3rd Apr 2023

8 Facts about the Economic Meltdown you won't hear anywhere else

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.

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.

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.

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.

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.

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.

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.

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.

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.) 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.

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.

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.

8.) 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.

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.

If you agree that our problems are not in Russia, China or Iran but in Washington, DC. please share.

Do yourself a favor. Think for yourself. Be your own person. Question everything. Stand for principle. Champion individual liberty and self-ownership where you can. Develop a strong moral code. Be kind to others. Do no harm, unless that harm is warranted. Pretty obvious stuff...but people who hold these things in their hearts seem to be disappearing from the earth at an accelerated rate. Stay safe, my friends. Thanks for being here.

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