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The End Game Has Begun

Phoenix Capital Research's picture




 

For six years, the world has operated based on faith and hope that Central Banks somehow fixed the issues that caused the 2008 Crisis.

 

All of the arguments supporting this defied common sense. A 5th grader knows that you cannot solve a debt problem by issuing more debt. If the below chart was a problem BEFORE 2008… there is no way that things are better now. After all, we’ve just added another $10 trillion in debt to the US system. 

 

Similarly, anyone with a functioning brain could tell you that a bunch of academics with no real-world experience, none of whom have ever started a business or created a single job can’t “save” the economy. Indeed, few if any of the Fed Presidents have even run a bank before. And yet they’re in charge of the banking system.

 

However, there is an AWFUL lot of money at stake in maintaining the illusion of Central Banking omniscience. So the media and the banks and the politicians were happy to promote them. Indeed, one could very easily argue that nearly all of the wealth and power held by those at the top of the economy stem from this fiction.

 

So it’s little surprise that no one would admit the facts: that the Fed and other Central Banks not only don’t have a clue how to fix the problem, but that they actually have almost no incentive to do so.

 

So here are the facts:

 

1)   The REAL problem for the financial system is the bond bubble. In 2008 when the crisis hit it was $80 trillion. It has since grown to over $100 trillion.

 

2)The derivatives market that uses this bond bubble as collateral is over $555 trillion in size.

 

3)Many of the large multinational corporations, sovereign governments, and even municipalities have used derivatives to fake earnings and hide debt. NO ONE knows to what degree this has been the case, but given that 20% of corporate CFOs have admitted to faking earnings in the past, it’s likely a significant amount.

 

4)   Corporations today are more leveraged than they were in 2007. As Stanley Druckenmiller noted recently, in 2007 corporate bonds were $3.5 trillion… today they are $7 trillion: an amount equal to nearly 50% of US GDP.

 

5)   The Central Banks are now all leveraged at levels greater than or equal to where Lehman Brothers was when it imploded. The Fed is leveraged at 78 to 1. The ECB is leveraged at over 26 to 1. Lehman Brothers was leveraged at 30 to 1.

 

6)   The Central Banks have no idea how to exit their strategies. Fed minutes released from 2009 show Janet Yellen was worried about how to exit when the Fed’s balance sheet was $1.3 trillion (back in 2009). Today it’s over $4.5 trillion.

 

We are heading for a crisis that will be exponentially worse than 2008. The global Central Banks have literally bet the financial system that their theories will work.  They haven’t. All they’ve done is set the stage for an even worse crisis in which entire countries will go bankrupt.

 

This process has already begun abroad.

 

In January 2015, the Swiss National Bank (SNB), backed into a corner by the ECB’s QE program, had a choice: print an obscene amount of money to defend the Franc’s peg or break the peg.

 

The SNB chose to break the peg. In a single day, the bank lost an amount of money equal to somewhere between 10% and 15% of Swiss GDP. More than that, it let the Franc appreciate… in a country in which 54% of the GDP is based on exports.

 

The next bank to lose its grip is the Central Bank of China.

 

With an economy in free-fall (GDP is growing by 3% at best), a dual house and stock bubbles bursting simultaneously, China’s regulators went on the offensive: freezing the markets, banning short-selling, arresting short-sellers, and pumping tens of billions of Dollars into the market per day.

 

Despite this, Chinese stocks continue to crater. And the economy hasn’t budged.

 

The fact of the matter is that despite public opinion, there are problems that are so big that the Central Banks cannot fix them. We’ve seen this in Switzerland and China. It will be spreading to other countries in the near future.

 

Indeed, by the look of things, the Fed began to lose control of the market last week when it failed to raise interst rates. Despite doing this, stocks have begun to plunge and are rapidly losing value.

 

In short, the next round of the great crisis is beginning.  It will take time to unfold, but we have reached Peak Central Bank Intervention. When Central Banks loosen policy and the markets fail to respond, you're in the End Game.

 

If you've yet to take action to prepare for this, we offer a FREE investment report called the Financial Crisis "Round Two" Survival Guide that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.

 

We are making only 100 copies available for FREE the general public.

 

To pick up yours, swing by….

 

Click Here Now!!!

 

Best Regards

 

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Our FREE daily e-letter: www.gainspainscapital.com

 

 

 

 

 

 

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Wed, 09/23/2015 - 13:28 | 6584490 FPearl602
FPearl602's picture

I did take his advice and now dine on Alpo bot with food stamps.

Wed, 09/23/2015 - 13:25 | 6584475 centerline
centerline's picture

Begun, the Clone War has...  hmmm...

Wed, 09/23/2015 - 12:44 | 6584286 BOPOH
BOPOH's picture

Please don't blame academics, they are only desicion providers. The qustion is who owns academics?

Wed, 09/23/2015 - 11:35 | 6583956 Thisisbullishright
Thisisbullishright's picture

Isn't this the same article they put out last week, and last month, and last year, and several years before that??

