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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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The only long term action being taken is the central banks and soverign funds are buying gold. When they can no longer buy cheap gold there will no longer be a reason to kick the can.
Don't make it so complicated. The "new balance" that man has been striving for is merely beer at 3:30.
Beer at 3:30 and stupidity at 5:30....
It is not the people who have" Lost everything" that you will have to worry about, it is the "people who have nothing to lose".
The first will be crying in his living room when the power get's shut off.
The second will be coming through the window, armed to the teeth,
and he is going to take any shit that "lost everyting" is weeping about,
eat the cat,steal the last bit of cheese going moldy in the refrigerator
and God only knows what else he might take a fancy to.
When the "Worked in an office all my life crowd" meet the "Been pushing a shovel for 20 years" crowd, they are going to have a very rude awawkening.
Different skill sets and no match. The numbers do not look good either.
"Lost everything" will look very cool in his well thought out fortress untill a Molitoff or 3 comes through the window, AK47 too hot to hold in the flames,house burning.
The military will not back up "Just lost everything",
They are from the other Clan, that is why they are in the military,
As in take a few rounds and get a college degree,for a chance at the non existant golden hoop.
I think you forgot to put the decimal point in front of the number you claim for your presence here.
Most of those guys are retired, like the guys I worked with at Deere when they were still using trip hammers. No, it will be the "sitting on their asses making babies for fun and profit, wiatin' on the check" crowd that will be restive and dangerous. The upside is they mostly have crappy weapons, do not understand that only specific ammo fits a particular caliber(ask a cop) nor do they train how to shoot. The "spray and pray" types are dangerous because they are mean froma futile exisitence and stupid. But they are cunning.
Get a gun, learn how to use it and make sure like minded people are nearby. Never trust the SOB next to you to shoot. Always figure if shooting is required, others will simply run away, unless you have trained with them. You are on you own.
Outstanding advice. Slow steady fire, target acquired beats spray & pray every time. Speed is good but accuracy is better. When the gibbons crowd comes a runnin' the advance is stopped very quickly with a few well placed rounds. Have a defensible perimeter that has to be crossed because I GUARANTEE you that 10 idiots running across open ground firing at will or even slowly advancing will IMMEDIATELY stop when they see their peers head snap back or his chest implode.
Vets like myself have the training and the wherewithal to see it through, been there, done that rodeo. Don't assume you can until the rubber meets the road. I've seen men crumble and not be able to pull the trigger. Given that, rely on no one but yourself for your self -preservation. Back up is nice, but not always effective.
I had a buddy that was in Grenada. He was assigned an area to watch and told that if he saw any movement, shoot and ask questions later. He saw a guy in the area and trained his scope on the guys head and kept track of him for about 10 seconds and then the guy's head exploded. A 15 year old kid that was running the show had shot the guy and proceeded to tear him a new asshole for not shooting immediately. That's when he realized the shit was real. Gonna get real around here very soon.
The biggest problem is they have absolutely been conditioned that when you die just hit reset
Train with your guns, train with your small units, then make your own claymores. Remember--there's lots of them in the "sittin on their asses, making babies" crowd.
Exactly.
IQ101
Another possibility is
that you have been playing too many video games.
Dont do video games, I just have a tendancy,life long, to read history books.
I would recomend the same to any of my associates.
Absolutely. Most of my ideas come from history, analogy, and logic. And of course, trying to punch holes in your ideas. So anybody who signals they stopped their thought process with an "it can't happen" comment instantly loses credibility with me. History teaches us the most ironic statements are:
let me sell you mine... then. Not my point of view, my history novel.
http://www.falakpema.com/buythebook.html
Guaranteed geo-political history of the middle ages plus a kinky novel! And its only the first book of the trilogy!
Nice looking book. I hope you do well with it.
+!
I haven't seen Fritjof Capra mentioned on ZH:
http://www.amazon.com/Turning-Point-Science-Society-Culture/dp/0553345729
He postulates that world "orders" last about 400 years, and that our current order goes back to the time when the Euorpeans were carving the world up into the current maps we all know.
Probably too much of a hippy.
Was he related to the great Frank?
I haven't read the book. I will. Having said that, there is no doubt in my mind that the year the European world reached a tipping point was 1492; a lot of people say that the middle ages ended in 1453 when Constantinople fell to the Turks, but for me the new dawning (Columbus) and the old mourning (expulsion of the Jews from Spain) was an even greater tipping point.
I don't know if Capra is on the same time line. Will find out. As for carving the world up, in 1494, Pope Borgia, (the ONE and only), negotiated the Peace of TOrdesillas between Portugal and SPain that would start the world global race to the West, as it would be contested subsequently by the Dutch, the English and then the French naval fleets. Tordesillas divided the western world between Spain and POrtugal according to an imaginary line drawn through the Atlantic Ocean (meridien 370). They had a rough idea what the world looked like then thanks to the Portuguese navigators and the Columbus expedition. It gave rise later to the birth of Brazil and the Spanish main.
I've given you my two cents above in my personal little wiggle about middle ages.
I don't think there's any direct relation.
I think you will find The Turning Point interesting, if not necessarily exactly aligned temporily with what you've outlined. I haven't read it in about 20 years, I'm going to dig it out again. The idea that I found most interesting was the notion that civilizations have a fairly constant lifespan - whether an Egyptian or Chinese dynasty, or our own (remains to be seen).
I agree with you on the Middle Ages ending with Coumbus. I guess at a fine enough granularity, all monumental cultural changes are a process and turning/tipping points become blunt and multiple.
Nice to see FC being mentioned on ZH. And he is/was (?) hardly a hippie, just taught at Berkley.
Plus, the hippies had it all figured out decades ago. The so called realists are just getting their wake-up slaps right about now.
Vivek (ORI)
You have got that right. Every one of the issues we are facing today was identified and objected to / protested over by the so called 'hippies' and 'crazies' at inception ... only to be collectively disparaged, alienated and ignored.
It would be a quite familiar feeling to many ZH'ers who have been identifying and warning about many things that have now materialised. Not so long ago we were all crazy doomsayers hiding gold under our mattress - now you are beginning to be acknowdeged as prescient and well prepared.
Sheep Flock
The DFH were right afterall...
DFH: Dirty Fuckin' Hippies
He's still around. I read The Turning Point first back in high school when I was a punk rocker, he seemed like a hippy to me, then. ;) I would imagine that many ZHrs would consider him a hippy now. I agree with you completely that the reductionists (realists) are wrong and that there have been alternatives presented - even in the West - for many, many decades.
I really enjoy reading your stuff, Vivek.
Bob
Everything???!!!!!
Had to say it again
But anyway a guy could make out with no mortgage when the banks are allowed to implode? Something good has to come out of this for us post nuclear cockroaches
His proprietary crash indicator which has caught every crash in the last 25 years; several times.
"the great great gods of long ago
they walked upon the moon
they drank the very blood of earth
from death they were immune"
http://thepeakoilpoet.blogspot.com/2011/08/for-our-sons-and-daughters-to...