How long is the list of global economic challenges? Leave it to the Wall Street Journal to sum things up succinctly:
Market Roundup
“Policymakers in Shanghai say they face a global economy more fragile than it has been since the European debt crisis risked derailing the global economy earlier this decade. Two of the world’s largest emerging markets, Brazil and Russia, are in the second year of recessions; China’s slowdown has hit Africa, Asia and Latin America. Rich nations like Saudi Arabia are experiencing their first-ever budget deficits during the global oil slump, while falling prices for other commodities are taking the wind out of exporters from Australia to Gabon.”
I could add several more challenges to that list, and indeed I have. So at this point, the key question isn’t: “What do monetary and fiscal policymakers WANT to do?” It’s: “What CAN they do to fight this slowdown?”
As part of the search for an answer, let’s look to the big conference in China. We’re starting to see some draft versions of the G-20 communiqué that will be issued when policymakers wrap things up in Shanghai tomorrow. If one thing is most apparent, it’s that nobody seems to be able to agree on what to say or do, or whether any of it will work anyway.
The OECD and IMF claim massive fiscal/deficit spending on things like infrastructure will succeed. China also wants some increase in deficit-financed spending and stimulative monetary policies.
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| Policymakers face a global economy more fragile than it has been since the European debt crisis. |
But France and Italy are talking down their ability to spend more, while Germany’s Finance Minister Wolfgang Schauble threw a shovel full of dirt on the idea of huge fiscal stimulus. His quote: “The debt-financed growth model has reached its limits” and just risks “zombifying of the economy.”
As for monetary policy, even central bankers are admitting they’re at the end of their rope. One example: The governor of the Bank of England just knocked negative-interest rate policies as misguided and likely to foster a “zero-sum game” environment, despite the fact that’s exactly what the Bank of Japan and European Central Bank are using.
Why do I keep harping on this topic? Two reasons:
A) It’s at the forefront of investor minds, and therefore dominating market-trading activity right now. But more importantly …
B) I believe we’re at a critical juncture. We’re passing the point of no return, the point where investors realize the futility of trying to use even more monetary- or fiscal-policy ammo to fight a down-phase in the credit cycle that’s all but inevitable.
| “We’re at a critical juncture … passing the point of no return.” |
Look, we had a six-and-a-half-year easy-credit bacchanalia. It fueled booms and bubbles in just about everything. In junk bonds. In emerging-market debt. In auto loans. In commercial real estate. In IPOs. In M&As. In stock buybacks. In artwork. In collectibles. In trophy Manhattan and Miami condos. Heck, the Journal just published a story about the “most extreme high-risk condos on the market,” discussing how palaces in the sky are piling up all over the U.S. as buyers balk.
Will another dose of QE or negative interest rates push off the era of reckoning for that?
Will a few billion, or even tens of billions, of dollars worth of bridges and high-speed trains change the path we’re on?
I maintain the answer is “No.” I believe we’re hurtling toward a future that no amount of G-20 talk, or action, can prevent. So we might as well accept it, deal with it, and invest in a way that helps us protect and build our wealth in that environment.
Yesterday, I told you I’m participating in a webinar that’s designed to help you do exactly that. It’s called “Finding Profits as Markets Falter and Gold Soars,” and it’s scheduled for Monday, Feb. 29 at 2 p.m. Eastern. I estimate it will take about 45 minutes of your time, and is entirely free to attend.
If you already registered, great. If not, you can do so using this link. I’ll be joined by noted gold and market experts Brien Lundin, Brent Cook, and Peter Schiff, and I expect it to be extremely valuable to you in these volatile times. Can’t wait to “see” you there.
Meanwhile, what do you think about my “inevitability” thesis? Are we past the point of no return, or is there still something policymakers can do to boost growth in an effective, lasting manner? What are you doing with your investments now that the G-20 gathering is going to wrap up? Hit up the discussion section to let me know.
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It’s almost the weekend. But that doesn’t mean you’re taking time off from weighing in on the issues of the day.
Reader Joe brought up the truthfulness (or lack thereof) of global economic data, saying: “The Chinese have been lying about their economy for quite a while now, much like the U.S. government and their media lackeys (New York Times, Washington Post, etc.). Hopefully the Chinese will reject the failed solutions of the IMF, OECD, and the hopelessly incompetent Jacob Lew. It’s obvious that the banksters only care about their survival and to heck with the people of Japan, Europe, the U.S., etc.”
