10 Facts about the Economic Meltdown you won’t hear anywhere else

By Christopher R Rice, Underground

I’ve been re posting articles about the causes of this upcoming economic crash but it’s a lot to read through so I’m putting the highlights together, kind of connecting the dots for you and then I’ll give you links to the original articles / my sources for further research.

The appearance of prosperity means nothing if the fundamentals do not support the optimism. That is to say, a bullish stock market, a high dollar index and a low unemployment percentage mean nothing.  

I relate these points because the future I am about to suggest here might sound outlandish to some, because it is so contrary to the “official” accounting of our current financial world.

David Stockman: Well, a lot of people said in 1999, “Yeah, maybe there’s a little bit of froth out there.” But, you don’t understand this time is different and then within three months, devastating collapse. Remember they called it the “Goldilocks Economy” in late 2007/2008? You had the Chairman of the Council of Economic Advisors saying, “No recession in sight anywhere,” in June. Okay, so no one sees it coming until suddenly there is an event, a black swan, something unexpected or unpredicted that tells everybody that the emperor is naked. You know who is naked? The Fed. They’re running a con game.

The stock market, the greatest false indicator of all time, is on the verge of implosion; and the banking elites are positioning themselves to avoid blame for this implosion while the rest of us are being sold on the most elaborate recovery con-game ever conceived.

People need to understand the threat is at their doorstep. It’s not a few years off or a decade away; it’s here now. We are right in the middle of collapse.

1.) Our financial system is based on a pyramid of debt, and we have allowed Wall Street to operate like a giant casino.  Our entire economy has essentially become a colossal Ponzi scheme.

A rather minor business cycle slowdown in 1994 was fought with a tidal wave of new credit under Fed chairman Alan Greenspan. That ultimately resulted in the Dot Com Bubble crash of 2000, but the lesson went unlearned.

Instead the Fed concluded that the idea was sound, but was simply not taken far enough. The elite cheerleading squad, captained by Paul Krugman, fully supported a doubling down, and the corporate media unquestioningly went along with the program.

So Greenspan and Bernanke created the Housing Bubble 1.0 by offering the world’s credit markets a price of money so low it couldn’t be refused. Housing was the story, and the Fed supplied the credit.

As predicted by a scant few of us, that all blew up spectacularly in 2008. And no constructive lessons were drawn from that experience, either.

With the political aircover to “save the system” (from the problems that it created!), Bernanke, Yellen, Kuroda and Draghi then led the most aggressive, coordinated central bank bender in all of human history.

Trillions and trillions were printed up, and many times that amount were leveraged and loaned.

Here we all are; stuck together in a world awash with credit. $250 trillion in debt. Four times that amount in unfunded liabilities. And a mind-bogglingly massive amount of tangled financial derivatives roughly the same size as both those debts and liabilities put together.

2.) Most people simply don’t understand the gravity of the situation.  Nothing was ever fixed after the last financial crisis.  Instead, we went on the greatest debt binge that humanity has ever seen, and central banks started creating trillions of dollars out of thin air and recklessly injected that hot money into the financial system.

In response to the financial crisis of 2008, the Fed under Chairman Ben Bernanke launched an aggressively expansionist monetary policy designed to prop up the financial system, the securities markets, and the broader economy. Hinging on massive purchases of government bonds to push interest rates near zero, this policy is frequently referred to as quantitative easing.

CNBC: The numbers are daunting if not shocking: $12.3 trillion of money printing, nearly $10 trillion in negative-yielding global bonds, 654 interest rate cuts since Lehman Brothers collapsed in 2008.

Those actions have resulted in global growth in advanced economies that likely won’t eclipse 2 percent this year, inflation levels that remain well below targets and a burgeoning global debt problem that remains unresolved, withstood only through the lowest interest rates the world has seen in 5,000 years.

Flooding the market with trillions of new fiat currency units and pushing interest rates to zero for the greater part of a decade made a new crisis inevitable.

So now we are in the terminal phase of the largest financial bubble in human history, and there is no easy way out.

And that is why our leaders have been piling on the debt and global central banks have been recklessly creating money.

Debt brings consumption from the future into the present, and so it increases short-term economic activity at the expense of long-term financial health.

CNBC: Total household debt rose by $193 billion to an all-time high of $13.15 trillion at year-end 2017. The highest total ever, even more than was owed right before the crash in 2007.

But it is inevitable that our bad choices would catch up with us, and the pain that we are going to experience is going to be absolutely off the charts.

This crash will be unlike anything the world has ever seen. Put simply, there has never been this much debt in the system (hundreds of trillions worldwide), so there will be no historical precedence for the crash.

3.) Global stocks are falling precipitously once again, and banking stocks are leading the way.  If this reminds you of 2008, it should, because that is precisely what we witnessed back then.  Banking stocks collapsed as fear gripped the marketplace, and ultimately many large global banks had to be bailed out either directly or indirectly by their national governments as they failed one after another.  The health of the banking system is absolutely paramount, because the flow of money is our economic lifeblood.  When the flow of money tightens up during a credit crunch, the consequences can be rapid and dramatic just like we witnessed in 2008.

So let’s keep a very close eye on banking stocks.  Global systemically important bank stocks surged in the aftermath of Trump’s victory in 2016, but now they are absolutely plunging.  They are now down a whopping 27 percent from the peak, and that puts them solidly in bear market territory.

U.S. banking stocks are not officially in bear market territory yet, but they are getting close.  At this point, they are now down 17 percent from the peak…

The US KBW Bank index, which tracks large US banks and serves as a benchmark for the banking sector, is down 2.5% at the moment. It has dropped 17% from its post-Financial Crisis high on January 29.

Of course European banking stocks are doing much worse.  Right now they are down 27 percent from the peak and 23 percent from a year ago.  The following comes from Wolf Richter

But unlike their American brethren, the European banks have remained stuck in the miserable Financial Crisis mire – a financial crisis that in Europe was followed by the Euro Debt Crisis. The Stoxx 600 bank index, which covers major European banks, including our hero Deutsche Bank, has plunged 27% since February 29, 2018, and is down 23% from a year ago

I wish that we didn’t have a global economic system that was so dependent on the “too big to fail” banks, but we do.

