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Will 2016 Bring About a 2008 Type Crisis? Pt 1

Phoenix Capital Research's picture




 

The world is lurching towards another Crisis.

 

Japan, which has been ground zero for Keynesian insanity, is back in technical recession. This comes after the Bank of Japan launched the single largest QE program in history: a QE program equal to 25% of GDP launched in April 2013.

 

This program bought an uptick in economic growth for just six months before Japan’s GDP growth rolled over again.  Similarly, an expansion of QE in October 2014 pulled Japan back from the brink, but GDP growth collapsed again soon after, plunging the country into technical recession earlier this year.

 

 

Japan is completely insolvent. The country has no choice but to continue to implement QE or else it will go completely bust in a matter of months. However, with the Bank of Japan already monetizing ALL of the country’s debt issuance, the question arises, “just what else can it buy?”

 

We’ll find out in 2016. But Japan is now officially in the End Game from Central Banking.

 

Europe is not far behind.

 

The ECB has cut interest rates to negative, cut them further into negative, launched a QE program, and then cut interest rates even further into negative while extending its QE program.

 

EU GDP growth has flat-lined at barely positive.

 

 

But the economy is having serious difficulty fending off deflation.

 

When your ENTIRE banking system is leveraged by 26 to 1, as is Europe’s, even a 4% drop in asset values renders the system insolvent. Without significant inflation, the EU’s banking system is toast.

 

 

ECB President Draghi better have more in his bazooka that what he’s fired so far, or the EU’s $46 trillion banking system will collapse. However, as is the case with the Bank of Japan, the ECB is facing a shortage of viable assets to buy.

 

Between these two banking systems alone, you’ve got the makings of a global financial crisis at least on par with 2008. Both countries are sinking into deflation at a time when their respective Central Banks have little if any ammo left. This leaves the US Fed to hold the system together. But the Fed is TIGHTENING, not loosening monetary policy.

 

The stage is set for another Crisis. Smart investors are preparing now.

 

We just published a 21-page investment report titled Stock Market Crash Survival Guide.

 

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

 

We are giving away just 1,000 copies for FREE to the public.

 

To pick up yours, swing by:

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

 

Best Regards

 

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

 

 

 

 

 

 

 

 

 

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Fri, 01/01/2016 - 08:20 | 6984866 dumdum
dumdum's picture

 

 

First, it was 2010, then 2011,........then 2015, and now 2016.

I hate to dissapoint all of you, but human stupidity can last for a long long time.

I'm sure the psychopaths in power have a lot more tricks up their sleeves yet, to prevent a collapse. 

The system will collapse, I just don't think 2016 will be the year.

Fri, 01/01/2016 - 00:31 | 6984563 boeing747
boeing747's picture

Of course not, the earliest is at 2nd half of 2017. 

Thu, 12/31/2015 - 17:29 | 6983465 surf@jm
surf@jm's picture

The welfare warfare state must be propped up at any cost......

And in preparation for the fuedal system to come. poverty stricken imported third worlders, and poverty stricken, once middle class  Americans are to be shoved together, so the resulting balkan clashes divert attention from the ruling elites mismanagement and corruption, and to give those same elite a reason to take control and intervene......

Thu, 12/31/2015 - 14:13 | 6982504 Insurrexion
Insurrexion's picture

Here is a much better, free read on the topic:

 

https://www.linkedin.com/pulse/truly-big-shorts-john-m-cunningham?trk=pu...

Thu, 12/31/2015 - 04:13 | 6981082 Fed-up with bei...
Fed-up with being Sick and Tired's picture

Please, ZH, tell them to make more than 1,000 free copies available -- pretty please! I know that Phoenix only offers this once in a very long time between offers!

Fri, 01/01/2016 - 05:00 | 6984765 Kprime
Kprime's picture

It can be days between offers.  One gets very thirsty.

Thu, 12/31/2015 - 03:00 | 6981026 fleur de lis
fleur de lis's picture

When our psychopathic leaders demolished the whole financial structure back in 2008, they used it to fleece everyone and rope in more money for themselves. That they left entire swaths of society in shreds was of no concern to them at all.

Another recurrence would only be a surprise to the targets. The instigators and marauders have already picked out what they want.