Reader Howard also picked up on the China theme with these comments: “China is a work in progress with almost insurmountable challenges. Their foreign-exchange holdings won’t be helped without a continuing export drive into the future. To be perfectly honest, I wouldn’t like the Chinese leaders’ job.”
Reader Peter offered a quick take on what investors may want to do here, saying: “Buy bullion gold and stash it somewhere safe!” Reader Anthony G. also added a short verdict on the latest market action: “The bulls are back. The G-20 troops have saved the day or stocks are overbought again.”
As for interest rates, Reader Nels said: “Is the real interest rate 25 basis points or 300 basis points? Who knows? And what difference, at this point, does it make?
“The Fed can’t tighten because they will blow up too-big-to-fail borrowers, like Uncle Sam and most corporations. The Fed can’t NOT tighten because they will blow up too-big-to-fail lenders, like pension funds and insurance companies. 25 bp? 300 bp? Either way, there will be big trouble. There is no good way out of the mess that the Fed has enabled.”
Great insights all around. In the spirit of Peter and Anthony G.’s comments, let me again offer some quick takes: Gold is overbought and likely to correct in the short term, but it may finally be breaking out of its long-term bear-market trend. The bulls are throwing a party now, but a major letdown could be looming once the G-20-hype fades.
China is going to keep massaging the truth as long as they can because they have no other good options. And when it comes to interest rates, the market is already taking matters into its own hands and driving yields higher on everything from junk bonds to emerging-market bonds to leveraged loans.
So it doesn’t matter what central banks do or say. The credit cycle has turned, and the consequences are already baked in. So get prepared for them. Monday’s webinar is a great start, and as a reminder, you can register for free here.
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Easy credit has been the lubricant for the boom in M&A. But the gears are really grinding down now. The Wall Street Journal reported today that Goldman Sachs Group (GS) is having trouble helping raise money to finance Vista Equity Partners’ $6.5 billion purchase of Solera Holdings (SLH).
The investment bank is trying to sell around $2 billion in bonds to pay for the deal. But some buyers are balking and others are demanding higher and higher yields – more than 11%, according to the Journal.
Marco Rubio and Ted Cruz tried to derail Donald Trump’s campaign for the Republican nomination in a raucous Houston debate last night. Whether the newly aggressive push to challenge Trump is too little, too late remains to be seen with Super Tuesday primaries looming next week.
Global trade collapsed by almost 14% in dollar-terms last year, according to a Dutch-based organization that monitors the movement of goods between countries. That was the worst slump since the global financial crisis in 2009. China and emerging markets were most responsible for the slump, according to the Netherlands Bureau for Economic Policy Analysis.
U.S. GDP grew at a 1% rate in the fourth quarter, compared with an earlier estimate of 0.7%, according to the Commerce Department. That was still half the growth rate from the previous quarter, however, and consumer spending growth was revised lower.
So what do you think: Is the economy weakening or strengthening? Will the slump in global trade, and tightening credit markets, continue to put pressure on growth going forward? Any thoughts on last night’s debate? Speak up in the comment section below.
Until next time,
Mike Larson
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Recommended Articles by Mike Larson:
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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Inventories are increasing, just when business should be starting to fill shelves with new products, there will be no shelves to put them on “new products”, prices will crash in the next quarter, car sales are already in trouble as the bait to lease new cars is below profit margins, just like 2007.. Detroit will fall apart if this happens, and surrounding community already looks like a war zone, the whole state is already crumbling, roads bridges and infrastructure are a wreck…………. Any thing that is bought and paid for with tax dollars should be made in the United States where tax dollars will be brought in from workers not sub out to foreign country’s for cheap labor and no tax return..
“What CAN they do to fight this slowdown?†you ask. Nothing that will be effective, but you can bet the will continue to do more that is destructive.
What’s wrong with 0% growth? While we in the first world will have to accept a somewhat lower standard of living, at least the earth’s finite resources will last longer and we’ll enjoy a cleaner atmosphere due to a lower level of oil/mining/industrial/agriculture production.
