Mauldin: “Financial Crisis” Coming By End Of 2018; Prepare Urgently

"Financial Crisis Of Historic Proportions" Is "Bearing Down On Us"

John Mauldin of Mauldin Economics latest research note, Prepare for Turbulence, is excellent and a must read warning about the coming financial crisis. Mind refreshed from what sounds like a wonderful honeymoon and having had the time to read some books outside his "comfort zone" he has come to the conclusion that we are on the verge of  a "major financial crisis, if not later this year, then by the end of 2018 at the latest."

Source: Financial Times

Mauldin is a New York Times bestselling author and respected investment expert and his excellent analysis concludes with advice to prepare urgently for the financial "crisis of historic proportions" which is "once again bearing down on us":

"You and I can’t control whether banks are ready, but we can control whether we are ready. I am working on a number of fronts to help you. My brief time away convinced me beyond any doubt that a crisis of historic proportions is once again bearing down on us. We may have little time to prepare. We definitely have no time to waste."

His financial crisis warning is important as Mauldin is no perma-bear. Indeed up until now his central thesis was that we were in the "muddle through economy" and that the U.S. economy and global economy would "muddle" along and we would avoid a financial crisis. So not only has he changed his central thesis but he has gone from being neutral and mildly positive to being very bearish and concerned about a severe financial crisis.

Mauldin is a long time advocate of owning physical gold including gold coins  as financial insurance - taking delivery and secure storage.

"I do not think of gold as an investment. It is insurance for me. I buy a fixed amount of gold nearly every month, no matter the price. I hope the price of gold goes down, because that means I get more coins in the mail to go into the vault. Yes, I take delivery of my gold, and it is near me if I need it."


Contents

Afraid of the Truth
We Couldn’t Take the Chance
Policy Brick Wall
Least-Bad at Best
Getting Out of Dodge
Global Contagion
Barefoot on the Beach

 

Introduction

“The job of the central bank is to worry.”

– Alice Rivlin

“The central bank needs to be able to make policy without short-term political concerns.”

– Ben Bernanke

“… from the standpoint of the overall economy, my bottom line is we’re watching it closely but it appears to be contained.

– Ben Bernanke, repeatedly, in 2007

“Would I say there will never, ever be another financial crisis? You know, probably that would be going too far, but I do think we’re much safer, and I hope that it will not be in our lifetimes, and I don’t believe it will be.”

– Janet Yellen, June 27, 2017

“My good friends, for the second time in our history, a British Prime Minister has returned from Germany bringing peace with honor. I believe it is ‘peace for our time.’ Go home and get a nice quiet sleep.”

– Neville Chamberlain, September 30, 1938

 

Photo: Monica Muller via Flickr

The way we assess problems depends on our perspective. People can look at the same set of facts and reach quite different conclusions based simply on their circumstances. This is why it’s good at times to get away from your normal environment. Listen to a wide variety of opinions. Read books outside of your comfort zone. You’ll see things differently when you return.

I had that feeling on returning to the US from Shane’s and my honeymoon in St. Thomas. We’re now officially married, and we thank everyone for the congratulations and kind wishes. I saw a little bit of news while we were there but spent more time just relaxing with my bride and reading books.

Re-entering the news flow was a jolt, and not in a good way. Looking with fresh eyes at the economic numbers and central bankers’ statements convinced me that we will soon be in deep trouble. I now feel that it's highly likely we will face a major financial crisis, if not later this year, then by the end of 2018 at the latest. Just a few months ago, I thought we could avoid a crisis and muddle through. Now I think we’re past that point. The key decision-makers have (1) done nothing, (2) done the wrong thing, or (3) done the right thing too late.

Having realized this, I’m adjusting my research efforts. I believe a major crisis is coming. The questions now are, how severe will it be, and how will we get through it? With the election of President Trump and a Republican Congress, your naïve analyst was hopeful that we would get significant tax reform, in addition to reform of a healthcare system that is simply devastating to so many people and small businesses. I thought maybe we’d see this administration cutting through some bureaucratic red tape quickly. With such reforms in mind I was hopeful we could avoid a recession even if a crisis developed in China or Europe.

Six months in, the Republican Congress that promised to repeal and replace Obamacare, cannot even agree on the process. For six years they discussed what to do, and you would think they might at least have a clue ...