If they aren’t healthy, nobody is going to be healthy for long, and it is starting to look and feel a whole lot like 2008.

But unlike 2008, we also have a global trade war to contend with.

4.) I have previously warned my readers that the damage caused by this trade war would get progressively worse the longer that it lasts.

Many companies have been trying to ride it out, but eventually the money runs out and layoffs start happening…

Anyone who thought that this trade war would not have very serious consequences was just fooling themselves.  According to one source, tariffs paid by U.S. businesses are up 45 percent compared to a year ago.

Investors were initially giddy about Trump’s promises of fiscal stimulus, deregulation of energy, health care, and financial services, and steep cuts in corporate, personal, estate, and capital-gains taxes.

According to the nonpartisan Tax Policy Center, almost half of the benefits from Trump’s proposed tax cuts would go to the top 1% of income earners.

Yet the corporate sector’s animal spirits may soon give way to primal fear: the market rally is already running out of steam.

5.) Under Trump, fiscal deficits have pushed up interest rates and the dollar even further, and hurt the economy in the long term.

Trump’s fiscal stimulus has fueled inflation more than it has growth. Inflation forced the Federal Reserve to hike up interest rates sooner and faster than it otherwise would have done, which has drove up long-term interest rates and the value of the dollar still more.

This undesirable policy mix of excessively loose fiscal policy and tight monetary policy tightens financial conditions, hurting blue-collar workers’ incomes and employment prospects.

It is worth remembering how America’s 1930 Smoot-Hawley Tariff Act triggered global trade wars that exacerbated the Great Depression.

The Nobel laureate economist Edmund S. Phelps has described Trump’s direct interference in the corporate sector as reminiscent of corporatist Nazi Germany and Fascist Italy.

To be sure, expectations of stimulus, lower taxes, and deregulation did boost the economy and the market’s performance in the short term. But, as the vacillation in financial markets indicates, the president’s inconsistent, erratic, and destructive policies have taken their toll on domestic and global economic growth in the long run.

The stock markets worst enemy is unpredictability and Trump is considered to be very unpredictable. Can you feel it? How greed is now giving way to fear?

Additionally, an increasingly interconnected world economy means that the spark that ignites a stock market plunge in the U.S. can be lit anywhere around the globe. 

6.) The Great Crash of 1929 is mostly associated with plummeting stock prices on two consecutive  trading days, “Black Monday” and “Black Tuesday,” October 28 and 29, 1929, in which the Dow fell 13% and 12%, respectively. But this was only the most dramatic episode in a longer term bear market.

After peaking at a value of 381.17 on September 3, 1929, the Dow eventually would hit bottom on July 8, 1932, at 41.22, for a cumulative loss of 89%. It would take until November 23, 1954 – over 25 years later – for the Dow to regain its pre-crash high. The Great Crash is generally considered to be one of the factors contributing to the onset of the Great Depression of the 1930s.

Concerned about speculation in the stock market, the Federal Reserve “responded aggressively” with tight money policies starting in 1928, which helped to spark the Great Crash, per the Federal Reserve Bank of San Francisco (FRBSF). Moreover, in 1929 the Fed pursued a policy of denying credit to banks that extended loans to stock speculators, according to Federal Reserve History.

Former FED chairman Alan Greenspan, is among those who now warn that, by continuing this easy money policy for years after the 2008 crisis was stemmed, the Fed has created new financial asset bubbles.

Janet Yellen Warns Another Financial Crisis Could Be Brewing (Fortune)

Janet Yellen, former chairwoman of the Federal Reserve, is sounding a warning bell about another financial crisis in the making, saying the loss of authority by banking regulators and the move toward deregulation are worrisome.

Yellen pointed to leverage loans—those extended to businesses with weaker credit—as a primary area of concern, since regulators are currently powerless to address them at the top level. Instead, they can only focus on problems at individual banks.

“I think things have improved, but then I think there are gigantic holes in the system,” Yellen told a New York audience Monday night, as quoted by CNBC. “I’m not sure we’re working on [the leverage loan issue] in the way we should, and then there remain holes, and then there’s regulatory pushback. So I do worry that we could have another financial crisis.”
The IMF‘s latest Financial Stability Report, is a surprisingly candid discussion on the topic of whether “Rising Medium-Term Vulnerabilities Could Derail the Global Recovery”, which is a politically correct way of saying the financial system is on the verge of crashing.

When there is fear and panic in the air, lending tends to really tighten up, and a major credit crunch is just about the last thing that we need right now.

It’s been really bad for global markets so far, and more trouble is brewing.  Hold on to your hats, because it looks like it is going to be a bumpy ride ahead.

7.) 1 January 2018 is the date when a host of new regulations are set to come in force, which will “constrain lending ability and prompt banks to only advance money to the best borrowers, which could accelerate bankruptcies worldwide,” according to Bloomberg. Other rules to come in play will require banks to stop using their own international risk assessment measures for derivatives trading.

Ironically, the introduction of similar well-intentioned regulation in January 2008 (through Basel II) laid the groundwork to rupture the global financial architecture, making it vulnerable to that year’s banking collapse.

After January 2018, we are seeing the probability of a new crisis convergence in global energy, economic and food systems.

Today, we are all supposed to quietly believe that the economy is in ‘recovery.’

If the U.S. economy collapses, you would not have access to credit.

Banks would close. Demand would outstrip supply of food, gas and other necessities. If the collapse affected local governments and utilities, then water and electricity would no longer be available. As people panic, they would revert to survival and self-defense modes. The economy would return to a traditional economy, where those who grow food barter for other services.

