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Tag Archives: Economic collapse

Consumer Confidence Foretells Economic Crash?


Consumer9

Consumer Confidence

 

Anyone who stops to think about it knows that the fundamental strategy for generating investment profits is to buy an investment when the price is low and sell when that investment’s price is high. The name of that strategy is “buy-low/sell-high”. The difference between the “buy low” price (say, $100) and the “sell high” price (say $300) is the measure of the profit ($200, in this example) made on the investment.

No one seeking investment profits can refute the “buy-low/sell-high” strategy. On considering that strategy, virtually everyone will say, “Well, of course,” or “Obviously” or even “Well, duh”.

However, the buy-low/sell-high” strategy isn’t as simple as it sounds. There’s a problem: investors like to behave like herd animals. We are generally and genetically afraid to act independently. We feel more comfortable believing someone else (especially an “expert”) than we do in trusting our own eyes and ears. Insofar as that tendency is prevalent, investors are prone to ignore the buy-low/sell-high strategy and instead “buy high” (when virtually everyone is buying and says “now’s the time to buy”) and “sell low” (when virtually everyone is selling at a low price). This “sell-low/buy-high” strategy is a sure formula for going broke. I.e., most investors tend to “buy high” (when the investment’s price is $300) and “sell low” (when the price is $100) and thereby suffer a $200 loss.

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What Can’t Be Paid, Won’t Be Paid


National Debt Creditors About to Lose their Assets [courtesy Google Image]

National Debt Creditors About to Lose their Assets
[courtesy Google Image]

I’ve argued for five years that the U.S. National Debt is too great to ever be repaid in full, or even by half.  My personal guesstimate is that at least 80%–and probably 90%–of the National Debt will inevitably be repudiated.  That repudiation will take the form of hyperinflation, express repudiation (“Sorry, boys–but we’re too broke to pay that debt.”), or perhaps even WWIII (a good war could wipe out virtually all memory and enforce-ability of the National Debt.).

Here’s a graphic that illustrates my argument.  If you take a few minutes to view the graphic, you’ll see the size of the U.S. National Debt is:

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1. Larger than the 500 largest public companies in America;

2. Larger than all assets managed by the world’s top seven money managers;

3.  25X larger than all global oil exports in 2015;

4. 155x larger than all gold mined globally in a year; and, my personal favorite:

5. Larger than all of the world’s physical currency, gold, silver, and bitcoin combined.
In other words, there’s not enough actual money and currency in the world to repay the U.S. National Debt.
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Monetary Madness Part I—Negative Interest Rates


Negative Interest Rates-- Heading for Hell? [courtesy Google Images]

Negative Interest Rates–
Taking us towards Hell?
[courtesy Google Images]

The fundamental premise underlying negative-interest rate bonds is that lenders pay government borrowers for the “privilege” of lending to government. Based on this premise, governments receive loans at less than the face value of the bond. For example, if you loaned $100,000 to the government on a negative-interest loan, you might only receive, say, $98,000 when you redeemed that bond. You’d lose $2,000 for the privilege of lending to the government.

In all of world history, I doubt that there’s ever before been a time when lenders paid borrowers for the privilege of lending money.

The world is embracing negative-interest rate bonds for the first time. That fact is not evidence of economic creativity and financial innovation so much as evidence of desperation and the financial madness that lies at the heart of debt-based monetary and economic systems.

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A few facts about negative-yield bonds:

According to Bank of America Merrill Lynch, the global amount of government bonds having negative yields is now $13 trillion,.

Just two years ago, there were virtually zero negative-interest rate bonds. The subsequent, two-year rise to $13 trillion is unprecedented.

In February A.D. 2015, the total amount of negative-interest debt was $3.6 trillion.

By February A.D. 2016 that negative-interest debt had nearly doubled to $7 trillion.

In the five months since February, A.D. 2016, the amount of negative-yielding bonds nearly doubled again to $13 trillion.

The spread of negative-yielding bonds is unprecedented, fantastic and accelerating.

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30 Year Bear Market


Milton Berg is the founder and CEO of MB Advisers–a Wall Street financial institution.

Mr. Berg is predicting a “30 year bear market” in stocks and bonds.  T-h-i-r-t-y years.

I’m skeptical.  A 30-year bear market in stock and bond markets would almost certainly correspond to a 30-year Greater Depression.

I expect a global depression that will last somewhere between 5 and 10 years.  I could imagine a depression lasting 15 to 20 years.  But I find the prospect of 30 years of global economic depression to be extremely unlikely.

Still, Berg is no dummy and he’s certainly more knowledgeable than I am in such matters.  Therefore, a 30-year bear-market/depression is at least conceivable.

Whatever the duration, consensus is growing that we’re on the verge of a “Greater Depression”.

video    00:05:17

Here’s a link to the same video in a clearer format:

http://www.bloomberg.com/news/videos/2016-05-11/milton-berg-we-re-at-the-cusp-of-a-30-year-bear-market

 

 
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Posted by on May 20, 2016 in Economic collapse, Economy, Video

 

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Catherine Austin Fitts on: Trump vs. Clinton; Economic Collapse?


Greg Hunter (USAwatchdog.com) interview.

This is a fairly long interview, but it’s insightful and worth your time.

There’s a week’s worth of news in these 49 minutes.

video      00:49.20

 

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“Worth A Shot” Economics


Janet Yellen: the Fed's "It's Worth A Shot" Gunslinger [courtesy Google Images]

Janet Yellen: the Fed’s “It’s Worth A Shot” Gunslinger
[courtesy Google Images]

Casey Research recently published an article entitled “Let’s Try Giving out Free Cash”. Well, that certainly sounds like an idea that could catch on with the general public. But what’s it all about?

It’s about government trying to stimulate the economy by handing out free “helicopter money” directly to all the people rather than to the “too big to fail banks”.

Casey Research explained:

 

“Economist Milton Friedman coined the term “helicopter money” in the 1960s. He said that in the event of an economic contraction, the government could drop free cash from helicopters to stimulate the economy. People would spend the free money, causing the economy to grow. Friedman likely never took the cartoonish idea seriously. However, last week, former Fed chairman Ben Bernanke said helicopter money could be worth a shot.”

Gee, there’s a slogan sure to inspire public confidence: “Helicopter money—it’s ‘worth a shot!”

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Bill Holter: Collapse Any Time; No Later than Election


video    00:31:05

 

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