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We're Rapidly Approaching the Crisis to Which 2008 Was a Warm Up
Stocks broke
down in a big way this week, falling below the trendline that has supported
them since late August. Indeed, it looks as though we not only broke below this
line but have since rallied to retest it: a classic pattern during corrections.
The question
now is if this is just a minor correction or the start of something more. The
S&P 500 appears to have formed a rising bearish wedge pattern (see above),
which usually is a termination pattern that results in the underlying security
falling to retest its base (in this case 1050 or so on the S&P 500).
However,
with Government intervention in the markets being what it is, we could also
simply see a minor correction here followed by yet another ramp job. Indeed,
this is exactly what happened in 2009 when stocks broke a near perfect rising
bearish pattern only to bounce back and begin yet another ramp job:
Thus, the
BIG question for US stocks is whether the market has already digested all the
QE hype to the point that threats of additional liquidity does nothing, OR if
the Bernanke “Put” is still in play.
While this
might not seem like a big deal, I can assure it is THE most significant issue
the financial markets face right now. The reason for this is that IF the
Bernanke “Put” is no longer relevant, that is additional liquidity and
bailouts, doesn’t actually induce a rally anymore… then the entire financial
system will collapse in one form or another.
Remember,
the only thing that pulled us from the brink in 2008 was Bernanke printing like
a lunatic. It’s the ONLY thing that has held the market together. And while it
may have kicked off a major rally in stocks… it FAILED to address the underlying
issues that caused the Crisis in the first place: namely excessive debt and
leverage.
In fact,
Bernanke has made the financial system even MORE leveraged than it was in 2008.
So if the Fed’s moves no longer have an effect on the markets, then it’s time
for the REAL Crisis… the Crisis to which 2008 was a warm up.
Why?
Because when
the stuff hits the fan this time around, the Fed will be powerless to do
anything. Bernanke’s already shot every bullet he’s got. So when he loses
control this time around, not only will the market crater, but the belief that
has kept the financial system afloat through every Crisis of the last 30 years
(namely that the Fed can always save the day) will shatter.
And when
that happens it will be the US financial system, NOT just stocks that goes
down.
Prepare Now!
Graham
Summers
PS. If
you’re getting worried about the future of the stock market and have yet to
take steps to prepare for the Second Round of the Financial Crisis… I highly
suggest you download my FREE Special Report specifying exactly how to prepare
for what’s to come.
I call it The Financial Crisis “Round Two” Survival
Kit. And its 17 pages contain a wealth of information about portfolio
protection, which investments to own and how to take out Catastrophe Insurance
on the stock market (this “insurance” paid out triple digit gains in the Autumn
of 2008).
Again, this
is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com
and click on FREE REPORTS.
PPS. We ALSO
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have all already SOARED as a result of the Fed’s monetary policy.
You can
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Agree.
Rainmaker Ben has made the stock market wealth effect his firewall. Watch the market.
Insiders have sold and businesses and banks have been stuffing themselves with cash.
We know it's going to crash. The Middle East and high oil will be the perfect scapegoat.
Throw technical analysis out the window, it has as much value as fiat currency. Central banks worldwide are monetizing debt not for benefit of the markets (aka bernanke put) but to finance their political masters who are running massive deficit. Rally has nothing to do with fundamentals but by fear of monetization. The currency war going on in the world isn't going to end until someone blinks and passes a balanced budget. The masses who are still sitting in cash fearful of market correction will eventually wake up to what central banks are doing and they'll stampede for the door. Dump your PM & commodities, I'll continue to be a buyer.
Are you suggesting the game is rigged? Don't you know a lady on PBS talked to a banker who said gold is in a bubble? Treasuries are where it's at.
i'm tired of everyone and his cousin yelling, "everything is about to collapse any minute now!"
no shit.
and it seems like everyone from celente to schiff are peddling something. "yeah, the shit's about to hit the fan. but if you subscribe to my newsletter or if you buy gold from europac, you'll be okay."
uh, okay.
i don't want to shoot the messenger, but man, i'm itching to beat the crap out of salesmen.
how about shooting the rodent in your attic? Peace n love...to his memory, once gone as sacrificial proxy for soothing his housemaster's ire..
Murderer.
Perhaps you should beginin DC. Plenty of snakeoil salesfolk there.
Perhaps you're interested in subscribing to my free newsletter?
In my newsletter I answer the one question that everyone is asking... "what will people wipe their asses with when the U.S. monetary system collapses?"
You might even be interested in buying wholesale toilet paper from my on-line store...??? People gotta poo
Uhh... Captain
They've even taken the ass wiping option out of money. Best you could do today is wipe your butt on your computer screen.
No worries my friend. I find that unless a bill has been in circulation for quite a while, it is far too rough for my tender hiney...