A U.S. economic collapse would create global panic. Demand for the dollar and U.S. Treasurys would plummet. Interest rates would skyrocket. Investors would rush to other currencies, such as the yuan, euro or even gold. It would create not just inflation, but hyperinflation as the dollar became dirt cheap.

8.) The global selloff has erased $5 trillion from stock and bond markets in October alone!

By unilaterally manipulating interest rates and the money supply, central banks create the monetary conditions leading to economic booms that become economic busts. And they do a great job of concealing the fact that they usually initiate the bust through their own actions as well. 

We’ve never seen anything like the current bubble we’re in. Stocks, bonds, real estate, fine art, you name it — nearly everything has been inflated to all-time highs. When this Everything Bubble pops, the pain is going to be especially calamitous.

And it’s increasingly looking like the “pop” has sounded.

Now that the world’s central banking cartel is taking a long-overdue pause from printing money and handing it to the wealthy elite, the collection of asset price bubbles nested within the Everything Bubble are starting to burst.

The cartel (especially the ECB and the Fed) is hoping it can gently deflate these bubbles it created, but that’s a fantasy. Bubbles always burst badly; it’s their nature to do so. Economic suffering and misery always accompany their termination.

It’s said that “every bubble is in search of a pin”. History certainly shows they always manage to find one.

Greed on the way up and then fear on the way down. But neither has much influence without a tempting yarn and a lot of easy credit.

In their quest for power and glory (and accompanied by a dead-flat learning curve), the world’s central banks are now pursuing their third, largest, and most ill-considered attempt to defeat the business cycle by replacing it with a credit cycle. The fact that the prior two credit cycles blew up spectacularly doesn’t seem to be deterring them in the slightest.

How bad will it get? Honestly, pretty damn bad. Worse than 2000 and worse than 2008.

The 2008 crisis, which was about consumer debt, was triggered by mortgages. We still have consumer debt crisis problems ahead, adding the next financial crisis is likely to be in corporate debt.

The credit cycle is just that much larger this time.

The recent market volatility is just the beginning of the downslide.

Just “printing less” is causing the major stock indexes to stumble, while plunging the peripheral emerging markets into bear market territory.

And China increasingly has less and less motivation to help the US financial elites by rescuing their markets for them. Besides, the Chinese authorities have their own massive collapsing bubbles to contend with right now.

9.) The globalists have stretched the whole of the world thin.  They have removed almost every pillar of support from the edifice around us, and like a giant game of Jenga, are waiting for the final piece to be removed, causing the teetering structure to crumble.  Once this calamity occurs, they will call it a random act of fate, or a mathematical inevitability of an overly complex system.  They will say that they are not to blame.  That we were in the midst of “recovery”.  That they could not have seen it coming. 

With almost every major economy on the globe on the verge of collapse and most now desperately inflating, taxing, or outright stealing in order to hide their situation, with multiple tinderbox environments being facilitated in the Pacific with China, North Korea, and Japan, and in the Middle East and Africa with Egypt, Syria, Iran, Pakistan, Yemen, Mali, etc., there is no doubt that we are living in a linchpin-rich era.  It is inevitable that one or more of these explosive tension points will erupt and cause a chain reaction around the planet.  The linchpin and the chain reaction will become the focus of our epoch, rather than the men who made them possible in the first place.

In the economic arena, one might say that the collapse of Lehman Bros. was the “linchpin” that triggered the landslide in the derivatives market which is still going on to this day.  However, the derivatives market bubble was a carefully constructed house of cards, deliberately created with the help of multiple agencies and institutions.  The private Federal Reserve had to artificially lower interest rates and inject trillions upon trillions into the housing market, the international banks had to invest those trillions into mortgages that they KNEW were toxic and likely never to be repaid.  The Federal Government had to allow those mortgages to then be chopped up into derivatives and resold on the open market.  The ratings agencies had to examine those derivatives and obviously defunct mortgages and then stamp them AAA.  The SEC had to ignore the massive fraud being done in broad daylight while sweeping thousands of formal complaints and whistle blowers under the rug.

This was not some “random” event caused by uncontrolled “complexity”.  This was engineered complexity with a devious purpose.  The creation of the derivatives collapse was done with foreknowledge, at least by some.  Goldman Sachs was caught red handed betting against their OWN derivatives instruments!  Meaning they knew exactly what was about to happen in the market they helped build!

Many of these organizations and corporations operate a revolving door within the U.S. government.  Monsanto has champions, like Donald Rumsfeld who was on the board of directors of its Searle Pharmaceuticals branch, who later went on to help the company force numerous dangerous products including Aspartame through the FDA.  Goldman Sachs and JP Morgan have a veritable merry-go-round of corrupt banking agents which are appointed to important White House and Treasury positions on a regular basis REGARDLESS of which party happens to be in office.

10.) Very few Americans have any significant savings today. Most live on credit and those with savings have it stored in financial instruments that will be wiped out as the bankers collapse the system to hide the theft they have been involved in for decades. Those who think they will retire with their IRA, pensions or social security will suddenly find them all gone never to return leaving them with no means to care for themselves.

Those that own very few assets free and clear will become the new homeless as they become jobless and default on all of their credit obligations. All of the social safety nets that exist now to keep people fat and happy will fail leaving mobs of people to roam the streets to seek out what they need to survive. One only has to look at Venezuela today to see where this will all lead.

Understanding what will likely happen and insuring you have a plan to deal with it is the only hope you will have of coming through the coming bad years in tact. Those who trust in government or only live for today will reap what they sow and it will be unpleasant at best if they survive at all. A simple strategy to insure you do not suffer does not have to be expensive or complicated. The best plans are simple and allow you to adapt to the changing times.

When the next great depression hits it will be unlike anything we have lived through before. Nothing will be as it seems and only those that have the resources to adapt will come through it whole. Preparation is the key to adapting to future events and those without resources will reap a bitter harvest as they struggle to survive. No announcements will be made, no warnings will be given by the establishment, it will just suddenly happen out of the blue and everyone will say it was unpredictable. But those who prepared will know better.

