hidden deals at the highest level are underway, and friction is omnipresent. The Bobcat Corp rejection of USTBills at Pacific ports is a clear story. For every one story recounted, there are 10 to 20 not yet heard. My firm belief is that in Asian banking systems, they do not want the USTBills anymore. The banks in Asia are trying to dump them in heavy volume, not accumulate more worthless toilet paper. Finally the sharp blowback from printing QE money has hit. The USFed monetary policy saves the big insolvent banks, but kills capital. The result has finally seen manifested in USD global rejection, or at least hints toward the same. Asian banks still hold vast sums of USTBonds. They are not going to announce the rejection, but instead fight behind the walls for better terms of payment, even as they pursue the Gold Trade Note for payment at ports. It is coming, like daybreak follows the long night.

NEW SCHEISS DOLLAR & GOLD TRADE STANDARD

In time, expect an eventual refusal by Eastern producing nations to accept USTreasury Bills in payment for trade. The IMF reversal decision assures this USTBill blockade in time, and might accelerate the timetable. The United States Govt cannot continue on five glaring fronts of gross negligence and major violations. These violations have prompted the BRICS & Alliance nations to hasten their development of diverse non-USD platforms toward the goal of displacing the USDollar while at the same time take steps toward the return of the Gold Standard.

The New Scheiss Dollar will arrive in order to assure continued import supply to the USEconomy. It will be given a 30% devaluation out of the gate, then many more devaluations of similar variety. The New Dollar will fail all foreign and Eastern scrutiny. The USGovt will be forced to react to USTBill rejection at the ports. The US must accommodate with the New Scheiss Dollar in order to assure import supply, and to alleviate the many stalemates to come. The United States finds itself on the slippery slope that leads to the Third World, a Jackass forecast that has been presented since Lehman fell (better described as killed by JPM and GSax). The only apparent alternative is for the United States Govt to lease a large amount of gold bullion (like 10,000 tons) from China in order to properly launch a gold-backed currency. Doing so would open the gates for a generation of commercial colonization, but actual progress in returning capitalism to the United States. The cost would be supply shortages to the USEconomy, a result of enormous export increases to China.

The colonization has already begun, with secret deals galore. It is very unclear what deals are being struck in order to arrange for the USGovt to have a proper gold reserve hoard, for backing a new legitimate USDollar. Meetings at very high level are in progress, with little if any popular representation, only elite members present. Failure to produce a legitimate bonafide gold-backed currency would mean the United States must proceed with the New Scheiss Dollar, an illegitimate fake phony farce of a currency. It would be subjected to a series of devaluations. The result would be heavy powerful painful price inflation from the import front. The effect would be to reverse a generation of exported inflation by the United States. The entire USEconomy would go into a downward spiral with higher prices, supply shortages, and social disorder. However, the rising prices would come from the currency crisis, and not so much from the hyper monetary inflation. That flood of $trillions has been effectively firewalled off.


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http://beforeitsnews.com/economy/2016/10/ustbill-rejection-at-ports-in-progress-jim-willie-2855830.html?currentSplittedPage=0

 Jim Willie: US T-Bill Rejection at Ports in Progress! As the West risks a fall into the Third World from a generation of outsourcing, asset bubbles, and financial fraud, as soon as the new currency regime is installed as part of the financial RESET.

August 31st will be marked on the calendars. On that day, the largest casualty finally slammed global trade ports when South Korea’s Hanjin Shipping filed for court receivership after losing its bank support (credit lines), which left its assets frozen. Ports from China to Spain denied access to its vessels. Hanjin Shipping is SKorea’s largest shipping firm and the world’s seventh biggest container carrier. It is a truly huge player. It operates some 70 liner and tramper services around the globe, transporting over 100 million tons of cargo annually. Its fleet consists of some 150 containerships and bulk carriers. It commands four regional headquarters in the US, Europe, Asia, and South East & West Asia, with nearly 5000 people on global staffs. They run numerous major ports for their world class logistics network. Other shipping firms will go bust soon. Even leader Moller-Maersk is in deep trouble, now considering a restructure.

HANJIN SHIPPING CRISIS! Jim Willie: US T-Bill Rejection at Ports in Progress!

August 31st will be marked on the calendars. On that day, the largest casualty finally slammed global trade ports when South Korea’s Hanjin Shipping filed for court receivership after losing its bank support (credit lines), which left its assets frozen. Ports from China to Spain denied access to its vessels. Hanjin Shipping is SKorea’s largest shipping firm and the world’s seventh biggest container carrier. It is a truly huge player. It operates some 70 liner and tramper services around the globe, transporting over 100 million tons of cargo annually. Its fleet consists of some 150 containerships and bulk carriers. It commands four regional headquarters in the US, Europe, Asia, and South East & West Asia, with nearly 5000 people on global staffs. They run numerous major ports for their world class logistics network. Other shipping firms will go bust soon. Even leader Moller-Maersk is in deep trouble, now considering a restructure.