I've got my own backup plan for keeping my arse nice and clean after a proper dumping.
http://www.youtube.com/watch?v=Zfl6wJsjDy4&feature=related
u r nuts
u can literally set off an A bomb in the US and market will still hit all time high within a week..
Wait.. Wait & wait, but mostly pray - pray that the rest of the world is dumber than the US fed reserve---it could be true and then we would be truly lucky, indeed we would be God's country. But whatever u do do not lose the faith I have lived in many countries and there is a lot worse than Timmy and Bernanke.
lol, well said... the city on the hill...over the next hill...I'm sure of it...the founding father's ghosts told me so...as for those running the country...they're much worse around in this lousy world...look at Khaddafi...maybe the guy in Saudi next...all so bad...but all on our side...oh, well...time for another Stolich...
There are a lot of bad guys not on our side also.
I suppose you prefer to live in russia or china? Do you have any idea what life is like there for the average Falak? You wouldnt be so bold in your criticism.
I don't see what the correlation is between today's Russia, which is free of USSR, today's China, and USA shenanigans. Two wrongs don't make a right. All aggressive nations are not acceptable. So ganging up with bad guys to rob their people is not a good thing. Even if there are other bad guys NOT on our sides. You fight all the bad guys. Period. Don't choose between the cholera and the syphilis. Fight both, if you are a good doctor.
Excellent point Falak --- well said!
Indeed, I am enraged every time that I (we) am demanded by the Establishment to choose between Evil A and Evil B, as in, for example, having to vote for the corrupt, pro-status-quo Republican or the equally corrupt, pro-status-quo Democrat. I choose not to endorse or enable any evil.
@Parth:
Exactly what is this "faith" you want us to keep??? Knowing is superior to having only "faith". I have more than faith, I KNOW from experience that if you rely on protection from someone who has been robbing you and claims for itself the legal power to continue to rob you and steal from you, ( what some call "government"), I will not be "safe" and will continue to be robbed. Are you arguing that our system is somehow superior to the other states in many other countries because of the "rules" that they claim are involved in their robbery? I prefer not to be Robbed by any robber -- period!
http://www.youtube.com/watch?v=KzyogKiXhEA
The faith that there is some really extreme stupidity and corruption out there that makes the USA look like an angel. We might still win this game because there is no credible challenger.
@Gold 36000
Without knowing what you mean by "win this game", it is difficult for me to respond.
Those who call themselves a "government", including the US Government, and those who feed them by going along with the crimes that are committed to sustain these people, (taxation,fiat money, etc.), enable theft, fraud, and violence. So all governments are lessor or greater "demons", and none of them are "angels", not even fallen angels (to continue your metaphor) because they were conceived in moral contradiction and crime to begin with (taxation is theft).
I thought Hitler and Stalin were dead?
You have no idea what he's talking about.
I'm really getting tired of these "the world is coming to an end" posts. Hello, didn't you read the earlier ZH post from Timmy? "Central banks have a lot of experience in managing these things." Now, shut the f up and buy. Buy, buy, buy.
Hillybilly - oh yeah its going down. Question who comes out of the mess. The world order as we know it under the dollar reserve system is dead.
But so are the others. The quadrillion dollar question is who survives? I wish the American founding fathers philosophy does.
You mean...Timmy might not be right? Central banks can't manage these things? No, no, no. Tell me its not so. Timmy and Benny have to survive. For the good of the country, for the good of the world, for the good of the universe, for the good of all mankind, for now and evermore.
Of course Timmy's right. He was picked by that super smart guy whose college grades are a national security secret; the guy with incredible judgement who lowered the oceans and healed the planet. So have faith in Timmy and Ben, they reaaly do have it under control and someday you will confess in re-education camp that you regret having doubted them.
Hillybilly--anger is great but US bill of rights needs to survive. Sure WW3 is next, sure the anti-christ is here but if the BILL OF RIGHTS gets burnt I am sorry to say we are going to lose lot more than the dollar. Sigh and I moved 20000kms for that freedom.
"... if the BILL OF RIGHTS gets burnt ..."
>>> IF <<< the BOR get's burnt?
How long have you been asleep?
@Parth
Why do you think begging for your "rights" from a gang that survives through theft and the initiation of force, (US government during its entire history), ever was or ever will be a winning strategy: "Congress shall have power to lay and collect taxes..." ?????
