Syrian Conflict Is A Distraction From A Secret War

This report was originally published by Brandon Smith at Alt-Market.com

Back in March 2010 I published an article titled ‘Will Globalists Trigger Yet Another World War?’ under the pen name Giordano Bruno describing what I felt would be the most effective triggers for a new global conflict. In that article I pointed to Syria as the primary powder keg, followed in close second by Iran and Yemen. This was written well before the Syrian civil war was engineered by establishment interests. I focused on potential false flags that could be used as a rationale by the U.S. or Israel to invade the region, thereby giving Russia and China reason to retaliate, for the most part economically. Ultimately, this scenario would play out perfectly as a cover for the deliberate collapse of the U.S. dollar as the world reserve currency.

In August 2012 I reiterated my concerns in an article titled Syria And Iran Dominoes Lead To World War, right after the Syrian civil war began to gain momentum.

Needless to say, I have not changed my general thesis since those days; however, I would like to touch upon certain factors now that the dangers I examined in those articles are mostly coming to pass in 2018.

First, no hard evidence has been produced by western intelligence agencies to support the claim that Bashar Al Assad used chemical weapons against his own people. None. Therefore, there is no basis for the latest missile attacks on the regime. This same exact false flag tactic was attempted under the Obama administration to draw the U.S. people into open war in Syria, and it failed. Now the chemical weapon card is being played again, this time with a “conservative” president. The establishment must be hoping that Republicans will find excitement in becoming the war party so long after the Bush years.

As I queried the last time a chemical false flag was attempted, what exactly does Assad have to gain by initiating a chemical attack against innocent civilians when he has the tactical momentum and upper hand in the civil war?  The answer is nothing. The only people that have anything to gain by asserting such an attack, either real or fabricated, are people seeking to create chaos for their own benefit.

The insinuation of neocon warmonger John Bolton into the Trump cabinet suggests that the neocons are very much back in charge and that ongoing war is guaranteed. At this late stage in the game, it is unlikely that our government or any other government involved in the Syrian theater even cares to explain its actions. When establishment criminals no longer care if their criminality is transparent to the public, THEN it is time for a large scale societal collapse.

Second, each successive Trump involved theater, from the trade tariffs to international war tensions, has become progressively more dramatic, and I believe this is meant to hide the effects of the Federal Reserve’s balance sheet cuts and interest rate hikes. The real and secret war being waged is not against Syria or Syria’s allies, but against the American people and our economic stability.

In January of this year, I warned that central banks were preparing to enter into an accelerating process to deflate the massive market bubbles they created to prop up our fiscal system over the past several years. That process is indeed continuing, and each successive rate hike and balance sheet cut will act in a cumulative fashion. Meaning, central bankers are treating the global economy like an oversized Jenga tower, pulling blocks here and there until the system topples completely from lack of stability.

This latest event in Syria is yet another grand gesture of illusion, designed to provide cover for the banking cabal as they pull the plug on financial life support. It also is timed rather conveniently for the Fed’s next policy meeting on May 1-2. The meeting is likely to include yet another interest rate hike as well as a large reduction in the balance sheet, resulting in another sizable plunge in stocks. All negative moves in our manipulated markets will now be blamed on Trump administration activities as well as blamed on trade retaliations by eastern nations. The mainstream media will no longer discuss the reality that central banks are the true cause behind a systemic breakdown.

Third, the current pattern of events suggest there will be a joint economic retaliation by Russia and China. China has publicly admonished the U.S. government for its strike in Syria, and this is merely added to the increasing tensions over trade tariffs by Trump. Again, this is a perfect opportunity to undermine the U.S. economy, primarily through China and Russia initiating a dump of the dollar as the world reserve currency.

The dump of the dollar has already begun in a semi-covert fashion. China’s currency has been inducted into the IMF’s Special Drawing Rights basket system, and China has also launched the first international oil exchange that does not use the dollar as the petro-currency. What many people are ignoring is the fact that the shift away from the dollar is being championed and helped along by the globalists at the IMF itself.

An impending change in the global monetary framework is often referred to as the great “global economic reset” by IMF members like Christine Lagarde. This change will be facilitated by central banks as they sabotage their respective national economies through the creation and destruction of market bubbles. Ultimately, it will not be the Chinese Yuan that replaces the dollar as world reserve currency, but the SDR basket system, controlled by the IMF.

The question of how this can be done by the globalists without an unprecedented liquidity crisis often comes up. I’m not so sure they care if there is a liquidity crisis, at least for a short time. Yes, the U.S. dollar has some of the most liquid markets in the world, but it is wrong to assume the globalists will not sacrifice those markets in order to force the public into accepting one world centralization of monetary administration (the biggest and most important step in establishing global government).

People who argue that the dollar will never be demolished by the globalists cling to the false notion that there is no liquidity replacement for the dollar. In reality, there is a replacement — cyrptocurrencies and blockchain technology.

The IMF has recently applauded blockchain systems and crypto as a potential rejuvenating force in international money transactions. Far from being opposed to cryptocurrencies, global elitists have been piling into them with praise and with investment dollars.

The global economic reset is not about East versus West. It is not about trade wars and nationalism. No, the global reset is about banker centralization of assets and consolidation of power. Beyond that, it is about the public ACCEPTING the reset as necessary and “good” for society. Globalists want us to beg for their rule. When one understands this simple truth, all the current events and disasters of our era begin to make sense. Crisis is the quickest path to complacency and tyranny.

The Syrian quagmire is a path to engineered and guided calamity. Its effects will continue to leach into the economic world as an international excuse for a trade war tit-for-tat. Syria is a smoke and mirrors game.

The true war, a secret war, is being fought between liberty champions and lying globalists. For now it remains a cold war, a battle of principles and facts versus disinformation and fear. One day this war will become a hot one. Until that time, distractions will assail the public like a hailstorm. My hope is that we can educate enough people to see through the fog of this hidden war; enough people to come out the other side and change things for the better.

******

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After 8 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.

The Fed Has Its Finger On The Button Of A Nuclear Debt Bomb

This article was originally published by Brandon Smith at Alt-Market.com

I hear a lot of talk lately in the alternative media (and even the mainstream media) of the potential for World War III. The general assumption when one hears that term is that “nuclear conflict” is imminent. But a world war does not necessarily have to be fought with nukes. For example, we are perhaps already witnessing the first shots fired in a global economic war as the Trump administration gets ready to implement far-reaching trade tariffs. This action might provide cover (or justification) for destructive attacks on the U.S. fiscal system by China, Japan, Russia, the EU, OPEC nations, etc. The ultimate attack being a dumping of their U.S. debt holdings and the death of the dollar’s world reserve status.

Of course, an economic “world war” between nations would in itself be a smokescreen for and an even more insidious internal war being waged against the global economy by central banks.

There is a longstanding misconception that central banks always manipulate economic conditions to make them appear “healthy” and that the main concern of central bankers is to “defend the golden goose.” This is false. According to the evidence at hand as well as open admissions by central bankers, these private institutions have throughout history also deliberately created financial crises and collapses.

