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5 Charts Which Show That The Next Economic Crash Is Dead Ahead
Submitted by Michael Snyder via The Economic Collapse blog,
When an economic crisis is coming, there are usually certain indicators that appear in advance. For example, commodity prices usually start to plunge before a recession begins. And as you can see from the Bloomberg Commodity Index which you can find right here, this has already been happening. In addition, I have previously written about how the U.S. dollar went on a great run just before the financial collapse of 2008. This is something that has also been happening over the past few months. Some people would have you believe that nobody can anticipate the next great economic downturn and that to try to do so is just an exercise in “guesswork”. But that is not the case at all. We can look back over history and see patterns that keep repeating. And a lot of the exact same patterns that happened just before previous stock market crashes are happening again right now.
For example, let’s talk about the price of oil. There are only two times in history when the price of oil has fallen by more than 50 dollars in a six month time period. One was just before the financial crisis in 2008, and the other has just happened…
As a result of crashing oil prices, we are witnessing oil rigs shut down in the United States at a blistering pace. In fact, almost half of all oil rigs in the U.S. have already shut down. The following commentary and chart come from Wolf Richter…
In the latest week, drillers idled another 41 oil rigs, according to Baker Hughes. Only 825 rigs were still active, down 48.7% from October. In the 23 weeks since, drillers have idled 784 oil rigs, the steepest, deepest cliff-dive in the history of the data:
We are looking at a full-blown fracking bust, and this bust is already having a dramatic impact on the economies of states that are heavily dependent on the energy industry.
For example, just check out the disturbing number that just came out of Texas…
The crash in oil prices is hammering the Texas economy.
The latest manufacturing outlook index from the Dallas Fed plunged again in March, to -17.4 from -11.2 in February, indicating deteriorating business conditions in the state.
Ouch.
But this pain is going to be felt far beyond Texas. In recent years, Wall Street banks have made a massive amount of money packaging up energy industry loans, bonds, etc. and selling them off to investors.
If that sounds similar to the kind of behavior that preceded the subprime mortgage meltdown, that is because it is.
Now those loans, bonds, etc. are going bad as the fracking bust intensifies, and whoever is left holding all of this worthless paper at the end of the day is going to lose an extraordinary amount of money. Here is more from Wolf Richter…
It suited Wall Street just fine: according to Dealogic, banks extracted $31 billion in fees from the US oil and gas industry and its investors over the past five years by handling IPOs, spin-offs, “leveraged-loan” transactions, the sale of bonds and junk bonds, and M&A.
That’s $6 billion in fees per year! Over the last four years, these banks made over $4 billion in fees on just “leveraged loans.” These loans to over-indebted, junk-rated companies soared from about $40 billion in 2009 to $210 billion in 2014 before it came to a screeching halt.
For Wall Street it doesn’t matter what happens to these junk bonds and leveraged loans after they’ve been moved on to mutual funds where they can decompose sight-unseen. And it doesn’t matter to Wall Street what happens to leverage loans after they’ve been repackaged into highly rated Collateralized Loan Obligations that are then sold to others.
At the same time, we are also witnessing a slowdown in global trade. This usually happens when economic conditions are about to turn sour, and that is why it is so alarming that the total volume of global trade in January was down 1.4 percent from December. According to Tyler Durden of Zero Hedge, that was the largest drop since 2011…
Presenting the latest data from the CPB Netherlands Bureau for Economic Policy Analysis, according to which in January world trade by volume dropped by a whopping 1.4% from December: the biggest drop since 2011!
We are seeing some troubling signs in the U.S. as well.
I shared the following chart in a previous article, but it bears repeating. It comes from Charles Hugh Smith, and it shows that new orders for consumer goods are falling at a rate not seen since the last recession…
Well, what about the stock market? It was up more than 200 points on Monday. Isn’t that good news?
Yes, but the euphoria on Wall Street will not last for long.
When corporate earnings per share either start flattening out or start to decline, that is a huge red flag. We saw this just prior to the stock market crash of 2008, and it is happening again right now. The following commentary and chart come from Phoenix Capital Research…
Take a look at the below chart showing current stock levels and changes in forward Earnings Per Share (EPS). Note, in particular how divergences between EPS and stocks tend to play out (hint look at 2007-2008).
