The Great Economic Reset, Only Months Away?
In case you haven’t noticed, the DOW is down nearly 800 points in the last several weeks. Friday, the world markets have suffered their bleakest day of the year so far. Prominent financial players are expressing extreme concern, and some believe the end game is nigh. Could we finally be at the precipice of the economic tipping point, about to be hurled over the edge into an economic apocalypse that will make the events of 2008 seem like child’s play?
Time is running out.
The truth is setting in.
This is all eerily reminiscent of the years following 1929. Following the initial crash (2008 parallel), the stock market rebounded, and the people thought they were ‘out of the woods’ and everything seemed okay (like today). Then, it all crashed hard, leading to the deepest years of the Great Depression. The past few years ‘the system’ has been propped up by massive bailouts, money injection into the banking system, and policies enabling banks to absorb their bad debt without defaulting. The problem is… this has all been temporary, and the ‘real’ economy has not improved. It has in fact worsened – despite the numbers that are presented (misrepresented) by the banksters, the government, and the main stream media.
30% of the purchasing power of the dollar has been destroyed in the past four years while wages remain stagnant. The U.S. economy needs 125,000 NEW jobs each month just to stay even with the unemployment rate. The most recent reporting has been well below that, and the prior month’s numbers were revised downward well below that as well. China is rolling over, the Eurozone is in complete economic turmoil with the breakdown and apparent eminent sovereign default and exit of Greece. Money has been fleeing Greece (and now Spain) with ongoing bank runs.
We have been lulled into a false sense of security as we have been in the eye of the economic hurricane for several years now, and most have forgotten that the winds are swirling all around us as we are about to re-enter the fury of the storm. There has been no real correction yet, no deleveraging or unwinding of the massive derivative market. No one has been held accountable.
Greece is almost gone. Spain, and then Italy will swiftly be next. Dominoes will fall. All this while the Fed may be too late to act as it plays politics with the current election cycle in the U.S.
The outcome is not in question. However the timing and management (or lack thereof) of the unwinding is. At the present time, it appears that the market may be realizing the truth of the matter as they are fleeing to ‘safety’. Reality has arrived. Friday’s Gold was up $66 an ounce.
We don’t know what is to come. The world has NEVER been here before. Those who believe the U.S. can remain unscathed from what is happening in Greece, Spain, Italy and the Eurozone, evidently do not understand the definition of ‘contagion’. It can happen VERY fast.
Reported from an ‘insider’ source at SteveQuayle.com, who predicts the collapse of the Eurozone within 6 months,
The Iron boot has been firmly planted to the pedal of this runaway tractor trailer that is heading off the cliff. All of the Euro banks including my former associates at the Royal Bank of Scotland (RBS) are all prepped and ready for the Euro collapse. What we in the inside are calling “Spanish Flue” is now running hot with temperatures that are setting ten year yields sky high. What many do not realize is that Bankia’s demise has started a breach in all the firewalls and safety measures that are in place in the Eurozone. This had an immediate effect on the Italian markets as you can now see the pandemonium that is there.
We keep hearing reports of massive bank runs that are occurring across many of the PIIGS but is not just limited to them. As I stated many times the UK and France are the most vulnerable to the Eurozone collapse, many of their populace are cashing out of their equities though there is a massive media blackout about this. European contacts report that there is a flight to German bonds, UK and a mass migration to the US dollar. But these currency life preserver jumps will not help as the contagion in all FIAT markets are affected. It is a game of hot potato that the investors are playing, jumping from one asset to the next and again before the one that they just jumped to burns. A juggling act with fire that cannot be quenched.
On Friday, Jim Sinclair of jsmineset.com said, “QE to infinity is for certain. About that there is no question whatsoever. It cannot be avoided;” “The Fed is playing with something worse than fire. That fire is posted in a video today [see below] and references a worldwide financial crisis that if it starts cannot be stopped by any power on the planet.” “They are already easing up on the rhetoric. The Fed will downright panic as the world’s economies go from slow to dropping out of sight. That is what is on the plate tonight, this night, right here and now.”
This is one day going to end very badly. Time is running out. There is no stopping this. There is prediction among some insiders that the Eurozone will collapse this fall/winter with naked exposure of all derivative markets the world over. In essence, the end. The great reset.