ONLY SOLUTION I CAN SEE IS….
CUT GOVT SPENDING 50%
ABANDON WTO AND TARIFFS
CUT TAXES TO BRING REVENUE BACK FROM ABROAD
RAISE TAXES ON HIGH END EARNERS
INFRASTRUCTURE SPENDING TO PUT MINORITIES BACK TO WORK
heres my idea raise the cap on social security to 250,000— to—- to 400,000 dollars…. simplify the federal and state taxes eliminate all of the loopholes , fire 95% of the IRS employees raise taxes on alcohol cigarettes and create high taxes on states that let people sell marijunana stop all the illegals from taking your jobs and sending that money back to south America or mexico , I was talking to a friend of mine recently we were talking about illegals in this country he is guessing at his business he might have between 700-900 illegals ………. but like he told me what can I do they come with a social security numbers they have documentation but they come with a translator he knows they are here not legally but with laws like affirmative action he is forced to hire them rather than make a mistake and get sued
at least the translator is making money
to win any war, you must first identify the enemy. to find out who the enemy is, just google-Zionist bankers who own the federal reserve. also google – kennedys secret societies speech. kennedy was shot, Reagan was warned, and every pres. since then has done their bidding. our congress and supreme dorks do their bidding. wars are continual because they make more money in one day of war, than one year of peace. they borrow to all sides. their so-called money is endless-they print it out of thin air. we are fools to think any country can pay down the debt. no currency comes into existence until a person or country takes out a loan. debt-based. our country is ruled by some very evil men. we need our treasury to issue the fed a rubber check, send them packing-forever. if the treasury issues the cash, their is no interest, very little debt.
There is no need for a conspiracy to explain the situation when normal greed, shortsightedness, and human stupidity work just as well.
Blaming the “outsiders” is akin to the Salem witch trials and, yes, Nazi Germany (all hail Godwin!). I won’t get through your tin-foil hat, but your post needs a rebuttal so that less crazy readers don’t despair.
Give me a break Adolf! Zionist bankers running the economy? Maybe in Israel. This misguided rhetoric has been used for thousands of years, anti-Semitism is ugly no matter who does it. There is a conspiracy of stupidity, when too much is made of something it has no value, “money” included. During the American Civil War the Union printed gazillions of “Greenback” dollars. They were so valueless, the Federal Government refused to accept them as any form of payment, that it was cheaper to use them than buy toilet paper. The Weimar Government printed so much “money” it cost billions of Marks to mail a letter across town by 1932. The more the funny money presses run the deeper the hole gets. Billseubert if want to see the enemy, just look in the mirror, the World is being misruled by fools.
I don’t know about the Zionist bankers part but what Bill is describing is very real. In a series of excellent essays by Judge Anna Von Reitz she describes the encredibly intricate legal machinations of European Banking interests, U.S. Corporate interests, and disingenuous politicians that have conspired to deprive citizens of any real freedom regarding their labor and property. Since 1040 the government owns us lock, stock, and barrel the instant our birth is registered. What they did to us in 1913 was nothing short of criminal. I won’t bore you with details here but if you want to see how badly we have all been sold down the river check it out. Caution! You may never bother to vote again. Jim
1940
There is something they can do but it doesn’t take economic principals into account just good old common sense. The Fed should raise rates and put money into the hands of the middle class who will actually spend it. Nothing they have done for 8 years has increased demand only served to finance stock buybacks and overseas investments. Give a one time tax break of 10% only foreign held money and bring those trillions back here. Trillions more will come as money seeks higher returns and the Saudis the Chinese and the Japanese will be forced to liquidate their reserve currencies. Maybe then everyone will realize that monetary policy for the sake of ill gotten gains is not the answer but creating jobs and demand is.
Easy money won’t have much influence over the direction the US economy heads. That should be obvious after 8+ years of interest rates hovering around zero and the result being tepid, lackluster GDP growth. Ignoring non-us economies for a moment, what would spark US GDP growth is a reduction in regulations, an easing of costs associated with hiring new employees and creating an atmosphere of potential profitability that would encourage business owners, and potential owners, to invest in new businesses and/or grow their existing business.