(Before It’s News)

Image result for pictures of HANJIN SHIPPING CRISIS

By: Jim Willie CB, GoldenJackass.com 

World trade has fallen for the second quarter in a row. The decade of stagnation of industrial production in the United States, Japan, and European Union can be blamed on financial engineering, housing bubbles, war, and recently on destructive monetary policy in QE bond purchase program. It is not stimulus, but rather a destroyer of capital. The West contains several nations with heavy industrial emphasis, hardly advanced economies anymore. They risk a fall into the Third World from a generation of outsourcing, asset bubbles, and financial fraud, as soon as the new currency regime is installed as part of the financial RESET.

The CPB Netherlands Bureau for Economic Policy Analysis, a division of the Ministry of Economic Affairs, just released its preliminary data of its Merchandise World Trade Monitor. Trade volumes rose 0.7% in June sequentially, after falling 0.5% in May. Trade was flat year-over-year, but below the volumes of December 2014. On a quarterly basis, world trade fell 0.8%, contracting for the second quarter in a row. Without a doubt the global economy is stuck in a powerful recession. No positive constructive remedies or proper reform policy have been put in place since the Lehman failure. Exactly none. To be sure, none have even been attempted.

Worse, the CPB recently adjusted its world trade data downward, going back several years. The newly updated data depicts a post-Financial Crisis recovery of global trade which is considerably weaker than their original data had indicated. These downward adjustments of 2% to 3% came in a climate of stalled economic growth, according to the IMF. Much of the Western national data is rubbish, forced positive by the common NeoCon fascist dictum. The chart of the CPB’s World Trade Monitor index shows the old data released as of July 2015 (blue line) and the newly adjusted data released (red line). Observe the horrendous 4.4% downard adjustment from the peak in global trade volumes in the original data for December 2014 and in the current data for June 2016. They confirm a broadbased global recession of about 1.0%, in full contradiction of the nonsensical constant Orwellian propaganda of sluggish recovery, spouted routinely in the drumbeat of mainstream news.

https://i2.wp.com/goldseek.com/news/2016/1013gj.jpg

World trade is a direct reflection of only the goods producing economy. Services are not shipped around the world. An airline flight of a group of consultants is not considered world trade, any more than tourism. Finished products, raw materials, and intermediate goods (like car parts for assembly) are shipped regularly. So industrial production, excluding construction, is key. The trend is terrible for advanced economies. Global industrial production, excluding construction, rose 0.6% in June, after a 0.3% decline in May. The index for industrial production in advanced economies rose to 102.5, below where it had been in January at 103.4, a level reached after the Financial Crisis in December 2012. The industrial output remains below from the glory days before the Financial Crisis when the index peaked at 107.8 in February 2008. The global economic recession is as painfully evident as it is denied.

The current level for the index has returned almost exactly to where it was in April 2006, right before the Lehman failure and ensuing crisis. The world has endured a full decade of stagnation, without any remote attempt at remedy or reform, while the bank syndicate remains in power. Remove rose colored glasses. Combine the abandoned austerity budget initiative for the USGovt with the ongoing big bank welfare (known as QE), the preserved insolvent big banks (in dire need of liquidation), the expanding welfare state, then sprinkle on Arab human garbage, and stir with the maintained constant war. Thus no economic recovery, just talk of such.

To varying degrees, the gripping recession has occurred in the United States, Japan, and the EuroZone. A few other so-called industrialized (advanced) economies have exceeded their pre-Financial Crisis levels. Industrial production has shifted to emerging economies, capitalizing on their cheap labor for many years, such as China. Decades ago the vast array of companies in the US, and eventually in Europe and Japan, began outsourcing production to emerging economies in foreign lands. Hence, industrial production in emerging economies has surged over this period. This was particularly the case after the Financial Crisis when companies in the US, Europe, and Japan redoubled their efforts to get production relocated offshore, using easy money from the USFed which moved the cost of money to near 0%, where it has remained for seven years. However, an extreme point of caution. The Emerging Market USD-based debt stands at over $5 to $9 trillion, depending on the definition of such nations. Some estimates are higher. The debt is on the verge of default, due to their currency declines and reduced commodity income, including from crude oil.Thanks to Wolf Street for the contribution.

