Chris Martenson is an economic researcher and futurist, specializing in energy and resource depletion, and co-founder of PeakProsperity.com. As one of the early econobloggers who forecasted the housing market collapse and stock market correction years in advance, Chris rose to prominence with the launch of his seminal video seminar, The Crash Course, that interconnected forces in the economy, energy, and the environment that are shaping the future, one that will be defined by increasing challenges as we have known it. Chris’s insights are in high demand by the media as well as academic, civic, and private organizations around the world, including institutions such as the U.N., the U.K. House of Commons, and the U.S. State Legislatures. So with that we’d like to welcome Mr. Chris
A normalization effort is going to then basically expose that the stock market is roughly overvalued by 100%? "100%, yes. I actually think the case is a little bit harsher than that; in fact, quite a bit harsher than that."
The central planners are in a state of fear and panic. They are trying everything and anything to create market validation for their policies, watching with trepidation as their favored economic metrics fail to respond to all of their frenzied efforts. They are so far over the tips of their skis right now that there's nothing they won't do. By the time a central bank is behaving as recklessly as Japan, it's time to edge towards the exit, because the chance of a flash fire in the building has grown uncomfortably high. That is, instead of providing comfort, these most recent moves should invoke greater worry for those of us alert enough to see them for what they are: acts of panic.
...people love to hear about how technology always saves the day... "Among the thousands of shale producers, you can guarantee there are pioneers just like those who started the shale revolution. As profit margins erode due to low or even lower future prices, the pioneers will try out the revolutionary new shale techniques that have yet to be deployed." It sounds good in the same way that Twinkies taste good. We would remind people here that back in the 1700's the South Sea company, the stock shares of which bubbled up enormously - even causing Isaac Newton himself to lose the then-staggering sum of 20,000 pounds - was billed as “a company for carrying out an undertaking of great advantage, but nobody to know what it is". Would it be unreasonable to restate the author's claim as "shale operators to deploy new technology of great advantage, but nobody to know what it is?". Ungrounded hype is the same thing no matter when or where it happens.
There's something we 'regular' citizens wrestle with that the elites never seem to: a sense of moral duty.
The current Ebola outbreak, unlike others throughout history, is lasting a very long time; with cases now being reported on a variety of continents well outside of its equatorial African origin. We're not especially worried about Ebola striking me or my loved ones (for reasons we explain below). But we're growing increasingly concerned about government response to the outbreak. So let's spend some time understanding the nature of Ebola, specifically, and viral contagion, more generally. At the very least, Ebola can serve as an instructive reminder about how our society's responses to a viral outbreak could prove to be at least as disruptive and damaging as the virus itself.
Look, it's really this simple: Anything that can't go on forever, won't.
The current bubbles in financial assets -- in equities and bonds of all grades and quality -- raging in every major market across the globe are no accident. They are a deliberate creation. The intentional results of policy. Therefore, when they burst, we shouldn't regard the resulting damage as some freak act of nature or other such outcome outside of our control. To reiterate, the carnage will be the very predictable result of some terribly shortsighted decision-making and defective logic.
Looking at the past 100 years of the US dollar's history, one theme becomes abundantly clear: in times of crisis, the US government has no issue with changing its own rules or breaking its own laws. And those "temporary" emergency measures have a nasty habit of quickly becoming permanent. As we see the US money supply exponentially accelerating since the 1970s, and the Federal Reserve more than tripling its balance sheet since 2008, it's only prudent to ask the question: Without constraints, are we in danger of destroying the purchasing power of our currency by making too much of it?
The US is clearly now pushing Russia towards war. But if you read the signs correctly, Russia has been preparing for exactly this outcome for many years.
As John Kenneth Galbraith famously stated, "The process by which money is created is so simple the mind is repelled." As Peak Prosperity's Chris Martenson explains (as part of his excellent Crash Course), essentially, money is lent into existence though fractional reserve banking. The dollars you deposit at the bank? They turn into nearly 10x that amount as your bank subsequently makes loans using that money as collateral. As simple as the process is, nearly every American remains ignorant of it and its massive implications. At the heart of the matter is this: our money supply and its related debt obligations MUST continue expanding (thereby devaluing the purchasing power of each dollar ad infinitum) -- forever -- or the entire system collapses upon itself. Prepare to be repelled...
For reasons that have no rational explanations at this time, the US and Europe have embarked on a concerted program to demonize Putin, ostracize Russia, and bring the world as close to a major conflict as it's been since the Cold War, a time hardly memorable to many in the current crop of our elected officials. A dangerous dynamic is brewing between the West and Russia/Putin. We are seeing a rush to war very similar to the one that led up to Saddam's ouster, but this time, we have much less justification (hard to believe) and the opponent is tremendously more capable. There is little sense in the course the West is currently pursuing, little to gain, and much to lose. The main conclusion here is that not only is the US poking the bear, but it is doing so with increasing frequency and upping the ante dangerously with each step.
There are three fundamental forces disrupting the conventional order, and everyone with their eyes open sees them at work every day:
- Essential resources are becoming more expensive.
- The system of expanding credit/debt to fund more consumption (i.e. “growth”) has reached marginal returns and is failing.
- Networked software, automation and robotics are reducing the need for human labor on a global scale.
As a result of these three structural forces, economic instability is not going to go away any time soon. Technology leapfrogs the obsolete and inefficient; no wonder conventional sectors and the market for traditional 9-to-5 jobs are both stagnating.
Economic laws are not optional. They are like the laws of physics - inexorable!
We talk a lot about Peak Cheap Oil as the Achilles' heel of the exponential monetary model, but the real threat to the quality of our daily lives would be a sustained loss of electrical power. Anything over a week without power for any modern nation would be a serious problem. When the power goes out, everything just stops. A blackout of a few hours results in an inconvenience for everyone and something to talk about. But one more than a day or two long? Things begin to get a bit tense; especially in cities, and doubly so if it happens in the hot mid-summer months. Anything over a week and we start facing real, life-threatening issues.