We all know what came next.
And guess what?
According to CNBC, a lot of the “smart money” is pulling their money out of the stock market right now while the getting is good…
Recent market volatility has sent stock market investors rushing for the exits and into cash.
Outflows from equity-based funds in 2015 have reached their highest level since 2009, thanks to a seesaw market that has come under pressure from weak economic data, a stronger dollar and the the prospect of monetary tightening.
Funds that invest in stocks have seen $44 billion in outflows, or redemptions, year to date, according to Bank of America Merrill Lynch. Equity funds have seen outflows in five of the last six weeks, including $6.1 billion in just the last week.
It doesn’t matter if you are a millionaire “on paper” today.
What matters is if the money is going to be there when you really need it.
At the moment, a whole lot of people have been lulled into a false sense of complacency by the soaring stock market and by the bubble of false economic stability that we have been enjoying.
But under the surface, there is a whole lot of turmoil going on.
Those that are looking for the signs are going to see the next crisis approaching well in advance.
Those that are not are going to get absolutely blindsided by what is coming.
Don’t let that happen to you.
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My bullets and booze are buried in the back yard. Bring it on.
If that booze an't in oak, its a sin. Cause its going to be there a while.
Nope.
Vodka in glass 1.75 liter bottles. Lots.
Instant coffee, in 8 oz. glass jars. Lots.
Honey in 1lb. glass jars. Lots.
Sugar in 5 lb. cans. Lots.
Salt in 5 lb. cans. Lots.
.22 LR ammo in 50-round cases. Lots.
Dehydrated refried beans, in 5 lb. cans. Lots.
All this stuff lasts forever.
Lots.
You basement dwellers are hilarious.
You asskissers are revolting.
"Bunker dweller" seems more appropriate in their case. Many of the notorious "survivalist" types in America appear to frequent these forums.
"50 round cases of .22 LR".
Listen bro, don't hurt your back with those. Be careful!
As I understand it this was a true story - one family in Germany when times were good the father of the house put aside a 100 lb bag of beans. As the war progressed food became more and more scarce, and finally his family ate that bag of beans sparingly while they watched their neighbors starve. Grand Pianos sold for a bag of potatoes.
'Oh it will never happen here.' - It's happening already Califoria will not be producing a crop this fall. We read every day on zerohedge about the coming banking collapse - what happens when all the corporate farmers who are in debt up to their titties fold up and stop growing food?
And you gold stackers will have a large advantage in the small 6 month window after this crash which looks to be right on schedule for the end of the Shemitah Year this September. After that in the end you can't eat gold. But you could be shot for having it..
Food preparation doesn't even have to be costly - go buy the largest rubbermaid you can find - fill it with f-grade oats from the feed lot mill or rice and beans.
He even realized he needed to bury his food out of the house because he full well knew the army and police will be given full food and asset looting capabilities as long as they continue their protection of the elite just a little bit longer..
+a million points
https://www.youtube.com/watch?v=5MjDCiWJ8oY
Let me get this straight...
You have vodka and coffee?
Salt and refried beans?
Honey and sugar?
Did you make a list of the most unhealthy and least nutrious items that you could imagine? Before buying them in bulk and ruining your back lawn?
One packet of vegetable seeds would have been a smarter course of action.
To clarify --
these are items to barter, which have extremely long shelf life, for the things you cannot grow/produce yourself. I already have the very large vegatable garden, and storage space filled with harvest that I've canned, dehydrated, and frozen.
You're thinking like a tpyical guy from the 'Merican Outback. If you think like a businessman, then it's...
"Bullets, Booze and TOILETRIES*" that will make you rich.
* Especially "Feminine Hygiene" products. You know the saying: "If Mama ain't happy..."
THe missus is on her way to buy some crates of tampons. Thanks for the tip.
The next economic crash can hardly be anything BUT ahead, can it?
"Winter is coming"... is only untrue when winter has just arrived.
Tell her to buy a menstrual cup for herself. Made of silicone, reusable. Rinse, cleanse with rubbing alcohol, totally portable/packable, and you've just cut your dependence on a supply chain by a big factor.