Prepare for Turbulence should be read in full at Mauldin Economics

 

News and Commentary

Gold on track for first weekly gain in three (Nasdaq)

Cautious Fed lifts stocks to record high, investors eye earnings boost (Reuters)

U.S. budget deficit reaches $90 billion for June (Reuters)

London house price slump continues (Ciyt AM)

JPMorgan Hires New Head of Global Government Relations (Reuters)

How silver could bounce back after a ‘bearish 2017’ (Marketwatch)

Gold – building a base for higher? Forecasts (Forex Live)

The Tripwire on the Next “Black Monday” (Daily Reckoning)

Are IPOs a good investment? (Stansberry)

Bitcoin's acceptance among retailers is low and getting lower (Bloomberg)


German police search for stolen huge gold coin worth $3.9 million (Washington Post)

Gold Prices (LBMA AM)

14 Jul: USD 1,218.95, GBP 940.54 & EUR 1,067.92 per ounce
13 Jul: USD 1,221.40, GBP 944.51 & EUR 1,071.05 per ounce
12 Jul: USD 1,219.40, GBP 947.60 & EUR 1,064.29 per ounce
11 Jul: USD 1,211.90, GBP 938.98 & EUR 1,063.68 per ounce
10 Jul: USD 1,207.55, GBP 938.63 & EUR 1,060.11 per ounce
07 Jul: USD 1,220.40, GBP 944.47 & EUR 1,068.95 per ounce
06 Jul: USD 1,224.30, GBP 946.14 & EUR 1,077.51 per ounce

Silver Prices (LBMA)

14 Jul: USD 15.71, GBP 12.11 & EUR 13.76 per ounce
13 Jul: USD 15.95, GBP 12.34 & EUR 14.00 per ounce
12 Jul: USD 15.83, GBP 12.31 & EUR 13.82 per ounce
11 Jul: USD 15.51, GBP 12.02 & EUR 13.61 per ounce
10 Jul: USD 15.22, GBP 11.82 & EUR 13.36 per ounce
07 Jul: USD 15.84, GBP 12.29 & EUR 13.88 per ounce
06 Jul: USD 16.01, GBP 12.36 & EUR 14.09 per ounce


Recent Market Updates

- Video – “Gold Should Probably Be $5000” – CME Chairman Duffy
- India Gold Imports Surge To 5 Year High – 220 Tons In May Alone
- “Silver’s Plunge Is Nearing Completion”
- China, Russia Alliance Deepens Against American Overstretch
- Silver Prices Bounce Higher After Futures Manipulated 7% Lower In Minute
- Precious Metals Are “Best Defence” Against Bail-ins In Economic Crisis
- Buy Gold Near $1,200 “As Insurance” – UBS Wealth
- UK House Prices ‘On Brink’ Of Massive 40% Collapse
- Gold Up 8% In First Half 2017; Builds On 8.5% Gain In 2016
- Pensions Timebomb In America – “National Crisis” Cometh
- London Property Bubble Bursting? UK In Unchartered Territory On Brexit and Election Mess
- Shrinkflation – Real Inflation Much Higher Than Reported
- Goldman, Citi Turn Positive On Gold – Despite “Mysterious” Flash Crash

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

 

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Comments

Truther Fri, 07/14/2017 - 16:38 Permalink

Thanks but I ain't buying today.Sooooo... 2010 to 2017 and every cuck wants to vent some gloom and doom, and now "end" of 2018 is the real deal.Well, my fucking prediction says by Jan 2018. Anyone agree?Next please.

BandGap Iconoclast421 Sat, 07/15/2017 - 09:59 Permalink

These predictive tools are meaningless when the data is being manipulated. So the unemployment statement is total bullshit. We might be into month 8 as far as dropping and never even know it.These assinine articles from "experts" (buy my book!) are popping up all over the place to induce complacency. Prepare as if the shit will hit the fan by the end of this month.

In reply to by Iconoclast421

techpriest BandGap Sat, 07/15/2017 - 13:09 Permalink

IMO, the only really concerning statement lately was Janet Yellen saying "There will be no more recessions in our lifetime." Institutional smugness tends to be the true signal of the top.

But hey, if the article is true, I will be out of debt and have a couple years of experience rowing my own food. May have some offgrid work finished as well. Prepare while you can - being 25% prepared is still better than zero.

In reply to by BandGap

doctor10 Truther Sat, 07/15/2017 - 06:07 Permalink

"cui bono" ,,,the MICBankerz of course. Who does NOT benefit from resolution of the crisis' proactively...MIC/Bankerz-the very cause of it.

However...no action is beginning to work a bit as well. Which is why we always hear screams of agony from the usual suspects about "gridlock" -which means Congress isn't doing the MICBAnkerz bidding

Jamie Dimon's public laments come from the fact he's getting the picture Congress won't/can't organize itself WITHOUT HRC as president, to bail them out the next time. The best We the People can hope for is enough Congressional confusion to impede the MIC as well

In reply to by Truther

doctor10 aliens is here Sat, 07/15/2017 - 06:12 Permalink

That isn't news. Been that way since 2004. At least. Funny things happen to (R's) and (D's) that think they were elected to do otherwise.

Anybody believing in the cowboyz and indianz Republican and Democrat game to get anything done on behalf the American people is still thinking like its the 20th century.

Most of us are way past being manipulated in that fashion today.