History shows, pundits obsess over what precisely triggers a crash, as if that matters. It doesn’t, because ’cause’ of a bubble’s bursting can be anything

Remember, the markets always surge before the crash. We’ve had the surge, so we know what comes next.  

Click for more: How to Prepare
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HOW DID THIS HAPPEN?

Once the US stopped being the world’s largest industrial powerhouse, ceding ground first to Germany and Japan, then to China, it went along accumulating prodigious levels of debt, essentially confiscating and spending the world’s savings, while defending the US dollar with the threat of violence. It was, for a time, understood that the exorbitant privilege of endless money printing needs to be defended with the blood of American soldiers. The US saw itself, and positioned itself, as the indispensable country, able to control and to dictate terms to the entire planet, terrorizing or blockading various other countries as needed. Now all of these ideological shibboleths are in shambles.

• The pro-democracy rhetoric is still dutifully spouted by politicians and mass-media mouthpieces, but in practice the US is no longer a democracy. It has been turned into a lobbyist’s paradise in which the lobbyists are no longer confined to the lobby but have installed themselves in congressional offices and are drafting prodigious quantities of legislation to suit the private interests of corporations and oligarchs. Nor is the American penchant for democracy traceable in the support the US lavishes on dictatorships around the world or in its increasing tendency to enact and enforce extraterritorial laws without international consent.

• Laissez-faire capitalism is also very much dead, supplanted by crony capitalism nurtured by a thorough melding of Washington and Wall Street elites. Private enterprise is no longer free but concentrated in a handful of giant corporations while about a third of the employed population in the US works in the public sector. The US Department of Defense is the largest single employer in the country as well as in the whole world. About 100 million of working-age able-bodied Americans do not work. Most of the rest work in service jobs, producing nothing durable. An increasing number of people is holding onto a precarious livelihood by working sporadic gigs. The whole system is fueled—including parts of it that actually produce the fuel, such as the fracking industry—by debt. No sane person, if asked to provide a workable description of capitalism, would come up with such a derelict scheme.

• Free trade was talked up until very recently, if not actually implemented. Unimpeded trade over great distances is the sine qua non of all empires, the US empire included. In the past, warships and the threat of occupation were used to force countries, such as Japan, to open themselves up to international trade. Quite recently, the Obama administration was quite active in its attempts to push through various transoceanic partnerships, but none of them have succeeded. And now Trump has set about wrecking what free trade there was by a combination of sanctions and tariffs, in a misguided attempt to rekindle America’s lost greatness by turning inward. Along the way, sanctions on the use of the US dollar in international trade, especially with key energy exporting nations such as Iran and Venezuela, are accelerating the process by which the US dollar is being dethroned as the world’s reserve currency, demolishing America’s exorbitant privilege of endless money-printing.

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As the US Economy Collapses, What Will Happen and How to Prepare

By Christopher R Rice (from around the web), TheUnderground

Future historians are likely to identify the Bush administration’s rash invasion of Iraq as the start of America’s downfall.

The causes of a crash like this are many and varied. While most media sources tend to report on things in terms of a simplistic dichotomy (this or that), reality tends to be more complex

The World Economic Forum ranked the United States at a mediocre 52nd among 139 nations in the quality of its university math and science instruction in 2010.

I have previously warned my readers that the damage caused by this trade war would get progressively worse the longer that it lasts.  

Many companies have been trying to ride it out, but eventually the money runs out and layoffs start happening… 

Anyone who thought that this trade war would not have very serious consequences was just fooling themselves.  According to one source, tariffs paid by U.S. businesses are up 45 percent compared to a year ago.

Most people simply don’t understand the gravity of the situation.  Nothing was ever fixed after the last financial crisis.  Instead, we went on the greatest debt binge that humanity has ever seen, and central banks started creating trillions of dollars out of thin air and recklessly injected that hot money into the financial system.

Flooding the market with trillions of new fiat currency units and pushing interest rates to zero for the greater part of a decade made a new crisis inevitable. So now we are in the terminal phase of the largest financial bubble in human history, and there is no easy way out.

And that is why our leaders have been piling on the debt and global central banks have been recklessly creating money.

But it is inevitable that our bad choices would catch up with us, and the pain that we are going to experience is going to be absolutely off the charts.

This crash will be unlike anything the world has ever seen. Put simply, there has never been this much debt in the system (hundreds of trillions worldwide), so there will be no historical precedence for the crash. Under Trump, fiscal deficits will push up interest rates and the dollar even further, and hurt the economy in the long term.

Trump’s fiscal stimulus will fuel inflation more than it does growth. Inflation will then force the Federal Reserve to hike up interest rates sooner and faster than it otherwise would have done, which will drive up long-term interest rates and the value of the dollar still more.

This undesirable policy mix of excessively loose fiscal policy and tight monetary policy will tighten financial conditions, hurting blue-collar workers’ incomes and employment prospects.

It is worth remembering how America’s 1930 Smoot-Hawley Tariff Act triggered global trade wars that exacerbated the Great Depression.

The Nobel laureate economist Edmund S. Phelps has described Trump’s direct interference in the corporate sector as reminiscent of corporatist Nazi Germany and Fascist Italy.

To be sure, expectations of stimulus, lower taxes, and deregulation did boost the economy and the market’s performance in the short term. But, as the vacillation in financial markets indicates, the president’s inconsistent, erratic, and destructive policies have taken their toll on domestic and global economic growth in the long run.

The stock markets worst enemy is unpredictability and Trump is considered to be very unpredictable. Can you feel it? How greed is now giving way to fear?

Already, in anticipation of higher short-term rates, investors have driven longer-term interest rates higher. Yields on 10-year Treasury notes, for instance, reached as high as 2.86% on Monday, up from 2.40% at the start of the year and 2.03% in September.

The IMF’s latest Financial Stability Report, is a surprisingly candid discussion on the topic of whether “Rising Medium-Term Vulnerabilities Could Derail the Global Recovery”, which is a politically correct way of saying is the financial system on the verge of crashing.