HANJIN SHIPPING CRISIS

The Hanjin crisis brings new headache to US-based importers. Trailers stack up, adding to client costs while trailer shortage looms. The idle containers are clogging the entire system. Confusion abounds, as emergency measures are being sought. A drop-off point system for the empties is being considered. Soon the used containers will become a newly created market for cargo owners. The bankruptcy of South Korea’s Hanjin Shipping Co Ltd is causing ripple effects for importers bringing goods from Asian factories to the US marketplace. Port facilities are being jammed, while a shortage of trailers is created to move ocean shipping containers on US roads and railways. The world’s seventh largest container carrier owns and transports more than half a million containers. They are in many cases clogging up ports and truck yards, tying up trailers that cannot be used to handle other cargo. The growing chaos is beginning to worry freight handlers at US ports on the West Coast. Witness the first sign of follow-on effects from the failure of Hanjin. The problem stems from Hanjin’s shortage of cash, which has stranded $14 billion of cargo owned by companies such as HP Inc, Home Shopping Network, and Samsung Electronics. Much of the cargo have been stuck on over 100 ships at sea because cargo handlers, tug operators, and ports are refusing to work with Hanjin unless they are paid upfront. They all are aware of the risk of not receiving payment.

In recent weeks, terminal operators in the California ports of Long Beach and Oakland are not taking back empty containers. Many in the industry doubt Hanjin will pay storage costs, which has led to a growing backlog of empty containers and the trailers they sit on. The containers are stranded. Thousands of Hanjin containers are on trailers kept out of circulation. The uncertainty surrounding Hanjin appears to be pushing truckers to lock in trailers from the local organization pool. Maybe the vast pile-up of containers can be fashioned into sleek condominiums like in Detorit, like lego communities.

Simply stated, if a container reads the Hanjin label, there is no place for it to go. One intermediate solution put forth is the creation of a Drop-Off Point for containers after their cargo is discharged. In Southern California, shipping industry executives are discussing a staging area where truckers could drop off empty containers to free up trailers.Another mid-term solution has been proposed. The cargo owners could resort to buying the containers they hold, which would clear up any legal uncertainty around them, thereby enabling the return of chassis. A new niche market is emerging.

Global supply chains are paralyzed after world’s seventh largest container shipper filed for bankruptcy, with its assets frozen within the system. Eastern (Asian) mega-corporations are not too big to fail, not coddled and bailed out (like in the West). Hyundai Merchant Marine might purchase some of Hanjin’s diverse assets. Shipping rates have been reduced amidst the glut, as the global economy is due for a large slam.

August 31st will be marked on the calendars. On that day, the largest casualty finally slammed global trade ports when South Korea’s Hanjin Shipping filed for court receivership after losing its bank support (credit lines), which left its assets frozen. Ports from China to Spain denied access to its vessels. Hanjin Shipping is SKorea’s largest shipping firm and the world’s seventh biggest container carrier. It is a truly huge player. It operates some 70 liner and tramper services around the globe, transporting over 100 million tons of cargo annually. Its fleet consists of some 150 containerships and bulk carriers. It commands four regional headquarters in the US, Europe, Asia, and South East & West Asia, with nearly 5000 people on global staffs. They run numerous major ports for their world class logistics network. Other shipping firms will go bust soon. Even leader Moller-Maersk is in deep trouble, now considering a restructure.

HIDDEN PROBLEM IN USDOLLAR AS PAYMENT

The shipping stalemate from Hanjin has suspicious elements and overtones. Perhaps the Asians generally are conspiring to throw a wrench into the Western Economy. The strong hint of a USDollar rejection at the ports is a major component in the financial angle, possibly the initial salvo in the global financial RESET. Dire challenges exist to shipping with respect to finance, threatening the Global Economy.

Be sure to know that what follows is speculation, but informed and backed by the last few years of events. The stage is set, during a trade war and a global visceral response to the QE monetary hyper inflation that undermines the USDollar. The East led by China want the RESET to be done, but the West delays interminably. The Western bankers and their controlled governments are printing money to cover their failed bonds and to finance their huge debt. THIS CANNOT STAND. Global finance has been turned on its ear. Numerous national banking systems are insolvent. The expected pull of the plug has been looming for many months. Consider some thoughts by EuroRaj, a brilliant analyst on the Jackass team. He wonders if the Asian producers have finally found a lever to pull with shipping and its related payments, to interrupt global trade with the West. It has been not only lopsided, but the payments have been in low quality printed paper and impaired debt. Refer to USTreasury Bills, which seem to be a problem, perhaps being rejected at ports as payment. Consider the theory by my brilliant colleague with 20 years of bank analyst experience, a savvy fellow who has contributed much to the Hat Trick Letter since 2013.

The Hanjin story sounds very shady for a number of reasons. The total debt involved is only at $5.6 billion. Nobody stops operations in a bankruptcy, since the situation worsens quickly and the creditor damage grows deeper. The banks or specialist funding companies step in quickly with an urgently needed service, to provide debtor in possession financing (DIP) funding. Imagine some potential motives at work here. First, perhaps Team Asia wishes to throw a monkey wrench for trade between China and Europe. Note how China and Spain are mentioned in the articles concerning the Hanjin debacle. Second, perhaps a plan is afoot to bring global trade and manufacturing to a halt, so that USFed can justify QE to Infinity in full bloom soon while the Western Economies are severely distracted.

