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The current financial system is on borrowed time.
This is not fear mongering. It is fact.
The system almost went down in 2008. Since that time, every major decision
made has been to double down on the very same bad ideas that created 2008.
Those bad ideas:
1) Excess debt driven by loose money policy.
2) Moral hazard (not allowing those who make terrible choices
in the banking industry to fail).
3) Increased Centralization of the economy.
The first two are a product of the third. You can only get into a place
where one terrible decision is made after another when you have only a
handful of people making decisions in a consequence free environment.
The drive for Centralization has been ongoing for 70+ years. Today, 4-5
players dominate every industry in the US. Media, drugs, energy, banking, you
name it, there are 4-5 companies that control 90% of the market.
The flip side of this is that self-employment is at an all-time low
relative to total employment. This hollows out the economy, eviscerates the
Middle Class, drives incomes lower, and makes the US a less competitive,
vibrant economy.
It also kills creativity and risk-taking as an increasing percentage of
the US relies on big business for their incomes and so is afraid to speak out
of turn or take risks (start new businesses). Consider the financial media
where one wrong question of a Central Banker gets you fired. This benefits
neither the reporter, nor the banker, nor the economy as it kills creativity/
competition/ quality of work and the like.
The drive for Centralization goes all the way up the corporate food chain.
With innovation dulled by bloated corporate structures, executives
increasingly rely on financial engineering to juice returns (it doesn’t help
that such a large percentage of executive compensation is based on stock
prices, but that’s a topic for another time).
As a result of this, companies are issuing debt to buyback shares,
leveraging up their corporate balance sheets (again the
Centralization/concentration of wealth theme) to increase earnings per share.
Today, US corporations are 30% more leveraged than they were in 2007 (the
previous credit bubble). But they are not the only ones. Central Governments
have been issuing debt at a record pace as they cajole an ever-increasing
number of voters to buy into the status quo by dangling social services
programs in front of them.
As a result of this, today the financial system has over $20 trillion MORE
debt than it did in 2008. Put another way, whatever problems the system had
in 2008, there are $20 trillion worth more of them today.
By logic alone, this tells us as that another 2008-type event is coming on
a larger scale. 2008 was caused by derivatives based on consumer-focused
assets (houses). The next crisis will be driven by derivatives on
government-focused assets (bonds).
That will be the ultimate crisis. The crisis to which 2008 was the
warm-up. The Crisis of Centralization breaking apart.
If you’ve yet to take action to prepare yourself and your portfolio for
the next round of the Crisis, we just published a 21-page investment report
titled Stock Market Crash Survival Guide.
In it, we outline precisely how the crash will unfold as well as which
investments will perform best during a stock market crash.
We are giving away just 1,000 copies for FREE to the public.
To pick up yours, swing by:
https://www.phoenixcapitalmarketing.com/stockmarketcrash.html
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