In recent years, Republicans have been characterized by two principal positions: They like starting wars and don’t like paying for them. George W. Bush initiated two major wars in Iraq and Afghanistan, but adamantly refused to pay for either of them by cutting non-military spending or raising taxes. Indeed, at his behest, Congress actually cut taxes and established a massive new entitlement program, Medicare Part D.

Bush’s actions were unprecedented.

No one ever imagined a US president would actually conspire to attack his own country in order to engineer a political agenda…but one did. And now, by Trumps own inaction, is doing the exact same thing Bush & Cheney did.

The Federal Reserve bank and its manipulation of the currency supply is directly causing this depression.  

Suddenly you reach a point where there is too much money chasing limited resources. According to economic theory, that is when inflation happens.  

One group caused another group to lose their property’s value. In most places, this activity by another name is called “destruction of property” or “theft.” However, currency devaluation is such an esoteric and ingenious form of theft or destruction that it goes unnoticed and unexamined by the majority of the population.  

Whenever central authorities inflate the currency supply it causes the value or purchasing power of the currency to decline. This value is basically lost or “stolen” from the people.

Debt brings consumption from the future into the present, and so it increases short-term economic activity at the expense of long-term financial health.

The only reason why we have even gotten this far is because interest rates have been pushed to historically low levels.  If the average rate of interest on U.S. government debt even returned to the long-term average, we would be paying more than a trillion dollars a year in interest on the national debt and the game would be over.

Even common sense tells you a society completely based on financing there is something seriously wrong. Remember, the markets always surge before the crash. We’ve had the surge, so we know what comes next.

The entire western civilization and their governments are completely broke. What part of this do you not understand?

We can barely afford the debt service now at practically 0%, so just how exactly are people and the governments going to afford two, four or nine times the payments??? 

Our financial system is based on a pyramid of debt, and we have allowed Wall Street to operate like a giant casino.  Our entire economy has essentially become a colossal Ponzi scheme.

A rather minor business cycle slowdown in 1994 was fought with a tidal wave of new credit under Fed chairman Alan Greenspan. That ultimately resulted in the Dot Com Bubble crash of 2000, but the lesson went unlearned.

Instead the Fed concluded that the idea was sound, but was simply not taken far enough. The elite cheerleading squad, captained by Paul Krugman, fully supported a doubling down, and the corporate media unquestioningly went along with the program.

So Greenspan and Bernanke created the Housing Bubble 1.0 by offering the world’s credit markets a price of money so low it couldn’t be refused. Housing was the story, and the Fed supplied the credit.

As predicted by a scant few of us, that all blew up spectacularly in 2008. And no constructive lessons were drawn from that experience, either.

With the political aircover to “save the system” (from the problems that it created!), Bernanke, Yellen, Kuroda and Draghi then led the most aggressive, coordinated central bank bender in all of human history.

Trillions and trillions were printed up, and many times that amount were leveraged and loaned.

Here we all are; stuck together in a world awash with credit. $250 trillion in debt. Four times that amount in unfunded liabilities. And a mind-bogglingly massive amount of tangled financial derivatives roughly the same size as both those debts and liabilities put together.

And the politicians never examine the costs to the public or the benefits to the public of financial reform. That is never part of the discussion.

As the U.S. economy collapses, you will not have access to credit.

Banks will close. Demand will outstrip supply of food, gas and other necessities. When the collapse affects local governments and utilities, then water and electricity will no longer be available. As people panic, they will revert to survival and self-defense modes. 

A U.S. economic collapse will create global panic. Demand for the dollar and U.S. Treasurys will plummet. Interest rates will skyrocket. Investors will rush to other currencies, such as the yuan, euro or even gold. It will create not just inflation, but hyperinflation as the dollar becomes dirt cheap.

Millions of investors, pensioners, insurance customers, and creditors will lose a fortune. (The FDIC currently only holds enough reserve for 40% of the nations current depositors, which is pointless anyway since the dollar will have no value)

You can’t depend on fractional reserve banks to provide access to your funds during a crisis.

As occurred during the last crisis, we are likely to see some traditional financial institutions and even national governments become insolvent. They can print money in an attempt to stop the bleeding, but this inevitably leads to high inflation or hyperinflation.

Very few Americans have any significant savings today. Most live on credit and those with savings have it stored in financial instruments that will be wiped out as the bankers collapse the system to hide the theft they have been involved in for decades. Those who think they will retire with their IRA, pensions or social security will suddenly find them all gone never to return leaving them with no means to care for themselves.

The debt load for the working poor has nearly quadrupled in the past 20 years as a percentage of their income.

It’s this system that dooms every average worker to poverty. And almost guarantees that the rich and the powerful will stay that way.

This was not some “random” event caused by uncontrolled “complexity”.  This was engineered complexity with a devious purpose.  

As the next great depression hits it will be unlike anything we have lived through before. Nothing will be as it seems and only those that have the resources to adapt will come through it whole. Preparation is the key to adapting to future events and those without resources will reap a bitter harvest as they struggle to survive. No announcements will be made, no warnings will be given by the establishment, it will just suddenly happen out of the blue and everyone will say it was unpredictable. But those who prepared will know better. 

Those who trust in government or only live for today will reap what they sow and it will be unpleasant at best if they survive at all. A simple strategy to insure you do not suffer does not have to be expensive or complicated. The best plans are simple and allow you to adapt to the changing times. 

History shows, pundits obsess over what precisely triggers a crash, as if that matters. It doesn’t, because ’cause’ of a bubble’s bursting can be anything

Click for more: How to fight the NWO
Click for more: How to Prepare
Click for more: Survival skills

This is the age old strategy of Centralization; to remove all choices within a system, by force or manipulation, until the masses think they have nothing left but the choices the elites give them. 