The question I always get from people new to the field of alternative economics is — “Why would central bankers crash a system they benefit from?” This question is drawn from a flawed understanding of the situation.

First, there is the assumption that economic systems are static rather than fluid. In reality, vast sums of wealth can be transferred into and out of any notion on a whim and at the speed of light. The collapse of one economy or multiple economies does not necessarily include the destruction of banker wealth. Even if wealth was their top goal (which it is not), global banks and central banks do not see any particular economy as a “cash cow” or a “golden goose.” From their behavior and tactics in the past, it is more likely that they see national economies as mere storage containers.

Banks can pour their wealth, which they create from thin air, into one or more of these many available containers. They can circulate that wealth within the container for a time and then pour all their wealth out at a moment’s notice. One container is no more valuable to them than any other container, and sometimes sacrificing a container can be beneficial.

The perceived destruction of a national economy can often be exploited as a means to a greater end. Usually this “greater end” means exploiting the crisis to justify centralization of power or the transfer of power from the public into the hands of an elitist class.

I have outlined the history of such transfers on numerous occasions, including the liquidity crisis of 1914 (just after the establishment of the Federal Reserve) leading into World War I and the subsequent hoarding of financial power by banks as well as the creation of the League of Nations.

Or how about the artificial bubble in multiple asset classes created by the Federal Reserve in the 1920s through low interest rates? A bubble which was then burst through the aggressive raising of interest rates at the onset of the Great Depression. This crash coincided with other fabricated economic disasters in Europe and Asia, leading to social despair, the rise of communism and fascism and World War II. This crisis benefited the banking establishment greatly as thousands of smaller independent banks were crushed and a handful of major banks devoured all assets. And, let’s not forget that WWII led to the creation of globalist edifices like the United Nations, the IMF, World Bank, the beginning roots of the European Union, etc.

Every new economic calamity seems to consolidate property and bureaucratic control into the hands of the same class of technocrats. And each calamity is linked to a very important economic factor — massive debt dependency.

So, let’s fast forward to today’s era of burgeoning crisis and how central banks like the Fed are feeding the fire of disaster. I would like to focus most of all on our debt situation to illustrate how the Fed can and will trigger an explosion, a controlled demolition of our financial system. What is our debt situation in the U.S. today?

The Consumer Debt Bomb

Total American household debt skyrocketed beyond $13 trillion at the end of 2017, well beyond historic highs. This is the fifth consecutive year of household debt increases, including credit cards, auto loans, mortgages, student loans, etc. This trend suggests that the “economic recovery” so far has not actually been based on any legitimate wealth creation or resurgence, but an even greater dependence on the same debt that helped cause the crash of 2008. The Fed’s money printing did NOT trickle down to consumers as was originally promised.

While these sectors of consumer debt did not necessarily enjoy the same near-zero rates as banks and corporations did after the crash and the bailout bonanza, their rates are now rising along with the Fed’s rate increases. This is affecting numerous asset classes including housing markets and auto loans.

The cold hard reality is that as the Fed raises interest rates all other areas of the economy come under pressure. The average citizen, with his/her record debt levels, is now subject to the machinations of the central bank through the arbitrary shifting of a single data point like “inflation”.

The Corporate Debt Bomb

This debt bomb is possibly the most subversive and the least understood. I have been warning about how corporate debt and rising interest rates could cause a stock market crash for quite some time, but only recently have mainstream analysts caught up to this realization.

Today, institutions like S&P Global Ratings are showing that at least 37% of 13,000 corporations examined have a debt to earnings ratio of five times, making them “highly leveraged.” This debt level is also even higher than it was in 2007 just before the collapse of Lehman and the beginning of the credit crisis.

The concern goes beyond debt holdings, though. Consider the fact that corporations have been exploiting low interest rates to borrow incredible sums of cash for the sole purpose of purchasing their OWN stocks. Stock buybacks are basically a legal form of market manipulation in which companies buy stocks back from the public and greatly reduce the number of existing stocks circulating in the market, thereby artificially increasing the value of each stock overall and keeping the Dow in the green.

Stock buybacks have been the primary fuel for the longest bull market in history, a bull market so fake that even the mainstream media has been questioning its validity lately. Stock buybacks are completely dependent on cheap debt, and cheap debt is disappearing as the Fed continues raising interest rates. The natural reaction by stock markets will be a crash.

Some people may question whether or not the Fed is actually doing this “deliberately,” or if they are simply ignorant. I would refer them to the recently released Fed minutes from 2012, in which Jerome Powell, now the chairman of the Federal Reserve, talked repeatedly of the negative reaction that would occur within markets once the Fed began cutting its balance sheet holdings and raising interest rates after addicting equities markets to the drug of easy profits.

Jerome Powell himself is recorded as knowing exactly what will happen as interest rates rise, and he is continuing to raise them anyway, while also cutting the Fed balance sheet far faster than was originally telegraphed to the public. How can anyone in their right mind argue that the Fed is not bringing the U.S. economy down deliberately?

The National Debt Bomb

This debt bomb has a much longer fuse that the other two, but in the wake of a potential global trade war (World War III), the question arises as to how long it will take before major U.S. treasury bond holders like China dump their holdings in retaliation.

With Trump refusing to take a stand against the continued raising of the national debt ceiling, and the addition of his $1.5 Trillion infrastructure spending plan, there is little doubt that our national debt will continue to rise. Therefore, foreign investment is essential.

It is important to remember that the Federal Reserve used to be the largest purchaser of U.S. debt or the “buyer of last resort.” Now, the Fed has ended quantitative easing and is cutting its balance sheet swiftly. So, the only buyers left are foreign central banks and investors. My prediction is that the Fed will not step in if a trade war escalates to a treasury bond dump. Or, that they will not step in until it is far too late to stall the resulting crisis.

In Barack Obama’s eight years as president the national debt was essentially doubled. This is a unsustainable rate of debt issuance, even for a nation with the world reserve currency. If we lose foreign investment and the world reserve currency then that debt accumulation will come back to haunt us.

It is important to remember that whatever happens within our economy and the global economy, central banks like the Fed have fully facilitated the bubbles produced as well as the inversions that result. The Fed knows exactly what it is doing. And all other factors, from the Trump trade wars to foreign dumping of U.S. treasuries and the dollar, will be a distraction from the banking elites truly culpable.

Economic warfare can in some cases be just as devastating as nuclear warfare.  It can wipe out entire populations, give rise to tyrants and enslave the minds of individuals through the weaponization of resource scarcity.  Such wars, though less psychologically immediate as our cinematic fears of atomic doom, should be taken very seriously, and the culprits behind them have to be dealt with harshly.

***

If you would like to support the publishing of articles like the one you have just read, visit our donations page here. We greatly appreciate your patronage.

You can contact Brandon Smith at: brandon@alt-market.com

After 8 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.

The Pie Is Shrinking So Much The 99% Are Beginning To Starve

This report was originally published by Charles Hugh Smith at PeakProsperity

Social movements arise to solve problems of inequality, injustice, exploitation and oppression. In other words, they are solutions to society-wide problems plaguing the many but not the few (i.e. the elites at the top of the wealth-power pyramid).

