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A Hard Rain’s a-Gonna Fall

Après moi, le déluge

~ King Louis XV of France

A hard rain’s a-gonna fall

~ Bob Dylan (the first)

As the Federal Reserve kicked off its second round of quantitative easing in the aftermath of the Great Financial Crisis, hedge fund manager David Tepper predicted that nearly all assets would rise tremendously in response.

“The Fed just announced we want economic growth, and we don’t care if there’s inflation… have they ever said that before?”

He then famously uttered the line “You gotta love a put”, referring to the Fed’s declared willingness to print $trillions to backstop the economy and financial makets.

Nine years later we see that Tepper was right, likely even more so than he realized at the time.

The other world central banks followed the Fed’s lead. Mario Draghi of the ECB declared a similar “whatever it takes” policy and has printed nearly $3.5 trillion in just the past three years alone. The Bank of Japan has intervened so much that it now owns over 40% of its country’s entire bond market. And no central bank has printed more than the People’s Bank of China.

It has been an unprecedented forcefeeding of stimulus into the global system. And, contrary to what most people realize, it hasn’t diminished over the years since the Great Recession. In fact, the most recent wave from 2015-2018 has seen the highest amount of injected ‘thin-air’ money ever:

Total Assets Of Majro Central Banks

In response, equities have long since rocketed past their pre-crisis highs, bonds continued rising as interest rates stayed at historic lows, and many real estate markets are now back in bubble territory. As Tepper predicted, financial and other risk assets have shot the moon.

And everyone learned to love the ‘Fed put’ and stop worrying.

But as King Louis XV and Bob Dylan both warned us, what’s coming next will change everything.

The Deluge Approaches

This halcyon era of ever-higher prices and consequence-free backstopping by the central banks is ending.

The central banks, desperate to give themselves some slack (any slack!) to maneuver when the next recession arrives, have publicly committed to ‘tightening monetary policy’ and ‘unwinding their balance sheets’, which is wonk-speak for ‘reversing what they’ve done’ over the past decade.

Most general investors today just don’t appreciate how gargantuanly significant this is. For the past 9 years, we’ve become accustomed to a volatily-free one-way trip higher in asset prices. It’s been all-glory with no risk while the ‘Fed put’ has had our backs (along with the ‘EBC put’, the ‘BOJ’ put, the ‘PBoC put’, etc). Anybody going long, buying the (few, minor) dips along the way, has felt like a genius.

That’s all over.

Based on current guidance from the central banks, “global QE” is expected to drop precipitously from here:

YoY Changes in Global QE

With just the relatively tiny amount of QE tapering so far, 2018 has already seen more market price volatility than any year since 2009. But we’ve seen nothing so far compared to the volatility that’s coming later this year when QE starts declining in earnest.

In parallel with this tightening, global interest rates are rising after years of flatlining at all-time lows. And it’s important to note that our recent 0% (or negative) yields came at the end of a 35-year secular cycle of declining interest rates that began in the early 1980s.

Are we seeing a secular cycle turn now that rates are creeping back up? Will rising interest rates be the norm for the foreseable future?

If so, the world is woefully unprepared for it.

Countries and companies are carrying unprecendented levels of debt, as are many households. Rising interest rates increases the cost of servicing that debt, leaving less behind to invest or to meet basic operating needs.

Simon Black reminds us that, mathematically, rising interest rates result in lower valuations for stocks, bonds and housing. But so far, Wall Street hasn’t gotten the message (chart courtesy of Charles Hugh Smith):

DJIIA price history

(Source)

So we’re presented with a simple question: What happens when the QE that’s grossly-inflating markets stops at the same time that interest rates rise?

The answer is simple, too: Prices fall.

They fall commensurate with the distortion within the system. Which is unprecendented at this stage.

But Wait, There’s More!

So the situation is dire. But it gets worse.

Our debt that’s getting more expensive to service? Well, not only are we (in the US) adding to it at a faster rate with our newly-declared horizon of $1+ trillion annual deficits, but we’re increasingly antagonizing the largest buyers of our debt.

This is most notable with China (the #1 Treasury buyer), whom we’ve dragged into a trade war and just announced $50 billion in tariffs against. But Japan (the #2 buyer) is also materially reducing its Treasury purchases. And not to be outdone, Russia recenty dumped half of its Treasury holdings, $47 billion worth, in a single fell swoop.

