This page has been archived and commenting is disabled.

The Next Crisis is at Our Doorstep

Phoenix Capital Research's picture




 

For weeks now, I’ve been warning about a market collapse. Among the numerous items I pointed out were:

 

1)   The US economy rolled over in a big way in Q1

2)   The Euro Debt Crisis was spreading to Italy and Spain

3)   China was showing signs of economic contraction

4)   Mutual funds were overly invested in stocks

5)   Historical patterns forecasting a collapse

6)   Signs that the Fed had lost control of the markets

 

And on and on.

 

Meanwhile the mainstream financial media’s consensus was that everything was just fine and that at worse the “recovery” was slowing just a bit. The Euro issues were contained. The US debt issues weren’t a problem. And the Fed would be able to get the economy roaring in no time.

 

Well here we are and the markets are an absolute bloodbath. Other than hopes for QE 3 there really isn’t much to be bullish on. Indeed, we are very likely heading into the REAL Crisis in short order.

 

That Crisis will be a Crisis of Faith in the US Fed’s ability to contain and/or solve the problems of the financial system.

 

For 80+ years, the US financial system has operated under the belief that the Federal Reserve could handle any problem. This belief was put to the ultimate test in 2008 when the Fed faced off against the biggest Financial Crisis of the last 80 years. And the ONLY thing that kept us from the brink was the belief the Fed could fix things.

 

It couldn’t. And we’re all beginning to see that now.

 

So when the next Crisis hits it will become clear the Fed CANNOT fix these issues (it never could but most people hoped regardless). And that’s when the real collapse will begin as the entire financial structure of the markets (mutual funds, hedge funds, investment banks, etc) comes unhinged.

 

Remember, the issues that caused 2008 were never actually dealt with. They were merely swept under the rug. And with leverage levels now higher than they were during the Tech Bubble, a much weaker economy than then, and the US Federal Reserve itself now virtually bankrupt with garbage debt, the next Round of this Crisis will make 2008 look like a picnic.

 

On that note, if you’ve yet to prepare your portfolio for Round Two of the Financial Crisis, you can find actionable investment ideas that will not only protect your portfolio, but help you produce outsized profits in my FREE report, The Financial Crisis “Round Two” Survival Kit.

 

This report is over 17 pages long and includes detailed analysis of why the First Round of the Financial Crisis happened, why the next round (Round Two) will be even worse than 2008, and which investments can produce triple digit winners when the market crumbles.

 

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 two other reports, one outlining how you can purchase Gold at just $350 per ounce and another featuring two investment ideas that will skyrocket as the world’s paper currencies collapse in an Inflationary Armageddon.

 

These other two reports How to Buy Gold at $350 and The Inflationary Armageddon are also available at the OUR FREE REPORTS tab on http://www.gainspainscapital.com.

 

 

 

 

 

 

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 08/03/2011 - 15:51 | 1521750 Smiddywesson
Smiddywesson's picture

Come on Graham, you can come up with something a little more substantive.  Your article says the equivalent of "I wrote about this in the past, I wrote about that, and the next big crisis will be accompanied by a lack of confidence in the system, in fact I am going to coin the phrase 'A Crisis of Confidence.'

Dispense with the formalities and just give us the advertisement without the "article" or give us something up to your usual standards.  You are better than this.

Wed, 08/03/2011 - 16:17 | 1521858 Zero Govt
Zero Govt's picture

Yes the round-up of the pessimistic news, which we ourselves repeat like a mantra every day anyway, with the inevitable plug at the end is getting a bit stale round here

Graham, tell us some stories about the bunker in your garden packed with ammo and 6 months supply of canned tuna.. i like a good laugh

Wed, 08/03/2011 - 15:19 | 1521646 hbjork1
hbjork1's picture

As the crunch proceeds, businesses will hire but hire carefully.  It will become well known that diplomas from the diploma mills do not guarentee jobs.  Web sites, if not gov agency postings, will appear that rate employment success for various sources. 

There are jobs available now but the applicant must have a real degree or real experience.

Of course, a person can always create a product and do it themselves.

Wed, 08/03/2011 - 14:07 | 1521424 PulauHantu29
PulauHantu29's picture

You think you got a crisis? ...better read what Dr Housing Bubble has to say:

 

"Student loans will keep a lid on how high housing prices will recover once the economy does settle down.  It is amazing to think that currently $1 trillion in student loans still need to be paid and the amount of student debt is only growing.  The question of higher education worth always comes up during recessions.  Yet the one thing that pundits miss, just like they missed with the housing bubble this last time around, is that we have an enormous market of subprime college players eating up a large portion of government backed loans.  Of course these toxic outlets usually grab headlines once bubbles burst but you also have students going to top quality institutions that routinely charge $50,000 a year or more.  This is similar to what was seen in the housing market. "

 

http://www.doctorhousingbubble.com/

 

It took me eight years to pay my loans off but when you put them as a priority (and work your butt off!) they disappear pretty fast.