The basic assumption of social movements is that Utopia is within reach, if only the sources of the problems can be identified and remedied.  Since inequality, injustice, exploitation and oppression arise from the asymmetry of power between the few (the financial and political elites) and the many, the solution is a reduction of the asymmetry; that is a tectonic realignment of the social structure that shifts some power—economic and/or political—from the few to the many.

In some instances, the power asymmetry is between ethnic or gender classes, or economic classes (for example, labor and the owners of capital).

Social movements are characterized by profound conflict because the beneficiaries of the power asymmetry resist the demands for a fairer share of the power and privileges, while those who’ve held the short end of the stick have tired of the asymmetry and refuse to back down.

Two dynamics assist a social, political and economic resolution that transfers power from those with too much power to those with too little power: 1) the engines of the economy have shifted productive capacity definitively in favor of those demanding their fair share of power, and 2) the elites recognize that their resistance to power-sharing invites a less predictable and thus far more dangerous open conflict with forces that have much less to lose and much more to gain.

In other words, ceding 40% of their wealth-power still conserves 60%, while stubborn resistance might trigger a revolution that takes 100% of their wealth-power.

History provides numerous examples of these dynamics.  Once the primary sources of wealth-generation shifted from elite feudal landowners to merchants and industrialists, the wealth (and thus the political power) of the landed elites declined. As the industrialists hired vast numbers of laborers drawn from small farms and workshops, this mass industrialized labor became the source of the wealth generation; after decades of conflict, this labor class gained a significant share of the wealth and political power.

The civil rights and women’s liberation movements realigned the political and economic power of minorities and females more in line with their productive output, reducing the asymmetries of ethnic and gender privileges.

In broad-brush, progressive social movements seek to broaden opportunities and level the playing field by reducing the asymmetric privileges of dominant classes defined by power and privilege.  The core mechanism of this transition is the recognition and granting of universal human rights: the right to vote, the right to equal opportunity, and rights to economic security, i.e. entitlements that are extended universally to all citizens for education, healthcare, old-age pensions and income security.

Again in broad-brush, these movements have largely been categorized as politically Left, though many institutions deemed conservative (for example, various churches) have often provided bedrock support for progressive movements.

Social movements which seek to limit the excesses of state power tend to be categorized as conservative or politically Right, as they seek to realign the asymmetry of power held by the state in favor of the individual, family and the traditional social order.

The Expanding Pie Fueled Expanding Entitlements

Writer Ugo Bardi recently drew another distinction between Left and Right social movements: “Traditionally, the Left has emphasized rights while the Right has emphasized duties.”

As rights manifested as economic entitlements rather than political (civil liberty) entitlements, rights accrue economic costs. As Bardi observes: “Having rights is nicer than having duties, but the problem is that human rights have a cost and that this cost was paid, so far, by fossil fuels. Now that fossil fuels are on their way out, who’s going to pay?”

I would argue that the cost was also paid by higher productivity enabled by the technological, financial and social innovations of the Third Industrial Revolution, roughly speaking the interconnected advances of the second half of the 20^th century.

These advances can be characterized as expanding the economic pie; that is, generating more energy, credit, technological tools, opportunities, security and capital (which includes financial, infrastructural, intellectual and social capital) for all to share in a socio-political-financial allocation broad enough to make everyone feel like they were making some forward progress.

This long-term, secular expansion of the pie naturally generated more demands for additional entitlements and rights, as the economy could clearly support the extra costs of allocating additional wealth and resources to the many.  From the point of view of the few (the elites), their own wealth continued expanding, so there was little resistance to expanding retirement, education and healthcare entitlements.

But in the 21^st century, the expansion of the pie stagnated, and for many, it reversed. Adjusted for real-world inflation many households have seen their net incomes and wealth decline in the past decade.

Despite the endless media rah-rah about “growth” and “recovery,” it is self-evident to anyone who bothers to look beneath the surface of this facile PR that the pie is now shrinking. This dynamic is increasing inequality rather than reducing it.

The Shrinking Pie And Stagnant Productivity

It is a truism of economics that widespread increases in productivity are required to generate equally widespread increases in income and capital, i.e. productive wealth. To the consternation of many, productivity has stagnated since 2010; no wonder household income for all but the upper crust has gone nowhere.

If we glance at a chart of productivity, we see a strong correlation with speculative investment bubbles (the dot-com and housing bubbles 1995-2005) and speculative spikes fueled by central bank monetary stimulus (2009-10).  Absent bubbles and monumental excesses of central bank stimulus, productivity quickly sinks to its secular trend line: downwards.

This next chart depicts the long-term trend line of productivity through all four industrial revolutions. Note the decline concurrent with the 4^th Industrial Revolution (mobile telephony, the Internet, AI, robotics, peer-to-peer networks, etc.) and the depletion of cheap-to-access-and-refine oil:

The unwelcome reality is that the economy is changing in fundamental ways that cannot be reversed with policy tweaks, protests or wishful thinking.

Consider the percentage of the gross domestic product (GDP) that goes to employee compensation (wages and salaried). Labor’s share of the GDP has been in a downtrend since 1970, which not coincidentally was the peak of secular productivity:

In this below chart of the distribution of wealth in the U.S., we find the same correlation to the downtrends in productivity and labor’s share of the economy.  The bottom 90% of households’ (the many) share of the wealth pie topped out in the early 1980s and has declined precipitously since, while the wealth of the top 0.1% (the few) has more than tripled since the late 1970s:

This next chart depicts the remarkable (and recent) spike income growth the few have recently enjoyed, at the expense of everyone else:

The increase in wealth and income inequality and the decline of productivity and labor’s share of GDP are the result of structural changes in the economy, changes with far-reaching consequences.

While it’s appealing to identify policies endorsed by self-serving insiders and elites as the source of these changes, that is far from the whole story. Much of this growing asymmetry stems from profound changes in the global economy that depreciate labor (as conventional labor is no longer scarce) and increase the gains of the top few in a “winner take most” allocation that benefits speculation, leverage and new ways of organizing labor and capital that reward the organizers far more than the users/participants.

In this new era of a steadily shrinking pie, the sources of inequality and related social problems have also shifted.  As a result, the social movements that were effective in the past are no longer effective today. Attempts to address rising inequality with the old tools are fueling frustration rather than actual solutions.

In Part 2 — Social Unrest: The Boiling-Over Point, we examine why our existing models for social change have slipped into ineffectual symbolic gestures that fuel fragmentation and frustration — and why that will lead to a dangerous boiling over of the 99% against the elites controlling the system.

When that happens (and it seems inevitable at our current trajectory), the rending of our social fabric will happen stunningly fast. The ensuing social disunity and disruption will be of the sort many alive today have never seen.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

Astronaut Scott Kelly gets questioned by flat-Earther about ‘bubbles in space’

Ret. NASA veteran astronaut Scott Kelly was recently confronted while on tour by a man asking about ‘bubbles’ which can be seen during some spacewalks

(INTELLIHUB) — Retired veteran Astronaut Scott Kelly was recently trolled by a flat-Earther while on tour about ‘bubbles in space.’

