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The Great Collapse Has Officially Begun
I’ve been warning of this for well over two years. My primary warnings were:
- 1) That 2008 was just a warm-up
- 2) That the REAL Crisis had yet to unfold
- 3) That the REAL Crisis would make 2008 look like a picnic
Well, the period I’ve been warning of is now here. What’s happening right now is not just a market crash, bear market, deflation, or any other item related to just one asset class.
Instead, this is a collapse of the entire US monetary and political system and the mentality of spending one’s way to wealth.
For 80+ years, the US has operated under a crony capitalist system in which politicians dole out political and economic favors to the chosen few whose bribes/donations funded their campaigns.
This system was aided and abetted by the US Federal Reserve, which dealt with any and all economic issues by printing more money. Whether it was the Asian Crisis, Long Term Capital Management, or the 2008 Crash, the Fed dealt with the issue by opening the floodgates and flooding the financial system with liquidity.
Aside from making moral hazard (the notion that those large firms who screwed up were never actually allowed to fail) the bedrock of the financial system, the Fed also blew a credit bubble which in turn funded bubbles in virtually every asset class: bonds, stocks, real estate, emerging markets, even some commodities.
Indeed, the vast majority of US economic growth over the last 40 years has been fueled by the Fed’s loose money policies. Bill King, an analyst and investor whom I admire, shared the below chart with me a while back. It charts US GDP growth in nominal terms (the dark blue line), the performance of the Dow Jones Industrial Average (the black line), and REAL GDP growth or growth that accounts for inflation (the light blue line).
As you can see, when we account for inflation, the US economic “miracle” of the last 30 years is in fact not all that miraculous. Take away easy credit and Fed funny money and the US GDP has barely grown at all since the ‘70s.
When your entire financial system is built on debt eventually you hit a brick wall. We did this in 2008. The Fed barely held the system together by going “all in” and funneling over $11 trillion in bailouts, backstopping the major US banks, and transferring north of $2 trillion in garbage debt to the public’s balance sheet (these are just the moves we know about).
This effort has now failed as the world collectively realizes that the Fed cannot hold the system together. This began to become clear when QE 2 spent $600 billion and the US got at most three months’ worth of improved economic data (while inflation exploded throughout the global economy, leading to riots, coups, and more).
In simple terms, we’ve now entered the Real Crisis, the END GAME, for our current monetary system. Before the dust settles on this mess, the US and its political, economic, monetary structure will look very very different.
However, before we get there, we will see riots, civil unrest, possibly martial law, for certain a Government shutdown, bank holidays, a debt default/ restructuring, the re-instatement of the Gold standard or something like it (possibly a basket of commodities), food shortages, and more.
We will also see trade wars, possibly another World War, a temporary backlash against globalization, a de-consolidation or fragmentation of corporate America, and other items.
In plain terms, we’re entering a period in history that will rival the Revolutionary war. This country will be very very different by the time it has ended. Many people will lose everything in this mess. Yes, everything. So if you have yet to take steps to prepare for this, you need to get moving NOW!
I can show you how. Indeed, my Surviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor.
Within its nine pages I explain precisely how the Second Round of the Crisis will unfold, where it will hit hardest, and the best means of profiting from it (the very investments my clients used to make triple digit returns in 2008).
Best of all, this report is 100% FREE. To pick up your copy today simply go to: http://www.gainspainscapital.com and click on the OUR FREE REPORTS tab.
Good Investing!
Graham Summers
PS. We also feature four other reports ALL devoted to helping you protect yourself, your portfolio, and your loved ones from the Second Round of the Great Crisis. Whether it’s my proprietary Crash Indicator which has caught every crash in the last 25 years or the best most profitable strategy for individual investors looking to profit from the upcoming US Debt Default, my reports covers it.
And ALL of this is available for FREE under the OUR FREE REPORTS tab at: http://www.gainspainscapital.com.