For the last twelve months I’ve wrote, warning, what was coming, see articles/links below:

As World Financial Markets Tumble, Brace for the oil, food and financial crash of 2018 (December 5, 2018)

Federal Reserve to raise interest rates quickly (December 5, 2018)

Great Depression of 2018 With 1970s-Style Inflation (December 5, 2018)

US Economy Collapse, What Would Happen and How to Prepare (December 4, 2018)

WARNING: Trump’s hidden agenda PLEASE READ / SHARE (November 29, 2018)

Stock Market Crash: The Dow Has Fallen (November 23, 2018)

2018 Stock market collapse followed by nuclear war (November 12, 2018)

Asian Stocks Lose $5 Trillion This Year With No End in Sight (October 28, 2018)

Asian shares nose dive as Wall St. erases all of 2018 gains (October 24, 2018)

Global Banking Stocks Are Crashing Hard – Just Like They Did In 2008 (October 23, 2018)

Crash that will send Dow down 17,000 points (October 14, 2018)

Prepare for the biggest stock-market selloff in months, Morgan Stanley warns (July 30, 2018)

Debt Bubble(s) and the Digitization Of All Trade (July 14, 2018)

The Stock Market Is Being Torched Again (March 3, 2018)

Guggenheim’s Minerd warns of a possible replay of 1987 stock market crash (February 20, 2018)

How Wall Street’s ‘fear gauge’ is being rigged, according to one whistleblower (February 14, 2018)

EX-CIA GOLDMAN ANALYST: ‘We are in an extraordinarily dangerous time right now’ (February 9, 2018)

How America will collapse (by 2018) (September 27, 2017)

Secret China war plan: trillions in U.S. debt (August 28, 2017)

Wall Street is sending huge warning signs for stocks (July 31, 2018)

The IMF’s Big Currency Reset (July 18, 2017)

The Secret Global Reset Agreement (July 18, 2017)

Economic Collapse and the Digitization Of All Trade (July 17, 2017)

It Is Mathematically Impossible To Pay Off All Of Our Debt (July 7, 2017)

Fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers (July 7, 2018)

Trump will carry Wall Street to the giddy heights of the 1920s before a fantastic crash, economists warn (July 6, 2017)

Bankruptcy guru Edward Altman sees similarities to 2007 in the credit market today (June 25, 2017)

Debt Bubble (June 15, 2017)

JIM ROGERS: The worst crash in our lifetime is coming (June 11, 2017)

WAIT THERE’S MORE:

Beginning of the Greatest Financial Crisis the World Has Ever Seen (December 17, 2018)

Debt Bombs Ticking Across the Globe (December 17, 2018)

Bubble, Meet Pin; It’s Just the Beginning of the Downslide (December 17, 2018)

IMF warns storm clouds are gathering for next financial crisis (December 15, 2018)

Janet Yellen Warns Another Financial Crisis Could Be Brewing (December 12, 2018)

James Rickards says Donald Trump can’t stop the next financial crisis (December 10, 2018)

Bank Stocks And Tech Stocks Crash As The Yield Curve Inverts (December 5, 2018)

Senate passes rollback of banking rules enacted after financial crisis (December 2, 2018)

GE Plunges Again as Analysts Double Down (December 1, 2018)

Apple’s stock tumble makes it unanimous — the FAANG bull market has ended (November 26, 2018)

Can OPEC+ Halt The Oil Price Slide? (November 25, 2018)

Crypto’s Worst Week Since Bubble Burst Puts Loss at $700 Billion (November 24, 2018)

Why The 1929 Stock Market Crash Could Happen In 2018 (November 18, 2018)

Growing Dangers to Stocks From the U.S.-China Trade Conflict (November 14, 2018)

How the China trade war could get very bad, very fast (November 14, 2018)

Crude oil’s collapse sends shock waves across global markets (November 14, 2018)

A ticking time bomb in China has global markets looking really shaky right now (October 27, 2018)

The market is ‘right in the eye of the storm,’ and two charts show dark clouds ahead, says Bank of America analyst (April 2, 2018)

Deleting Facebook’s billions: stock sinks as outrage swells (March 26, 2018)

Retailers are filing for bankruptcy at a staggering rate — and these 19 companies are next to default (March 18, 2018)

Bear Stearns 10 Years Later: Could the Great Financial Crisis Happen Again? (March 14, 2018)

BUT WAIT, THERE’S MORE:

America will fall Into Famine by 2019 (April 2, 2018)

Arrival Of The ‘End Game’ (December 4, 2018)

FAMINE FEAST: Squirrel (November 24, 2018)

Ancient Biblical Prophecies (November 23, 2018)

The Four Horsemen of the Republican Apocalypse (November 23, 2018)

Trump is the Last President! You are the Last Generation! (September 29, 2018)

Feast Of Trumpets 2018 | October Surprise (September 29, 2018)

9/11 Never Forget Never Forgive (September 10, 2018)

Apocalypse Now (March 17, 2018) 

Join the underground railroad. Because if Julian Assange is not safe, no one is safe.

Crash that will send Dow down 17,000 points

By Stephanie Landsman

He’s a market watcher known for making bold calls spanning decades. Now, Harry Dent is arguing that the Trump rally is setting investors up for an inevitable stock market crash.

Investors have embraced President Donald Trump’s victory by sending stocks on a tear to new record highs. Dent, however, thinks there’s trouble brewing.

“I think this is going to be a stock market peak of a lifetime followed by a crash very similar to the early 1930s. This happens once in a lifetime,” Dent Research Founder Harry Dent recently told NBC’s “ Futures Now .”

He added: “I think this is the last rally in this bull market.”

Dent may be calling for the rally’s last hurrah, but he’s also forecasting another jump for the Dow over the next few days.

“The markets are assuming that he is going to create three to four percent growth on a sustainable basis,” said Dent. “It is demographically impossible…. When the markets figure this out, they are going to crash.”

Dent makes the case that the U.S. workforce will see negative growth, estimating that the population will grow just over a quarter percent over the next 50 years. He also points to rock bottom productivity that not even tax cuts can solve in the immediate term.