“So many times during spacewalks outside the International Space Station we can see air bubbles rising up, can you touch on how air bubbles rise in space?” The man asked the former astronaut.

Being a good sport, Kelly replied, telling the man that he has seen water (sweat) floating around in his helmet before during spacewalks but is unaware of any ‘bubbles in space.’

“It’s a harsh environment out there and the outside of the space station gets beat up pretty good and sometimes you’ll see little flakes of paint or something that you might have disrupted floating away from the suit,” Kelly explained. “You know, that’s generally what that is.”

Related:

Featured Image: (Photo credit: NASA/Kim Shiflett) NASA Kennedy/Flickr

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You’re Just Not Prepared For What’s Coming

This report was originally published by Chris Martenson at PeakProsperity.com

I hate to break it to you, but chances are you’re just not prepared for what’s coming. Not even close.

Don’t take it personally. I’m simply playing the odds.

After spending more than a decade warning people all over the world about the futility of pursuing infinite exponential economic growth on a finite planet, I can tell you this: very few are even aware of the nature of our predicament.

An even smaller subset is either physically or financially ready for the sort of future barreling down on us. Even fewer are mentally prepared for it.

And make no mistake: it’s the mental and emotional preparation that matters the most. If you can’t cope with adversity and uncertainty, you’re going to be toast in the coming years.

Those of us intending to persevere need to start by looking unflinchingly at the data, and then allowing time to let it sink in.  Change is coming – which isn’t a problem in and of itself. But it’s pace is likely to be. Rapid change is difficult for humans to process.

Those frightened by today’s over-inflated asset prices fear how quickly the current bubbles throughout our financial markets will deflate/implode. Who knows when they’ll pop?  What will the eventual trigger(s) be? All we know for sure is that every bubble in history inevitably found its pin.

These bubbles – blown by central bankers serially addicted to creating them (and then riding to the rescue to fix them) – are the largest in all of history. That means they’re going to be the most destructive in history when they finally let go.

Millions of households will lose trillions of dollars in net worth. Jobs will evaporate, causing the tens of millions of families living paycheck to paycheck serious harm.

These are the kind of painful consequences central bank follies result in. They’re particularly regrettable because they could have been completely avoided if only we’d taken our medicine during the last crisis back in 2008.  But we didn’t. We let the Federal Reserve –the instiution largely responsible for creating the Great Financial Crisis — conspire with its brethern central banks to ‘paper over’ our problems.

So now we are at the apex of the most incredible nest of financial bubbles in all of human history.

One of my favorite charts is below, which shows that even the smartest minds among us (Sir Isaac Newton, in this case) can succumb to the mania of a bubble:

It’s enormously difficult to resist the social pressure to become involved.

But all bubbles burst — painfully of course. That’s their very nature.

Mathematically, it’s impossible for half or more of a bubble’s participants to close out their positions for a gain. But in reality, it’s even worse. Being generous, maybe 10% manage to get out in time.

That means the remaining 90% don’t. For these bagholders, the losses will range from ‘painful’ to ‘financially fatal’.

Which brings us to the conclusion that a similar proportion of people will be emotionally unprepared for the bursting of these bubbles.  Again, playing the odds, I’m talking about you.

How Exponentials Work Against You

Bubbles are destructive in the same manner as ocean waves. Their force is not linear, but exponential.

That means that a wave’s energy increases as the square of its height. A 4-foot wave has 16 times the force of a 1-foot wave; something any surfer knows from experience.  A 1-foot wave will nudge you.  A 4-foot wave will smash you, filling your bathing suit and various body orifices with sand and shells.  A 10-foot wave has 100 times more destructive power. It can kill you if it manages to pin you against something solid.

A small, localized bubble — such as one only affecting tulip investors in Holland, or a relatively small number of speculators caught up in buying swampland in Florida — will have a small impact.  Consider those 1-foot waves.

A larger bubble inflating an entire nation’s real estate market will be far more destructive. Like the US in 2007. Or like Australia and Canada today.  Those bubbles were (or will be when they burst) 4-foot waves.

The current nest of global bubbles in nearly every financial asset (stocks, bonds, real estate, fine art, collectibles, etc) is entirely without precedent. How big are these in wave terms? Are they a series of 8-foot waves? Or more like 12-footers?

At this magnitude level, it doesn’t really matter. They’re going to be very, very destructive when they break.

Our focus now needs to be figuring out how to avoid getting pinned to the coral reef below when they do.

Understanding ‘Real’ Wealth

In order to fully understand this story, we have to start right at the beginning and ask “What is wealth?”

Most would answer this by saying “money”, and then maybe add “stocks and bonds”. But those aren’t actually wealth.

All financial assets are just claims on real wealth, not actually wealth itself.  A pile of money has use and utility because you can buy stuff with it.  But real wealth is the “stuff” — food, clothes, land, oil, and so forth.  If you couldn’t buy anything with your money/stocks/bonds, their worth would revert to the value of the paper they’re printed on (if you’re lucky enough to hold an actual certificate). It’s that simple.

Which means that keeping a tight relationship between ‘real wealth’ and the claims on it should be job #1 of any central bank. But not the Fed, apparently. It’s has increased the number of claims by a mind-boggling amount over the past several years. Same with the BoJ, the ECB, and the other major central banks around the world. They’ve embarked on a very different course, one that has disrupted the long-standing relationship between the markers of wealth and real wealth itself.

They are aided and abetted by both the media and our educational institutions, which reinforce the idea that the claims on wealth are the same as real wealth itself.  It’s a handy system, of course, as long as everyone believes it. It has proved a great system for keeping the poor people poor and the rich people rich.

But trouble begins when the system gets seriously out of whack. People begin to question why their money has any value at all if the central banks can just print up as much as they want. Any time they want. And hand it out for free in unlimited quantities to the banks. Who have their own mechanism (i.e., fractional reserve banking) for creating even more money out of thin air.

Pretty slick, right?  Convince everyone that something you literally make in unlimited quantities out of thin air has value. So much so that, if you lack it, you end up living under a bridge, starving.

Let’s express this visually.

“GDP” is a measure of the amount of goods and services available and financial asset prices represent the claims (it’s not a very accurate measure of real wealth, but it’s the best one we’ve got, so we’ll use it). Look at how divergent asset prices get from GDP as bubbles develop:

(Source)

What we see in the above chart is that the claims on the economy should, quite intuitively, track the economy itself.  Bubbles occurred whenever the claims on the economy, the so-called financial assets (stocks, bonds and derivatives), get too far ahead of the economy itself.

This is a very important point. The claims on the economy are just that: claims.  They are not the economy itself!

Yes the Dot-Com crash hurt.  But that was the equivalent of a 1-foot wave.  Yes, the housing bubble hurt, and that was a 2-foot wave.  The current bubble is vastly larger than the prior two, and is the 4-foot wave in our analogy — if we’re lucky.  It might turn out to be a 10-footer.

