For many years I have predicted that the “slow burn” would continue. As we begin 2017, the heat has been turned up dramatically. The financial coup d’état drained trillions of assets from sovereign governments, pension funds, municipal and community institutions, and households. Falling interest rates have compounded these losses.
Now, the debt growth model is over and the cost of capital for these existing institutions is rising. It has become more difficult for some to “kick the can.” It is impossible for others. What remains in the existing institutions are liabilities.
We are currently witnessing an acceleration of “controlled demolitions” of existing liabilities as pension funds, insurance companies, and businesses must renegotiate or abrogate their contracts. Sovereign governments – who have the capacity to print currency and to issue more debt – must engage in a deeper re-engineering of government assets and operations.
The most important question before the United States is whether or not we will re-engineer the return on investment to taxpayers of government investment, credit, contracts, appropriations and regulations from a negative to a positive return. If we do, we will create explosive wealth. If we do not, we are in for a long, harsh financial squeeze at best…or civil war at worst; perhaps even a repeat of the “rape of Russia.”
In our 2015 Annual Wrap Up (and in numerous recent quarterly and annual wrap ups), the Solari Report focused on the growth of a new, networked economy which we call Global 3.0 and the reinvestment of funds shifted through the “financial coup d’état.”
In this year’s report, we have chosen to focus on the traditional industrial economy of Global 2.0 and to ponder how the demolition of liabilities will be managed in 2017 and beyond. But much is happening — including continued growth — in Global 3.0, so we’ll mention some of the highlights.
Given Brexit, the change in the US administration and the upcoming European elections, 2017 will be a year of transition. Looking down the road over the next 5-10 years, we face a wide variation in what is possible. If we succeed in coming into balance with the environment and make a successful transition to a multipolar world — including the implementation of new technology in productive ways — investors will enjoy significant opportunities. If we do not, the risks will continue to rise.
Will the Dow rise to 30,000 or fall to 10,000? Either scenario is a possibility.
I. Global 2.0: From Slow Burn to Pressure Cooker
A. Controlled Demolitions Accelerate
- CalPERS Cuts Pension Benefits For First Time
- Every Household in California Owes $93,000 to Pay for State Pensions
- Two Decisions Could Make Big Changes in California’s Public Pension System
- Dallas Police and Fireman Pension Fund Suspends Pension Withdrawals
- Iron Workers retirees get bad news on pension cuts
- Retirement Savings and Enhancement Act (portability and lifetime)
- Former Fed Advisor: State Pensions Time Bomb Spells Disaster For The US
- Puerto Rico’s Warning for States, Cities: You Might Be Next
- Britain: Pension Age May Be About to Rise Again, Says Former Minister
- Greece Pensioners Receive Controversial Christmas Bonus Payment
- David Cullum’s 2016 Year in Review: Pensions
- John Hancock Withdrawing From Long-Term Care Market
- Collapse of Long-Term Care Insurer Reflects Deep Industry Woes (Subscription Only)
- A Second Zurich Insurance Executive has Committed Suicide
Bankruptcies and Failures:
- The Titanic of Retail: Sears Is ‘Set To Sink’ As Stores Close, Executives Flee, and The CFO Admits the Brand is Falling Short
B. The Debt Growth Model is Dying The War on Cash:
- India Confiscates Gold, Even Jewelry, in Raids on Hidden Money
- 86% Of Indian Currency Void: Masterstroke Or Big Blunder
- David Collum’s 2016 Year in Review – War on Cash
- Revealed: The Hidden Agenda of Davos 2016
- Where to Stash Your Cash: 1st Quarter Wrap Up
The End of the Bond Bull:
- ‘Trump Thump’ Whacks Bond Market for $1 Trillion Loss
- Planet Debt: 1st Quarter Wrap Up 2015
- “Central Banks Now Own $25 Trillion Of Financial Assets”
- Unanswered Questions About Wells Fargo: Are Phony Mortgages on the Fed Balance Sheet?
Negative Interest Rates Turn to Rising Interest Rates:
- Negative-Yielding Bonds Jump to Almost $12 Trillion
- Federal Reserve Caps Off 2016 With Interest Rate Hike
US Dollar Rising:
- Is the U.S. Dollar Set to Soar?
- Why is the US Dollar Rising?
- $50 Trillion Sideline Cash Conundrum?