(for a laugh watch "I am allowed to rob you":
http://www.youtube.com/watch?v=ngpsJKQR_ZE )
Also for more fun watch:
http://www.youtube.com/watch?v=Xbp6umQT58A
http://www.youtube.com/watch?v=P772Eb63qIY&feature=channel
http://www.youtube.com/watch?v=02rvMwSlAu0&feature=channel
http://www.youtube.com/watch?v=BKyutB3u2bM
http://www.youtube.com/watch?v=3IRbwpc2XV4&feature=channel
http://www.youtube.com/watch?v=sLCEXtpTNYU
http://www.youtube.com/watch?v=suNzxthcTJs
http://www.youtube.com/watch?v=nOBD6v8g1F4
http://www.youtube.com/watch?v=KzyogKiXhEA
And then maybe read:
http://www.lewrockwell.com/orig6/molyneux4.html
http://faculty.msb.edu/hasnasj/GTWebSite/MythWeb.htm
http://www.libertarianstandard.com/articles/david-j-heinrich/justice-for...
http://mises.org/journals/jls/1_2/1_2_1.pdf
http://polycentricorder.blogspot.com/2009/01/anarchic-ireland-rough-draf...
Working my way through your links... all good so far. Thanks.
Be sure to turn out the lights when you're done, Big Jim.
I might be pursuaded to keep the Bill of Rights, but only if it is balanced with a Bill of Responsibilities. Don't see that happnin'.
The author forgets that Bernanke is not, in fact, out of bullets. Financial and economic ones, perhaps, but the real ones still await a major conflict that of course will require financing.
The test of faith is coming, for the US citizenry in Bernanke and the Federal Gov't system in general, and otherwise. Prepare indeed, for attempts at misdirection and fear inducement of scale. The prelude is concluded, the intermission almost ended, the audience verily returns to station for the main spectacle soon to be commenced momentarily.
We only have to go back to Dubya's invasion of Iraq, with the "your with us or your agin' us" drumbeat.
The entire MSM stood mute and offered not one contrary squeak of doubt.
Good People stood back so they weren't stomped by the raving crowd.
Hitler and Goebels would have been proud.
well george bush did steal hitler and goebel's enabling act, renamed it the patriot act, and usa congressmen voted on it with out reading it
Hitler called it the patriot act too.
except france...let me refresh your UN debate memory..They went down in official opposition..But the US ignored it.
That is right... it cost Saddam a pretty penny to get the frogs to fight for him in the UN. Or did you forget WHY they stood up for Saddam? It's called corruption.
Dammit. Now I've got the munchies.
i don't even think Benny need any bullet, he just need to say "i will not let SPX go below 1300" and that's all it take.
welcome to the USSA
Absolutely right Crab Cake- And there is only one country that can win WW3- USA! the greatest peacekeeping force on earth.
peacekeeping force, what an oxymoron; bombing for peace is like f**king for virginity
Try beating the falling $! Peacekeeping? on Stolichnaya? Chopin or Beethoven, it all adds up to hot air on the rise. What goes up...
In a conventional war, China would mop up, they have the manpower and the manufacturing capacity. In a nuclear war, everyone on the planet is a loser.
"In a nuclear war, everyone on the planet is a loser."
There won't be nuclear war. Ever heard of "mutually assured destruction"?
China is winning the economic war ...and America is losing.
Koos, your first sentence is embarrassing, shush now, you have no idea of what you speak..
I think the idea of WWIII is misplaced. Look at a country like Libya. They have a lot of oil, but the country is a total mess. The amount of money the U.S. or China would spend "peacekeeping" in Libya would easily equal the value of the oil they would extract. China can't successfully invade the U.S., and conversely the U.S. can't successfully invade China. I think a new, low-level cold war is much more likely.
"In a nuclear war, everyone on the planet is a loser."
China has enough nukes to cause considerable grief should the USA ever go that route, but not enough to fully deter a strategic war. People have inflated notions about the effectiveness of nuclear weapons. Yes, the destructive radius from the largest warheads is city-scale, but most weapons actually deployed and usable are much smaller than that. Given the age of the U.S. arsenal, and the typical poor quality/reliability of Chinese systems, I'd guess that in any conflict, only half of the weapons would actually reach their targets and explode. Certainly not something to wish for, but also not the end of life on Earth.
We should be more concerned about the development of fourth-generation nuclear weapons now underway in labs of the major powers. These micro-nukes will significantly alter the nature of warfare, equivalent to the advent of gunpowder in the age of the crossbow.
Let's see if I have it right. The option to being hit with a 2X4 is an arrow. Got it.
Still hurts like hell.
China have a huge army, but no means to move it anywhere quickly. I'm no rah-rah flag-waving American, but even I can see the obvious truth - the US could obliterate the rest of the world's conventional forces in a conventional war. The US spends as much as the rest of the world put together on 'defence', and its constant warmongering means it has plenty of experience using its firepower.
Of course, any total, 'conventional' war would quickly escalate to nuclear, so it's all a bit moot really.
"US could obliterate the rest of the world's conventional forces in a conventional war."
Oh really?
Then why have we been in Iraq 8 years?
Why have we been in Afganistan 3 years, 4 years, whatever?