Should this trend lead, understandably, to lower demand for US Treasurys in the future, that only will put further pressure on interest rates to move higher.

And this is all happening at a time when the stability of the rest of the world is fast deteriorating.

Developing (EM) countries are getting destroyed as central bank liquidity flows slow and reverse — as higher interest rates strengthen the USD against their home currencies, their debts (mostly denominated in USD) become more costly while their revenues (denominated in local currency) lose purchasing power.

Fault lines are fracturing across Europe as protectionist, populist candidates are threatening the long-standing EU power structure. Italy’s economy is struggling to remain afloat and could take the entire European banking system down with it. The new tit-for-tat tariffs with the US aren’t helping matters.

And China, trade war aside, is seeing its fabled economic momentum slow to multi-decade lows.

All players on the chessboard are weakening.

The Timing Is Becoming Clear

Yes, the financial markets are currently still near all-time highs (or at the high, in the case of the Nasdaq). And yes, expected Q2 US GDP has jumped to a blistering 4.8%.

But the writing is increasingly on the wall that these rosy heights won’t last for much longer.

These next three charts from Palisade Research, combined with the above forecast of the drop-off in global QE, paint a stark picture for the rest of 2018 and beyond.

The first shows that as the G-3 central banks have started their initial (and still small) efforts to withdraw QE, the Global Financial Stress Indicator is spiking worrisomely:

GFSI chart

Next, one of the best predictors of global corporate earnings now forecasts an imminent collapse. As go earnings, so go stock prices:

Global EPS chart

And looking at trade flows — which track the movement of ‘real stuff’ like air and shipping freights — we see clear signs that the global economy is slowing down (a trend that will be exacerbated if oil prices rise as geologist Art Berman predicts):

Global trade chart

The end of QE, higher interest rates, trade wars at a time of slowing global trade, China/Europe weakening, EM carnage — it’s like both legs of the ladder you’re standing on being sawed off, as well all of the rungs underneath you.

Conclusion: a major decline in the financial markets is due for the second half of 2018/first half of 2019.

Actions To Take

Gathering clouds deliver a valuable message: Seek shelter before the storm.

Specifically, it’s time to:

  • Get liquid. When the rug gets pulled out from under today’s asset prices, ‘flat’ will be the new ‘up’. Simply not losing money will make you wealthier on a relative basis — it’s the easiest, least-risky strategy for most investors to prepare for what’s coming. “Cash is king” in the aftermath of a deflationary downdraft, when your dry power can be then used to purchase high-quality income-producing assets at excellent value — fractions of their current prices. And in the interim, the returns on cash are getting better for investors who know where to look. We’ve recently explained how you can now get 2%+ interest on cash stored in short-term T-bills (that’s 30x more than most banks will pay on cash savings). If you’re sitting on cash and haven’t looked seriously yet at that program, you really should review our report. With more Fed tightening expected in the future, T-bill rates are likely headed even higher.
  • Get your plan for the correction into place now. In addition to your cash, how is the rest of your portfolio positioned? Do you have suitable hedges in place to mitigate your risk? Does your financial advisor even acknowledge the risks detailed in the above article? The last thing you want to do in a market downdraft is make panicked decisions. So if you haven’t already put together a contingency plan for a 20-40%+ market drop, consider scheduling a consultation with the firm we endorse (it’s completely free).
  • Nibble into commodities. The commodities/equities price ratio is the lowest it has been in 47 years. That ratio has to correct some point soon. Much of that correction will be due to stocks dropping; but the rest will be by commodities holding their own or appreciating. While it’s true that commodities could indeed fall as well during a general deflationary rout, that’s not a guarantee — especially given that many commodities are now selling at prices close to — or in some cases, below — their marginal cost of production. The easiest commodities to own yourself, the precious metals, are ‘dirt cheap’ right now (especially silver), as explained in our recent podcast with Ronald Stoeferle. And with today’s bloodbath, they just got even cheaper. Here’s a helpful free 27-page ebook explaining ways to purchase and store gold & silver in today’s markets.
  • Assess and address your biggest vulnerabilities before the next crisis hits. Are you worried about the security of your current job when the next recession hits? Are rising interest rates causing you to struggle in deciding whether to buy or sell a home? Are you trying to come up with a plan for a resilient retirement? Are you assessing the pros and cons of relocating? Do you have homesteading questions? Are you trying to create new streams of income? Chris offers private consultations on these common questions, as well as many others. If you’re wrestling with big life decisions like these, scheduling a consultation with him can prove valuable in helping you make the best choice.