The mystery to me is how people have forgotten the lessons of prior bubbles so rapidly.  How they cannot see the current bubbles even as the data is right there, and so easy to come by.  I suppose the mania of a bubble, the ‘high’ of easy returns, just makes people blind to reality.

It used to take a generation or longer to forget the painful lessons of a bubble. The victims had to age and die off before a future generation could repeat the mistakes anew.

But now, we have the same generation repeating the same mistakes three times in less than 20 years. Go figure.

In this story, wishful thinking and self-delusion have harmful consequences. It’s no different than taking up a lifelong habit of chain-smoking as a young teen.  Sure, you may be one of the few who lives a long full life in spite of the risks, but the odds are definitely not in your favor.

The inevitable destruction caused by the current froth of bubbles is going to hurt a lot of people, institutions, pensions, industries and countries.  Nobody will be spared when these burst.  The only question left to be answered is: Who’s going to eat the losses?

This is not a future question for a future time; it’s one that’s being answered daily already.  Pensioners are already taking cuts.  Puerto Rico will not be fully rebuilt.  Shale wells drilled when oil was $100/barrel, but being drained empty at $50/barrel, represent capital already hopelessly betrayed. Young graduates with $100,000 of student debt face lost decades of capital building. The losers are already emerging.

And there’s many more to follow.  This story is much closer to the beginning than the end.

The bubbles have yet to burst. We’re just seeing the water at the shore’s edge beginning to retreat, wondering how large the wave will be when it arrives. Hoping that it’s not a monster tsunami.

The End Is Nigh

History’s largest bubbles have had the exact same root cause: an expansion of credit that causes leverage to go up faster than the income available to service it.

Simply put: bubbles exist when asset price inflation rises beyond what incomes can sustain. They are everywhere and always a credit-fueled phenomenon.

(Source @hussmanjp)

Look at the ridiculous trajectory of the S&P 500, especially since Trump got elected. I don’t know about you, but pretty much everything that has happened in the US over the past year has been either a diplomatic clown show or a financial cruelty to the average citizen. And yet prices have risen at their highest pace in two decades?

My view is that the Trump election was a totally unexpected black swan shock for the global central banking cartel, and it freaked out.  With the Dow down -1,000 points in the late night hours following Trump’s surprise win, the central banks dumped gobs and oodles of money into the equity markets to prevent carnage.

All that money calmed investors and sent prices roaring higher over the following months. The resulting 80-degree rocket launch will hurt a lot when it comes back to earth. Good going central banks!

This is all happening when we’re as close as ever to a military (if not nuclear) confrontation with North Korea, Russia is busy beefing up its war machine, Saudi Arabia has pivoted away from the US towards China and Russia, and most of our European allies are inching away from us.

Meanwhile, the FCC is about to rule against the vast majority of the public and allow US corporations to turn the internet into a pay-for-play toll road — completely undermining the core principle of the most transformative and useful invention of the millennium. By eliminating net neutrality the FCC has ruled ‘against’ you, and ‘for’ the continued usurious profits of the cable companies.

Worse, heath care premiums continue to increase by double-digits each year. They’re going up by a horrifying 45% in Florida and 57% in Georgia, to name just two unfortunate states out of many.

And to really rub salt in the wounds of the nation, the DC swamp is busy passing a tax change that will further drive an enormous gap between the 0.1% and everybody else by lowering taxes on corporate profits (already the lowest in the world if you measure both tax on profits and value-added taxes).

How to pay for the massive cost of this deficit-exploding bill?  Easy, just eliminate deductions for average people (such as the state and local tax deductions) and begin taxing the waived tuition of graduate students. That’s right, the government helped to massively bloat tuition fees via massive lending to students and then wants to squeeze the poorest and hardest-working among them.

I wish I were kidding here. But like a cruel joke re-told at the wrong moment, the GOP is busy destroying the meager and precarious financial situation of our citizens just so it can toss a few more dollars into the already-bloated wallets of the richest people in the country.

The long rise of the ultra-wealthy is not some mystery.  It arose as a predictable consequence of the financialization of, well…everything that began in the 1980’s:

The above chart speaks to a deeply unfair system that punishes hard working people in order to give more to those who merely shuffle financial instruments around or own financial assets.

This is the system that the Fed is working so hard to preserve. This is the system that Washington DC is working so hard to sustain.

It’s flat out unfair and punitive.  It both punishes and rewards the wrong folks, respectively.  Debtors are provided relief while savers are punished.  The young are saddled with debts and face impossible costs of living mainly to preserve the illusion of wealth for a little longer for the generation in front of them.

For so many reasons, folks, none of this is sustainable. If the system doesn’t crash first under the weight of its excessive debts or the puncturing of its many asset price bubbles, the brewing class and generational wars will boil over if the status quo trajectory continues for much longer.

In Part 2: When The Bubbles Burst… we detail what to expect as the unraveling starts. When these bubbles burst, as they inevitably must, the aftermath is going to be especially ugly.

Understand the likely path the carnage is going to take and position yourself wisely ahead of the crisis — so that you and those you care about can weather the turmoil as safely as possible.

Remember: the role of bubble markets is to injure as many people as badly as possible when they burst. Don’t be one of the victims.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

This Is The Real Threat To Us All: “Don’t Be Fooled By The Magic Show”

The following article was originally published by Brandon Smith of Alt-Market.com

Federal Reserve Will Continue Cutting Economic Life Support

by Brandon Smith

I remember back in mid-2013 when the Federal Reserve fielded the notion of a “taper” of quantitative easing measures. More specifically, I remember the response of mainstream economic analysts as well as the alternative economic community. I argued fervently in multiple articles that the Fed would indeed follow through with the taper, and that it made perfect sense for them to do so given that the mission of the central bank is not to protect the U.S. financial system, but to sabotage it carefully and deliberately. The general consensus was that a taper of QE was impossible and that the Fed would “never dare.” Not long after, the Fed launched its taper program.

Two years later, in 2015, I argued once again that the Fed would begin raising interest rates even though multiple mainstream and alternative sources believed that this was also impossible. Without low interest rates, stock buybacks would slowly but surely die out, and the last pillar holding together equities and the general economy (besides blind faith) would be removed. The idea that the Fed would knowingly take such an action seemed to be against their “best self interest;” and yet, not long after, they initiated the beginning of the end for artificially low interest rates.

The process that the Federal Reserve has undertaken has been a long and arduous one cloaked in disinformation. It is a process of dismantlement. Through unprecedented stimulus measures, the central bank has conjured perhaps the largest stock and bond bubbles in history, not to mention a bubble to end all bubbles in the U.S. dollar.

Stocks in particular are irrelevant in the grand scheme of our economy, but this does not stop the populace from using them as a reference point for the health of our system. This creates an environment rife with delusion, just as the open flood of cheap credit created considerable delusion before the crash of 2008.

Today, we find our economic fundamentals in complete disarray, but the overwhelming fantasy within stocks still remains. Why? Because yet again, for some reason, no one is ready to accept the reality that the Fed is pulling the plug on America’s fiscal life support. Nary a handful of economists in the world think that the Fed will raise interest rates one more time this year if ever again, and the threat of a balance sheet reduction is the furthest thing from everyone’s mind. Daytrading investors are utterly convinced they have the Fed by the short hairs. I say, the situation is actually in reverse.