The question has come to center stage. As a result of the bankruptcy process, the global supply chain stands at risk to endure an unexpected failure. The South Korean oceans ministry had been in negotiations for Hyundai Merchant Marine to take over some routes. The global implications from the bankruptcy are unknown, since without precedent due to enormous scale. The potential impact on global supply chains remains devastating, with a cascading waterfall effect, whose impact on global economies could be severe as a result of the worldwide logistics chaos. Both economists and corporations around the globe, the affected firms suffering deep impacted and others, will have yet another excuse on which to blame the radical slowdown in profits and economic growth in the third quarter. An official admission of a global recession, along with numerous individual national recessions, might come. Do not expect the USFed to hike interest rates with the shipping disaster in the background. They are all talk!

PRETEXT FOR USTBILL REJECTION

Here is the central point, perhaps a seminal event in progress with respect to the Global Financial RESET, an action done by angry Asian producers. We might be witnessing a pretext in action, to cover for the rejection of the USDollar, the refusal to accept USTreasury Bills at ports in return for cargo delivery. At risk is the stoppage of all goods shipped from Asia to the United States. The stakes have risen. The Asians are out of patience. The damage multiplies each month. They might be fed up with toilet paper spewn by the USGovt and USFed, a money laundering duo. We might be seeing a trade war salvo of high order, this round led by Asia, directed at the USEconomy, forcing the RESET that Washington and Wall Street refuse to permit, refuse to initiate. The American retailers and other clients who order the Asian ships loaded with cargo typically pay with USTreasury Bills. The Asians might be finally calling an end to payment in USD terms, rendered African toilet paper by QE and the massive hemorrhage of $1 trillion USGovt debt. Hyper monetary inflation has stern nasty consequences. The US trade deficit is a whopping $500 billion per year, which is financed by debt during a time of suspected debt default and full debt monetization.

The red flag could be telling us to that RESET is here. The urgent call would be to stock up on essential supplies and to buy physical gold & silver (then to hold it). Without any hesitation or equivocation, the hangup at ports implies something particularly foreboding about the state of global finance. The DIP Financing step has been short-circuited. It smells like a coordinated operation is being carried out by Team Asia, with Hanjin a sacrificial lamb, albeit a very big lamb.

Futhermore, more stench with signals. The goods carried as cargo have nothing to do with the troubles of the transportation company. They are separate. The suspicion is that the producers who load the ships with cargo from actual work are interested in higher quality payments, no longer finding the USTBill acceptable as payment. The USGovt officials would put a news blackout on the USD rejection. The real physical goods are there. Look beyond the stated news. It is the payment in USD terms which is the problem. The DIP Financing should be an easy issue to overcome. Such financing is standard operating system, and has been for 50 years. With each passing month that QE wrecks the financial platforms and undermines capital structures, the payment in USD terms is more assuredly to be refused. We might soon hear about payment in kind for the cargo, as in the form of any commodity or finished good being requested. Perhaps demands for barter on hard assets such as commodity swaps will be part of trade payments, a concept cited by The Voice on countless occasions in the last year or two. This could be accomplished with copper plates, iron ore, cement, oil & gas, even credits toward commercial building purchase, port facility purchase, bridge and toll road purchase, even more.

GOLD TRADE NOTE INTRODUCTION

The Gold Trade Notes for trade payment might be coming into view, initially with commodity transfers, later swap contracts, and finally gold-backed short-term notes which supplant the USTBill. One might think of used newspapers on the floor, or of the dodo bird. The trade might be made in exchange for either goods delivered or USTBills held. Detect a growing connection to finished goods being withheld from delivery. This is probably another sign of refusal of USTBills as payment. As footnote, be sure to know that the preliminary steps to the Global Currency RESET will not be laid out in full disclosure for public benefit. It represents a tremendous investment opportunity for the elite, which they never tend to share. In fact, the RESET might be well along before it is even recognized. End to EuroRaj main thoughts and open analysis, for which much gratitude is given. The Jackass believes a few critical elements to the RESET are in place. More details on DIP Financing feature is included in the September Hat Trick Letter report.

