The 2008 Great Financial Crisis came about because we began to hit “debt saturation” levels. The crisis was one of solvency but was attended to with added liquidity. Sovereign treasuries still had the ability to add debt to their balance sheets which was done in unprecedented amounts. Now, we are again bumping up against debt saturation levels as sovereign treasuries by and large have little room left to add more debt in efforts to reflate. The root problem of solvency was never addresses, only postponed to another day. That “day” seems to be in sight.
The Fed recently did a study concluding that a $4 trillion increase in their balance sheet should be enough to reverse a future recession. I would ask several questions: first, 2008 began as a downturn in real estate in the U.S. and quickly spread to financial asset prices and thus institutional balance sheets …
James Gowans the President and CEO of Arizona Mining joins us to discuss central bank money printing, the real risk of hyperinflation of the US Dollar as we’ve seen in Venezuela and the trend of big money moving into metals mining stocks, including Zinc mining companies like Arizona Mining. Jim explains that Zinc has actually outperformed gold and silver in 2016 rising more than 40% year-to-date, “A big move has begun,” Jim notes, “there’s something fundamentally wrong with the economy.”
The commodities are rising fast as the decades long bond market bubble begins to deflate. This is going to translate into much higher prices for the stuff people need. Inflation… and ultimately hyperinflation as John Williams has predicted, is looking increasingly likely.
The fellow in the photo above is taking a bit of a risk. If all does not go well for him, he may become a candidate for the annual Darwin Awards – an award given to those who have inadvertently taken themselves out of the gene pool.
Of course, Darwin’s premise was that, through natural selection, those who are born weaker, deformed, or otherwise less capable of survival are less likely to live long enough to procreate, thus assuring an ever-stronger, more adaptable species.
Double-digit inflation is a non-linear development. What I mean by that is, inflation doesn’t go simply from two percent, three percent, four, five, six. What happens is it’s really hard to get it from two to three, which is ultimately what the fed wants.
It’s proving extremely difficult just to get up to two. Personal consumption expenditures (PCE) is the core price deflator, which is what the fed looks at. Currently, it is at about 1.6, 1.7 percent, but it’s stuck there. It’s not going anywhere. The fed continues to try everything possible to get it to two with hopes to hit three. Where the problem arises is once you get to three, the next stop isn’t four, it’s eight, and then it goes to ten. In other words, there is a big jump.
For 6 ½ months; readers have been warned that the anemic advance in gold and silver prices over this period of time was/is a Fake Rally. The arguments in favor of this conclusion are almost too numerous to list.
a) Gold and silver are currently undervalued by roughly an order of magnitude, and in the case of silver, closer to two orders of magnitude. In any legitimate rally, the upward slope in prices would have been much, much steeper.
b) In a legitimate rally, silver always outperforms gold. Yet despite silver being undervalued versus gold by roughly an order of magnitude, the price of silver lagged the price of gold originally, and has barely kept pace throughout this sluggish “rally”.
…..Donald Trump is absolutely correct that China is a great economic menace. But that’s not owing to incompetence at the State and Commerce Departments or USTR in cutting bad trade deals.
Nor is it even primarily due to the fact that China egregiously manipulates it currency, massively subsidizes its exports, wantonly steals technology, chronically infringes patents and hacks propriety business information like there is no tomorrow.
Pardon me if this article starts out a bit disjointed, as I accidentally erased the notes I took last night, amidst the 155th “Sunday Night Sentiment” attack of the past 161 weekends. And afterwards, the 689th “2:15 AM” raid of the past 793 trading days, which I was able to document in real-time because someone called me at 3:00 AM, acting surprised that I wasn’t on “European time.” I mean, do I have a French, German, or British accent?
Thankfully, the amount of notes was minimal, as amidst the “summer doldrums,” trading volumes are exceptionally low – with “volatility” at 20-year lows, care of the most maniacal, relentless market manipulation in global history.
The Rationale for Interventionism
It has been almost eight years since former U.S. President George W. Bush warned the world that “without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold.”
The government’s response to the crisis was a USD700 billion rescue package that was supposed to prevent U.S. banks from collapsing and encourage them to resume lending, which was soon to be followed by a series of Quantitative Easing (QE) packages injecting money into the economy.
Are police necessary? Although this existential question often produces a knee-jerk ‘of course they are, who would protect us?’ a growing call for the abolition of police — and working examples to back it up — deserves more than scornful dismissal, particularly amid epidemic-level violence by agents of the State.
Police are under no obligation to protect the public they putatively serve — a series of state and Supreme Court decisions stretching back more than three decades indisputably establish this fact — so the lingering question, ‘who will protect us?’ is of no consequence to the case for dismantling every police department in the nation.
If you have been waiting for a public announcement or news headline to let you know that an economic collapse has begun, you are in for the surprise of your life. If history in other countries and in Detroit, Michigan is any indication, there won’t be an announcement. An economic collapse tends to sneak up on a city, region, or country gradually over time. In some cases, the arrival of an economic collapse is so gradual that most people living in it aren’t even aware of it at first.
Things just get gradually worse, often so gradually that people and families adjust as best they can until one day they actually realize that it’s not just their home or their neighborhood that has been hit so hard financially, it’s everyone. By that time, it’s often too late to take preventative action.