Wed, 08/03/2011 - 13:49 | 1521342 hannah
hannah's picture

STOP WITH THE 'FED IS TRYING TO FIX...'...BULLSH^T...!!!!!!!!!! the fed is stealing taxpayer money and giving it to the banks. they havent tried to 'fix anything...until you understand that , you will not understand what is going on and what will happen in the future.

 

the fed wil do a qe3 and a qe4 and on and on til they cant do it because the system has collapsed.

Wed, 08/03/2011 - 13:35 | 1521274 New American Re...
New American Revolution's picture

I've got to party with this dude, what an upstart.    Get a few drinks in him and he'll be telling jokes all night and everyone will be in the aisles.   I've never seen such an up-beat attitude of we-can-do-it-ism, this guy is one high energy positive thinking American.   He really should run for Congress, or President,.... or sumpthin, don'cha think?

Wed, 08/03/2011 - 13:17 | 1521177 PulauHantu29
PulauHantu29's picture

The UK Guardian Headlines are scary today:

 

"Greece in panic as it faces change of Homeric proportions Fear is driving a silent bank run in Greece...."

 

http://www.guardian.co.uk/world/2011/aug/01/greece-panic-change

 

I hope they can work it out.

Wed, 08/03/2011 - 12:37 | 1520998 DavosSherman
DavosSherman's picture

That wasn't the doorbell, that was hells bells rining

Hells bells 

Hells bells, you got me ringing 

Hells bells, my temperature's high 
Hells bells 

Wed, 08/03/2011 - 13:16 | 1521171 RichardENixon
RichardENixon's picture

You're on a Highway to Hell, I take it?

Wed, 08/03/2011 - 12:25 | 1520951 sodbuster
sodbuster's picture

Zimbabwe Ben has always tried to convince everyone he had all these tools at his disposal to deal with the economic crisis. But in reality, he has only one- the creation of fiat money. That's why central banksters HATE precious metals. It reveals them as the frauds they really are.

Wed, 08/03/2011 - 11:59 | 1520881 financeguru500
financeguru500's picture

OP.

I think your explanation of the "next big crisis" is very broad and generic. I could write an article on how the next big crisis is right around the corner in a typical scaremongering fashion but without any solid basis it sort of leaves readers feeling perplexed.

My own opinion is that the next BIG crisis will be student loan debt spiraling out of control. It currently stands at about $900 billion and with a current 30% default rate of student loan holders, the rate is about to skyrocket to the trillions. Add to the fact that you cannot walk away from student loan debt and you have the real crisis no one is prepared for. If I had to put a date on when I expect things to go south with student loans, I would guess sometime around next summer as the number of students defaulting jumps past the 50% mark. With the significant number of students attending college to get a better life during this depression, we will have record numbers of graduates unable to find jobs. It just can't get any worse than that.

Wed, 08/03/2011 - 14:50 | 1521552 ratso
ratso's picture

financeguru - you couldn't be more right.  

In addition to what you write,  the entire state of college and universty education needs to be examined for ruthlessly exploiting the immature aspirations of young people with degrees that lead to nowhere at great expense to the students, to the sate and to the federal government.  It is a consciously created fraud which has perpetuated ever increasing costs in the guise of providing a tangible result.  

This doesn't mean every degree or school is worthless.  However, all schools participate in this to some extent and some to a greater extent.

When will we have the courage to address the real issues of higher education head?  With ever shrinking resources, I say the time is NOW!

Wed, 08/03/2011 - 12:16 | 1520924 Are you kidding
Are you kidding's picture

But that's the beauty of their system...you don't HAVE to pay back the government...the government CAN go without repayment...unlike a private bank.  It's the banks who offloaded the student loan business onto the government...so they wouldn't be stuck with them!

Wed, 08/03/2011 - 12:12 | 1520913 rsnoble
rsnoble's picture

If you can't walk away from a student loan then how do you default on it?  Well I assume you don't pay it.  So what happens there.....endless calls?  I guess they'll drag you to court and if you have nothing to take they're screwed?  I assume it will just mount up until you finally get a job and then they'll take whatever the maximum amount is under your state guidelines for garnishment.