The missus got herself one, loves it. Uses the occasional pad when the rain gets heavy, so to speak (just for insurance.)
Bullets, Booze and Broads. Whether you or the buyers of the Broads supply the toiletries is up to you.
Your windows are blocked in untill they are mere firing slits while your Mom is out front selling ham sandwiches for one gold eagle each.
That's not all your Mom is selling. Zing!
Sorry, couldn't resist a good 'your Mom' joke.
I got chickens too. I recommend having a few hens.
rabbits because they breed like rabbits. low maintenance protein.
Get protein from daily chicken eggs. Then after a couple of years, you get to eat the chicken.
Still legal to raise hens in Chicago.
The sinking of the Titanic (or more correctly "Olympic") was possibly the largest case of insurance fraud to that date. Is the coming crash the plan to make the buyers of the insurance (derivatives) unbelievably wealthy while the rest of us go down with the ship?
https://www.youtube.com/watch?v=n_d_GEy8lr0
THe Titanic or Olympic
this story ties it into the creation of the federal reserve.
Very very interesting!The Titanic Conspiracy - The Great Deception [John Hamer]
Umm Ok.
I would think that the typical ZH reader would get the originally linked video's comments about JP Morgan, as tying this to the banksters. I made it thru 2/3 of your video and learned practically nothing that the OPs video didn't cover in 45 min, other then that there was a meeting at Jeckyl Island a few years prior to the meeting leading to the formation of the Fed.
Supposedly this video will tie that back in, but at this point it is boring me to sleep.
The banksters need to repay us.
While I am as tired as others around here who have been complaining of those who have been saying this:
The fucking bankers need to repay us.
Buried objects tend to decompose unless they are well protected. You know, shit like water and freezing tends to do a real job on stuff in the ground. Not to mention tree roots. The only buried object that won't decompose is gold. And when you kick off, your heirs will need really good luck to find any of your shit. Most likely, they will leave it in the ground.
That is why you put your rubber maid on a pallet with some pallet side walls and plastic covering the rubber maid. Using a inverted V-configuration screwed together will make a simple triangular lock around the rubbermaid. Then buy some bulk cinnamon at costco and sprinkle a layer of it over the food on the inside of the rubber maid container - Cinnamon is a broad anti-septic, anti-fungal etc. No fungus will be able to take root inside it. Cayanne pepper sprinking liberally on the plastic will act as a digging animal deterent, before they can pull apart the pallet trap.
Looking at the way NATO is provoking Russia for all we know - tactical nukes could be flying by Christmas - I am not sure how HFT algos will respond when the first nuclear detonation occurs in some city - unplanned. One of the Russian analysts figure the best way to deal with America is drop a nuclear warhead into any one of the formation fissures at the base of Yellowstone.. Look at the mess that would trigger?
On a long enough time frame - this level of instability in finance, geopolitics, and world finance will lead to a societal collapse. Not even a debate of if, but when, there are those preparing, and there are those who are not.
With so many people burying stuff in their own back yard, backyards must be well esteemed by all types of hunter-gatherers.
Long backhoes.
Remember preppers.....like the first rule of Fight Club.....first rule of Prep Club is no one talks about Prep Club......or backyard techniques.
Which prep club website has those rules?
It's coming...
SOMETHING is coming. Some days it seems like a market crash. Other days, it seems like a dollar crisis. Neither would surprise me.
Which happens first determines where I should allocate my wealth. If the market crashes first, then I want to be in dollars now (or PMs). If the dollar loses reserve status, then I want to be in stocks (or PMs).
How is my logic? I am a newer investor. Should I just buy a house?
A strategy dependent on guessing right is like Russian roulette with your purchasing power. Unencumbered, physical assets are the best play against a reset to reality. That means don't buy a house if you have to leverage it. Being in dollars (fiat currency) and being in PMs are diametrically opposed views of currency - not sure why you view them as interchangeable hedges against stawks.
Update your passport if its expired.
