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12 Signs That An Imminent Global Financial Crash Has Become Even More Likely
Submitted by Michael Snyder via The Economic Collapse blog,
Did you see what just happened? The devaluation of the yuan by China triggered the largest one day drop for that currency in the modern era. This caused other global currencies to crash relative to the U.S. dollar, the price of oil hit a six year low, and stock markets all over the world were rattled. The Dow fell 212 points on Tuesday, and Apple stock plummeted another 5 percent.
As we hurtle toward the absolutely critical months of September and October, the unraveling of the global financial system is beginning to accelerate. At this point, it is not going to take very much to push us into a full-blown worldwide financial crisis. The following are 12 signs that indicate that a global financial crash has become even more likely after the events of the past few days…
#1 The devaluation of the yuan on Tuesday took virtually the entire planet by surprise (and not in a good way). The following comes from Reuters…
China’s 2 percent devaluation of the yuan on Tuesday pushed the U.S. dollar higher and hit Wall Street and other global equity markets as it raised fears of a new round of currency wars and fed worries about slowing Chinese economic growth.
#2 One of the big reasons why China devalued the yuan was to try to boost exports. China’s exports declined 8.3 percent in July, and global trade overall is falling at a pace that we haven’t seen since the last recession.
#3 Now that the Chinese have devalued their currency, other nations that rely on exports are indicating that they might do the same thing. If you scan the big financial news sites, it seems like the term “currency war” is now being bandied about quite a bit.
#4 This is the very first time that the 50 day moving average for the Dow has moved below the 200 day moving average in the last four years. This is known as a “death cross”, and it is a very troubling sign. We are just about at the point where all of the most common technical signals that investors typically use to make investment decisions will be screaming “sell”.
#5 The price of oil just closed at a brand new six year low. When the price of oil started to decline back in late 2014, a whole lot of people were proclaiming that this would be a good thing for the U.S. economy. Now we can see just how wrong they were.
At this point, the price of oil has already fallen to a level that is going to be absolutely nightmarish for the global economy if it stays here. Just consider what Jeff Gundlach had to say about this in December…
And back in December 2014, “Bond King” Jeff Gundlach had a serious warning for the world if oil prices got to $40 a barrel.
“I hope it does not go to $40,” Gundlach said in a presentation, “because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be — to put it bluntly — terrifying.”
#6 This week we learned that OPEC has been pumping more oil than we thought, and it is being projected that this could cause the price of oil to plunge into the 30s…
Increased pumping by OPEC as Chinese demand appears to be slackening could drive oil to the lowest prices since the peak of the financial crisis.
West Texas Intermediate crude futures skidded through the year’s lows and looked set to break into the $30s-per-barrel range after the Organization of the Petroleum Exporting Countries admitted to more pumping and China devalued its currency, sending ripples through global markets.
#7 In a recent article, I explained that the collapse in commodity prices that we are witnessing right now is eerily similar to what we witnessed just before the stock market crash of 2008. On Tuesday, things got even worse for commodities as the price of copper closed at a brand new six year low.
#8 The South American debt crisis of 2015 continues to intensify. Brazil’s government bonds have been downgraded to just one level above junk status, and the approval rating of Brazil’s president has fallen into the single digits.
#9 Just before the financial crisis of 2008, a surging U.S. dollar put an extraordinary amount of stress on emerging markets. Now that is happening again. Emerging market stocks just hit a brand new four year low on Tuesday thanks to the stunt that China just pulled.
#10 Things are not so great in the United States either. The ratio of wholesale inventories to sales in the United States just hit the highest level since the last recession. What that means is that there is a whole lot of stuff sitting in warehouses out there that is waiting to be sold in an economy that is rapidly slowing down.
#11 Speaking of slowing down, the growth of consumer spending in the United States has just plummeted to multi-year lows.
#12 Deep inside, most of us can feel what is coming. According to Gallup, the number of Americans that believe that the economy is getting worse is almost 50 percent higher than the number of Americans that believe that the economy is getting better.
Things are lining up perfectly for a global financial crisis and a major recession beginning in the fall and winter of 2015.
But just because things look like they will happen a certain way does not necessarily mean that they will. All it takes is a single “event” of some sort to change everything.
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#7 is bullshit. the fed raised the ffr because oil hit $140/bbl and THAT is what caused the crash. there is no market, there is only the fed gangsters.
If I had a dollar(ok, maybe ASE) for every one of these articles Snyder has written over the years, financial collapse would be less of a concern than what to do with my massive hoard of silver....