“You can’t have stocks keep going up at this rate when earnings are going nowhere,” said Dent. “”I think it [Dow] is going to end up between 3000 and 5000 by next year.”

Dent, who is also the editor of the “Survive & Prosper” newsletter, says there are other major factors which will spark an ‘epic’ pullback.

“I think the trigger is people seeing that Donald [Trump] will not be able to do everything that he said, and the economy will be slowing by then,” he said. “The biggest trigger, kind of like the subprime crisis in 2008, is going to be Italy. Italy is bankrupt. Its bonds are trading at lower rates than ours which is ridiculous.”

Not only could Italy send the European markets into a tailspin, Dent is also particularly worried about China.

The world’s second largest economy “has the greatest real estate bubble, an overbuilding bubble, in all of modern history. That’s going to blow, ” warned Dent.

Yet, he says that this could also be the best time in decades to re-position for huge gains. “In the next few months, investors will have the best opportunity to switch their investment strategies and profit dramatically,” he said.

“I make bold forecasts, and especially with things like [quantitative easing] and massive government intervention — yes, I’m going to miss some things. But, I have the guts to make these bold calls,” argued Dent.

Want more?

Several noted economists and distinguished investors are warning of a stock market crash.

Jim Rogers, who founded the Quantum Fund with George Soros, went apocalyptic when he said, “A $68 trillion ‘Biblical’ collapse is poised to wipe out millions of Americans.”

And the prophetic economist Andrew Smithers warns, “U.S. stocks are now about 80% overvalued.”

Smithers backs up his prediction using a ratio which proves that the only time in history stocks were this risky was 1929 and 1999. And we all know what happened next. Stocks fell by 89% and 50%, respectively.

Even the Royal Bank of Scotland says the markets are flashing stress alerts akin to the 2008 crisis.

They told their clients to “Sell Everything” because “in a crowded hall, the exit doors are small.”

Blue chip stocks like Apple, Microsoft, and IBM will plunge.

But there is one distinct warning that should send chills down your spine … that of James Dale Davidson. Davidson is the famed economist who correctly predicted the collapse of 1999 and 2007.

Davidson now warns, “There are three key economic indicators screaming SELL. They don’t imply that a 50% collapse is looming – it’s already at our doorstep.”

And if Davidson calls for a 50% market correction, one should pay heed.

Indeed, his predictions have been so accurate, he’s been invited to shake hands and counsel the likes of former presidents Ronald Reagan and Bill Clinton — and he’s had the good fortune to befriend and convene with George Bush Sr., Steve Forbes, Donald Trump, Margaret Thatcher, Sir Roger Douglas and even Boris Yeltsin.

They know that when Davidson makes a prediction, he backs it up. True to form, in a new controversial video, Davidson uses 20 unquestionable charts to prove his point that a 50% stock market crash is here.

Most alarming of all, is what Davidson says will cause the collapse. It has nothing to do with the China meltdown, Wall Street speculation or even the presidential election. Instead, it is linked back to a little-known economic “curse” that our Founding Fathers warned our elected officials about … a curse that was recently triggered.

Bankruptcy guru Edward Altman sees similarities to 2007 in the credit market today By Julia LaRoche

Legendary bankruptcy expert Dr. Edward Altman cautioned that this benign credit cycle — characterized by low default rates, low yields, low spreads, and lots of liquidity — could come to an abrupt end.

“It’s been a terrific market for investors for quite a long time and if anything is concerning it’s that we now are more than ten years into a benign credit cycle,” Altman, a professor at NYU Stern School of Business, told Yahoo Finance. “We’ve never had such a long benign cycle. And just that one little fact is something that we should be concerned about because if it comes to one and it could come to an end very dramatically.”

Altman, the creator of the financial-distress sniffing Altman Z-Score, warned in mid-2007 of a “Great Credit Bubble” and that there was going to be trouble in the market. He predicted that a meltdown would stem from corporate defaults. While the primary culprit of the financial crisis turned out to be mortgage-backed securities, investors who heeded Altman’s warning nevertheless avoided a lot of grief.

So, how does today’s market compare to the market in 2007.

“There are some similarities, yes, although the situation back in the great financial crisis was pre-meditated by the mortgage-backed securities and we don’t have that problem now,” he said.

Troublingly, Altman sees the reckless behavior of 2007 surfacing again.

“Back in 2007 prior to the crisis in ’08 and ’09, the fundamentals of credit risk of the companies issuing bonds and taking out loans were quite low,” he said. “And the similarity that I see now between 2007 and 2016 is very similar fundamentals, quite a bit high risk and it doesn’t seem to bother the market because it’s the only game in town in terms of getting yield greater than what you can get for low-risk securities like governments and high-grade corporates.”

In other words, investors aren’t buying junk bonds just because the risk-reward balance is favorable. They’re buying because the rewards of investing in lower risk bonds just aren’t cutting it anymore.

Altman is perhaps best known for the Z-Score, a formula he created 50 years ago that’s used to predict bankruptcies. Since that time, he noticed that bankruptcies have gotten increasingly bigger.

“[What] I’ve seen over the years is larger and larger companies filing for bankruptcy on a regular basis. On average, in the United States, something like 15 more than $1 billion companies, in terms of liabilities, go bankrupt every year, on average,” Altman said. “This year already it’s 13. Last year, it was almost 40.”

He noted that inflation has something to do with it, but what’s actually happening is companies have been taking advantage of debt and low interest rates like never before, and the corporate debt ratios are way up.

“Speaking about the Z-score, if you compare the average Z-score of companies in 2007 with the average in 2016, which is the last time we looked at it, guess what. The average is actually lower today than it was in 2007, and 2007 was right before the great financial crisis, and of course, in ’08 and ’09 we saw a tremendous increase in corporate bond defaults and loans.”

Low Z-scores are associated with financial distress.

He added: “So the good news is that it’s no worse, but the bad news is, fundamentally, the companies are no better than they were back in 2007 at least by our model.”

