At PeakProsperity.com, we pride ourselves on providing fact-based context
to breaking important events.
Within 72 hours of the Japan tsunami in 2011, we had analyzed the
situation and concluded with high probability that three core meltdowns had
occurred at the Fukushima nuclear plant. While it took years for officials to
finally admit to the full extent of the crisis, history has validated our initial analysis.
How did we get it right? By using a science-based approach grounded in
observation, deduction and a healthy skepticism of what the
"experts" in charge claimed. We also went to great lengths to
educate our readers about the science in play, explaining in detail how radioactivity and contamination differ, the health
risks from such a nuclear accident, and what concerned folks could do to
remain as safe as possible.
When California's authorities suddenly reversed course and scrambled to
evacuate nearly 200,000 residents living downstream of the Oroville dam,
within an hour, we had released an analysis of the situation, explaining the
critical differences among the primary spillway, the main dam, and the
auxiliary spillway.
Where mainstream media outlets were consumed by covering the Grammy’s, we
were able to tweet and blog relevant details to the worried people hungry for
information about the dam's integrity, keeping them both grounded and informed:
By 10:00pm that same Sunday night of February 12th, we had
shared a series of updates with schematics, images and conclusions
that was more complete, accurate and hysteria-free than any other news source
we could find at the time.
By the next morning, we had located and interviewed one of America's top
dam experts, who provided an absolutely spectacular assessment of the
situation at Oroville. That podcast has been listened to by nearly 50,000 people
at this point, including residents of Oroville who have used its
insights to determine whether or not to return home at this time.
And on top of all this, our own community began filling in the blanks with
their expertise. One community member, an emergency worker deployed to the
dam earlier this week, has been providing us with valuable insider
information that state officials have resisted making public.
The reason I'm relating all of this now is because of the instructive
lessons involved. It’s worth noting that communications from officials in
Oroville transitioned from a steady, repeated stream of “Everything is
fine. There's nothing to worry about” to suddenly “Run for your lives!”
within an hour.
Of course, the 188,000 people living downstream from the dam were caught
off guard by the mandatory evacuation order. Many left with none of their
possessions, only to get hopelessly caught on clogged roads. It was a time of
panic and disorder, with no one seemingly in control.
The main lesson from Oroville -- or Fukushima, or Katrina -- is that
governments do a poor job of relating accurate information to their citizens
when big threats are involved. Part of that is likely due to a desire to
avoid stoking fear. Part probably due to politics and bureaucracy. And part
probably due to plain old incompetence.
Regardless of the cause, it means that the public -- even the vigilant
ones -- suffer information deficits when it matters most. Simply put, the
authorities do not share all the facts necessary for making informed
decisions.
Why is why our longstanding advice has been a straightforward call to
'trust yourself' when assessing crisis risk. In most cases, good
old-fashioned common sense and a little sleuthing will get you far closer to
the truth, and faster, than 99% of your peers who are relying on being told
what’s happening by those in charge.
In most cases, the information you need to assess the truth will be right
there, hiding in plain sight but always obvious in retrospect. This means
it’s also available to you in real-time, providing you're willing to trust
your own eyes and you know where to look.
Which brings us to one of the truly great risks we're facing today. One
with much more destructive potential than a single failed dam but, like
Oroville, one the authorities are desperate to keep us in the dark about.
The Mother Of All Financial Bubbles
We are now living through the mother of all financial bubbles. We've been
living with it so long now that we have to take three giant steps backwards
to even detect its broad outlines.
As a reminder, a bubble exists when asset prices rise beyond what incomes
can sustain. Florida swampland in the 1920’s, tech stocks in the late 1990s,
or Toronto real estate today -- all are fine examples of this.
The US government and the private banking cartel known as the Federal
Reserve, in cahoots with a very compliant and complicit mainstream
media, are doing everything in their vast and considerable power to convince
us that we are living in an golden era of risk-free prosperity. And that
tomorrow will be even better.
Now, regular readers of PeakProsperity.com's reports will know there's a
mountain of evidence contracting this. But it's critical to understand that
this is the same public perception management style as we've recently seen at
Oroville: Deny, deny, deny... and then finally admit the obvious.
So let’s take those three giant steps backwards and see if we can spot the
flaw in the ‘everything is awesome!’ meme that the Fed et al are trying to
paint for everyone by flooding the “markets” with so much thin-air liquidity
(between $150-$200 billion a month) that nobody has any clue what anything is
truly worth anymore.
Giant Step Backwards #1: Infinite growth is impossible.
This is such an easy concept that I'm continually surprised at how poorly
appreciated it is and how much resistance it receives when raised. But it
works like this: the earth is a sphere and therefore has a defined surface
area and a defined amount of resources available for use.
The availability of these resources ranges across a spectrum from
dense/concentrated on one end to dilute/useless at the other. Humans have
already extracted and consumed most of the easily obtainable stuff. Now it
gets harder.
Regardless of the economics of these resources, they are finite.
And as our economic requires resources to function, if we want our economy to
grow from here, that means consuming more resources at a faster
rate then we have been. If resources are finite, then growth will one
day prove finite, too.
This should be utterly, blindingly obvious to everyone. But it’s not,
apparently. The Federal Reserve and the central banks in other nations are
unified in their call for more economic growth, always and forever. That’s
plan A. There is no plan B.