We’re lurching through the final steps of familiar territory as the status quo we’ve known for the past near-decade is ending.

The mind-bogglingly massive central bank stimulus supporting asset prices are disappearing. Interest rates are rising. It’s hard to overemphasize how seismic these changes will be to world markets and the global economy.

The coming months are going to be completely different than what society is conditioned for. Time is running short to get prepared.

Our recent report, The Breaking Point Is Upon Us, details how signs of collapse are now quickly accelerating around the world. The currency and bond markets of five major countries are now in the danger zone, as many more teeter on the edge. If you haven’t already read this report, we recommend doing so now. It drives home how important the recommended steps above are.

Because when today’s Everything Bubble bursts, the effect will be nothing short of catastrophic as 50 years of excessive debt accumulation suddenly deflates.

A hard rain indeed is gonna fall.

peak prosperity



38 Comments on "A Hard Rain’s a-Gonna Fall"

  1. Cloggie on Sat, 16th Jun 2018 7:19 am 

    G7 in Canada, the aftermath:

    DJT had some colorful things to say to his collegues:

    To Abe/Japan: you don’t have the problems I have. I can send you 25 million Mexicans, but you won’t be in office much longer after that.

    To Macron on terrorism: you should know Emanuel, all terrorists are in Paris.

    http://www.spiegel.de/politik/ausland/donald-trump-soll-emmanuel-macron-beim-g7-gipfel-beleidigt-haben-a-1213335.html

  2. MASTERMIND on Sat, 16th Jun 2018 8:09 am 

    Clogg

    Just wait till the oil runs short in a few years..And Trump is hanged from the gallows and Trump tower is burned to the ground!

    Borders are imaginary!

  3. joe on Sat, 16th Jun 2018 9:47 am 

    Depends on what you mean MM. The land border with Mexico is purely imaginative since the creation of both Mexico and the US began with European powers who didn’t really care about borders on the land they were stealing from the red – man instead they focused on swapping resources and then the US continued that when they tore away parts of Mexico from what was still more or less Spain. As for the warning about interest rates. Nothing could be more important or fundamental to the idea of built in risk to oil supplies or the economy in general. Fiat currency where the mathematical calculation of interest is derived from the base rate of almost zero is never going to last. Rates have to rise to make sure that bonds sold almost a decade ago at zero per cent can turn a profit of one or two percent when they begin to mature. Its demand for credit which is the issue. It is institutions and governments who have been hoovering up this credit to prevent their countries from collapsing economically which will be most at risk, specifically I’m thinking of Italy, Spain, Greece and Deutche Bank who have still got massive issues with bad debt and massive issues with their banks…..

    These as yet still unresolved problems coupled another round of global mass migration may indeed fuel another surge of populism or what Cloggie foolish likes to think of as a return of facism. Truth being of course that facism is here, it’s what’s causing us all our problems.

  4. BobInget on Sat, 16th Jun 2018 10:55 am 

    Inflationary pressures, still far greater than
    deflationary.

    Pumping up an already robust economy with an extra trillion $, unbalanced ‘tax cut’ assures chaos.

    I’l agree, with ‘joe’ in just about everything except
    that last sentence.
    Trump is no Mussolini. Trump couldn’t define or spell Fascism. None of the three major Fascist
    world leaders of WW2 were out to enrich themselves. One could say the same about Stalin.

    Trump is in the game to make money. He has no ideology except Queens white superiority.
    Putin, another Fascist threat, is using Trump as a ‘useful idiot’.

    If we are to have a genuine Fascist Leader it will have to an person like our current Sec of State,
    Mike Pompeo, third in line.

  5. Dredd on Sat, 16th Jun 2018 2:11 pm 

    It figures.