Are you prepared for the chaos that will follow such an event? I hope so. If not, start planning TODAY.
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Here’s a kicker. 99% of people do not know what derivatives or CDS’s are or the consequences of them falling over are.
They are about to get a rude shock.
In my country many top economists have already written Europe off. Because we are linked geographically and economically to Asia they are hoping that China and Asia will pull us through. Although there is some pessimism about this as well.
Back to CDS’s and derivatives. Some local authorities and semi government entities have borrowed big from foreign and local banks and invested in overseas CDS’s and in the derivative market. Some of these entities are already in dire financial stress after GFC MK I. This has been kept very quiet by the MSM and federal and state governments. I would not be surprised if their are many semi government municipalities and semi government organizations in the same situation in the U.S.
I would suggest that the S.starts H.T.F. as from this very coming week. I was predicting a Fall/Winter collapse however I have revised this to as soon as July.
Did you know that worldwide, approximately 56 Trillion dollars worth of loans must be refinanced in July alone? Many of these loan refinancing must be made by European banks that are now technically (or in fact) insolvent.
Interesting note. From 1932
Looking over the precipice of national default and an untimely exit from the international monetary system, the Greek leader issued a somber warning to Europe’s economic leaders: “Bear in mind that if you leave the small states without assistance, a black future awaits Europe.”
Delivered by Prime Minister Eleftherios Venizelos on April 15, 1932, less than two weeks before his nation would suspend loan repayments and exit the gold standard
Isn’t ironic that one of the main Greek current political parties leaders and former deputy Prime Minister has the same name – Venizelos
It does look awful but this stuff always takes longer than you think. Seasonality suggested 1277 in early June for the S&P, so we’re right there. From 6/12 to 7/11, seasonality suggests 1372. By 8/8, it suggests 1217. From around the time of this month’s crop report, grain prices are seasonally strong. We would see $8.66 wheat by mid August if we follow seasonality. Gold will be testing $1800 by late August if we follow the season. I’m just saying that everything looks terrible but prices are following what seasonality suggested back in early April. Sometimes, the news is made to fit the price action. Sometimes, the seasonality is just what is needed to push things over the edge. We don’t know yet which we have going now. You don’t want to take new positions going contrary to seasonality though. If we do get a rally into early July, a sign that it’s just a technical bounce might be that dollar/yen has continued to weaken. Seasonality suggests we probably won’t see 79 again and would be getting down close to 74 by late summer. Having trouble holding above 77 wouldn’t be a good thing to see in July. One thing that’s scary is the economy is inverted where the lagging indicators are stronger than the coincident. We normally fix this with a recession. It seems early in the recovery but this is late in comparisons. It’s just so weak that we think it’s still early.
I’m not so concerned about stock market seasonality and such things. Rather, the bigger picture of horrific debt and spending upon fragile foundations of nations and too-big-to-fail banks who are leveraged beyond rationality, along with the mountain of derivatives and counterparty risk associated with all… which are dominoes waiting to topple if this all is not managed to perfection…
@All; I agree with beano, it only takes one entity, i.e. Greece, to not want to “play by the rules” to create the premise that the ones being helped get the attitude that “austerity, austerity, we don’t need no stinking austerity!!!” (deep bandito voice over) and start the panic that causes it to happen. You have the blind leading the blind. Just bought a greenhouse and am planning my first fall garden, just for theses reasons. Survive well. Enjoy.
It’s true the bigger picture matters in the end as we’re all in for a rough time, but you still have to deal with the present. Seasonality just gives a heads up, so people may have avoided the recent losses and might want to sell after the summer rally. A friend that looks at the big picture moved to Switzerland recently. He recently sent a bunch of graphs suggesting Asian financial markets are going to be the next topic. He still buying for a summer rally and planning on selling later in the summer to “the suckers” as he calls them. He’s smart in taking action for the big picture but still living in the present. A lot of this stuff is so far beyond our control that we should probably think about it less.
“A lot of this stuff is so far beyond our control that we should probably think about it less.”
I do agree there is such a thing as analysis paralysis, which is debilitating. However we should ‘think’ about this stuff, because if we do not, we will be sticking our heads in the sand and will not be prepared for what ‘could’ happen. I entirely agree that most of this (maybe all of it) is out of our control, but we do control what we do and the decisions we make as individuals.