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Wrong, that makes you a fine forecaster... you forecast an event, and it came to pass. Point for you. The issue is are you a relevant forecaster? Do your forecasts allow a person to take steps to position themselves favorably against the ultimate fruition of your forecast? So, when you use the sun not coming up as an example, with a 4 billion year delay, your forecast is not relevant... it may well be true, but there are no steps somebody can take for optimum positioning as they'll be dead well before you are proven correct. When people have the technology to live 10 billion years, your forecasts now become relevant.
So, to get to the point.. somebody forecasting the collapse of an empire with a +/- of a few years on their forecast IS a relevant forecast. Nobody can forecast the exact time/date of such a forecast, but the point is that the time frame is one that allows for positioning.
I knew as soon as I read this
"In simple terms, we’ve now entered the Real Crisis, the END GAME, for our current monetary system"
that this would be a gold bug article. Phoenix Capital always works it too hard to be believable.
Just sayin'.
I found this interesting and informative.
It's a presentation by Mike Maloney from GoldSilver.com about Debt Collapse and The Case for 20,000 Gold.
Tell my fellow Long islanders that, Where the north shore in Port Jefferson near the pier is filled to capicity on a Tuesday evening with hundreds of people enjoying their lives with not a care in the world . They will look at you and say , What the fuck you talking about homey. Moral of story. ...Live your life. We are all doomed. Go to the beach. Get laid. Enjoy.
That is true, for now. But, things can change real fast when the masses see the rich living large, while the masses that who feel they got the shaft from the rich, will wake up and organziae via Twitter, and target the rich. Anarchy is already erupting in scores of countries of countries around the globe. Those living in rural areas will be have a less exposure to riots and looting.
Like the Jews in Poland lining up for a train ride? Or spending a night or two in the Superdome? "Don't worry, be happy?"
No thanks, I think I'll keep preparing and stocking up on food. Ukraine 1933 food as a weapon:
http://www.youtube.com/watch?v=NJ4L8JEILNE
Is this for real?? WTF?? So he's talking about World Wars and he's saying we should buy ETFs (that's what I understood from a commenter his newsletter advices may contain)?
.
US "deserves" a AAAA credit rating. One LA fireman is equal to 200 Thai day laborers, one UC college president is worth 500 Thai day laborers. Why? Because the fireman and college president are more "entreprenurial". Yet Thailand is self sufficient and those day laborers I know have chickens running around their backyards. Before 2000 maybe we didn't have to reconcile what an asian makes versus a westerner, but that is what created the Savings Glut that is now blowing the Big Bubble to it's apex. Gold is a bubble? Take a look at the FRED chart on TWEXOMTH. It's just now touching where we were in 1996. That's not a bubble, along with Treasury debt?
There are going to be a shit ton of Americans with chickens running around in their back yards as a primary source of food. Those are the lucky ones. The rest will starve to death waiting in line for 'entitlements' that will never come.
The smart ones already have their chickens and the means to protect them from thieves.
"my Surviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor."
And you wonder why we're failing as a civilization?
Double post
First things first; reading SAS Survival Handbook by John "Lofty" Wiseman
Nice book pitch. Why don't you at least feign a touch of subtlety next time? Pathetic... I mean really. Fear, riots, martial law? The only thing a rerun of the Great Depression is going to do is expose the human condition as it relates to society. It boils down to whether you believe people are inherently good or bad, prone to violence or not, and whether you believe young men in uniform would ever turn their weapons inward.
In the event we see a repeat of the Great Depression there will no doubt be isolated incidents of civil disobedience and protest, but a breakdown of human decency where we all go ape shit in the streets and Barack Obama or his successor take us into World War? Do us all a favor, don't get high before you weild a pen. It's irresponsible and quite frankly, just downright stupid.
The facts are these:
1) People, at least the ones who need controlling, will believe anything that is fed them through current media venues.
2) Truth is an irrelevant sideshow in the court of public opinion, and hence, public reaction.