***A major hitch obstacle can be inferred. Payment in USD terms might be the clot in the artery. Demands might be for hard asset swaps, and the contract security from large scale commitment of commodities, facilities, and property. The swap trade is coming into view, a presage of the Gold Trade Note.***

The Jackass concludes the USD rejection could be lifting its head within a gathering storm, without clear identification. It is indeed difficult to identify all the elements when hidden deals at the highest level are underway, and friction is omnipresent. The Bobcat Corp rejection of USTBills at Pacific ports is a clear story. For every one story recounted, there are 10 to 20 not yet heard. My firm belief is that in Asian banking systems, they do not want the USTBills anymore. The banks in Asia are trying to dump them in heavy volume, not accumulate more worthless toilet paper. Finally the sharp blowback from printing QE money has hit. The USFed monetary policy saves the big insolvent banks, but kills capital. The result has finally seen manifested in USD global rejection, or at least hints toward the same. Asian banks still hold vast sums of USTBonds. They are not going to announce the rejection, but instead fight behind the walls for better terms of payment, even as they pursue the Gold Trade Note for payment at ports. It is coming, like daybreak follows the long night.

NEW SCHEISS DOLLAR & GOLD TRADE STANDARD

In time, expect an eventual refusal by Eastern producing nations to accept USTreasury Bills in payment for trade. The IMF reversal decision assures this USTBill blockade in time, and might accelerate the timetable. The United States Govt cannot continue on five glaring fronts of gross negligence and major violations. These violations have prompted the BRICS & Alliance nations to hasten their development of diverse non-USD platforms toward the goal of displacing the USDollar while at the same time take steps toward the return of the Gold Standard.

The New Scheiss Dollar will arrive in order to assure continued import supply to the USEconomy. It will be given a 30% devaluation out of the gate, then many more devaluations of similar variety. The New Dollar will fail all foreign and Eastern scrutiny. The USGovt will be forced to react to USTBill rejection at the ports. The US must accommodate with the New Scheiss Dollar in order to assure import supply, and to alleviate the many stalemates to come. The United States finds itself on the slippery slope that leads to the Third World, a Jackass forecast that has been presented since Lehman fell (better described as killed by JPM and GSax). The only apparent alternative is for the United States Govt to lease a large amount of gold bullion (like 10,000 tons) from China in order to properly launch a gold-backed currency. Doing so would open the gates for a generation of commercial colonization, but actual progress in returning capitalism to the United States. The cost would be supply shortages to the USEconomy, a result of enormous export increases to China.

The colonization has already begun, with secret deals galore. It is very unclear what deals are being struck in order to arrange for the USGovt to have a proper gold reserve hoard, for backing a new legitimate USDollar. Meetings at very high level are in progress, with little if any popular representation, only elite members present. Failure to produce a legitimate bonafide gold-backed currency would mean the United States must proceed with the New Scheiss Dollar, an illegitimate fake phony farce of a currency. It would be subjected to a series of devaluations. The result would be heavy powerful painful price inflation from the import front. The effect would be to reverse a generation of exported inflation by the United States. The entire USEconomy would go into a downward spiral with higher prices, supply shortages, and social disorder. However, the rising prices would come from the currency crisis, and not so much from the hyper monetary inflation. That flood of $trillions has been effectively firewalled off.


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http://beforeitsnews.com/economy/2016/10/ustbill-rejection-at-ports-in-progress-jim-willie-2855830.html?currentSplittedPage=0

‘It’s Bordering Chaos’: $14 Billion in Cargo Stranded at Sea, Crews ‘Go Crazy’ on Hanjin Ghost Ships!

‘It’s Bordering Chaos’: $14 Billion in Cargo Stranded at Sea, Crews ‘Go Crazy’ on Hanjin Ghost Ships

Thursday, September 8, 2016 15:45

(Before It’s News)

 

By ZeroHedge.com

The fallout from last week’s historic bankruptcy of one of the world’s biggest shipping lines, Hanjin Shipping, continued with little resolution with as much as $14 billion worth of cargo stranded at sea according to the WSJ, sending cargo owners scurrying to try to recover their goods and get them to customers. Since Hanjin’s bankruptcy protection filing, dozens of ships carrying more than half a million cargo containers have been denied access to ports around the world because of uncertainty about who would pay docking fees, container-storage and unloading bills. Some of those ships have been seized by the company’s creditors.

As Bloomberg adds, 85 Hanjin ships that have been effectively marooned offshore as ports in the U.S., Asia and Europe have turned the company’s ships away. The worry is that Hanjin ships won’t be able to pay port fees or their contents might be seized by creditors, which would disrupt port operations. The global shipping disruption comes just as companies are shipping merchandise to fill shelves and warehouses for the end-of-year holiday season.

Earlier this week, South Korean authorities rushed to piece together a capital injection. Hanjin Group will provide 100 billion won ($90 million), including 40 billion won from Chairman Cho Yang Ho, to help contain disruptions in the supply chain. At the same time, South Korea’s ruling Saenuri Party asked the government to offer about 100 billion won in low-interest loans to the shipping line if Hanjin Group provides collateral, in what is effectively a government funded DIP loan.

Some have calculated that the funding package won’t be enough: South Korea’s Ministry of Oceans and Fisheries estimates Hanjin Shipping needs more than 600 billion won to cover unpaid costs like fuel, including about 100 billion won immediately for payments such as to port operators to unload cargo from stranded ships. 