In reply to by aliens is here

MrSteve aliens is here Sat, 07/15/2017 - 14:21 Permalink

Depends how you define control:: for instance Trump still has very many open vacancies in the bureaucracy to fill,  so the Executive could be said to be out of control. The House and Senate are never under control. The Supreme Court still has a majority of leftish judges who are not under GOP control...I understand your feelings that the current crop of crooks is a major failure but you don't say what success would look like.

In reply to by aliens is here

JailBanksters Fri, 07/14/2017 - 19:02 Permalink

It's sounding more like Y2K everyday, where Trains will be falling out of the Sky and Planes will be coming off the Rails.The world spent hundreds of Billions preparing for Y2K, a threat that never really existed, except in the eyes of "Experts".And these "Experts" got quite rich out of selling cures for Y2K.There is NO official date set, and it's purely a Banking Problem not a General Public Problem.And it's only a Problem when People and Politicians think we actually need Banks/Central Banks, we really don't need them.Why do we need Banks to loan us something that doesn't exist ?   

roddy6667 JailBanksters Sun, 07/16/2017 - 04:15 Permalink

As an ex COBOL programmer, I thought there might be a chance that embedded code could cause electrical or communication problems. I had a good sized stash of food set aside in addition to the usual things I store. On New Year's Eve, I was on the Internet in multiple chat groups all around the world. Nothing happened. I went to bed before midnight where I was.After Y2K, the Coming Ice Age, Domino Theory, Peak Oil, the Population Bomb, and a lot of other Fear Porn campaigns, I don't worry about much.

In reply to by JailBanksters

JailBanksters roddy6667 Sun, 07/16/2017 - 07:08 Permalink

I was doing IT Support at the time, and also wrote some software.What really really P'ed me off was all "Experts" on TV delivering their daily Appocolypse warnings.Your car won't start, mobiles won't work, Buses, Train will be late, Coffee pots will explode etc etc.But in the Majority of case, all you had to do was Manually enter the New Date.My Company had an army of "Experts" auditing everything from Windows Calculator to Accounting Systems and Photocopiers to PC's.Biggest waste of Time, Money and Effort I've ever seen.The problem was 1,000 smaller that what the "Experts" were predicting, was the World Ready a day before, they all said NO ! 

In reply to by roddy6667

conraddobler Fri, 07/14/2017 - 20:51 Permalink

The crisis is ongoing and pernicious and as others said, "a slow death".It's not going to crash it's going to exhaust us all by zombifying us into nothingness.We'll be sending all our money to banks and insurance companies wondering when the crash will hit.NEWSFLASH IT'S A FUCKING HEIST AND IT'S ONGOING. 

GreatUncle conraddobler Sat, 07/15/2017 - 08:14 Permalink

What is the heist based upon?An economy that can support the current level of debt.But if it support the debt then why is the debt growing?The economy collapsing kills the debt off and that is why in 2008 they could not crunch the system to correct it.The economy would not exist no more and why UK PM Brown flew to washington.It is actually what happened to Greece once you start cutting an economy you go down the rabbit hole far faster than if they had printed it. (hard place)The print though is going to make the slaves more and more agitated though. (thats the rock)Mr rock meet hard place.2008, the QE / heist, because it was so big got brought out into the open and now they can't hide it because it is too big!Now explain again why a banker should get a free mega handout and all us ordinary people get "fuck all" when it is all being printed!And please no $1M to a banker for every $1 an ordinary person gets as a handout.Now kill the system, all taxation everything and you only pay for what you need not what all the entitled rich or poor believe they should have and you get nothing.

In reply to by conraddobler

roddy6667 conraddobler Sun, 07/16/2017 - 04:08 Permalink

Exactly. The "Crash" is stretched out over time and nobody notices. They are too busy worrying about Russians and elections, the Kardashians, WWE, video games, spectator sports, porn, TV, or the latest iPhone.While the Great Unwashed were distracted, food was sold in smaller packages for the same price. Durable, quality merchandise was suddenly replaced by the cheapest thing that could be ordered from China. This is allowing the masses to continue their consumerist lifestyle even though they have less money and buying power. They are retarded, so nobody notices. Idiocracy is here.

In reply to by conraddobler

e_goldstein Fri, 07/14/2017 - 21:07 Permalink

No, John, the financial crisis was in 2007-2008 when you wrote "We have to save the banks to save the system."What's coming is the financial apocalypse. A word that means 'unveiling.'I hope you hang with the banker scum you were defending 10 years ago you weasely, corpse-looking fuck.

Black-Man Fri, 07/14/2017 - 23:23 Permalink

I'll decipher. "I am recently divorced and just remarried. I have to pay alimony and my new trophy wife... well... I need subscribers bad. Oh... financial disaster coming late 2018... when my alimony kicks it up a notch on my first and second wives"