At the moment what’s keeping companies from going bankrupt as they did during the financial crisis is the incredible amount of liquidity and low interest rates.

Fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers

Nobody knows when reality will overtake the rhetoric, lies, phony statistics, wishful thinking, fake prices and tiresome poseurs pretending to be world leaders. The situation is universal, a consequence of incompetent leaders and careless (or ignorant) citizenry. Global problems are continuing to mount, along with the risk that the consequences of years of bad policies and inept leadership compound (as sometimes happens) in a short window of time.

Unemployment figures are also a source of faulty or misleading data.  A 35-year low in the workforce participation rate, a policy-driven transition from full-time to part-time jobs, and the transition from high-paying jobs to relatively low-paying service jobs, all combine to make the headline rate a poor measure of employment health. Support for our statement is provided by the data on real wages, which have been stagnant during the entire post-crisis period.

Guggenheim’s Minerd warns of a possible replay of 1987 stock market crash By Jennifer Ablan, Reuters

Investors should brace for a possible replay of the 1987 stock market crash later this year, given this month’s slump came against the backdrop of Federal Reserve interest rate hikes and rising inflation, Scott Minerd, Global Chief Investment Officer at Guggenheim Partners, said on Tuesday.

On Monday Oct. 19, 1987, following large declines on Asian and European markets the previous week, the Dow Jones Industrial (.DJI) Average plunged 508 points, or 22.6 percent, for the biggest-ever single day decline in percentage terms by the blue-chip benchmark.

“Today, investors have the same sorts of concerns they had in 1987,” Minerd said. By August 1987, equities were at record highs, the Fed was raising rates, the U.S. dollar was under pressure and there were increasing concerns over inflation, Minerd noted.

“The concern was the Fed was behind the curve as it accelerated rate increases,” he said. “By October, things were becoming unhinged. Bond yields had risen in the face of an extended bull market in stocks. The market reached a tipping point and began its infamous slide.”

As the Fed continues to raise rates this year, valuations of risk assets based upon faith in ultra-low rates and central bank liquidity will come into question, Minerd said.

JIM ROGERS: The worst crash in our lifetime is coming

“We’ve had financial problems in America — let’s use America — every four to seven years, since the beginning of the republic. Well, it’s been over eight since the last one.

This is the longest or second-longest in recorded history, so it’s coming. And the next time it comes — you know, in 2008, we had a problem because of debt. Henry, the debt now, that debt is nothing compared to what’s happening now.

In 2008, the Chinese had a lot of money saved for a rainy day. It started raining. They started spending the money. Now even the Chinese have debt, and the debt is much higher. The federal reserves, the central bank in America, the balance sheet is up over five times since 2008.

It’s going to be the worst in your lifetime — my lifetime too. Be worried.”

The End of Social Security
By Christopher R Rice

The U.S. was the largest creditor in the world. Now the debt is in the trillions of dollars. Trillions of dollars transferred from the worlds richest and most powerful country. This is a form of destructive economic management at a level of graft and corruption that has NO parallel. There’s nothing comparable to that in history.

The national debt is in the trillions of dollars, even our kids will never see it paid off. As the administration and Congress argue over cuts in social programs, inequality in America grows more extreme each day. Even the great financial crash didn’t derail this trend. The richest 400 Americans, for example, increased their wealth by 54 percent between 2005 and 2010, while the median middle-class family saw its wealth decline by 35 percent.

It’s not the result of mysterious global forces, or technology, or China, or structural problems concerning the skills and education of our workforce. Rather, it is the direct result of policy choices made by Democrats and Republicans alike.

The U.S. policy (includes tax policy, financial deregulation, trade policy, anti-labor policy, and much more.) for the past 30 years has been aggressively dedicated to shifting income share away from the poor and middle class and into the pockets of the already rich.

The top 1 percent of the U.S. population now owns about a third of the wealth in the country. Since the late 1970s wealth inequality, while stabilizing or increasing slightly in other industrialized nations, has increased sharply and dramatically in the United States.

Instead of taxing the Super Rich our politicians want to slash social programs, after school programs, instead of making corporations pay their fair share, our politicians want to take a knife to social security and Medicaid.

TRUMP and SOCIAL SECURITY

Back in 2000, Trump wrote a book in which he referred to Social Security as a “Ponzi scheme”, proposed increasing the retirement age to 70, and claimed, “Privatization would be good for all of us.” As recently as 2011, he said he was on board with plans to cut Social Security, Medicare, and Medicaid — but that Republicans should be very careful “not to fall into the Democratic trap” by doing it without bipartisan support, or they would pay the price politically.

I think most people remember what happened to all of the mentally ill in this country when Ronald Reagan switched to block grants for the states? Which is what they plan to do to Medicaid and Medicare. People with mental disabilities were thrown out into the streets, where they remain today. The same thing is about to happen to Americas senior citizens. The wall that Trump keeps talking about building along our southern border is not to keep the refugees out, but to keep us in.

According to economic journalist, David Cay Johnston, author of “Perfectly Legal,” this trend is not the result of some naturally occurring, social Darwinist “survival of the fittest.” It is the product of legislative policies carefully crafted and lobbied for by corporations and the super-rich over the past 25 years. New tax shelters in the 1980s shifted the tax burden off capital and onto labor. As tax shelters rose, the amount of federal revenue coming from corporations fell (from 35 percent during the Eisenhower years to 10 percent in 2002). During the deregulation wave of the ’80s and the ’90s, members of Congress passed legislation (often without reading it) that deregulated much of the financial industry.

If corporations paid taxes, our government could have a surplus – roads, dams, hospitals and schools would not be in disrepair or overcrowded because the government would have plenty of money for all these things as they once did and would not be looking for ways to cut social security or other social programs.

Want more?

Debt Bubble(s) and the Digitization Of All Trade

Business tax payments plunge, while workers pay more

Homeless U.S. Veterans

Socialism for the super rich and Capitalism for the poor

War on Poverty FAILURE

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