Part one discussed the “what” and “why” of unpayable debt, an inevitable “reset” or the end of the current financial world. Part two addresses when.
REVIEW FROM PART ONE
- A risk/reward analysis for 2018—202? points toward gold and silver, not stocks, bonds, corporate debt, student loans or most asset classes.
- The “everything bubble” will burst. Consequences will be dire for many individuals, businesses and governments.
- Debt and spending are “out of control.” Central banks will “paper over” massive defaults, and fiat currencies will devalue.
- Hyperinflation, defaults and resets occurred in many countries and could (will) happen in developed countries such as the U.S.
- Rig for stormy weather! Gold and silver bullion and coins are “insurance” against the inevitable currency devaluations that must occur in our debt based fiat currency systems.
The global economy carries debt of about $250 trillion, an impossible sum to repay, which suggests default, devastating inflation, and probably both.
A reset may occur as a series of rolling debt defaults, stock and bond market crashes, and/or hyperinflation—South American style. Unbacked fiat currencies and over-valued stock markets are likely to crash. The reset could also happen as a slow moving default and credit crunch that progresses from the periphery—Turkey, Iran, Venezuela, Argentina—to Europe, Japan and the United States. Or, it may be a global reset that occurs within a few days.
WHAT OTHERS SAY
From Jim Sinclair and Bill Holter. (Heed their experience, wisdom, and intelligence.)
“Contagion is on its way in the currency market. When is now.”
From Bill Bonner:
“Fed policy always consists of the same three mistakes.
- Keeping interest rates too low for too long, resulting in too much debt.
- Raising interest rates to try to gently deflate the debt bubble.
- Cutting rates in a panic when stocks fall and the economy goes into recession.”
“… printing money—lots of it—to cover soaring deficits… save the bankers… reward the cronies…” [When mistakes one, two and three have failed.]
From Charles Hugh Smith: “The Global Financial System Is Unraveling.”
“… a great many currencies around the world are in complete meltdown. This is not normal. Nations that over-borrow, over-spend and print too much of their currency to generate an illusion of solvency eventually experience a currency crisis…” [Venezuela, Argentina, Japan, Europe, U.S. etc.]
“The fact that so many currencies are melting down at the same time is telling us the global financial system is unraveling, and unraveling fast.” [When is now!]
“The belief that U.S. markets are somehow disconnected from global markets and immune to the repricing of risk, debt, assets and currencies is magical thinking.” [It can happen here.]
“JPMorgan suggests the next financial crash may be so cataclysmic that the Federal Reserve may have to enter the market to buy up stocks…” [Save the 1%.]
From Bill Holter:
“Can the country survive without borrowing” Can the financial system survive without the life support policies fostered by the central bank?”
From Alasdair Macleod:
“Change will only come for the ultimate collapse of a system that promotes interests over freedom.” [The collapse of the deep state, if it happens, will be traumatic.]
“China could easily have accumulated a strategic reserve of 20,000 tonnes [of gold] before the public was authorized to acquire gold… We do know that in addition to the state’s accumulation, some 17,000 tonnes have been withdrawn from SGE vaults by the general public.”
[Supposedly Fort Knox contains 4,500 metric tons of gold, unaudited since the 1950s. That gold is probably as real as congressional integrity…]
“The next credit crisis, itself an event of which we can be sure, will almost certainly be met with lower interest rates and more quantitative easing.” [and dollar devaluation]
“… the yuan and the ruble, will not survive in their current form. They will have to be backed by gold… America could save the dollar by following suit… but to do so requires her to abandon almost everything the government and the Fed currently believe…” [The Fed will do the “right thing,” only after all alternatives have failed…]
From Gains, Pains and Capital:
“The Fed has burst the Everything Bubble… [by raising interest rates]
“… capital is moving into the US propping up our markets, while the rest of world collapses.” [Disaster moves from the periphery toward the center.]
From The Motley Fool: “6 Signs the next Recession might be closer than we realize”
- “The unemployment rate will push lower. [via the power of statistical manipulation]
- The yield curve is flattening. [sign of recession]
- Inflation has begun picking up. [Fed statistics show rising inflation.]
- Home sales are beginning to decline in key markets. [remember 2008]
- Credit card debt and late payments are on the rise. [I wonder why.]
- The economic cycle suggests a correction.” [Bull markets driven by trillions of funny money don’t last forever.]
From Bill Bonner:
“… a credit deflation… with falling stock prices and a recession—is inevitable. Every credit-fueled boom eventually runs out of gas… and then turns into a bust.”
“… $69 trillion worth of debt hanging over the U.S. economy… wouldn’t exist with honest money or honest interest rates. And it will go away—along with the asset prices, businesses, and lifestyles it supports—when the credit bubble pops.”
Repeat: From Jim Sinclair and Bill Holter.
“When is now.”
[thanks to central bank policies, mis-priced risk, artificial interest rates, overwhelming debt, and QE]
A reset is inevitable, probably soon. Many signs show we are at the end of the credit cycle. A reset has begun in other countries.
Jim Sinclair thinks the world will be very different by June 2019. It’s almost certain that most or all of the following will occur in several years.
- Economic recessions, stock and bond market corrections and crashes.
- Central bank printing, more QE, bank bailouts, pension fund bailouts.
- Currencies, including the U.S. dollar, will be worth less.
- Commodity prices will fly higher as central banks devalue currencies.
- Global debt of $250 trillion will increase, perhaps correct, and then surge much higher as QE, bailouts, emergency measures, defaults and other “corrective measures” are used. [Save the big banks, but everyone else is expendable.]
- Politicians will promise to “do something” besides collecting payoffs.
- Universal Basic Income (UBI) and other nonsense will be considered.
- A reset will crash into the U.S. from other countries and shock most people.
- Winter is coming!
From Ted Butler:
“We are locked and loaded for an upside move of great significance in gold and silver.”
Miles Franklin will recycle dollars from over-valued stock markets into real money—gold and silver. The conversion is important because some stocks sell at all-time highs while gold and silver prices are low.