- China’s Central Bank Is Facing a Major New Headache
The Future of the Euro:
- Solari Report: The Real Rate of Inflation
- The Burrito Index: Consumer Prices Have Soared 160% Since 2001
US Budget Hot Potato:
- Rep. Sam Johnson (R-TX) Chair of the Social Security Subcommittee Proposes Social Security Means Testing
- McConnell, Warning of ‘Dangerous’ Debt, Wants Tax Cut Offsets
- Coming Clean Beyond the Fiscal Cliff by Catherine Austin Fitts
II. Inside the Pressure Cooker: Will We Expand or Shrink the Pie?
A. Return on Investment to Taxpayers: Will It Turn Positive Or More Negative?
Productivity Growth: Labor vs. Human Productivity:
- No Recovery: An Analysis of Long-Term U.S. Productivity Decline
- Productivity, Prosperity & the Popsicle Index from 2nd Quarter Wrap Up 2016
B. Piratization: Could the Rape of Russia Happen Here?
- Solari Report: Russia and the Ukraine Backstory with Anne Williamson
- Solari Report: Dimitry Orlov: Teaching Us to Survive and Thrive
- Samuel Alito: America Faces ‘Unprecedented Challenges to Our Constitutional Structure’
- Corporate America Is Just 6 States Short of a Constitutional Convention
- ALEC’s Jeffersonian Project Pushes to Amend Constitution
- Inside the Conservative Push for States to Amend the Constitution
C. National Security State Costs Out of Control
- Government Workers Now Outnumber Manufacturing Workers by 9,977,000
- Boeing Sweats Under Trump Spotlight as SoftBank Feels Warmth
- After Meeting with Trump, Boeing Relents on Cost of Air Force One
D. More Cut & Run
- Lockheed Cuts and Runs
- Wave Of Mergers Washing Over The Economy
- Over Half A Trillion In M&A: October Mergers Smash All Records With $500.1 Billion In Deals
- Bayer and Monsanto to Merge in Mega-deal that Could Reshape World’s Food Supply
- US Companies are ‘Hoarding’ a Record $2.5 Trillion in Cash Overseas
E. Corruption: Out of Control
- Americans’ Trust in Political Leaders, Public at New Lows
- The Panama Papers: Making Digital Crimes Fashionable
Pedophilia & Control Files:
- ‘Dark Room’: Major Western Media Remove Norway Pedophile Ring Story
- The Darkest Secrets Revealed: Ole Dammegard & Carine Hutsebaut
- Sofia Smallstorm: November Issue of Avatar Update (Subscription Required)
- Sofia Smallstorm on the Real Deal: Connecting Pizzagate, CPS, Vaccines, Children’s Rights Bill and Straw Man
- A “Soft Coup” Attempt: Furious Trump Slams “Secret” CIA Report Russia Helped Him Win
- Bev Harris: Black Box Voting
- Dems Move to Replace Elections Official Who Claimed Voter Fraud Rampant in NYC
- The Election was Stolen: Here’s How…
F. Decentralization: Can We Re-Localize? Can It Work?
- U.S. Court of Appeals Says Local Governments Can Prohibit GE Crops
- Sonoma County Vote Success Leads to Largest GMO Free Zone in US
- How America Is Putting Itself Back Together
- China’s Reviving the American Heartland: One Low Wage at a Time
- Open Letter to My Congressman
- Trump’s Education Secretary Plans To Get Rid of Common Core
- Tax Escrows and Writ Cuo Warranto
- A Solari Report: Can Our Communities Serve as a Financial Safe Haven in Troubled Times
G. Equity Creation Greater than Controlled Demolitions?
H. Covert Cash Flows: Black Budget, Secret Dividends
- Catherine Austin Fitts and Dr. Joseph Farrell at the Secret Space Program Conference 2014 San Mateo
- Solari Report: WOW! Secret Space Program 2015 with Dr. Joseph Farrell
III. Global 3.0 Rising
C. 5G is Coming
- FCC: Intimidating Press, Suppressing Science at “5G” Rollout
- Check Out the Whale Hologram in the School Gym
- Legally Blind Man Sees Clearly For The First Time Ever, Thanks to Virtual Reality
- Britain’s Army is Investing $1 Billion in Insect-sized Drones, Laser Firearms, and Virtual-reality Goggles
D. Surveillance Capitalism
IV. How Will Investors Handle This Much Uncertainty?
A. Artificial intelligence and the Financial Markets
B. The Rise of Index Funds
- Investors Are Fleeing Stock Funds at the Fastest Pace in Over 5 Years
- Are Index Funds Eating the World? (Subscription Only)
- A Volatile Calm – The Paradox of 2016 Financial Markets
- Former CEO Of UBS And Credit Suisse: “Central Banks Are Past The Point Of No Return, It Will All End In A Crash”
- “Economy Shattered, Currency Collapsing”: Venezuelans Wait in 6 ATM Lines For Enough to Buy Rice
D. The Rise of Investment Screening