Existing tax rates are simply too high and discourage risk taking, rules and regulations make the cost of doing business exceedingly uncertain. It now takes somewhere in the neighborhood of $1 billion to develop a new drug with a lead time of 5 – 7 years (at best) and politicians are using drug companies as scapegoats for the high cost of healthcare. Suggestions that the minimum wage needs to be increased to $15 per hour presents a huge hurdle for would-be entrepreneurs considering starting a new business. With such high costs at the very beginning their business endeavors don’t even have a chance to get off the ground. The economy won’t begin a strong recovery/growth phase until the government eases the impediments to growth that have been erected over the last several years.
I like the way you think!
OOOOH Ronnie. Where are you when we need you?
Why don’t we have people like you running for office? Jim
I do believe that Mike Larson has summed it all up “quite correctly.” We are about to “pass through a period in t i m e” that most of us simply do NOT believe is possible.
The double entendre facing the US currently is that Obama is “lame” and he is also a “lame duck” (not that he has a clue nor can he seriously influence the economy anyway). … Congress is only worried about getting reelected and at what D.C. restaurant they will dine at this evening, we have a bunch of poor choices for the presidency on both sides, the fed is at a standstill as to how to effect the economy, we lack god old fashioned inflation, we over spend on everything, we cow-tow to the Chinese, the Saudis, Iran, and to a certain degree to the Russians. Cutting taxes and most of all cutting the budget to may be ammunition to kick start this sluggish mess we are currently experiencing.
See comment above.
Tariff s on imported oil!
maybe this does not relate, but I think we should let technology work-the robots, the computers and the mobile devices. We then create jobs and money by making use of the leisure time and leisure activities.
What about Larry E.? He doesn’t get an invite to your gold expert forum… His loins must be burning right now.
There is nothing the G-20, the central banks or any government can do that can fix the economy. After every downturn we never try to fix the real problems. Rather, we try to fix the symptoms with low interest rates and liquidity. This just makes things worse and creates even more bubbles so that the next economic downturn is much worse than the last one. There is also the debt problem. The world debt has gone from 140 trillion to 225 trillion in just 9 years, a 62% increase. Most of us know that severe debt kills an economy and now the world economy is rapidly dying.
Eventually the G-20 house of cards will collapse, and out of the ashes maybe a sensible economic system will arise. We can always live in hope.
What to do? Lets see, buy guns and ammo, buy gold, buy emergency food, and dig a hole. There’s no way out of the debt cycle we’re in. Just hope you survive for a while. Much, much worse is to come. If you think it’s bad, just wait. You ain’t seen nothing yet.
The central bankers have no clothes. They will continue to sow bad advice and bad investment.
There is no escaping the need for a Jubilee debt forgiveness [HAIRCUT] followed by breaking down all the big banks into much smaller entities, and an organized program of liquidity pumping into THE BOTTOM HALF of the population, not the top…..forget foreign and infrastructure investment until all of this is done or well underway.
Yes to Dennis Morisseau! Until the top echelons of the wealth holders–and their political servants–in this country recognize Henry Ford’s wisdom–that anyone who makes (or repairs or sells or . . ) a product should be paid enough money to buy that product– the working/middle class will continue to disintegrate. Then the only source of wealth will be swapping money with other wealthy people–and that source is, by the laws of nature, not inexhaustible.
GULP!
You forgot a bubble, Healthcare under Obama Care. There has been such explosive growth of medical care offices with borrowed money that now even the appraisers are concerned, especially if they held liable for the losses in the event of a medical office bankruptcy. I believe that Healthcare is a sector that needs additional examination.
Steven, I agree! A lot of consumers disposal income is being used to pay high insurance premiums and deductibles. I am amazed that Lancaster General Hospital pays the CFO more than double their top surgeons earnings. When asked by the newspaper about it, they responded that it wouldn’t raise the health care cost there. Why go through med school for all the extra years when a business degree pays more? Well we can all get jobs in the public sector and have our health care for free!