  6. Creedoninmo on Sat, 16th Jun 2018 3:09 pm 

    Someone finally put a time table on it. I like time tables

  7. Makati1 on Sat, 16th Jun 2018 5:55 pm 

    The current situation is the Fed’s plan, not mistake. TPTB want the Us economy leveled so that their one world goal can be reached. That also means the take down of the EU economy. I doubt that the one world thingy will succeed, but the birth pains will still be felt, even if it is stillborn.

    Seems that their plan is on track, baring a huge natural disaster … Yellowstone or another mega volcano erupting? The San Andreas or New Madrid letting lose? There are several events like these that are well overdue.

    We live in “interesting times’.

  8. DMyers on Sat, 16th Jun 2018 7:50 pm 

    Buen comento, Mak. I hope you will speak to the unspoken in your comment. You say that a huge natural disaster, i.e., Yellowstone or any number of potential volcanoes erupting, would change the planned course of TPTB.

    Isn’t it possible that TPTB have foreseen these same potential game changers and have a plan to capitalize on rather than be defeated by the said natural disasters? Just asking. Would you be willing to guarantee it as a course changer?

    There are the underground bunkers we’ve been hearing about. TPTB might have it right and survive the apocalypse. The hordes will be gone. They will have it all and believe they can go it alone. But AI will turn on them. There will be vindication of the dead.

    Just a couple of thoughts on the subject, Mak. Mainly asking if a major disruption would necessarily stymie TPTF?

  9. Makati1 on Sat, 16th Jun 2018 8:13 pm 

    DMyers, In my opinion, I would say that a Yellowstone eruption would end all plans of everyone. The world we inhabit today is nothing like that of Krakatoa or any other major event in history. We number almost eight billion on a planet that, at best can support about 1/4 that number.

    Can you imagine the deaths in the first days/weeks? Millions. Who would bury them? Disease would sweep the land as they rot and are consumed by rats, flies and other vermin.

    Plagues would sweep the land as there would be nothing to stop them. Bubonic plague exists in the Us and is only controlled by antibiotics. All of the ancient plagues are still waiting to explode again. No, I do not think even TPTB would survive a major event like that.

    We have no idea how such events might affect the world, but you can be sure, they would set off a series of events in other areas like economics, ecologies and delivery systems. TPTB are not prepared for unplanned major events. They are barely able to keep the planned ones on track. I guess we will have to wait and see.

  10. Makati1 on Sat, 16th Jun 2018 8:16 pm 

    BTW: A Yellowstone eruption could equal 100,000 nuclear bombs in energy with the corresponding nuclear winter. Can the ecology survive that? I doubt it.

    http://www.industrytap.com/supervolcanic-eruptions-as-powerful-as-100000-nuclear-bombs/10038

  11. MASTERMIND on Sat, 16th Jun 2018 8:29 pm 

    Financial catastrophe resulting from resource depletion and a debasement of value of fiat currencies. Then a 12-month window of tyranny and government lockdown on citizens, followed by a 6-month window of absolute carnage and death. Then, a period of about 6 months of slow die-off and that’s pretty much that. Oh, and starting sometime within the next 5 years or so..

    https://imgur.com/a/pYxKa
    https://imgur.com/a/rBtIrfg

  12. Makati1 on Sat, 16th Jun 2018 9:25 pm 

    MM, you really see that happening? I don’t. I see much change outside of the Western countries. Much pain for those at the top of the ladder. Not so much for those near the bottom.

    Resources: Not going to disappear over night. Food and water will still be here decades from now, just less and different. Waste will disappear.

    Money debasement will be replaced with a new system that is more controlled. Again those at the top with the most to lose, will lose it. Those farther down, not so much. Climb down the ladder now and voluntarily before it is pulled out from under you.

    A challenge, MM. Not the end of the world for the billions near the bottom of the ladder.

  13. MASTERMIND on Sat, 16th Jun 2018 10:16 pm 

    Mattis: Putin Is Trying To “Undermine America’s Moral Authority”

    https://medium.com/@caityjohnstone/mattis-putin-is-trying-to-undermine-americas-moral-authority-d16f1267f5a

    Get em Mad Dog! Putin is a dead man walking!

  14. GregT on Sat, 16th Jun 2018 10:31 pm 

    MM,

    Not to be redundant, but I’ve read most of the papers that you continue to link to ad nauseum a long time ago.