Wed, 08/03/2011 - 12:30 | 1520974 RockyRacoon
RockyRacoon's picture

Reinstitution of debtor's prisons, of course.   We will have all those well educated *cough* college students pooled into closed dorms and cubicles facing the glowing screens of display panels.   Low pay, confined conditions, a measly pay going toward paying off the debt, ever increasing by accrued interest.   Hmmm.  Where have we seen these places before?    Sweat shops in far away places like China, India, etc?    It's the only way to lower labor costs in the U. S. to approach the $1/day rates around the world.   You think this wasn't well planned and executed.   Sorry, didn't mean to bring up the fate of those who will NOT work in those conditions.   Those on work release programs will be the promising and cooperative alumni who will work out of the dank basements at their parents house.

Wed, 08/03/2011 - 12:37 | 1520999 financeguru500
financeguru500's picture

Interestingly enough, prisons already operate under these conditions and some 90% of prisons are privately run now. Get busted for doing drugs, guess what Now your working for 10c an hour building furniture for use in government buildings.

Wed, 08/03/2011 - 13:48 | 1521346 RockyRacoon
RockyRacoon's picture

You're joking, right?  Prison is where you can get 3 hots and a cot, hot showers, free clothing, free medical care, cable TV, exercise rooms, and association with like-minded individuals.  ...and you can't be fired.  Other than the sex is bad (for most), it's the place to be in the 21st Century!

Wed, 08/03/2011 - 14:56 | 1521565 Shock and Aweful
Shock and Aweful's picture

Wow...you are so enlightened on life on the inside.

Are are you one of those brainwashed guys who watches "MSNBC PRISON WEEKEND" ?Or maybe one of the real geniuses out there who was told by Limbaugh or Hannity that prisons in the U.S. are like "counrtry clubs" 

I got news for you...It aint all it's cracked up to be - not even close.

Maybe you'll have your chance to check it out first hand soon - I hear that they are making new laws all the time which will most likely make the shit you do today...illegal tomorrow.  Hell, you probably did (or thought about doing) something that could already end your ass up in some state prison / gladiator academy.  So consider yourself lucky.

Wed, 08/03/2011 - 14:00 | 1521400 financeguru500
financeguru500's picture

Yeah you may be able to get all of those benefits, but from what I hear, they work you to the bone for slave labor wages.

Did you know most prisons in the U.S. are operated for profit and are privately run? How do you think they make a profit? They run manufacturing at the prison, pay the inmates ridiculously low wages and then sell the manufactured goods. The reason most people don't know this is because the manufactured products are actually purchased by the government (at really expensive prices mind you). I am prior Coast Guard and I can tell you that whenever the Coast Guard had to procur furniture, it had to first seek furniture made by prisons. I can't remember offhand what the name of the company is but there is a big manufacturing catalog that comes out each year with the items you can buy from prison labor.

Prisons are run like government employment, only for slave labor wages.

Wed, 08/03/2011 - 12:26 | 1520955 financeguru500
financeguru500's picture

Try repossession of personal property; any personal property.

Here's the steps of what will happen.

1. Student refuses and or cannot pay back student loan.

2. Student receives calls from company managing debt to negotiate a payment plan. (if plan cannot be reached or student cannot pay due to no income/low income go to step 3)

3. Court summons is sent to student.

4. If student refuses to go to court, student is now a criminal and will have warrant for arrest. If student does go to court, judge will have mandatory garnishments of income. If no income, judge will have mandatory repossession of all personal property not currently having a loan on it (car if paid off, house if paid off, other personal goods such as television etc)

5. If student does have income, but not enough to pay past the interest rate (which will be higher due to default) the student will be living perpetual serfdom to pay off the debt they can never repay.

 

Now how in the world can the economy get better when there is a growing and growing number of students who cannot get jobs good enough to pay back their student loans. I read an article recently which stated some 85% of graduating college students are moving back in with their parents because they cannot find a job good enough to support themselves. That is a scary statistic.

Wed, 08/03/2011 - 21:32 | 1522604 Chuck Walla
Chuck Walla's picture

Well, Illinois has the answer.  They passed the Illinois "Dream Act".  Now, taxpayers, who pay for their own kid's college educations, can help pay for the illegal's kid's college educations and add to the competition of their own for already scacrce jobs.  YES WE CAN!!!

 

The Illinois Democrats must really need the illegal vote to hang on to power which is just stunning in light of the unions being bought and paid for decades ago!

Wed, 08/03/2011 - 12:45 | 1521024 Crack-up Boom
Crack-up Boom's picture

Nobody goes to jail for failing to pay a debt per se.  If the defendent fails to appear in response to a subpoena, the defendant may be found to be in contempt of court and could go to jail, but not necessarily, and it has nothing to do with the underlying debt.  A witness who happens to owe nothing to anybody would face the same potential of jail time (which might be a very low potential) for failure to appear.    