Here are five names that are solid evidence of impending doom: Hillary, Bush, Trump, Sanders, and Kardashian.
...I looked, and there before me was a pale horse! Its rider was named Kanklesaurus, and Hell followed with it.
All the signs are stacking up for an epic collapse.
This link proves that there will be a
"RESET of Global Economic & Financial System
Parallels Bankruptcy of Predatory Capitalism"
http://cosmicconvergence.org/?p=10851
Snyder is right this time!
e_goldstein
Where does Kanklesaurus come from? It doesn't come up in the search engines.
There's a monkey sitting at a typewriter; eventually he will write a masterpiece.
No, but they will think they have. Then force you to accept it at gun point..
If not, well, there's always Plan Z:
https://www.youtube.com/watch?v=pfv6u4An8hU
I'm not posting my new charts for a few weeks because of a conflict of interest, but let's just say that this is a great time to be an Alpha male willing to fuck anything with two tits, a hole and a heartbeat.
This is the juciest market in 8 years and it will be fun to watch it implode while the smart money assrapes the fools. But what I can post is a repeat from last night, thank you Snyder for copying ZH and other sources for your list articles.
08.11 All the Financial Charts You’ll need Tonight to KNOW Disaster is about to HappenDie.
Add to the above list this upcoming cluster in the Treasury market...curious I've never heard any discussion of this???
http://econimica.blogspot.com/2015/08/fed-never-intended-to-raise-rates-or.html
I'm more interested in seeing what happens if/when they try to start winding down that 4.5t balance sheet than a couple small rate increases. Any small amount they did manage to raise it over the next couple meeting, if at all, wiont matter, they'll be right back to ZIRP shortly. Followed closely by another round of QE.
all the chat about a 1/4pt hike but the real story is the 6yrs it will take at $500B a year to normalize to a target of $1.5 T...(approx. $42B/mo in rolloff or outright sales in addition to new debt and if foreigners keep selling...TIMBER...almost all discussions are focused on reducing Treasury holdings and maintaining MBS to maturity)...sure hope nothing bad happens over the next 6 fucking years while they "normalize" just to get the balance sheet back to where it's only double what it was when all this started.
How can something so ridiculous be accepted as "the plan"?
"I'm more interested in seeing what happens if/when they try to start winding down that 4.5t balance sheet"
Don't hold your breath.
never gonna happen. it will do nothing but grow till it catastrophically explodes, collapses in on itself and becomes a black hole.
Next time I am at the gas station, I will fill 'er up. Do my bit to end the world according to Mike.
What is with ZH and these poorly-timed blast/mushroom cloud jpegs?
THE SKY IS GETTING A LITTLE LOW RIGHT NOW
This fall is going to be awesome.
indeed, the smell of buring leaves, a nip in the air, a hot cocoa by the fire,
yes I am looking forward to the fall.
tossing handfuls of FRNs on the fire, keeps the chill off.
awFULL
FIFY
What do you folks think the chances are of nothing epic happening this fall?
Like so many of us, I believe something terrible will indeed occur, but is anyone betting the other way? Just wondering... if I am thinking wrong...
I'll go with your thoughts. How do I buy invest in "nothing happening?"
Just be happy that when you turn on the hot tap, clean, hot water comes out, and hope it keeps on happening.
The world sucks.
Enjoy the good stuff as long as possible.
Do make sure you have some kind of buffer, because shit's approaching. Rapidly, I think.
Buy stawks!
90% of average americans don't think twice about the market, but for 7 years they've been re-filling their 401ks and mutual funds. Time for the next harvest.
We had a total dead stop in new work 4Q 2014 to 2Q 2015 and only have a trickle of preliminary work ie. unprofitable currently at my firm in the Architectural Engineering industry and we are almost always about 6 months ahead of a recession, a canary if you will. Leases aren't being signed, financing isnt coming through, expansions are on hold, buyers and sellers cant come to an agreement; everyone is ... just ... waiting ... to... see... what ... happens ...next. I have a bad feeling this shit is going to continue like this right through the 2016 elections.
Will be a good time to buy when the dust up settles. Only stuff of value though, no APPL, FB, etc.
Thanks for the replies, guys. Much appreciated!
Lin S -- i think geno smith will not complete a pass in the first ten jets games
He'll have more time to get on the Snapchat this year...
It is not a 50-50 chance. I put it at 30% chance of something happening. Full disclosure: I am not a finance, Economics, or other expert.
