Deflation is back on the front burner and it's going to destroy all of the careful central planning and related market manipulation of the past 6 years. Clear signs from the periphery indicate that a destructive deflationary pulse has been unleashed. After years of suppression, the forces of reality are threatening to overwhelm our managed global ""markets"'. And it's about damn time.
There’s simply too much debt and too little cheap oil for there to be any other trajectory to this story. We need to all prepare for the inevitability that, as the rot proceeds, the people of Greece will not be the only casualties of the banks' attempts at self-preservation. They'll try to throw all of us under the bus before taking any losses themselves.
There are large signs of stress now present in the credit markets. You might not know it from today's multi-generationally low interest rates, but other key measures such as liquidity and volatility are flashing worrying signs. While some may hope that rising yields are signaling a return to more rapid economic growth, or at least that the fear of outright deflation has lessened, the more likely explanation is that something is wrong and it’s about to get... wronger.
Last week we were reminded of what Elliott Management's Paul Singer highlighted as the "one risk that stands way above the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence" - an electromagnetic pulse (EMP). Specifically, we covered the release of an open letter written to President Obama on the country's concerning level of vulnerability to a natural or man-made EMP. What is stunning about the former CIA Director's comments below is not just the carnage an EMP could wreak, but the apparent rabid intransigence with which the electrical power lobby is fighting any responsibility for defending against one.
Last year, Elliott Management's Paul Singer highlighted "one risk that stands way above the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence" - an electromagnetic pulse (EMP). As Michael Snyder previously details, our entire way of life can be ended in a single day. And it wouldn’t even take a nuclear war to do it. All it would take for a rogue nation or terror organization to bring us to our knees is the explosion of a couple well-placed nuclear devices high up in our atmosphere. The resulting electromagnetic pulses would fry electronics from coast to coast, and, as PeakProsperity.com's Chris Martenson explains, the country is extremely vulnerable to an EMP...
The Fed insists that Cinderella's carriage is forever golden, ignoring the increasingly obvious reality that the carriage is turning back into a pumpkin before our eyes. The Fed's magic was always a short-term fix, akin to over-fertilizing and over-poisoning our economy to create the illusion of massive growth in profits and stock, bond and home valuations. Now that the magic is wearing off, the reality is going to hit everyone who believed the fantasy of permanent asset bubbles especially hard.
Humans desperately need a new story to live by. The old one is increasingly dysfunctional and rather obviously headed for either a quite dismal or possibly disastrous future. One of the chief impediments to recognizing the dysfunction of the old story and adopting a new one is the most powerful of all human emotional states: Denial. But here we are, 40 years after the Club of Rome and 7 years after the Great Financial Accident of 2008, collectively pretending that neither was a sign warning of the dangers we face -- as a global society -- if we continue our unsustainable policies and practices that assume perpetual growth.
What the honey-bee die-off means for humanity...
The lines have been drawn in many police departments: it’s us vs. them. Trust in many departments has been utterly shattered within some communities because the police hold themselves to a different standard than they do the populace. But the recent cases of police brutality are simply a symptom of a much larger problem. Society in the US is breaking down, civility has been lost, and the country is rapidly becoming uncivilized. This extends within and across all of the most important institutions.
We are at an important juncture as a global society: either we immediately prioritize a new trajectory focused on creating a positive, functional future or -- by continuing the consumptive, extractive, exploitative status quo -- we will default into a nasty nightmare. What will determine which future path we take is our collective narrative. It's the story we tell ourselves -- who we are, what we value.
When things are this obviously crazy, anything is possible.
Ukraine is back in the news cycle and for good reason as shelling continues even after the Minsk 'truce' deal. So what? The average American might ask. Ukraine is half a world away. Who cares what happens there? Putting aside the humanitarian reasons for not prolonging or intensifying a regional conflict, we risk not just only America's century-long ties with western Europe, but possibly the next world war. We are pushing our agenda and armaments right up against the Russian border -- for reasons that are still completely opaque at this time -- and Russia, understandably, will simply not stand for that.
The new Greek political party, known as Syriza, the Coalition of the Radical Left, has done the unthinkable: they've dared to speak the truth.
I quit Wall Street and decided that it was time to talk more about what was going on inside it, as it had changed. It had become far more sinister and far more dangerous.
~ Nomi Prins
The grand central banking experiment being conducted around the globe right now will not end well. With little more than a lever to ham-fistedly move interest rates, the central planners are trying to keep the world's debt-addiction well-fed while simultaneously kick-starting economic growth and managing the price levels of everything from stocks to housing to fine art. The complexity of the system, the questionable credentials of the decision-makers, and the universe's proclivity towards unintended consequences all combine to give great confidence that things will not play out in the way the Fed and its brethren are counting on.