Giant step backwards #2: You can’t print your way to prosperity.
History is replete with the failed attempts of nations to print their way
to prosperity. The pursuit operates on the same principle as alchemy: trying
to get something for nothing. It has invariably and always ended the same
way. In tears.
At first it, issuing more currency feels good because those closest to the
money printing get stinking rich while doing practically nothing. As that
trickles down, everybody initially feel smart and wealthier. Well, not
everybody; but those running the system sure do.
After a while, though, all that feel-good activity is revealed as a fraud.
It turns out prosperity wasn't printed, instead it was redistributed. From
one party’s pocket into another. And in most cases, from poorer pockets into
those of the already-privileged.
The same is happening today with the "thin air" money printing
being conducted by the world's central banks. We are now living with one of
the most extreme wealth gaps in US history, with the top 1% (really, the top
0.1%) owning a greater percentage of the nation's wealth than they ever have.
But it's even more nefarious than that, because the Fed is not simply
stealing from today's public; it is also stealing the prosperity of future
generations. When the party being stolen from hasn't been born yet, it can't
fight back.
In short, you cannot print your way to prosperity. Yet somehow we've
forgotten that. And we're dooming ourselves (and our children and
grandchildren) to becoming serfs in the process.
Giant step backwards #3: You can’t grow your debts faster than
your income forever.
This, too, should be completely obvious. You know perfectly well it
holds true for your personal life or your business, if you have one. And it’s
equally true for a nation, which is simply an aggregation of individuals and
businesses. But somehow this simple truth has been either forgotten or
deliberately ignored by today's economists and politicians.
Our grand experiment in debt-based fiat currency -- unbacked by anything
tangible, like gold -- began on August 15th, 2071 when Nixon
unilaterally broke the Bretton Woods agreement and forced the entire world
off of the gold standard. Not that the world minded much, because this then
meant that politicians and monetary hacks everywhere could ignore centuries
of economic lessons and begin making exorbitant promises by printing currency
like mad.
The giant step backwards this was is clear to anybody who can read a
chart.
Here’s the total credit market debt in the US. It has exploded higher at a
near-perfect exponential rate since that fateful day in 1971:
But what we really need to do is compare debt to income. Remember, you're
not supposed to grow the former at faster rate than the latter. So let’s add
(nominal) GDP to our chart and see what comes up:
As you can see, those lines began diverging a long time ago (aha! Right
around 1971. Imagine that.). They've been diverging at an increasing pace for
prety much the entire adult lives of everybody in power. At this point, our
leaders just assume “This is how the world works.”
“Reagan proved that deficits don’t matter”
~ Vice President Dick Cheney
The little wiggle in the exponential curve there, during 2008-2009, was
the wiggle that almost destroyed the world. Our entire system of credit and
money came very close to full-scale collapse, simply because it didn't grow
for a few brief years. Makes you shudder to think what would have happened
had it acutally contracted...
But back to the main point. If we compare the beginning of this wanton
debt-binge in 1970 with the state of things today:
We see that debt has shot up by a factor of 40 while income has only
increased by a factor of 17. We have indeed grown our debts wildly faster
than our income over the past 45 years
And, it should be noted, a lot of that GDP ‘growth’ is the byproduct of
borrowing and spending money we don’t have on things we don’t need. Said
differently: the debts will remain during any serious future economic
downturn but the GDP that is fraudulently based on excessive rates of
borrowing will vaporize as if it never existed in the first place.
That, my friends, right there is the very definition of unsustainable.
If something cannot go on, it won’t.
But the Federal Reserve, under the leadership of a pure academic like
Janet Yellen, cannot conceive of any approach other than perpetuation the
same system that has been in place while she's built her career.
Conclusion
The Fed is desperately seeking to keep the status quo in place, praying
that somehow things turn out OK, and clearly scared to death behind the
scenes. But, just like the officials at Oroville, when the cameras are on
her, Yellen smiles and tells us that all is well.
The Fed has printed as much money as it has dared for the time being. It
has since handed the baton over the ECB, and the Bank of Japan, who have
stepped in to keep the wheels of the world's debt production well-greased.
Around and around the baton gets passed. And we're told by our government
and media that this is all in our best interests. However, the only thing
these central banks are truly doing is stealing from savers and the elderly
today, and pretty much everyone tomorrow.
What have they done with the trillions in "thin air" currency
they have printed up? They handed them to the big banks, to speculators and
the already wealthy. Which should come as little surprise. These are the
people they count on for their high-status jobs, as well as the big payouts
awaiting them when they return to the private sector.
In the meantime, they’ve blown the Mother Of All Financial Bubbles.
This is primarily a bubble in debt (i.e., the bond market). But in its
making, new bubbles in real estate, stocks and a whole slew of other asset
classes were created.
When these bubbles burst, and they must, it will be a massively
destructive event. There will literally be nowhere to hide from the
repercussions.
You simply cannot count on anyone in power giving you anything like timely
warning or useful advice in advance. You need to find accurate, trustworthy
indicators on your own, and then decide how you're going to position
yourself, your loved ones, and your wealth accordingly.
In Part 2: How Bad Will It Get? we detail the tremendous
scale of the losses that will result when this Mother Of All Financial
Bubbles bursts. 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 Part 2 of this report (free executive
summary, enrollment required
for full access)