Meanwhile, in addition to the stranded cargo, there are other more pressing problems: “Our ships can become ghost ships,” said Kim Ho Kyung, a manager at Hanjin Shipping’s labor union.

“Food and water are running down in those ships floating in international waters.”  As a result, The company has started providing food, water and daily necessities to crews on six Hanjin ships anchored at ports including Rotterdam and Singapore. About 70 container movers and 15 bulk ships are stranded at 50 ports in 26 countries, according to Hanjin. One Hanjin captain operating a ship in international waters near Japan said his vessel has been given permission to enter a Japanese port Wednesday to unload cargo, but will be required to head back out soon after.

However the biggest threat is that being faced by Hanjin’s clients, who now find themselves with no products, and recourse.

About 95% of the world’s manufactured goods—from dresses to televisions—are transported in shipping containers. Though Hanjin accounts for only about 3.2% of global container capacity, the disruption, which comes as retailers prepare to stock their shelves for the holiday season, is expected to be costly, as companies scramble to book their goods on other carriers.

Analysts don’t expect the snarl to leave U.S. retailers with inventory shortfalls for the holidays, but the longer the logjam drags on, the greater the risk.

Some of those most reliant on Hanjin, such as Samsung Electronics, which has said it has cargo valued at about $38 million stranded on Hanjin ships in international waters, are taking alternative measures:  the company said it is considering chartering 16 cargo planes to fulfill its shipment contracts, mostly to the U.S. “We’re passengers on a bus, and we’re being told we can’t get off,” Evan Jones, a lawyer for the company, said Tuesday.

For now US retailers aren’t feeling too much pain, as Nate Herman, a senior vice president for the American Apparel & Footwear Association, said: “This is not impacting store shelves now,” however he added that “It will impact store shelves if the situation isn’t resolved.” On Tuesday, the association, which represents manufacturers and retailers, held a conference call with 150 members. “People are still trying to figure out how to get their boxes off the boat and move them,” Mr. Herman said

The problem retailers face is that there is little precedent how to deal with the fallout. While Hanjin was granted protection by bankruptcy courts in Korea and the U.S., conditions are “bordering chaos,” said Lars Jensen, chief executive of SeaIntelligence Consulting in Copenhagen.

With so many Hanjin ships barred from entering ports, shippers have no idea when their cargo will be unloaded.” Jensen added that 43 Hanjin ships are en route to scheduled destinations with no guarantees that they will be allowed to unload. An additional 39 are circling or anchored outside ports. Eight ships have been seized by creditors.

While the courts’ creditor protection permits Hanjin ships to move in and out of certain terminals in those countries without fear of asset seizures, shippers and brokers say the rulings don’t solve the shipping line’s problems in the U.S., as it is unclear whether Hanjin will be able to afford to have the ships unloaded once they dock. Moreover, the courts’ rulings don’t necessarily apply to ports in Asia and Europe.

But while manufactured cargo can survive indefinitely, crews on ships can not, and as Hanjin ships drift at sea, their crews face increasing uncertainties and diminishing supplies. “We usually have food and water for about two weeks,” said the captain of a Hanjin-operated ship speaking by satellite phone from the South China Sea. But, after 12 days at sea, “everything is getting tight—food, water and fuel,” he said.The captain added that he is rationing water and cutting back air conditioning to save energy.

“The heat is driving the crew crazy,” he said. His ship was carrying lubricants and home appliances from South Asia to a Chinese port, but last Thursday, he was told to stop, as the ship could be seized at its destination.

Adding to the confusion, the WSJ adds that shippers and brokers said the Korean government has designated only three so-called base ports—Los Angeles, Singapore and Hamburg—where Hanjin vessels can unload shipments without risk of being seized by creditors.

“Even in those ports, we don’t know who is going to be paying unloading and docking fees,” a broker in Singapore said. “Korea says it will be Hanjin, but Hanjin is telling us it has no money. It’s a total mess.”

It gets worse.

The Korean Shippers Council, which represents more than 60,000 trading companies, said Wednesday  its members“have not been able to figure out the whereabouts of their freight.”

And even those who do know where their ships are, will soon find a dramatic surge in costs.  Brokers said the problems extend to carriers with vessel-sharing deals with Hanjin. They include China’s Cosco Group, Japan’s Kawasaki Kisen Kaisha Ltd., and Taiwan’s  Evergreen Marine Corp. and Yang Ming Marine Transport Corp., which typically move thousands of Hanjin containers daily. Sanne Manders, chief operating officer at California-based freight forwarder Flexport Inc., said rates on Asia-U.S. cargo have risen 40% to 50% since Monday on all sea lanes—not just those operated by Hanjin.