You're right about the garnishments and taking of personal property to satisfy a debt, though.  And the issue with student loans not being dischargeable in bankruptcy is that the government can wait 10, 20, 30 years to finally collect.  That is, the debtor will never be able to accumulate wealth (in his or her name) until the student loans are paid (or the debt is being serviced as per whatever agreement is reached).  It's ridiculous that student loans are non-dischargeable.  It leaves universities free to swell their numbers without regard to the product they provide.   

 

Wed, 08/03/2011 - 15:11 | 1521622 Citxmech
Citxmech's picture

None of the private companies will be in business with a 50% default rate regardless of whether these loans can be discharged or not.  I'm betting that these junk loans will ultimately be sold back to the govt or fed (ie govt bail out) making all student subject to mandatory modification by the Feds.  The electorate will demad - and likely recieve, some kind of protection.  Even if it is a screw-job it won't be as bad as it would be otherwise.

Also note that there are homestead exceptions that prevent siezure of your only modest home and car etc.

btw, in 10 years, anybody who was thinking even remotely ahead will likely be able to pay off their total student debt load with a Krugerrand or two or a few hundred rolls of nickels.  =]

Wed, 08/03/2011 - 13:15 | 1521170 financeguru500
financeguru500's picture

That is, the debtor will never be able to accumulate wealth (in his or her name) until the student loans are paid (or the debt is being serviced as per whatever agreement is reached).

 

And this is how the Student loan bubble will be the next big crisis of our country. The current generation graduating from college expected to replace all the middleclass jobs are currently finding out they don't have access to those jobs. Their student loans default and they find themselves in perpetual serfdom. Thus the standard of living drops for most and they lose their purchasing power which also drags the economy down with it.

I strongly believe the end result of the student loan crisis will be underpaid factory workers with college degrees which inadvertently brings back manufacturing to the U.S.  The standard of living will be lower but a balance will be reached. I believe most people of the current college generation will never truly own their own homes and will probably work past their retirement age.

*Did you know some 35% of all people who own a 401k retirement plan are currently borrowing against their 401k because they need extra cash.

Wed, 08/03/2011 - 15:43 | 1521727 Smiddywesson
Smiddywesson's picture

*Did you know some 35% of all people who own a 401k retirement plan are currently borrowing against their 401k because they need extra cash.

I sure did, and the necessity was to buy even more gold.  I am not regretting that decision.

Wed, 08/03/2011 - 13:12 | 1521155 KickIce
KickIce's picture

They may attempt to do so but it would be hard to justify when many systems already face overcrowding and in some cases are releasing violent criminals.

Wed, 08/03/2011 - 12:39 | 1521004 the left behinds
the left behinds's picture

1 problem there is they dont have the space or manpower to enforce a 'reposession' of this magnitude.

I am one of those who can not even afford $100 a month toward a much inflated [just the premium, forget the interest] loan.

I think they don't really ever want students to actually pay that back, or there would have been jobs with fair wages for their courses of study after they [I] got done with scool.

If I [and all students] were making decent money, and if paying these loans off was going to fix everything, that is, all students making double payments on their loans, I would happily fork over the $.

That's never going to happen.

Wed, 08/03/2011 - 12:14 | 1520912 Transformer
Transformer's picture

Guru said "I think your explanation of the "next big crisis" is very broad and generic. I could write an article on how the next big crisis is right around the corner in a typical scaremongering fashion but without any solid basis it sort of leaves readers feeling perplexed."

I agree.  I don't see what everyone is getting so worked up about.  If there are any problems that the FED can't handle, well shit, we have this new Supercongress 13 which can certainly work out any problems in short order.  Everything is fine.

 

 

Wed, 08/03/2011 - 12:29 | 1520968 financeguru500
financeguru500's picture

Go Go Supercongress. I hope they get special rings they can put together to create some kind of superhero ability. Maybe Marvel or D.C. could create a comic book on it.

Wed, 08/03/2011 - 20:43 | 1522475 Bicycle Repairman
Bicycle Repairman's picture

Why do we need a "Super Congress"?  Don't we have the Justice League of America?  Just what superpowers do the members of the "Super Congress" have?  Extreme napping? Devastating flatulence?

Wed, 08/03/2011 - 23:07 | 1522798 StychoKiller
StychoKiller's picture

Able to whip out a credit card faster than a speeding bullet!

Move mountains of debt with only a (coke) spoon!

...

Wed, 08/03/2011 - 13:09 | 1521127 KickIce
KickIce's picture

lol.  It would have to be DC.

Wed, 08/03/2011 - 12:16 | 1520922 They are all we...
They are all well Capitalised's picture

Now, now, there's no need to be cruel. Besides all the fun is happening in Europe at the moment.

Wed, 08/03/2011 - 11:51 | 1520866 Fix It Again Timmy
Fix It Again Timmy's picture

The Humpty Dumpty Syndrome is here...

Do NOT follow this link or you will be banned from the site!