    I agree with most of the conclusions that those papers have presented, and have made plans accordingly. I will be the first to admit though, that they could be entirely wrong. Our current situation could be extended for decades into the future. I highly doubt it, but they could.

    None of the articles that you continue to link to come to the same conclusions as you have. Get a grip son, and get on with your life. If you aren’t willing to do that, please go and talk with a mental healthcare professional, and stop spamming this site with your immature, fatalistic view of life. It will come to end for all of, soon enough.

  15. Cloggie on Sat, 16th Jun 2018 11:20 pm 

    Mattis: Putin Is Trying To “Undermine America’s Moral Authority”

    https://medium.com/@caityjohnstone/mattis-putin-is-trying-to-undermine-americas-moral-authority-d16f1267f5a

    Get em Mad Dog! Putin is a dead man walking!

    As Greg observes, the article millimind links to squarly states the opposite of what millimind tries to suggest.

    medium.com makes a mockery of the idea “America’s moral authority”. All millimind is interested in is setting up the West tor a war with Russia, just like his tribe did between 1933-1941 vis-a-vis Germany. Because they want to conquer Russia, like they conquered Germany, all by 1933 design.

    Meanwhile in 2018, we have DJT in the WH. His energy policies may suck, but he accepts Russian Crimea and wanted Russia back in the G7 “in the interest of world peace” (send him to Oslo). Additionally we have a Merkel whose chancellorship could be over next week. Additionally we have an EU that is trying to find courage to jump into the power vacuum, DJT intentionally is creating, with his “America First” policy:

    https://www.rt.com/news/387313-us-losing-leadership-eu-mogherini/

    And then there is a rapidly rising China.

    Perhaps millimind, nobody gives a f* about mad dog mattis and his “moral authority”, presiding over a disintegrating country.

  16. MASTERMIND on Sat, 16th Jun 2018 11:28 pm 

    Greg

    Grow some hair on your balls..and wipe that sand out of your clit..

    LMFAO!

  17. MASTERMIND on Sat, 16th Jun 2018 11:33 pm 

    Clogg

    Areas Of The World More Vulnerable To Collapse

    Lastly, the end game suggests that the majority of countries will experience an economic collapse due to the upcoming rapid decline in global oil production.

    https://srsroccoreport.com/areas-of-the-world-more-vulnerable-to-collapse/#comment-65028

    Looks like Steve is on point! Sorry clogg your white privilege and toxic masculinity can’t save you..

    Learn to swim..

  18. MASTERMIND on Sat, 16th Jun 2018 11:44 pm 

    When the 450 nuke plants melt down and explode it will be like 1k nuclear bombs going off..This will be a full extinction event! It will be worse than any horror movie Hollywood could ever imagine…Better have an exit plan or you will be sorry..Actually i hope the people on this site don’t have an exit plan..they deserve to suffer..

  19. Makati1 on Sun, 17th Jun 2018 12:06 am 

    MM, if you are using your fantasy zombie collapse to justify your suicide, I suggest you get on with it. You will not be missed. As for those of us who live in the real world, it ain’t gonna be half as bad as you portray. At least not in most countries outside the West.

    Perspective, MM. Perspective. No one knows what tomorrow will bring and certainly are only guessing at any longer time lines. I would have expected the US to melt down years ago from debt, but, here we are. Still printing money and blowing the bubbles bigger and bigger. Maybe the government will just nationalize the oil industry and force people like you to work for food and shelter to keep it flowing? We shall see.

  20. Makati1 on Sun, 17th Jun 2018 12:09 am 

    BTW MM, I made my exit 10 years ago and have built a very comfortable life here in the Ps. It isn’t too late for you to do the same. But, the gates will slam shut and the serfs will be trapped when the SHTF. Did you know that you can earn ~$100K per year working overseas and not have to pay the IRS one cent? LOL

  21. GregT on Sun, 17th Jun 2018 3:24 am 

    “When the 450 nuke plants melt down and explode it will be like 1k nuclear bombs going off..This will be a full extinction event! ”

    Failed grade 5.