The minutes from the Fed’s July Open Market Committee Meeting indicate that while the central bank has been the savior of stock investors for several years, the party is about to end. Comments on the risks a bull market might pose to “financial stability” have been more frequent the past couple of months

Only a few weeks ago, former Fed chairman Alan Greenspan commented that bond markets could collapse and bring stocks down with them do to overvaluations and increasing interest rates.

Recent spikes in markets despite a steady stream of natural disasters, threats of war with North Korea, as well is “increased inflation” (according to Fed models) due to the damage wrought by Hurricane Harvey suggest that the Fed will indeed continue hiking rates into our ongoing financial collapse.

The next FOMC meeting will conclude on the 20th of this month, and the question is, will the Fed surprise with a rate hike and/or balance sheet reduction program? I believe the odds are much higher than many people seem to think.

First, let’s be clear, historically the Fed’s predictable behavior has been to skip major policy actions in September and then startle markets with renewed and aggressive actions in December. People placing bets on a Fed rate hike in September would look at this pattern and say “no way.” However, the narrative I see building in Fed rhetoric and in the mainstream media is that stock markets have become “unruly children” and that the Fed must become a “stern parent,” reigning them in before they are crushed under the weight of their own naive enthusiasm.

In my view, the Fed will continue to do what it says it is going to do — raise interest rates and reduce and remove stimulus, and that the mainstream narrative will soon be adjusted to suggest that this is “necessary;” that stock markets need a bit of tough love.

If the Fed means to follow through with its stated plans for “financial stability” in markets, then the only measure that would be effective in shell-shocking stocks back to reality would be a surprise hike, a surprise announcement of balance sheet reduction or both at the same time.

If the Fed intends to continue cutting off life support to equities and bonds in preparation for a controlled demolition of the U.S. economy, then there is a high probability at the very least of a balance sheet reduction announcement this week with strong language indicating another rate hike in December. I also would not completely rule out a surprise rate hike even though September is usually a no-action month for central banks.

This would fit the trend of central banks around the globe strategically distancing themselves from artificial support for the financial structure. Last week, the Bank of England surprised investors with an open indication that they may begin raising interest rates “in the coming months.” The Bank Of Canada surprised some economists with yet another rate hike this month and mentions of “more to come.” The European Central Bank has paved the way for a tapering of stimulus measures according to comments made during its latest meeting early this month. And, the Bank of Japan initiated taper measures in July.

Even Forbes is admitting that there appears to be a “coordinated tightening of monetary policy” coming far sooner than the mainstream expects. If you understand how the Bank for International Settlements controls policy initiatives of national central bank members, then you should not be surprised that central banks all over the world are pursuing the same actions and the same rhetoric. The only difference between any of them is the pace they have chosen in taking the punch away from the party.

The point is, when it comes to the fiat peddlers, there are indeed a few sure things, but continued stimulus is not one of them. One thing that is certain is that they will act in concert as they are clearly doing now in terms of policy tightening. Another thing that is certain is that if they plant a notion in the mainstream media — such as the notion that they are “worried about overvaluations in stocks” and that interest rates must rise, then they will follow through as they always have. Perhaps not at the pace the mainstream expects, or the pace I expect, but certainly somewhere in-between.

Finally, it behooves me to mention again that the Fed has done all of this before. In the lead up to the stock market crash of 1929, the central bank bloated stocks with easy credit measures and low interest rates, only to hike rates in the name of “quelling inflation.” This hacked the legs out from under markets with a machete, and the rest is history. The hidden purpose behind this tactic is extraordinary centralization on a global scale. The Fed is not interested in the health of the U.S. economy, it is interested in total globalization of all economies under one totalitarian umbrella. To make an omelet, you have to break a few eggs.

Of course, the Fed will not engineer a market crash in a vacuum. It is my suspicion that the next Fed meeting will be followed by a geopolitical distraction — the most likely candidate being increasing conflict with North Korea. Do not be fooled by the magic show. The real threat to us all is the central banking and international banking apparatus, including the BIS and the IMF. From now until the end of this year, remain vigilant.

If you would like to support the publishing of articles like the one you have just read, visit our donations page here. We greatly appreciate your patronage.

You can contact Brandon Smith at: brandon@alt-market.com

Unsuspecting Americans to be Hit Hard by this U.S. Scheme to Confiscate Your Savings:Alan Greenspan, 20-year head of the US Fed, reveals Washington’s nasty trick to confiscate the savings of unsuspecting Americans. Here’s How Some Americans Are Preparing

The Most Un-Fun Bubble Ever

Via Kevin Muir of The Macro Tourist blog,

The other day in the midst of an epic food-fight-rally in the stock market, a younger kid from my office wandered by and expressed his disbelief at the incessant bid. Shaking his head he asked me if I had ever seen something so insane.

Ahhh…. the joys of being young - everything is new.

I explained to him that I had indeed seen this movie play out before. A few times actually.

But herein lies the problem. All the grizzled old guys like me have been burned by so many bubbles, we see them everywhere. Corporate bonds, real estate, sovereign debt, equities - all you need to do is open your inbox to be inundated with research pieces warning about the dangers of sky high asset prices.

Yet there are some differences between today and all the previous bubbles.

One of the twitter guys that I respect immensely said recently, “[German] bunds are not in a bubble. No one is buying them on margin and no one is bragging at cocktail parties that they are long ‘em.”

Yup, I can’t say I disagree. German bunds are nothing like Japanese stocks in the 1980s, dotcom stocks in the 1990s or real estate in the 2000s. There is no public euphoria speculating on German rates going even lower. The long side of the German bund market might be a little crowded within the fixed income community as bond managers hide in supposedly safe bunds, but there is no mania engulfing the average person on the street.

Do I think German bunds are insanely overpriced? You betcha.

But if you use cocktail chatter as the only way to measure bubbles, then there aren’t any bubbles anywhere (except maybe in calling bubbles).

Let’s face it. There is no Gatsby-esque celebration regarding the recent stock market rise. No one is bragging at parties at how much money they are making. In fact it is just the opposite. Most people are complaining bitterly about how the stock market is running away on “terrible fundamentals” and how there is nowhere to invest their money without taking crazy risk.

This “bubble” differs greatly from all the other ones I have experienced. Previously you were labeled an idiot for not embracing it. Not so now. In the late 1990s Warren Buffett was called a Luddite for not buying into the Dotcom bubble, but today he ridiculed as an out of touch Octogenarian for purchasing stocks such as Apple at all time highs.

I understand the rally of the past couple of months has pushed us up into record overbought territory. We have hit a point where there are more bullish newsletter writers than any time since 1987. I have no doubt we are due for a pause, and maybe even a correction that shakes out all the recent buyers.

But I do not buy the idea this is some sort of speculative frenzy. Look at the flow of funds since the credit crisis.

This chart of equity flows over the past decade shows that both institutional and private clients have been net sellers over the majority of the time since the credit crisis. Where is all this speculative froth that has pushed equities up over the past decade?