Reason: Is most people would not plan to collapse the USA, but like the Iraqi war II was planned by a small group and like 2008 Crisis was planned by a small group there might be a plan to collapse Sep/Oct/Nov 2015. And this small group has a lot in USD Assets, Accounts, and draw their future money flows from the US and the Globe. Also a real collapse could require 25 years to recover from.
My imagination tells me that Europe, Ireland, UK, Spain, Portugal, Greece have had long term stagnation and low investment. So a future 48 months of contracting GDP is not a collapse, but a recession if it happens that way. The people running the US Economy are expert can kickers. The stock buy backs looks like a long term strategy to survive the unofficial recession/depression we are in since 2007. TPTB know wages and jobs are contracting along with consumption of different products & services.
TPTB know it is unlikely a leader or hero will show up to change the debt problems, wages & jobs problems.
Could be the Fascism in the US is on track with the plan to create multiple classes of poor people who can't qualify for the good jobs.
On the other hand a small group of people can initiate the Crash/Collapse to capture what we know is a lot of wealth in the USA and even Europe.
Can Kicking 70%, Planned Crash 30%.
We watch the OPEC oligarchs develop a lifestyle so bloated with excess that they have to accelerate their pumping to maintain their status quo...which means, just further accelerating the depletion of a finite resource. Then, every top 50 country on the planet borrowing money like a college senior just waiting for that great job offer.
...I can't say this with ANY of my friends or family because they are all addicted to hopium.
So I can only say it here.....we are going to really, really be screwed.
One sign we are all fucked....Kaitlynn Jenner
No, just her and she's asking for it, so give it nicely.
Hadn't fully appreciated how important that was, until you pointed it out!
Fukushima is irradiating the Pacific.
Monsanto is poisoning the planet.
The banksters are stealing everything that's not nailed down - soon they'll come with a wrecking bar for what is.
There are multiple wars going on and millions of people starving.
I can see how all that pales before some publicity seeking _______ (lost for a description) and their genital confusion.
"We are just about at the point where all of the most common technical signals that investors typically use to make investment decisions will be screaming “sell”.
The ship is sinking. Should I put on a life jacket?
If there's one available, I'd certainly keep a close track on its whereabouts.
people will kill for a life jacket. Grab a couple of one gallon milk jugs and a small rope as backup.
Strap one on now and get as far from the ship as possible. Don't want to get caught in the downdraft.
If the Yuan depreciates against the US dollar but appreciates against gold is there a devaluation?
interesting...nobody is talking about this in relation to gold....this guy Malpass is suggesting the delink from the US dollar coming is the first stage of the Yuan re emerging with tighter relationship with the rest of the Asian countries....
If gold rockets higher more western gold will either move eastward or the price fixing will collapse....
http://www.nysun.com/editorials/the-fiat-yuan/89249/
NY Sun... really?
Bank People
https://www.youtube.com/watch?v=OlopiI4DE44
I hope things go well in any case.
So it finally happened. China finally broke the peg to Dollar after Swiss broke the peg to euro declaring monetary policies dead. ECB and Japanese CB are printing like crazy in order to stop inflows of capital to Europe and Japan forcing dollar up since capital has nowhere to go for yield. Look for FED swap lines to its friends to help pay dollar liabilities as it was in 2008.
The PBOC saw futility of attempts of monetary "deflation" of the real estate bubble by blowing stock market bubble which they failed deflate in organized way even by buying half of the stock market in Shanghai. they are in panic and loss so they resorted to three things what they did 1994 devaluate, devaluate, devaluate. But they are already late to the party after a year of massive devaluation of other EM countries including BRICS without C.
Below there is a comment I wrote several months ago warning after ZH about massive demand collapse and over-leveraging of small to moderate businesses and households not to mention big corporations and scarcity of dollars for trade due to opening multiple swap lines and repatriation of yield hungry wolrd's capital to US and dollar after FED noise and utterances about raising rates.
Hence we have export craze everywhere and devaluation everywhere or Greek alternative of slavery, the only thing that allows for governments and economies to fund themselves by printing trash.
Sorry for it is little too long, here we go:
What so-called economists are trying hard to overlook is severe “real” inflation of commodities required for basic human subsistence such as food, transportation, education, healthcare, home rent or lease, etc., not as much due to nominal prices increase but due to massive aggregated income collapse of working people all over the world.