 

Wed, 09/23/2015 - 10:19 | 6583593 Crocodile
Crocodile's picture

BTW - keep your eye on the S&P 1940 level; they will fight like hell to keep it near there, which is why the battle has begun early and often with the HFT's.

Wed, 09/23/2015 - 10:18 | 6583586 EurGold
Wed, 09/23/2015 - 10:16 | 6583574 Crocodile
Crocodile's picture

WORRIED: "The Central Banks have no idea how to exit their strategies. Fed minutes released from 2009 show Janet Yellen was worried about how to exit when the Fed’s balance sheet was $1.3 trillion (back in 2009). Today it’s over $4.5 trillion."

 

That 4.5 trillion is understated by at least 4.5 Trillion and the shadow banking system, including the dark pools, which is aptly named due to its direct association with Satan, is likely in the quadrillions.

 

Therefore, the "exit strategy" is there is none.  No plan to exit; only grab hard assets and let it implode and explode upon humanity.  Get ready for some serious war; it is coming.

Wed, 09/23/2015 - 08:41 | 6583178 lakecity55
lakecity55's picture

I suspect TPTB are angling for a new Economic System. I think, by default, they will have to include the PRC. They all hang together or hang separately.

I suspect a 'new' Yuan will knock down 40% of the dollar.

Everywhere I travel, which is very extensive at this point, there is a big push by the PRC for the Yuan.

Let's wait and see what happens.

The best outcome would be a non-manipulated valuation of PMs. If it serves the interest of the PRC, the manipulation will be de-amplified.

And, Russia is also getting into the game. What agreements there are between Russia and the PRC are obviously State Secrets. Time will tell.......

Wed, 09/23/2015 - 13:29 | 6584493 centerline
centerline's picture

The shift in power here is quite apparent.  I agree.  The game is getting ready to move into a new phase quickly.  Matters in Ukraine and the deterioration of the EU are really accelerating it.

Wed, 09/23/2015 - 08:23 | 6583139 hungrydweller
hungrydweller's picture

Tick Tock on Graham's broken clock.

Wed, 09/23/2015 - 08:06 | 6583093 JIMSJOE2
JIMSJOE2's picture

I disagree on his position on China. When Martin Armstrong was invited by the Chinese Central Bank, he was very pleasantly surprised that it was not staffed by individuals from the world of academia but all were former bankers and traders with real life experience. He stated it was the only central bank that he knew of who was staffed with actual experienced staff who had real world experience. The west is doing it's China bashing because of the yuan devaluation and using their usual economic hit teams to destable markets. They are doing the same to Brazil, Argentina and Venezuela. Martin stated he agrees that China's Central Bank has made all the correct decisions in spite of the west's media bashing. There growth is slowing along with the rest of the world but any country in the west would absolutely love to have the growth that China still has!!!

jj

Wed, 09/23/2015 - 05:41 | 6582912 fancyfree
fancyfree's picture

Gloom and doom scenarios are off base. The Global Debt Facility containing the world's monetary gold reserves and other wealth has placed the Bank for International Settlements into receivership https://s3.amazonaws.com/khudes/Twitter4.19.15.pdf  Disinfo from the Network of Global Corporate Control identified by Vitali, Glattfelder, and Battiston of ETH Zurich 

http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf (which has the central banks at its hub) is no longer credible.  What is really going on is that the world's gold is going to be returned to the world's people in a global currency reset.  https://s3.amazonaws.com/khudes/Twitter4.25.15.1.pdf

The chances that this comes to pass are greater than 95% https://s3.amazonaws.com/khudes/sentia+model.pdf  The traitors serving the Network of Global Corporate Control were placed in default on September 20, 2015, and their assets are now under lien.  https://s3.amazonaws.com/khudes/Twitter9.22.15.2.pdf 

Wed, 09/23/2015 - 11:45 | 6584017 LawsofPhysics
LawsofPhysics's picture

"under lean", by whom exactly?  Good luck enforcing that!

So WWIII it is then?

Wed, 09/23/2015 - 05:37 | 6582907 Lucky Leprachaun
Lucky Leprachaun's picture

Phoenix Capital remind me of a street preacher carrying for years on end a sign 'THE END IS NIGH'.    At some stage they're gonna be right.

But I'm beginning to lose hope.

Wed, 09/23/2015 - 03:07 | 6582816 The Darwin Mode
The Darwin Mode's picture

"For six years, the world has operated based on faith and hope..." --Phoenix

Oh... I figured it was more like six thousand years, at least.

Wed, 09/23/2015 - 02:36 | 6582793 Dugald
Dugald's picture

Its all in the name....Phoenix Capital, the same tired old bird just keep

churning the same old cant.

Wed, 09/23/2015 - 01:11 | 6582713 Md4
Md4's picture

In short, the next round of the great crisis is beginning. It will take time to unfold, but we have reached Peak Central Bank Intervention."

I believe last week was the "pin pulled", and the Fed, absent a genuine miracle, is fully fucked this time.

They cannot claim even "tepid" recovery, as NO real recovery (tepid or otherwise) legitimately was in the offing, or takes this long.

Depressions? Yes.

Recoveries? No.