3) If core public belief and opinion have been rendered impotent to the extent they can be controlled as easily as flipping a switch then the current power structure is under no threat immediately or perennially.
4) Public reaction to domestic crises, especially crises perpetrated by the moneyed class, has always been subdued by a natural human aversion to violence and an overwhelming desire to believe authority.
Even if the global economy collapses people will wake up the very next day and figure out how to put bread on their tables. Life is that simple. We will figure it out. We always have. The road might be bumpy, but I'd rather look ahead into a brighter future and forge ahead in that direction than mire myself in your miserable view of the world. So why don't you take your fear-mongering sales pitch and shove it up your self-serving bunghole.
Let the markets take their pain. The doctor has all but left the building. The board has cashed out. We're on our own...
Good, logical post, Brett.
90% of Americans call themselves religious. I'm guessing 80% believe in doomsday prophesies. There's no other way to explain why so many are quick to believe every earthquake, flood, comet within 1 million miles or hiccup in nature is evidence of the end of everything.
The politicians and a whole load of unethical con artists milk this for all it's worth. These people are the ones who are easily controlled. They've been trained since birth to listen to authority figures.
As you mentioned, we already had a great depression. There were (and always have been) isolated incidents of violence, but there wasn't mass starvation or insurrection. The US has also had a few sovereign bankruptcies and currency devaluations. Society did not end.
There won't be a world war. For the simple reason that only the US has enough of a military to threaten more than their immediate border. The nuclear powers won't commit mass suicide. It's a stale mate of either mutual impotence or mutual destruction.
Good, logical post, Brett.
90% of Americans call themselves religious. I'm guessing 80% believe in doomsday prophesies. There's no other way to explain why so many are quick to believe every earthquake, flood, comet within 1 million miles or hiccup in nature is evidence of the end of everything.
The politicians and a whole load of unethical con artists milk this for all it's worth. These people are the ones who are easily controlled. They've been trained since birth to listen to authority figures.
As you mentioned, we already had a great depression. There were (and always have been) isolated incidents of violence, but there wasn't mass starvation or insurrection. The US has also had a few sovereign bankruptcies and currency devaluations. Society did not end.
There won't be a world war. For the simple reason that only the US has enough of a military to threaten more than their immediate border. The nuclear powers won't commit mass suicide. It's a stale mate of either mutual impotence or mutual destruction.
"Even if the global economy collapses people will wake up the very next day and figure out how to put bread on their tables."
Wrong!! The "people" don't know how to make bread, the bread making factory is 200 miles away and they can't get their flour delivery from the mill which is 500 miles away. Once the Walmart has been looted, emptied and burnt down, the mobs will be hungry, angry and some will be armed (see Rodney King Riot x 1,000).
Place your bet on FEMA, riot police and being rounded up into your local version of the "Superdome"? Or, you can prepare now with beans, bullets, band aids and bullion. There is NO RISK to the second strategy, but huge downside risk to choosing the reliance on the government to take care of you and your family. Wake up folks, this won't be your average depression.
You're right and the Walmarts empty within a very short time frame. I look at "modern" societies influenced by difficult or terrible circumstances to garner clues of possibilities- and there are many. Haiti, Africa and locally, Louisiana during Katrina for example- which is your "FEMA" reference, I presume. What's important to keep in mind when looking at these circumstances, is that most of these events really didn't last very long. Then imagine circumstances where these difficulties persist for several months. A year or more? I think the doom and gloomers are smart to hope for the best but plan for the worst. I'm semi-prepared but the rest of society scares the shit out of me. (Even when things are good!)