The so-called economists also trying hard to overlook severe deflation and depreciation of assets own by majority of working people, such as labor power, skills and education, conservative retirement assets, savings, value of work benefits, value of social programs, consumer services, land lease value, furniture, electronics, used cars mobile, phones and gadgets, computers and software, used clothes, memorabilia, low brow art and antics, etc. not as much due to loss of value of these assets but because of massive aggregated “real” income collapse due to “real” inflation and over-leverage affecting working people all over the world. In other words money circulation in second tier economy of 99% almost came to standstill. Almost all income was distributed up to 1% or rather 0.1%.
This is double whammy of “real” income and asset deflation and hence working people “net worth” spiraled down, accelerating toward collapse. The process of pauperization of western societies not only affected middle class but working class people when it initiated in US over three decades ago.
Very few emphasize enough that core of the issue is utter collapse of demand (due to collapse of income and value of assets) for anything throughout the world due to massive over-leveraging of business of all sizes and households often in US dollars/Euro/Yen not in domestic currencies leaving CBs helpless.
People simply paying off their loans and obligations and have nothing left for consumption or investment. This catastrophic collapse of world demand (pointed out by Russia and China) for most goods including food and oil causes, continuing for almost a decade now, dramatic flight of capital resulting in recalling massive amounts of speculative capital back to US. Japan and Europe refused to accept returning yen and euro assets desperately seeking shelter in panic. They are trying to accomplish it via QEs and NegIRP. They are trying to erect barrier to capital inflows in order to avoid surging of their currencies and killing their economies, meaning reminder of industries capable to export since domestic income and demand is dead.
This leaves, commodity driven, emerging markets in conundrum. Their currency is weak vs. dollar but they do not trade that much with US to take any significant advantage (US is a significant exporter of commodities itself), but if currency of a country to which they sell is weaker than their currency vs. dollar, their sales collapse. And that’s really the case throughout the world. So they fight a currency war indirectly among themselves, through FX dollar, by collapsing their CB interest rates while facing collapse of their own currencies vs. dollar due to capital flight. All that against common wisdom, which would suggest rate hikes instead.
That’s why while 75% of world currencies lost to dollar, 75% of all worlds CBs lowered interest rate within in last 12 months and they keep lowering to out-export each other giving up on domestic demand and growth or even preventing any significant growth in first place to avoid their currency surge. Even China accepts much lower growth, to talk yuan down, and Russia lowered the interest rates twice while was under FX attack and massive capital outflows, and was happy with rubel about half of its value 12 months ago. And with Rubel gains this year so far, there is talk of further easing to keep it correlated with price of oil at 60 Rb level.
More recently Central Bank of Vietnam and RBA were other CBs to devalue their currencies, the only remedy possible for tens of central banks in the world, which already drop their interest rates within last 12 months in order to prevent further collapse of their export driven economies. More to follow.
To defend themselves many countries, also in the west, abandon FX market monopoly and set up huge currency swap lines, or join newly created independent of Washington and dollar, international financial institutions to limit this spiral of death. Ironically swap lines actually boosts dollar since in addition to non-US$ denominated capital flight into US$ assets, there is shortage of FX dollar funding since nobody needs to sell dollars to buy other currencies if they have swap lines, with “fixed” exchange rate, open. In strange ways globalization makes de-dollarization inevitable one way or another. Dollar strength is in part result of dollar shortage at FX but not because everybody wants dollars but because nobody needs it any more as intermediary in FX exchange because it is overpriced to its value. It is classical FX market failure, similar to that of 2008 when FED open massive swap lines with worlds CBs to squash dramatic raise in dollar.
But why? What’s going on?
The general answer is that national economies and sovereign states (with few exception) are illusions. Their domestic markets are illusions, their economic and social policies are illusions maintained for domestic political audience. Global integration has been accomplished. Only global economy exists now. And unified global capital rules the world.
Production is distributed so much all over the world that no country controls production of nothing but some small subsystem, one of thousands parts from all over the world assembled in final product with no true ownership and no country of production. Just few multinationals are richer than GDP of at least bottom 120 countries in the world and have no national allegiance of any kind.
This serves purpose of practically eliminating any political leverage that country may have over world production. But now with ZIRP nobody has any leverage over global elites who print their profits. In other words countries (with few partial exceptions) cannot reestablish control over their economies and social policies by imposing tariffs, trade barriers, capital, labor controls, specific social, economic, military, foreign policies or whatever in any way that would not result in collapse of their “hollow” economies and painful political turmoil at least during transition.