“That amounts to easily $600 to $700 per container,“ Mr. Manders said. ”We think this period of high prices will be 30 to 45 days,” through the initial peak for Thanksgiving-season shipping, he said. Freightos, an online marketplace for booking freight shipments, said the average price per container on Asia-U. S. routes rose 56% to $4,423 on Tuesday from $2,835 a week earlier.

The surging costs are a problem as the global shipping industry has been operating at a loss since the end of 2015,and it’s set to lose about $5 billion this year amid an oversupply of vessels, according Drewry Maritime Research.

The financial woes have made terminal operators and marine service suppliers wary of working with Hanjin’s vessels. Typically, port fees for a ship that can carry 8,000 boxes would be about $35,000 per call.

“Getting ships arrested or stranded would minimize debt exposure for vendors, but it will also get the court to quickly take steps to normalize the company and start making payments,” said Rahul Kapoor, a Singapore-based director at ship consultancy Drewry.

* * *

Meanwhile, executives with freight-booking platform Shippabo warned that companies should expect delays as many cargo containers have been rerouted on different vessels. “For the top 25 importers, this is a blip,” said Frank Layo, a retail strategist at consulting firm Kurt Salmon. “They’re diversified, they’re not shipping it all on one line.” But for smaller retailers with less sophistication, “this could be devastating,” he said.

Another word for devastating? A “justification” to miss earnings for yet one more quarter.

http://www.zerohedge.com/news/2016-09-08/its-bordering-chaos-14-billion-cargo-stranded-sea-crews-go-crazy-hanjin-ghost-ships

More great articles here: http://www.zerohedge.com

http://beforeitsnews.com/economy/2016/09/its-bordering-chaos-14-billion-in-cargo-stranded-at-sea-crews-go-crazy-on-hanjin-ghost-ships-2850898.html

Americans now spend more on drinking and eating establishments than they do at grocery stores. Over 17 million kids went to college to be waiters or flight attendants.

Americans now spend more on drinking and eating establishments than they do at grocery stores. Over 17 million kids went to college to be waiters or flight attendants.

http://www.mybudget360.com/spending-on-bars-and-restaurants-passes-grocery-store-spending-college-degree-and-serving/

Americans now spend more on drinking and eating establishments than they do at grocery stores. Over 17 million kids went to college to be waiters or flight attendants.

Posted by mybudget360 in low wage labor, young Americans

There are many reasons why so many people now work in the low wage sectors of America. As it turns out, the eating habits of Americans have changed dramatically. Only in the last couple of years have Americans spent more on eating out than they do on actual groceries. Too bad the median annual pay for waiters and waitresses in 2015 was $19,250 with tips included. Companies still haven’t figured out how to outsource servers but our manufacturing base that once provided millions with good paying jobs is completely decimated. It also may have to do with a large number of young Americans living at home. Since homeownership is on the decline with the young, discretionary spending on eating out is up. Way up.

Spending on eating out!

It is an interesting cross point that for the first time in a generation people are spending more on eating out than they do on groceries. Are Americans just not cooking as much? Is there a preference simply for eating out? Or is it because the rise of the two-income household leaves no time for cooking?

It is probably a mix. But it might also be a part of the culture where people now feel as they should eat out more often. Here is the data:

spending on restaurants and grocery

Now I don’t want to sound like I’m an old timer here but when I was growing up, going out to a restaurant was a special event.  We didn’t grow up with much so going out to eat was a big deal and outing.  Yet today, it simply seems like everyone is going out and there is also the rise of massive numbers of fast food outlets that don’t require much money too.  The reasons may be many here.

The bigger issue is that our growing service sector is incredibly low paying and seems to be one of the fields in the U.S. that is booming.  It also seems to be indicative of how our country is being split out.  The few owners of the food establishments are likely doing very well and the massive army of servers are barely scraping by one step above poverty.  This isn’t to take one side here but where is the middle?  The middle class is now a minority in this country.

As it turns out, 17 million kids went to college to become waiters or flight attendants:

college degree

Source:  BLS

And with total student debt zooming over $1.4 trillion, you have to wonder what is going on here.  Part of what I feel is happening is that people want to pay for an “experience” that they simply do not want to miss out on.  For example, the “college experience” now means more than an education.  It also means massive stadiums, state of the art gyms, and student centers that rival theme parks.  Then you have people having the Starbucks experience where they drop $5 on a cup of coffee they could make at home for $1 or less even.  In the end, many simply cannot afford to have all of these experiences but are deep in debt trying to keep up (thank you credit cards).  At least getting drunk and lit can take your attention away from the real economy.

http://www.mybudget360.com/spending-on-bars-and-restaurants-passes-grocery-store-spending-college-degree-and-serving/

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Hanjin ships, cargo and sailors stranded at sea:It is a major disaster for the shipping companies and for the companies that own the goods in those containers,’ Greg Knowler, maritime and trade analyst with IHS Markit, told the BBC from Hong Kong.