They also cannot continue to use the "international developments" bullshit either, as this renders them essentially powerless. If other "developments" out of the Fed's hands become the guiding force in domestic monetary policy...zirp NEVER ends. Despite their obvious importance, the Fed should NEVER have tied their hands this way, regardless of the perceived consequences of an imploding China or EM.

Zirp is ITSELF damaging to the domestic economy, and for that reason, CANNOT continue much longer.

Therefore, it must be ended somehow, otherwise, WE go up.

If it is ended BEFORE those "international developments" abate or improve...THEY go up.

To lay domestic policy at the behest of foreign "developments" that have NO chance of improving without renewed western consumption (which CAN'T happen without income growth HERE), is...

...a checkmate.

We're just marking time as of last Thursday.

m

Wed, 09/23/2015 - 03:11 | 6582818 The Darwin Mode
The Darwin Mode's picture

"We're just marking time as of last Thursday." --Md4

We've been marking time since December 23, 1913

Wed, 09/23/2015 - 00:47 | 6582705 GuyBaker76
GuyBaker76's picture

END GAME  alright, with help from a visiting pontiff?  . . .

The price to be paid by the middle class won't be cheap:

http://www.floppingaces.net/2015/09/22/obama-and-pope-francis-vs-america...


And where's the media on this?  zzzzzzzzzzzz

Wed, 09/23/2015 - 00:41 | 6582702 Dragon HAwk
Dragon HAwk's picture

Phoenix Capital posts are for first time Zero Readers... soon as you realize that, you'll relax a little bit more..

Wed, 09/23/2015 - 00:28 | 6582679 fowlerja
fowlerja's picture

So you get the report ...guess what.. it has one hell of a disclaimer attached to it..here is about 10% of the disclaimer.

Disclaimer: The information contained on this report is for marketing purposes only. Nothing contained in this email is intended to be, nor shall it be construed as, investment advice by Phoenix Capital Research or any of its affiliates, nor is it to be relied upon in making any investment or other decision.

Wed, 09/23/2015 - 10:10 | 6583538 Wannabe_Oracle
Wannabe_Oracle's picture

Pretty sure every Prospectus is worded similarly - what's your point/

Tue, 09/22/2015 - 22:36 | 6582455 TheCentralScrut...
TheCentralScrutinizer's picture

It only makes sense that we need to have a market crash to create a bid on the 30 yr Bond and keep it below a 3 handle.

After all, we know China has to sell reserves (Treasuries) to prop up it's market and financial system.. 

Scrutinizer

Tue, 09/22/2015 - 21:33 | 6582217 Phoenix901210
Phoenix901210's picture

You've already put up this article. This is a repeat.

Tue, 09/22/2015 - 21:20 | 6582170 Fukushima Fricassee
Fukushima Fricassee's picture

This shit will blow but timing how long these bastards can float this shit remains difficult.

Tue, 09/22/2015 - 18:14 | 6581534 hannah
hannah's picture

"We are making only 100 copies available for FREE the general public."

 

well maybe 2 people will want a copy so what are you going to do with the other 98 copies....?

Tue, 09/22/2015 - 23:59 | 6582638 imbrbing
imbrbing's picture

I thought 1 copy in digital format on a hard drive was equal to infinite copies

Tue, 09/22/2015 - 23:14 | 6582552 Grosvenor Pkwy
Grosvenor Pkwy's picture

Zero Heads are considered to be the general public? What a bringdown!

Tue, 09/22/2015 - 18:27 | 6581577 nnnnnn
nnnnnn's picture

give them to zee refugees

Tue, 09/22/2015 - 17:56 | 6581480 4 wheel drift
4 wheel drift's picture

All of the arguments supporting this defied common sense. A 5th grader knows that you cannot solve a debt problem by issuing more debt.

hmmm...   no....  the mind of a fifth grader under the educational system of THIS country is already devoid of 'common sense'

 

therefore.....

If the below chart was a problem BEFORE 2008… there is no way that things are better now. After all, we’ve just added another $10 trillion in debt to the US system.

 

exactly......

Wed, 09/23/2015 - 14:18 | 6584729 ALANBEEKMAN
ALANBEEKMAN's picture

Beat me to it, 4 Wheel.

I was going to add that the average 5th grader in CA is too busy learning how to make a rainbow flag and practicing placing a  condom on a cucumber to learn anything about debt prooblems.

Tue, 09/22/2015 - 21:09 | 6582140 Jumbotron
Jumbotron's picture

The total of global debt and all its derivatives is actually over 1 QUADRILLION.  

In other words.....if ALIENS came along and made a fair market offer for the ENTIRE PLANET......you could not sell EARTH for 1 QUADRILLION !!   It's not worth that much.

TICK TOCK.....

Tue, 09/22/2015 - 22:02 | 6582336 Funny Money
Funny Money's picture

Does another end begin everytime Phoenix Capital posts, or have they been blabbing about the same end for years now?  Eventually you'll be right, but if you're clueless about the timeframe your prediction ahs zero value.

Wed, 09/23/2015 - 08:49 | 6583196 algol_dog
algol_dog's picture

You would of been broke years ago following they're advise. 

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