As an exercise only a designated troll like myself would engage in, I read W.J. Bryan’s “Cross of Gold”speech after the debate last night. Some Lincoln-Douglas too. My gosh, what has happened to public discourse in America? Without casting aspersions on any particular candidate I can safely say we have devolved our debates into food fights of 140 character sound bites. We wonder why our culture is producing such mediocre results. We have become a mediocre Nation, at best. I’m glad I’m closer to my end than my beginning. Jim
Oh! The Monmouth college political prediction guru that has nailed the last five elections says he gives Trump a ninety seven per cent probability of winning the general election. Batten down the hatches! Jim
I agree, Jim. We used to produce leaders. Now anyone who shows leadership qualities is put down and discouraged from exercising them. Kennedy was the last President to actually attempt to lead the nation. All his successors, including Reagan, have merely followed the prevailing trends. The present bunch of clowns running for our highest office are no exception. Trump will probably win, simply because he has entertainment value.
The great promise of the American Revolution was that there would finally be a country where the governed were governed by their own class. We lost that a long time ago. It’s probably too late. It doesnt matter who wins in November because it won’t be us. Jim
In spite of his positively disgusting personal life ( happy birthday Mr. President), Jack Kennedy and his brother Bobby were the last leaders that really cared about us. They were both asassinated. Just a coincidence. Jim
Trump is hard to trump right now. But after Tue. it’s really gonna get down and dirty. And if Bloomberg gets in the fits really really gonna hit the shan. (<:
Mule
This really could get interesting. If Mrs. Clinton gets indicted and Trump has any dirty laundry hidden away there is positively no telling how this will turn out. Jim
Can they move the Oval Office to a federal prison?
Hi Mike, You are absolutly right there will be a severe downturn in credit and the economy; but your forecast is a little late. Three years ago, Elliottwave International forecast a deflationary depression for the U.S., Europe and Japan which would occur by the middle of 2016 possibly followed by sharp ups & downs and the final bottom will occur in 2022. I hope both of you are wrong, but I’m out of the market so “have at it”. I enjoy your commentaries; keep them coming. Gordon
Hi Mike! I don’t why we worry about the economy when are government doesn’t. The government has encouraged our oil producers to increase oil production over the years. Today, our oil producers face financial uncertainties with an oversupply of oil. Saudi Arabia wants to pump our oil producers into bankruptcy. The government has a tariff on ethanol, which supports the agriculture industry, but where’s the support for our oil industry? A tariff employed on foreign oil would secure the future of the oil industry. Obama wanted to tax oil at $10/barrel , but this wouldn’t be necessary if a tariff was placed on the 10 million barrels/ day we import. A tariff would also be a huge boost to market capitalization by cutting the volatility and risks. Some of the basic reasons to impose tariffs are secure jobs, retaliate against a trading partner that is trying to harm a domestic industry, and not least, raise money for the treasury. Are we waiting for the ship to sail?
The problem isn’t money. Cash is stashed everywhere and the government is throwing it out to everybody to buy votes. The problem is two-fold: 1) a legal and tax jungle of laws that strangles new business and 2) demographics – an aging nation that is losing its workers and slowing population growth. The solution to the first problem is obvious. The solution to the second problem is an intelligent reform of the immigration laws. The US has always been strengthened by its immigrants because they have brought skills, a work ethic, enthusiasm, and a love of our country because of the opportunities it offers. Kicking people out because their parents came illegally years before is stupid, because they have grown up here and been educated here and are now ready to work here and start families here, solving the very demographic problem that is killing the economies of Europe, Japan, China, and US and Canada. We have a solution to our demographic problem just south of our border, but those other countries do not. I don’t normally cotton to what the Pope says, but his point about building bridges instead of walls makes good economic sense for the US.
We are pretty much the only nation of immigrants. Jim
not really. we’re just an extension of europe.
I very much appreciate your comments made Karl.
I am retired now and was brought up in a Catholic family. I made my communion at 7 and confirmation at 10. Then while in college I read the bible completely for the first time. I am a life long student of the testaments. It’s true that ignorance truly is bliss.
The bible teaches that we are all God’s children and can speak directly to him, that we can also pray directly to him. That is not what the catholic church preaches.
My point is, the pope heads up the biggest wall ever invented using religion as it’s government. With all do respect to the pope; his building bridges instead of walls comment seems to be hypocritical.
Although infrastructure improvements are needed, this approach can not be carried out in a sufficiently timely manner to have suitable impact to kick start the economy at this time; it simply would take too long to start construction. First there is planning, economic and environmental studies, and conceptual designs to be carried out for budgets to be established. Then final design work, drawings and bid documents to be completed before contracts can even go out to bid. Once contracts are eventually awarded the work and payments will need to be managed and supervised.