Yes, the last few months has seen retail chasing stocks, but are they buying in a frenzy? Or are they maybe “short” risky assets in their already depleted savings?

Most investors have saved far too little to fund their ever increasing longer lifespan. They are stuck between Central Banks’ financial repression era minuscule yields and their government’s continual reduction in retirement benefits. Not only that, but they got scared from equities’ collapse in the previous crisis, and have been steady sellers of risky assets, stuffing the proceeds into fixed income at the absolute worse time.

So although it might be fashionable to claim equities are in a bubble, be aware this “bubble” is completely different. It is not driven by speculation, but instead might be the most gigantic short squeeze of all time.

The reason there is little euphoria as stocks push up to new highs is that most investors are “under invested” in risky assets. Sure, the stock portion of their portfolio might be rising, but they don’t have enough to fund their retirement.

This overvaluation is still risky and dangerous, there is no doubt about that. Stocks are stupidly expensive. But they are up here on forced movement out the risk curve - not crazy speculation. There are no shoe shine boy stories.

Who knows what this will mean over the long run. The only thing I know for certain is that is not nearly as much fun…

It's Bubble Time

Submitted by Chris Martenson via PeakProsperity.com,

It"s impossible to predict with certainty how much more insane our financial markets will get before an inevitable correction. But my personal bet is: A lot!

For my reasons why, take a few minutes to watch the chapter on bubbles below from The Crash Course. For those who haven"t seen it before, the takeaway is this: bubbles pop only when greed in the market has been exhausted:

Bubbles make no sense economically. Or rationally. But they happen all the time as a part of the human condition.

Even while financial bubbles are enabled by dumb monetary and banking decisions, their actual genesis is rooted in primal human emotions. Greed on the way up, and fear on the way down.

The hardest part about these bubbles is not being swept up in them.  As the above video shows, history is chock full of asset bubbles. We humans just never seem to learn. Like Charlie Brown"s endless attempts to kick Lucy"s football, we get suckered in by the promise of easy riches, only to end up flat on our back when the market suddenly yanks that promise away.

Wash, rinse, repeat.

Most of you reading this might be thinking “Hey, I’m a reasonable intelligent person. I won"t fall victim to the next bubble.” Perhaps, but maybe not. The numbers say that the majority of you will. Unfortunately, being smart -- even a genius -- is no protection against being ruined by a bubble.

Remember from the video that even Sir Isaac Newton, easily one of the most brilliant humans ever to live, got his clock cleaned by the South Sea Bubble:

(Source)

Bubbles are much easier to enter than to exit. As they build, all your friends and neighbors are diving into the pool and enjoying easy riches. You deserve some of that good fortune, right? And there will be plenty of eager parties willing to help you get on the bandwagon. 

But when the bubble pops, though, action becomes much harder to take. At first, everyone assumes that the sudden drop is a temporary aberration and that the party will shortly resume. As prices fall further -- and they typically fall at a faster rate than when they were rising -- folks become paralyzed by fear on the way down, slowly realizing that their paper profits may indeed be gone for good. At first they"re unwilling to give up the dream of the "sure thing" they so recently had, and then, once the losses start mounting, they find themselves resistant to locking in those losses by selling. Instead, they hold on to the increasingly threadbare hope that prices will at least recover to where they can ‘get their money back.’

Of course, that never happens. For all those who bought in during the mania, their money was hopelessly betrayed the moment they placed their bet. And that’s what bubbles are – merely bets. And that bet is: I bet I can get out before everyone else.

That’s mathematically impossible for the majority. It’s really only possible for a very tiny few who have the vision and the discipline (and more often than not, the luck) to pull it off. Very rare are the people who get out at the top.

Don"t Be A Victim

So, to avoid becoming victim in the future, the first thing you need is the clarity to know when you have a bubble on your hands.

Well, it really doesn’t get any clearer than this:

Why Toronto (and Other Cities) Inflate Housing Bubbles to the Bitter End

Feb 20, 2017

“Let’s drop the pretense. The Toronto housing market and the many cities surrounding it are in a housing bubble,” Bank of Montreal (BMO) Chief Economist Doug Porter told clients in a note last week.

Many have called it “housing bubble” for a while, but now it’s official, according to BMO.

In January, the benchmark price and the average price were both up 22% year-over-year, with the average price of detached homes up 26%, of semi-detached homes 28%, of townhouses 27%, and of condos 15%. Double-digit price increases have become the rule in recent years.

But this jump was “the fastest increase since the late 1980s – a period pretty much everyone can agree was a true bubble – and a cool 21 percentage points faster than inflation and/or wage growth,” Porter explained in his note, cited by BNN.

(Source)

Holy smokes! Or rather, what are people smoking up there? Bubble weed, or something. A 22% yr/yr gain? On top of a string of recent years of double-digit gains?

Here are two more features about bubbles we need to keep in mind:

1. Bubble exist when prices rise beyond what incomes can sustain


2. Bubbles always have a blow-off top

First, house prices rising a ‘cool’ 21 percentage points above wage growth over a single year is the very definition of bubble behavior. Simple math tells us that anyone who borrows to buy property eventually has to pay that loan back.

The money to pay back that property loan comes from wages. Ergo, property prices and wages cannot depart from each other forever, or even for very long, without a lot of repayment defaults resulting.

As for ending in a "blow-off top", that"s just how history tells us bubbles finally exhaust themselves. They draw in every last sucker and lazy-thinking ‘investor’ until there"s no "greater fool" left willing to pay a higher price. This doesn"t require 100% participation from the local population; only 100% participation from everyone who can be drawn in. When that finally happens, that’s when the bubble bursts all of its own accord.

There"s another way for a bubble to end, but it practically never happens. Responsible bankers and lenders could prevent the bubble"s formation by simply not lending ridiculous amounts. It almost never happens for the same reasons that people buy overpriced houses: greed and our social programming to follow the herd. If all your banker buddies are making big bucks writing loans to anyone who can fog a mirror, then you"ll be rewarded for doing the same. Nobody wants to be the lone, unpopular voice urging restraint when the crowds are going wild.

The quotes below from the 1850’s show how this dynamic is nothing new to society:

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.”

“In reading The History of Nations, we find that, like individuals, they have their whims and their peculiarities, their seasons of excitement and recklessness, when they care not what they do. We find that whole communities suddenly fix their minds upon one object and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.”

?Charles Mackay,in Extraordinary Popular Delusions and the Madness of Crowds

Well, the good people of Toronto -- as well as Vancouver, Palo Alto, Melbourne, and a large number of other real estate markets -- have fixed their minds on the delusion that the recent skyrocketing price appreciation means that home prices will continue to always rise from here. So get in now! You can"t lose! Don"t risk getting priced out of the market!

What particularly crazy about this is that we just saw 10 short years ago how this movie ends. But those caught up in the current mania simply aren"t thinking logically right now. They"re fully captured by the bubble mania.

And, as before, it’s lonely out here for those of us trying to be the voice of sanity and reason. Nobody want’s to hear that now.