Even countries at war cannot stop cooperating economically, close borders or limit civilian trade, thing unheard off 50 years ago. The unimpeded and even increasing cross border trade and people movement between Russia and Ukraine continues, Poroshenko candy factories in Russia are making profit while they are on war footing. US increased exports to Russia in last 12 months while spewing apocalyptic rhetoric of WWIII. Germany owned factories in Russia dramatically increased investment of their profits in Russia to avoid losses of manipulated currency play. And it paid off handsomely so far. These are examples of global integration paralyzing the social or international policies.
This has most corruptive influence of national politics. That’s why all politicians that promised economic growth, betrayed the people as soon as they got in power since they knew the only way to the growth in global economy is to export if not they have to cut expenses, collapsing governmental and private social programs and dismantling democratic institutions that still left, to pretend to pay un-payable debt.
The fallacy of debt based global economic system is only too apparent.
There is no way out of world pauperization and death spiral except to break through globalism in very painful ways. Unfortunately, people rather believe in illusion than face pain of reality and turn around to stop this genocidal system of alien class of global oligarchy directed towards human extermination, all other priorities rescinded.
For brief discussion of inflation/deflation as well as so-called “free” markets, benchmarks and indices I suggest fresh look at financial propaganda of deceit at:
https://contrarianopinion.wordpress.com/2015/01/29/invisible-hand-and-ot...
For those believing that economy is rational science and economic conditions are result of laws or rules of economy I suggest interesting read on wage economy at:
https://contrarianopinion.wordpress.com/2015/01/28/slaves-of-wage/
www.salon.com/2015/03/19/the_1_percent_rigged_everything_why_no_one_can_...
Up yours, Republican Party SCUM.
Looks like a good link for me to read.
I just looked at Jeff Gundlachs Charts from the Link by Snyder above.
voodoo economics:
The four pillars of Reagan's economic policy were to
- reduce the growth of government spending, (Fail)
- reduce the federal income tax and capital gains tax,(Fail)
- reduce government regulation, (Fail)
- tighten the money supply in order to reduce inflation (epic Fail)
QE is total Voodoo Economics.
Exporting Jobs and Free Trade Globalism is Voodoo Also.
First off, you're Canadian, so there's that.
Second off, salon is not a reputable source for well anything.
Third off, lots of prog 1%ers.
Fourth, and most importantly, how is it possible that you read this website and are still stuck in the red/blue rep/dem paradigm? At the national level both parties are the same. Damn. Thing. Either you don't know this, which makes you a moron, or you do, which makes you a Canadian troll. Pick one but you have no other options.
I despise Alan Greenspan, & Ronald Reagan, Bill Clinton, and Robert Rubin, Larry Samuelson Summers, and all the crony Capitalists in the United States of America. I don't give a fuck which federal party they spew from because contemporary democracy died when these cocksuckers were elected to office. If I want to slam the Whore House, FED, and Congress, I will do so because I earned that right by living next door to the most effing' corrupt Corporation in the entire World for over half a century.
p.s. Don't judge the article by the rag it came from. Moreover, READ the fucking article if you want to learn something, but don't give moi shit for sharing on Z/H.
And yet the exact same policies have only been expanded upon the last 7 years.
Notice they've got Reagan sandwiched between a white supremacist and a retard.
We are already collapsing. Most of us just haven't hit the ground yet.
What can we do?
Strap in with a paid off house and car. Start stacking after that.
They're getting ready to strap one on.
I was so damaged by the last two bubbles that without guilt I will be as gleeful as a child at Christmas when the next crash comes and the empire finally burns.
We're already in the midst of a financial crash. It's just no one has the guts to say so yet.
stack heating, food and of you have any fiat left... convert it into gold bullion before it hits $5k an oz and stack that bullion as high as you can
https://www.karatbars.com/landing/?s=ramgold2206
The last sentence was anti climactic.
Michael always seems to have 9,10,12,etc. reasons why something is going to happen, I think one of these days he is going to hit a bullseye with one of his columns...
You can take a bet on the world economy collapsing except there won't be any bet taker with enough resources to pay you out on that.
Nuh uh, there won't be any recessions through 2020, the Fed's math said so itself.
Spend!! ........ I order you to spend!! .... pleease spend! ........ spend!!! ...or else!!!
OK, if you are refusing to spend, we'll start a war ..... we'll spend, on your behalf, on a few more guns, blow up some property and then they will spend rebuilding....... 'course, hopefully, they'll retaliate and blow up your property ........ THEN you'll spend.
He He
Signed
A Nice Banker