If you have storage available to you that is realitivly secure then invest in the most common calibers of ammunition (you don't need a gun if your against them). (It wont go down in price -- do your research.) Invest in guns. Not just for protection -- for investment. Look into curio and relic guns and auction houses. There are investment grade firearms that you would never think of shooting that will increase in price over time and there are intersting guns that you might shoot (for fun or security if your so inclined) that are truely investment grade. Even a boxes of parts (that are not legally a gun) could be worth $20K +++. All legal unless your in NY, MD, CA, and a few other communist states.
After you purchase a few pallets of ammunition and store it properly and buy a number of $5K---90K "investment" firearms that you will maintain and store properly (but may never shoot), just sit back and wait. Expect anywhere from as little as 25% to potentially 1000%+ return over the next 10-15 years. This is were government moral hazzard is your freind. When the political shitheels in Congress or the states start going after guns (or certain ammo) again you will get an immediate return of between 20%-$100%, but of course when you sell then you'll be in cash again (unless you barter). Just as you might be hedging 5-30% of your net worth or savings in PM, IMO you should consider also have an aditional 5-30% in munitions and ordnance. EVEN IF YOU DONT SHOOT. Think of it as abase metal.
Think of it as more subject to confiscation than gold...and make your storage arrangements accordingly.
YES or otherwise:
Noting that this is going to end badly, but it doesn't have to end badly for you. There are steps you can take to protect yourself, your wealth and your loved ones. Why not set up a second domicile offshore. Purchase real bullion gold and silver (not paper) and keep some of it overseas and some of it at home but in your safe. Invest in the stock market if it looks as if it has continued momentum, but do so craftily and hedge your positions. Reduce your debt. Buy farmland at home or abroad.
There are lots of ways to take "action." It may well be that the world's debt is a kind of tidal wave that is impossible to forestall. But if you are disciplined and foresighted you may be able to ride that wave.
Stockpile food, your bank accounts can be frozen with a simple keyboard command.
The virtual world of banking wealth can evaporate overnight - then those who had physically prepared will still be eating, those who did not physically prepare will not be eating.
Put it this way - if you threw your wallet in the garbage can and could use nothing in it - how far do you plan on getting without it?
so is Christmas.
who needs frackin... we need gold! start drillin
uvxy has been acting very strange lately!
Its been dead ahead for years now, its like the apocalypse that cried wolf
A creeping delay..
It won't seem like it came slowly when shifts from future to present tense. Sorta like when yer kids turn 18...or 40.
Everybody seems to forget that the wolf did show up.
Figure that everything is blowing up in slow motion while the Oligarchs position themselves for an all out implosion that should have taken place in March of 2008. Paulson & Geithner built TBTF specifically to bide time so that their cronies could take their time cashing their chips out of the Ponzi. The present bloated stock market is primed for anything but an increase in stock prices IMO. Every single day I shake my head and wonder out loud why this faux economy is still afloat for the central planners and central banksters? If this was private industry all of the CEOs would be summarily fired seven years ago.
2015 Inception.
When is the kick ?
It's Gona happen in the fall and everyone Gona be running around in a panic with their hair on fire when winter hits. Not prepared to get on the other side of it. Which is what they want
Snyder's prose style is always classic. Baleful and laconic, as if Eeyore blogged economics.
Everytime I think it can't possibly go on any longer, they keep pulling another rabbit out of their asses each time. Sure, it will have to happen at some point, but I have my doubts that it will be any time soon.
Edit - Of course, this is the first time I've publicly voiced my doubts, so with my luck, it will actually happen this year.
The future is in health care, hospices and funeral homes, but who is going to keep paying those great wages and such to those in the health care business? Another growing business is enforcement and spying.
When these things start happening we are going to need more than Apple, Facebook, Google and Microsoft among others to survive.
None of the above has anything to do with food, water and shelter, the basics of survival and that is where many will be headed, survival. There will be some that do well, but most will not, akin to the Great Depression.
Hang on to your hats, we are going for an economic and maybe warfare ride.
Expect a "live-in" like a bail-in...where the aged just stew in-place at the homes and there are no other new patients.
Then they will probably start granny internet porn businesses...for the remaining aged.
Its going to get weird.
Maybe they will hold them hostage and get paid off to keep the operation going.