And later, once the painful correction has wrought its destruction, those of us who dared to sound an alert may be blamed as responsible for the losses - as if by pointing out the delusion we caused the burst to happen.

Conclusion

I could go on and on, risking being the boy who cried wolf, and point out all the other obvious bubbles infecting our financial landscape that all but assure a very difficult future of financial and economic pain.

But I won’t at this time, having already pointed out the major bubbles in last week"s article, The Mother of All Financial Bubbles.

The delusion much of society wants to believe in is that we can get something for nothing. That is, to become rich, all we have to do is buy an asset like a house or Apple stock and simply wait.

The wealth will just magically arrive. No work performed, nothing new created, nothing done. Just buy, and wait.

Of course, even a cursory examination of all of life in nature (or before humans invented thin-air money printing) quickly reveals that actual wealth comes from hard work, usually coupled with taking risks.

But somehow we’ve slipped back into the common and very human delusion of that our current culture has somehow figured out how to escape the old bonds of wealth creation. This time is different!

The Romans re-minted coins in smaller and less pure weights and it worked! For a while. Then its empire collapsed on itself.

Zimbabwe (and now Venezuela) printed and it worked! For a while. Then its citizens were left impoverished.

Society"s dangerous conceit is in thinking that somehow we’ve managed to, this time, escape the hard rules of wealth creation and have discovered a new principle by which we can all get wealthy without doing anything at all. All you have to do is play the game. Put your money to work! Buy stocks and houses and you can"t go wrong!

And it’s working! For now.

But when we back up a bit, it’s pretty easy to see how this cannot be true. Not for the majority. Why? Because real wealth isn"t a paper gain on a house. Nor is it even money in the bank. Or a large stock portfolio.

Real wealth consists the final things you consume: food, appliances, transportation, entertainment, clothes, energy, etc.

Those are real things. They have to come from somewhere. Which means they have to be produced, stored, transported, and sold. By themselves, your cash and your stock portfolio have no value. Those are merely claims on true wealth.

So how can it be possible for everyone to be exponentially increasing their claims on real wealth, without the underlying pie of real wealth itself, increasing at an equivalent rate?

It’s not.

And that’s the painful lesson that gets learned and re-learned as each new generation gets duped and then dumped by an asset bubble.

Sadly, bubbles used to happen only once in a generation. Once those burned by the last bubble have died off, the younger generation has no living memory to prevent them from getting suckered by the next one. But for some reason, our current generation has something of an addiction to bubbles. We"ve lived through the tech stock bubble, the real estate bubble, and now we"re living inside the "everything" bubble.

What"s wrong with us?

My advice is to sell your house if you live in Toronto, or a similarly bubblicious real estate market. Similarly, reduce your exposure to stocks and bonds at these record highs, and develop a wealth protection strategy with a financial adviser who understands the risks in today"s markets.

Know what the bubble signs are and be smarter than Newton by standing aside, nodding knowingly, and tolerating your "smart" friends and neighbors.

It’s one of the very hardest things to do, but it’s also one of the most important.

Odds are high you"ll be proven the smart one once the current bubble bursts.

And if you haven"t read it yet, read our report How Bad Will It Get? in which we detail the tremendous scale of the losses that will result when this Mother Of All Financial Bubbles collapses. It will be a traumatizing time for society, and many, many people will see their wealth vaporize.

The key objective at this time is to position yourself for physical and financial safety. For those who do will be in a position to prosper greatly, as well as offer much-needed support to others, when the coming reset arrives.

Click here to read the report (free executive summary, enrollment required for full access)

Nomi Prins: Financial Crash From Epic Debt, Asset Bubbles “Possible In Last Quarter 2017”

Could there be a crash coming in 2017? Will increasing interest rates at the Federal Reserve trigger the beginning of the end?

It is possible, but not certain.

It will fall, perhaps, after a new sense of normal sets in, and some become comfortable with the change in leadership, and accustomed to drowning out the opposition yelling noisily from the other side. Expectations have been set for a growing economy, fresh infrastructure and new hopes for the average worker.

But getting too comfortable would be a huge mistake. All that could prove to be a mirage. And things could come crashing down.

On Friday, Donald Trump will be inaugurated as the 45th President, and all eyes will be on his first 100 days as he demonstrates what kind of president he will be, and his cabinet takes action. But even with the best intentions and carefully laid plans, there is no telling at this point how firmly he will be tested, and what kind of crisis America will have to endure during his first term. Wars, terror attacks, civil unrest, debt crisis and financial collapse all loom overhead.

Many have seen dark signals about the immediate future, but no one can claim to know the timing.

However, former Wall Street banker and now best selling critic of the predatory financial system Nomi Prins sees the pattern unfolding, and fears that the end of 2017 may be the time that everyone has been watching for. At the center of it is the whiplash effect of Federal Reserve stimulus-withdrawal (i.e. rate hikes and the contraction of easy money).

Greg Hunter of USAWatchdog interviewed Nomi Prins:

Former top Wall Street banker and best-selling author Nomi Prins correctly predicted no financial crash for 2016. Prins’ upcoming book is titled “Artisans of Money.” It is all about central bank money creation. What does Prins say about this year? Prins predicts, “In 2016, I pegged the non-crash. . . . Central bankers were finding new ways to extend their money creation policies. That is what kept the markets up.

There was a separate bid on the markets after Trump was elected. It was on the expectation that he would be good for growth, that he would be good for infrastructure and that he would create jobs. I do think there is a little juice in the central banks. I keep thinking there shouldn’t be, but they keep surprising all of us with their ability to boost the markets. They have artificially stimulated so many different asset bubbles, whether it’s debt, which is epic, or stock markets, many of which are at historic highs. If we have a crash, it will be in the second half of 2017. The promises, the rate hikes, the dollar being high could collapse into the realities of the stability and this artificialness. I am not sure about a crash this year, but if we see a big decline, it will be in the last quarter.”

Prins foresees gold prices surging during this last quarter period of instability. Those who’ve been eating sinking gold prices may find some relief once again, but the larger economic system is in danger of crashing and burning, and the possibility that the dollar will lose out:

“I think with the expectation of things going well, the dollar will be keeping a bit of a bid. It will be within a range but staying fairly up. I think the dollar will turn around and weaken in the second half of the year. . . .That’s why, in the last half of the year, gold will catch more of a bid.”

Prins discussed the alliance between Russia and China and what is about to unfold geopolitically.

“Because Russia, Putin’s very smart. He’s not just waiting to see what happens with Trump and the U.S. You know, there’s been very favorable rhetoric so far, but, you know, that could be a wild card. Things could be changed. Someone could get annoyed at someone else. So what he’s been doing, he’s been fortifying his relationship with Eastern Europe, his relationships with the UK, with Japan and particularly his relationship with China and the non-Russia BRICS countries. So all of this will be in flux…”

According to Nomi Prins, the crash wouldn’t be so much an immediate headline flashing-event, as it would be a steady decline and gradual sinking to the bottom.

Read more:

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Author: Mac Slavo
Views: Read by 298 people
Date: January 19th, 2017
Website: www.SHTFplan.com

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