Hanjin ships, cargo and sailors stranded at sea

A Hanjin container shipImage copyright Getty Images

With South Korea’s biggest shipping company filing for bankruptcy protection, the vessels, sailors and cargo of Hanjin Shipping are stuck in limbo, stranded at sea.

Ports, fearing they will not get paid, refuse to let them dock or unload.

That means the ships are forced to wait for Hanjin, its creditors or partners to find a solution.

It’s a case of unprecedented scale, with experts expecting the deadlock to last for weeks, if not months.

“[It is] a major disaster for the shipping companies and for the companies that own the goods in those containers,” Greg Knowler, maritime and trade analyst with IHS Markit, told the BBC from Hong Kong.

Read more: Shipping giant Hanjin to enter receivership

Peak season

Not only are ships not allowed to unload, containers waiting to be picked up are also being held back by the ports as collateral over unpaid bills.

And even if the ports did allow them in, Hanjing would probably not as the vessels could expect to be immediately repossessed by the firm’s creditors.

Beyond the ships and containers, there is of course the cargo within those containers – in many cases part of a tight chain of supply and delivery.

By September, the global shipping industry is already into what is its busiest time of the year ahead of the Christmas season.

“Just imagine, there are some 540,000 containers with cargo caught up at sea,” explains Lars Jensen, chief executive of Sea Intelligence Consulting in Copenhagen.

Shipping cranesImage copyright Getty Images
Image caption The cranes are ready but the Christmas merchandise is stuck at sea

That means that a lot of the goods en route to the US are geared at the busy year-end holidays and any disruption will be a major headache for the companies that have entrusted their products into the hauls of the Hanjin freighters.

Who owns what?

Let’s break down the somewhat confusing ownership structure at play here.

Hanjin operates partly with its own ships, and partly with vessels it leases from others. So some of the vessels stuck at sea are owned by other companies who now can’t get them back and on top of that have to assume they won’t get paid for leasing them in the first place.

The containers on board the ships are also not all Hanjin’s own. As the company is part of an alliance with five other cargo firms, there will be a mix of containers on each vessel – some belonging to Hanjin, the rest to the other four partners.

And lastly, there are the firms who own the content of the containers, for instance an Asian electronics firm sending its goods to the US market.

Hanjin’s bankruptcy is the largest ever to hit the shipping industry so there’s no roadmap as to what will happen now, no precedent of comparable scale.

Stuck in ports

There are the containers stuck at ports.

Tianjin containersImage copyright Reuters
Image caption Countless containers are stuck in ports around the globe

Let’s take a container brought from, say, the Philippines to Hong Kong, to then be picked up from there and taken to the US.

Berthing and handling of that cargo at the Hong Kong port costs money. If Hanjin can’t pay that, the port will hold on to those containers as collateral until someone will be willing to pay.

A possible solution would be that the companies who own the contents of those containers ask other shipping companies to step in and pick up where Hanjin left off. The cost of this would be immense, and would come on top of anything they had already paid to Hanjin beforehand. Part of it might be covered by insurance but it would still be an extremely costly endeavour.

Stuck at sea

The containers stuck on board the ships are the next problem. While at sea, there is no way to get the cargo off board.

Ships that are only leased by Hanjin could see their actual owner take back control and bring them into a harbour. They would still need to be cleared of their cargo but could then be leased to other companies.

Given that the owners of any leased vessels would probably not want to foot the bill themselves they may try to draft in the four partner lines that have containers on the ship or maybe even the companies whose cargo is inside those containers.

A train carries shipping containers from HanjinImage copyright Getty Images
Image caption Hanjin’s bankruptcy is the largest ever to hit the shipping industry

The ships owned by Hanjin itself would most likely have to be sold before anyone would bring in the money to get them into a port and cleared. The fact that they would have to be sold as is, i.e. at sea, and with a load of overdue containers on board would probably weigh down the price of the vessels.

Stranded sailors

Each stranded ship has about 15 to 25 crew on board. Unable to call at any port, they will have to depend on the supplies they have with them until a solution can be found. While food should last long enough, they will eventually need fuel.

In a worst-case scenario, should they find themselves unable to pay for fuel being delivered by a shuttle, they would risk running into serious trouble. In that case though, nearby ports would likely be forced to accept them.

Aside from the prospect of being stuck for weeks at sea, the sailors will also face uncertainly over their wages. Most of them are not actually hired by Hanjin but by crewing agencies. Those agencies are unlikely to get paid by Hanjin and therefore won’t be able to pay the crews.

“Unless someone steps in very quickly – and there is no sign of that – this will last a very long time,” according to Mr Jensen.

Ships, cargo and crew might find themselves stuck for weeks, if not months, without knowing when and where their current voyage will end.