The financial bubble and beurocratic regulations have not only robbed corporate America and hindered infrastructure rehabilitation and development, but have created a shortage of experienced Engineers that would be needed to implement any emergency program. Infrastructure rehabilitation will not serve as helicopter money, there would be too much lag time; and I do not even mention getting all the politicians and regulators on the same page in a timely manner. The only people receiving immediate benefit would be the beurocrats. Patch work is where the US is at today; it will require a whole change of mind set before real and lasting improvements can be made.
The first sensible comment I have heard on the subject. Jim
If the present bureaucratic system had been in place during World War II, we would still be considering plans for how to win it.
Steinway was still making pianos in 1944. It probably would have been a draw. Jim
In a deleveraging environment falling prices is inevitable. No amount of Central Bank or Government action or talk can derail this effect! The G20-meeting in China is but only a holiday.
The congress needs to do a lot of ‘pump priming’!! For the moment monetary policy is down for the count and fiscal policy rules. You think the ‘boys’ inside the beltway can get it done … I’ll give u 10 to 1 that they not only won’t do it but they don’t understand it either.
How long this part of prophecy takes to play out is anyone’s guess but looking at Daniel chapter 2 which is written more than 2500 years ago, it’s quite obvious that we are in the era of the iron and miry clay . Governments worldwide are so fragmented and collapsing all round and the stone cut out of the mountain without hands , in other words not man made will consume all of these man made governments and fill the whole earth.
A lot of prophecy has to be fulfilled yet like in Revelations by John where there will be a collapse of trade , no one will be able to buy or sell. We are close to that now . No one will be able to get food for survival except he has a certain “mark” of the “beast”.
Like John said ” here is the faith of the saints. ” he who has ears to hear let him hear. Prepare for the great day of The Lord to come. Say your prayers and listen to the still small voice .
Those prophecies are so vague that no one can make sense of them. They could say anything.
History has many lessons. History has taught us that in a capitalistic society growth is the key to wealth. And growth can only occur with an increase in population. As growth increases so does wealth and this wealth and power become concentrated in the hands of the relatively fewer and fewer people (as a percentage of the population) controlling the country. It has also taught us that power corrupts. As more power becomes concentrated in the hands of fewer people that corruption grows and the masses suffer and become envious. Eventually the masses want their fair share and rise up in revolution. This usually happens as the country’s economy declines for a variety of reasons. The one thing history has not taught us is what happens when this endless growth in population reaches the point where there just simply is not enough wealth (aka natural resources) to support the number of people on the earth. As there is no history of this there is no lesson. However it’s my guess that you’ll have a very bad situation solved by a massive culling of the population and we’ll start all over again. Do you think mankind has the morality or ability to put an end to this self destruction and create a system that relies on something other than a constant rise to wealth and power? Do you think for a minute that the various cultures of the world will ever understand that what flies in the face of their individual morality is the only possible solution to their problem?
You are right……we are due for some very nasty wars at the end of this long growth cycle. The cycles Larry looks at are good harbingers of what we face. And…..I think that Europe will be devastated once again.
As Mike says, we’ve had a six-and-a-half year easy credit bacchanalia. Now the bills are increasingly coming due, and those who signed off on them say you and I must pay them. With what? We have been running up our own debts. The “leaders” said it was the smart thing to do, after all.
The ‘expert’ Know-it-All Economists are struggling in vain to find ‘New Clothes’ for the Emperor(s).The forces of entropic cycles will have their day, and there will be Losers and Winners (as usual) in the quadrillion dollar Derivatives Market. Meanwhile, the average investor will be left in the dust of the inevitable disaster, unable to barter with or eat gold and silver coins and ingots as they struggle to exist in a surrealistic barteresque existence; and until the semblance of credibility returns to the Full-Faith-and-Credit “System” we will not be able to easily return to the Good Old Days. We are entering a new global game of Who-Can-We-Trust. Currently, there is no one who can be trusted. (Weiss excluded?)
As Tax Time nears,I am more convinced than ever that our beloved Republic is on the greased rail to degenerating into a shameless,out-of -control,full-blown Kleptocracy…