Soylent Green ? Never know.
they have been pushing it back, but they are lacking of tools to make it more, as each day it cost more and more and the more qe happen, the more unstability get in the balance, it is sliding slowly, it is not a matter of decades now, it is a matter of years, i see you POV, i think it is before the 2nd mandat of next president.
"According to Tyler Durden of Zero Hedge, that was the largest drop since 2011…"
I like that Synder is quoting Tyler in the article.....
Yawnnn...are u kidding me...wake me when it happens.
Can't believe people actually STILL waste time to write these.
It helps them stay sane. Like shouting at the News readers on tv. Therapy.
Tell me about it. Do we really need to hear about it every time Michael Snyder finds an ominous-looking chart?
I would like to agree with the article, but the plunge protection committee are not going to let a crash happen. They can legally do what is necessary, and they have unlimited funds.
Sorry, there is no "plunge protection committee". Nobody at the helm, and even the bridge is gone.
The only tool left to save the US economy now is "QE4", and I am not holding my breathe for that to work.
"For example, let’s talk about the price of oil. There are only two times in history when the price of oil has fallen by more than 50 dollars in a six month time period. One was just before the financial crisis in 2008, and the other has just happened…"
Umm, looking at a WTI chart from 1946 to present using the nominal price, prior to 2006, the price of oil could not fall $50 in a six month period without going to zero.
So that statement really doesn't mean shit.
http://www.macrotrends.net/1369/crude-oil-price-history-chart
Exactly.
How about doing the same calculation using Percentage Decline over a six month period?
Owa Mya Gowad! Do NOT get Tylers started on the 'stock fund outflows' weekly charts again....
(It seemed to go on forever last time, yet here we are today at near record highs...I know we're due for a huge crash, but some data seems more or less irrelevant due to the central bank printing bonanza)
...yes the Oil Shale Boom. A three legged stool: the ability to drill horizontally, the ability to stage fractures in said horizontal bore, the ability to borrow money at 3%.
The last leg has been removed. End of story.
Another "sky is falling" article. Yawn!!!
One must understand that a collapse is triggered by those who benefit.
And at a time known to themselves. Face it- if you know a collapse is coming will you not want to take advantage of it ?
Most everyone in the financial field now that reality is the system cannot survive. Those on the payroll of the presnt controlling powers know this too.
While we, the ZH'ers are clever, we can never know when the collapse will come, other than the fact that the day draws closer and closer.
Who knows , the coming Passover weekend may be the day!
I think these slick Fuckwads still have more up their sleeve than any of us could even imagine was possible. The collapse has already taken place....but you'll never know it. EVER!
PTI,
They can take those charts and graphs and burn them....the real indicator is named "Operation Jade Helm".....
Another Snyder classic.
You said it.
Not me.
These writers all sound like obama, just with the opposite conclusion. Roll out some data that spells boom or doom and let the viewer place his bet. They are all shills for the fucking casino.
Silverfish and others: It will happen or rather start to happen this year, September by all accounts, and gradually get worse. To anyone that remembers 07/08 downturn, this time will be worse.
try this, and read back articles. http://armstrongeconomics.com/armstrong_economics_blog/
And here.
http://www.sovereignman.com/
It might make your day.
In the 1sr chart..did oil prices actually fall 'just before' the 08 crisis? .. or did it fall because of?
Just asking.
When the printing presses finally break down,
and the proverbial sucker is not born every minute,
Chicken Little's sky may actually fall.
Until then, it will be business as usual.
A bit of fun parallel history:
In the 1860s, tobacconist John Hull perpetrated a money-making hoax--he had a 10-foot-tall stone statue of a man carved and then buried in Cardiff, New York, Hull then had it dug it up and sold it as an archaeological relic. Hannum and four partners bought the "artifact" knowing that people would pay to see it. According to plan, thousands of people paid good money to view it, and Hannum’s investment started to pay off --that is, until P. T. Barnum competition showed up.
Barnum built his own giant and claimed that it was the realCardiff Giant – a fake of a fake! When people flocked to see Barnum’s Cardiff Giant, Hannum (who didn’t then know that he himself had paid 40 grand for a fake) said of Barnum's rubes “There’s a sucker born every minute.”