Wed, 12/30/2015 - 22:52 | 6980601 InnVestuhrr
InnVestuhrr's picture

"Will 2016 Bring About a 2008 Type Crisis? "

If it does, then the global capital flight to safety plus QE n+1 will make my US Treasury portfolio SKYROCKET in capital gains, PLUS I get to collect 3% interest from the regime while waiting, so color me happy and earning income :-))

Thu, 12/31/2015 - 20:21 | 6984013 AGuy
AGuy's picture

"plus QE n+1 will make my US Treasury portfolio SKYROCKET in capital gains"

I believe BoJ has about $800 Billion invested in US Treasuries/Bills? I would think an emplosion in Japan would result in the BoJ selling its US holdings. I would think that before the damn bursts Japan would start selling its US treasuries on a Month to Month basis to purchase energy imports. A perfect storm would be that other nations sell too. China is already selling its US holding to increase liquidity as foriegn investors flee. So what happens whenChina and Japan are both selling.

FWIW: Its likely that all of the major currencies are interconnected. I think once one ship begins sinking all of the other ships will be dragged down with it. Also consider that the US Fed will probably take actions to avoid or slow a Japanese collapse.

In my opinion (at this time) it will be the EURO that goes down first. Japan still is a leading exporter and Europe has the same problems that Japan does plus many others (Muslim refugees, No centralized control over gov't debt/spending, much worse socialism, etc)

 

 

Fri, 01/01/2016 - 08:31 | 6984875 GreatUncle
GreatUncle's picture

Only one nation to me has escaped this trap provided they do not go down the same path again with a fresh start.

Iceland.

And why no central bank like the Greek one can ever be allowed to fail. All the bail in nations in EZ even if they struggle with the ongoing fiscal problem like Spain you will not be allowed to default so the population are now trapped in this never ending poor financial position. Even US cities like Detroit can never really be allowed to default in full because the total debt is crystallised and spreads like wildfire.

Only occurs when the overall level of debt is at a maximum for the earnings that can support it and once you exceed that without the bust you turn Japanese.

Thu, 12/31/2015 - 11:59 | 6981828 SMC
SMC's picture

No safe harbor this time. Every possible course of action carries significant risk without accurate and timely inside information.

Thu, 12/31/2015 - 12:14 | 6981888 new game
new game's picture

at 3 percent or less all good for now. as the amount goes up, then 2 1/2 percent all good and so on til euro or jap style cb ownership of all debt instruments. so then it is safe to say ussa can go on for quit some time, unless japam or the euro REALLY do errupt. hmmm, anything can happen, and if so, then expect a brentton woods pow wow with the outcome obeing a mixed bag of currencies arrangment to realign the deck chairs for another 40 years.

Thu, 12/31/2015 - 12:34 | 6981999 InnVestuhrr
InnVestuhrr's picture

USA government has ZERO problems servicing its debt. Some banks, corporations, municipalities, etc will go bust, but USA government will actually get it's debt interest rate LOWERED by any crisis due to flight to safety of USD and US Treasuries.

Thu, 12/31/2015 - 18:49 | 6983730 logicalman
logicalman's picture

USD & treauries will only remain safe havens as long as USD is the world's reserve currency.

The average time a currency survives as reserve currency is about 40 years.

Tick Tock.

 

Thu, 12/31/2015 - 13:06 | 6982151 Agstacker
Agstacker's picture

16 weeks?  Man, good to see you're sticking around, I need a good laugh now and then!

Thu, 12/31/2015 - 17:57 | 6983546 InnVestuhrr
InnVestuhrr's picture

I enjoy watching fools commit suicide - keep buying shiny shit, investment genius, while I keep profiting from US Treasuries.

Thu, 12/31/2015 - 09:49 | 6981360 Bindar Dundat
Bindar Dundat's picture

It will not be like 2008.  With $100 Trillion vanishing in days, even Countries with the strong rule of law will see Bail-ins that will ruin the 1% and leave the .1% even richer.    

Thu, 12/31/2015 - 20:01 | 6983939 Ol Man
Ol Man's picture

I think 2016 will bring about a 2016 type of crisis...

 

 Hopefully the world will remember the lesson for a while...

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