  22. Makati1 on Sun, 17th Jun 2018 3:50 am 

    Mm, a self proclaimed chemist who has no concept of physics or that nuke plants do not “explode” if left uncontrolled. They heat up and melt into the ground below. The reason it is called a “melt down”, not a “blow up”.

  23. Davy on Sun, 17th Jun 2018 5:19 am 

    Bullshit 3rd world they blow up and burn up just not a weapon grade explosion. There is hydrogen and other volatiles that explode. Both Chernobyl and Fukushima had explosions.

  24. Davy on Sun, 17th Jun 2018 5:25 am 

    “I would have expected the US to melt down years ago from debt, but, here we are. Still printing money and blowing the bubbles bigger and bigger.”

    3rd world, last I looked the US is tapering not easing. Rates are renormalizing. This is why all your Asian wonder countries are whining. It is Asia and Europe who are still printing the money. The US is now moping it up. Now if you are talking debt that is different. The US is still issuing debt. Get your facts right dummy.

  25. JuanP on Sun, 17th Jun 2018 5:45 am 

    Davy “Get your facts right dummy.”
    Says the board’s bully!

  26. Anonymouse1 on Sun, 17th Jun 2018 6:03 am 

    The exceptionalturd is not really the board bully. The board dumbass\blowhard would be more accurate. To characterize the e-turd, as a ‘bully’ elevates his status far higher than is warranted. Who knows, he might even take as a compliment of sorts.

    (He is, you know, insane after all)

  27. Davy on Sun, 17th Jun 2018 6:16 am 

    two groopie dumbasses that just said absolutely nothing as usual. Could you at least give the time and temperature. Welcome to PO dot com gutter dwellers.

  28. JuanP on Sun, 17th Jun 2018 6:24 am 

    Amouse1 “The exceptionalturd is not really the board bully. The board dumbass\blowhard would be more accurate. To characterize the e-turd, as a ‘bully’ elevates his status far higher than is warranted. Who knows, he might even take as a compliment of sorts.”

    I have always been generous. I agree with you and I do understand that Davy is completely insane, that is why I gave him a pass for years, but I decided to hit back because it is not fair that he ruined the board for everybody else, not because I think he will change. We all know he is too far gone and getting worse everyday.

  29. JuanP on Sun, 17th Jun 2018 6:26 am 

    Davy “two groopie dumbasses that just said absolutely nothing as usual. Could you at least give the time and temperature. Welcome to PO dot com gutter dwellers”

    Another abusive comment from the exceptionalist turd. Talk about saying nothing! LOL! God, he is insane!

  30. pointer on Sun, 17th Jun 2018 7:01 am 

    “A hard rain indeed is gonna fall.”

    Predictions are hard to make, especially about the future.

    It’s all much ado about nothing. Where else will oligarchs park their money safely? China? Russia? The EU? As long as the US Treasuries are perceived to be the safest investment in the world, at most we’ll just have the usual ups-and-downs. Nothing more. I’m amused by those who are awaiting collapse with baited breath. Some, like Mr. Peak Prosperity, are starting to turn blue from holding his breath.

  31. pointer on Sun, 17th Jun 2018 7:02 am 

    …bated…

  32. Davy on Sun, 17th Jun 2018 7:05 am 

    “Nomi Prins: The Central Banking Heist That Put The World At Risk”
    https://tinyurl.com/yc87qus4

    “The 2008 financial crisis was the consequence of a loosely regulated banking system in which power was concentrated in the hands of too limited a cast of speculators,” Nomi Prins tell me. “And after the crisis, the way the US government and the Federal Reserve dealt with this corrupt and criminal banking system was to give them a subsidy.”