The government is good at looking at the crime scene and writing a report. Think hard, people, about every psycho lone gunman, like that Virgin Tech dude. The big fat cops were hiding behind trees while the nut with a pistol executed whomever he wanted to. They never even tried to stop him. Same in the Fort Hood shooting, the cops were outside, the only reason they even shot him was because he engaged them first. They were busy trying to avoid contact. Have you ever seen a cop charge into a shooting situation while it was hot - I mean where Joe & Jane Civilian are getting shot, not when cops are getting shot. They may set up a "perimeter" and roadblocks, but they don't go in hot. Witness the Rodney King riots - Joe & Jane Civilian were being dragged out of their cars and trucks and getting stomped - where were the cops? The only people who didn't get robbed were the Koreans - armed and dangerous. They have my admiration.
My first experience with this was many years ago, when three masked men with shotguns robbed a bank in downtown Elmhurst, IL, a suburb of Chicago, at noon. The cops, who could be seen harassing hippies and high school kids every day all day downtown, managed to disappear until the robbers were safely away. They had learned from an earlier robbery in 1967 further west on North Avenue, Northlake, when the cops responded to a an alarm and pulled up in front of a branch bank that was in the process of being robbed. 2 cops died. The robbers weren't interested in "Freezing" - they charged the cops and shot at them through the glass doors.
There are good cops and bad cops, but I wouldn't count on either one to be there when they are needed. If the SHTF for real, they will be helping their families like anyone else would. They will not be there for you. Unless you are in NO, then they might shoot you for sport.
Never forget the old saw - "God helps those who help themselves".
The police don't need any help from you; and they expect the same from you."---bob Dylan song.
Here are some of New Orlean's finest looting a Walmart along with the other animals, think it can't happen in every major metro area?
http://www.youtube.com/watch?v=Fk7xbKmyVQw
Back in the 20s and 30s...I'd agree with you. In modern America? No way it will be as peaceful as you suggest. We've got 3X the population now...3X the amount of mouths to feed. We rely too much on technology these days. IF it get's as bad as the great depression this time...watch out!
And you can chuck in Fuckushima as another way in which the world now is different ... and Peak Oil ... and, well everything.
No previous model/theory fits.
edit
The article may be right or wrong, according to timing. But, the approach is for chumps. A funeral director should not be in charge of directing traffic.
ON the upside, there will be a lot of lead perforated bankers, financial asshats, cheerleaders (Kudlow and his ilk), politician and hopefully POLITICAL PARTY LEADERS and so called power brokers.
IO hope Warren Buffet takes it up the ass too. These pricks that think that they as so smart and rich of their "investing prowess" are just insider trader louts and pricks with no ideas at all.
FUCK 'EM ALL and I can't wait for the show.
expansion of the monetary base by the Central Bank:
"Hyperinflation has a single proximate cause, which is the central bank's large expansion of the monetary base. What causes such expansion? Large government deficits are one major cause. Fiscal deficits are financed by issuing treasury bonds. When the central bank buys these, it makes the monetary base rise. Government deficits, which have many causes such as wars and social programs, signal a weakness in the political and fiscal systems, which result in taxes not being high enough to cover government spending. The central bank itself causes an independent expansion of the base when it decides to issue credits to such entities as banks, businesses, and other central banks.
A major step in the course of a hyperinflation is a change in public behavior. The public decides to exchange depreciating paper for real assets such as goods and gold. When acted upon, this desire raises the velocity of money, causing the price level to accelerate its increase."
http://www.lewrockwell.com/rozeff/rozeff267.html
Lew sums it up pretty darn good.
No, not now. Shit is likely to hit the fan around 2020-2025.
I've only been reading ZH for about 6 months, but I have noticed that these guys have been claiming
we are days away from the 'final crisis' for as long as I can remember. Does anyone here know how
long they have been making these claims?
If you're talking about these Phoenix Capital guys, then yes, they're doom-mongers (and horrific spammers, too.)
However- if you have made the trades suggested, there's no reason to suggest that they have been wrong. It's not the right move to reject analysis because you don't like the results- you need to reject it if it's incorrect or faulty. When there is some indication that things are actually improving in any sector, that will be the time to start questioning the bearish outlook.
