At no time in my career (30 years) have economic fundamentals deviated from
asset prices as they are doing now. The developed world economies are in FREEFALL
in REAL terms as centrally planned economies implode under the iron grips of
the socialists, banksters and bureaucrats who control them.
Either fundamentally economies must explode higher (REAL wealth creation,
not printed and borrowed from the future) or asset prices must collapse to
reflect REALITY (destroying the financial system which whose BALANCE SHEETS
rests upon these MALINVESTMENTS and worthless sovereign debt they call ASSETS).
Financial asset markets ARE NOT a reflection of the REAL economy. They are
a Potemkin fac,ade, liquidity created and driven pure and simple. This series
(4 parts) will outline the real facts of the matter and how the convergence
of the financial world and real world will happen. It is only a matter of time.
A man-made disaster is unfolding in the developed world welfare states and
the ultimate denouement/debacle/ economic/societal collapse is UNAVOIDABLE.
The only question is the path (ups and downs) our world takes to that DESTINATION.
The reform of governments, regulations and tax systems required to restore
growth is a pipedream. It hasn't occurred till now and won't until our societies
ERUPT in protest from being RAPED by those who control the systems: bankers,
governments and special interest elites.
What are fingers of instability? They are areas of the economies which have
been taken to extremes using leverage and money printed out of thin air which
INVITE SYSTEMIC instability. Many years ago John Mauldin described a study
of sand piles created one grain at a time which were quite stable as they began
and became unstable as they grew in size. Creating the large zones of instability
PRONE to COLLAPSE under their own weight. Fingers of instability are a perfect
description/metaphor of our fiat currency and credit based financial systems.
As each dollar has been PRINTED and LENT into existence the greatest experiment
in leverage and financial HOCUS POCUS (swaps, shadow banking, OTC derivatives,
rehypothication, plunge protection team and bankster manipulations, etc.) has
unfolded.
"Since we're dealing with markets that are being manipulated by Central
Bank policies, there is no such thing as economic analysis anymore."~
Jeff Gundlach
ALL creating a something out of nothing houses of cards, built upon one another
but in reality NOTHING IS THERE except an illusion of wealth. It is not real
collateral. It is a DANGEROUS/ catastrophic illusion. The majority of the people
of the world live in the functional equivalent of the matrix movie (I urge
you to view all three).
The deleveraging and reform of economic policies to restore REAL growth MUST
occur before any ECONOMIC recovery can take place. This is the result of decades
of poor stewardship by our elected leaders and financial systems who have led/
used their respective BANKING fiefdoms to their benefit rather than to build
and maintain societies at large. Bankers at most levels have become undisguised
PREDATORS on the private sectors and citizens with the BLESSINGS of whatever
government holds power in the respective country.
"Insanity in individuals is something rare-but in groups, parties, nations,
empires and epoch's, it is the rule." ~ Friedrich Nietzsche
Globally REFLATION is the order of the day as CENTRAL BANKS fund insolvent
elites, crony capitalists, banking systems and governments. To give you a glimpse
of the absurdity the Bank of Japan and Federal Reserve are printing out of
thin air approximately, $59,737 dollars per second, $3.584 million per minute,
$215.053 million per hour, $5,161.290 million ($5.161 billion) per day & 160,000
million ($160 billion) per month & 2 million million dollars ($2 Trillion)
over the next year.
"The best way to destroy the capitalist system is to debauch the currency.
There is no subtler, no surer means of overturning the existing basis of
society than to debauch the currency. By a continuing process of inflation,
governments can confiscate, secretly and unobserved, an important part of
the wealth of their citizens. The process engages all of the hidden forces
of economic law on the side of destruction, and does it in a manner that
not one man in a million can diagnose." - John Maynard Keynes, 1920
Japan and the US are planning on increasing their respective monetary bases
50 to 100% in the next year:
This is a 92% year over year rate of change commencing about January 1, 2013
(thank you Bert Dohmen of the Wellington letter, www.dohmencapital.com I
highly recommend it). This number will be WELL OVER $4 trillion dollars early
next year. This is why the nominal economy is not crashing under the poor/destructive
economic policies of developed world socialists.
Incredibly, this probably is not enough to RESCUE the sovereign and financial
systems of the respective countries. Fiat currency and credit financial systems
DIE in waves of insolvency and print/borrow their way to worthlessness. As
each wave unfolds it is met with something out of nothing FAKE MONEY printed
out of thin air until the populations REVOLT against the monetary/economic
monopolists aka socialists in disguise.
I PREDICT this will be INCREASED by a factor of 2 over the next YEAR as the
Bank of England, China and ECB hit the gas pedals or their governments, credit
dependent economies and banks will sink into the abyss of systemic insolvency.
Quoting the Oracle of Omaha:
"I feel sorry for people that have clung to fixed-dollar investments,...Bernanke
had tough choices to make, but he decided to step on the gas pedal, in terms
of monetary policy, and he brought down rates to virtually unheard of levels,
and kept them there. And he's still got his foot on the pedal and that really
does hurt savers. It has made it extremely difficult for all kinds of people
who live on fixed-income investments," ~ Warren Buffet
The ECB president is aiming to join the fray as yesterday in Italy he said
this (thanks to the Gartman letter www. thegartmanletter.com for this quote):
"For the southern European countries, a Euro above 1.30 would be too high
for their economies. Among major central banks, the ECB is not expanding
its balance sheet, but it likely to consider such a step" ~ Mario Draghi
That's a PROMISE from the ECB. For people trying to store wealth in paper
think: the killing fields of Cambodia directly ahead. They have been and are
going to be SLAUGHTERED and their wealth transferred to the government and
financial systems to fund their MORAL and FISCAL insolvency!
ALL Government policies are political solutions to practical problems. Designed
to consolidate and grow GOVERNMENT/ financial system control of economies rather
than foster ECONOMIC growth. The verdict in the minds of those who must create
the ECONOMIC growth (entrepreneurs) to end the global financial crisis is NO
MAS (No more)! Investment in the future has and will continue to COLLAPSE!
We are now going to take a trip into George Orwell's: 1984 and Animal farm.
Where white is black and truth is fiction. Something for nothing societies
are in full roar seeking something for nothing, believing this fairy tale and
never having enough.
It's been almost 5 years since the Global Financial crisis began and we are
still looking for REFORM of GOVERNMENT policies which discourage, penalize
and prohibit economic RECOVERY. Would someone please show me just ONE new policy
that rewards prudence, hard work, risk taking, personal responsibility, reduces
costs of production, self-sufficiency, hiring new workers? Just one?
...
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