    “Her main target in the new work is “quantitative easing” – described by Prins as “a conjuring trick” in which “a central bank manufactures electronic money, then injects it into private banks and financial markets”. Over the last decade, she tells me when we meet in London, “under the guise of QE, central bankers have massively overstepped their traditional mandates, directing the flow of epic sums of fabricated money, without any checks or balances, towards the private banking sector. Since QE began, in the aftermath of the financial crisis, “the US Federal Reserve has produced a massive $4.5 trillion of conjured money, out of a worldwide QE total of around $21 trillion”, says Prins. The combination of ultra-low interest rates and vast monetary expansion, she explains, has caused “speculation to rage… much as a global casino would be abuzz if everyone gambled using everyone else’s money”. Much of this new spending power, though, has remained “inside the system”, with banks shoring up their balance sheets. “So lending to ordinary firms and households has barely grown as a result of QE,” says Prins, “nor have wages or prosperity for most of the world’s population”. Instead, “the banks have gone on an asset-buying spree”, she explains, getting into her stride, “with the vast flow of QE cash from central banks to private banks ensuring endless opportunities for market manipulation and asset bubbles – driven by government support”. Prins describes “the power grab we’ve seen by the US Federal Reserve, the European Central Bank, the Bank of Japan and other central banks”. Using QE, she argues, “these illusionists have altered the nature of the financial system and orchestrated a de facto heist that has enabled the most dominant banks and central bankers to run the world”

    “When the asset bubble pops, the fragile financial system and the broader economic environment could be thrown into deep depression and turmoil,” she says. “That’s why the QE baton has been passed from the US to other nations, and why the central banks are so desperate to collude.”

    “What we’ve witnessed, since 2008, is the unbridled ability of the so-called people at the top to implement socialism for the banks,” Prins tells me. “If anyone had said we are going to give $21 trillion to the global banking sector, it would never have happened – so we’ve had a backdoor process instead, under the pretense it would help ordinary people.” Leaning forward for the first time, Prins ups the ante. “Well, real people don’t believe that – and they’ll believe it even less as and when we have another crash, a crash off the back of ten years of emergency measures that were supposed to fix the system.” “The issue isn’t whether this money-conjuring game can continue,” she says as she prepares to leave. “The issue is that central banks have no plan B in the event of another crisis – and that’s going to create an even more massively negative view among ordinary people towards those who see themselves as elites.”

  33. Davy on Sun, 17th Jun 2018 7:06 am 

    This lady is a good read. We need to keep this in mind when we look forward to the oil markets and the renewable transformation. These energy sectors are only as good as the economy that drives them. Many cornucopians here and many articles I see are habituations to average annual growth. The 08 crisis quickly disappeared into easing and dropping rates. We keep thinking this experiment that is relatively young can continue and with it solar panels, wind turbines, and fracking rigs. These things are economic assets that will start to slow once the economy drops into lower economic activity. We currently still have plenty of growth along with decline. The question we need to ask is will this growth stand up to decline. How many investments both real and physical and abstract and digital will survive a downturn? A down turn will happen we are just delaying it. In a finite world endless average annual growth ends.

  34. Davy on Sun, 17th Jun 2018 7:37 am 

    Trade tensions at the same time we see tapering and a massive tax cut. What could go wrong!

    “China Warns US Corporations: You Are About To Become Victims Of A Trade War”
    https://tinyurl.com/yatbysu6

    “Of course, the Chinese aren’t stupid. They know that one way to pressure Trump into backing off would be aggressively lobby US businesses with threats – both veiled and obvious – that their businesses could come to harm, or perhaps ruin, if the conflict escalates. Already, the Wall Street Journal has published a story about China’s efforts to browbeat American businesses, recounting a meeting between a group of executives and Chinese Vice President Wang Qishan that reportedly took place in late March. When a group of American executives and other global corporate chieftains met with Chinese Vice President Wang Qishan in late March, they received a stern message about the simmering U.S.-China trade conflict: If tensions escalate, buckle up. “The message was pretty clear,” said a person who attended. “A lot of companies would become victims in a U.S.-China trade war.”

  35. Anonymouse1 on Sun, 17th Jun 2018 1:10 pm 

    No one reads or pays any attention, to your cut and pastes, exceptionalturd.

  36. Davy on Sun, 17th Jun 2018 1:15 pm 

    Weasel, you just did and you are somebody.

  37. JuanP on Sun, 17th Jun 2018 1:43 pm 

    Delusional Davy “Weasel, you just did and you are somebody.”

    No, he just told you that he didn’t. He probably saw your name, scrolled down, and was amazed that you copied and pasted a whole fucking article, and kept going. I know that’s what I did.

  38. Anonymouse1 on Sun, 17th Jun 2018 3:31 pm 

    Yes, comprehension is hurd wurk for the exceptionalturd, so, he just, doesn’t bother.

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