Will there be a "final crisis"? Who knows- and really, who cares. Anything "final" will, by it's own nature, blow all of our plans out of the water, and it likely won't matter what your positions were. It's always possible that a geometric collapse will start, but even if it does not, you can still do well by following the primary trends. Right now, that means PMs, and that is what they are advocating. There are no other trades available with a similar real ROI right now.
Now, if unemployment starts to drop, the FED raises interest rates, maybe some tariffs are enacted, and there is significant political reform, we can all heap scorn upon them- but until some kind of positive move takes place, doom and gloom is the flavor du jour.
Since about 33 A.D.
End of days and all that.
Scary stuff - in multiple ways.
About as long as Noah.
It's almost time to stop, isn't it?
funny how the article states that unbridled spending and debt is what has killed the maerican economy and then ends the story with the good 'ole amerikan BUY NOW! pitch....what a load of crap.
Iwas going to observe just that.
The sales pitch deflates the thesis.
End of times, bullish for the DOW, right?
Yeah, but what will TEOTWAWKI do to NFLX?
We are already in the global civil war created by the collapse of the welfare state abetted by crony capitalism. The banks and te government are flat out bankrupt, so they will try to steal their way back to prosperity through inflationary theft. http://www.futurnamics.com/civilwar.php
"No one saw this coming," testified the Bankers to Congress.
Transparent, self-promoting paranoid rant.
Anything to sell more subscriptions.
"Gold Just Went Over $2000, By Tonight That'll Cheep" Rollover-1981 2:55
http://www.youtube.com/watch?v=WI8dfFN7H1w
Gold is more than Platinum right now. They just started the tape now.
Would be a nice play from 41.50 to 46.00 in silver and 1650 gold to 1850+ and rising.,
The only question is simple. What goes up must come down. Kitco tape has it live. cash out profits as soon you see the first waterfall. (As in taking physical delivery.)
You paper schmucks are gonna get cremated if you hang on to that match too long.
@ 2:37 "Tell'em anything Barney, except what we're doing"
Why is that ashtray so clean?
Thanks for posting this video - that is deep.
A Dystopian future awaits us but it isn't a collapse (i.e. Mad Max). I like to think of Amerika transitioning from Huxley's Brave New world to something with an Orwellian flavor and Fascism de jour.
Some beta:
This is my first post after reading ZH closely for over a year. I like to get to know the community by observation first.
I am not a "Doom and Gloomer." Instead I like to think some of the writers and commentary here are from folks such as myself: Enlightened enough to see through the veil of bull-shit long enough to know what is on the other side isn't a happy ending. Unbridled avarice and lust for power mixed with arrogance and ignorance is what lives in the heart of these so called wizards, these "maestros."
Even though I own a small business developing enterprise mobile solutions and work hard each day for my dollars, I realize that all of this is "just for now." I am old enough and perceptive enough to have witnessed the great decline and recognize it for what it is. There is nothing wrong for fearing our "leaders" and for our future well-being.
However, I don't agree with this particular author's viewpoints only because there is far too much left unsaid and what is said only serves to blindly antagonize the mushrooms. Actually, perhaps, his articles border on psy-ops.
Anyway, thanks for keeping my days interesting. I look forward to tracing through your stack dump each and every day.
bravo, he is also selling the answer... I have no idea how it will go down; I plan on leaving. I lived in Japan durng the 90s... saw the same shit there.
good luck.
one of the best commentators on zh.....the results we are experiencing result from letting stupid fuck people run the world....alan greedspan was and is an idiot...the vast leadership class of amerika is made up of stupid fucks who think they know better but who only know how to leech and destroy economies and nations....they are scum....
Tony....seems spot on to me. Except perhaps include all the world's governments are run by stupid fucks. Name a country that isn't run by stupid fucks....including Switzerland. The only good thing about Switzerland is it's a small population and every adult must own a gun. What they did during WWII is for another post, but even stupid fucks can recognize opportunities and seize them as long as their government is also run by stupid fucks that allow it. It's called avarice, the mallady of the world.