by Weiss Ratings. www.weissratings.com
The early stages of what will be the most severe and painful financial crisis in U.S. history is now underway.
That’s according to a top analyst with The Edelson Institute — the financial think-tank with a remarkably accurate track record for calling major economic shifts.
They called the gold rally in 1999 (before the metal soared 533%) and the top of the gold market in September of 2011.
They also called the stock market crash in 1987 as well as the real estate crash in 2007.
Their secret to spotting major reversals ahead of the crowd is a proven system that was developed by a little-known presidential advisor after the Great Depression. It has since predicted every major market move for the last 50 years with incredible accuracy.
And today it’s foreshadowing one of the worst financial crises we’ve ever seen. The Dow’s recent 2,000-point plunge was just a taste of what lies ahead.
See the proof for yourself.
No fewer than three of the most powerful economic waves in existence are now converging in a way that hasn’t been seen since 1929.
And they are warning of a great unraveling that is about to explode into the headlines.
Cycle #1 shows that businesses will hoard cash ... create fewer jobs ... and stop reinvesting in business growth. And by doing so, will help drag the economy to a near-standstill.
Cycle #2 indicates that consumers, shaken by weak job growth and plunging household income will pull back too, leading to slower business formation and slower inventory turnover.
Cycle #3—which predicted both the Great Depression and the 2008 Great Recession—shows a coming period of massive economic pain including an ever-weaker economy, chronic unemployment, soaring interest rates, massive defaults on public and private debt and more.
Sound familiar? It should, because the evidence is clear that we have already entered the early stages of these unstoppable cycles.
Deutsche Bank identifies several possibilities that could the trigger a new financial crisis.
1. China is the world's second-biggest and fastest growing economy. It suffers from rapid credit expansion due to an insatiable demand for debt-fuelled growth, compounded by a hugely active shadow banking system, as well as a property bubble. A collapse would send shockwaves through the world’s financial markets.
2. Japan, the world's 3rd-largest economy, fails to grow with any real strength. It must try to manage large budget deficits, and the highest public debt ratio in the developed world at a time when the population is falling and ageing with obviously fewer and fewer workers to pay the bills and more and more elderly to try to support.
3. Brexit. Although a crisis looks unlikely now, so did WWII when relevant financial precursors were similar. Investors expect a deal to be struck, but if it goes wrong it could create a financial collapse across Europe.
4. Italy's unstable political and economic situation: its rise of populism with the comedian-activist Beppe Grill leading the 5 Star Movement. If the movement gains power it could destabilize the country's international position. Italy debt to GDP pile is 133%, the second highest of any eurozone country, 4th highest globally. Its domestic banks have suffered greatly over the last few years having suffered poor management, fraud, and corruption.
5. Markets and investment vehicles have changed. An ETF is a passive fund which tracks an index and seeks to outperform a given index through frequent buying and selling of individual investments. Growing numbers of investors opting to invest in ETFs rather than actively-managed funds, which are associated with higher fees and have offered lower returns over the last decade. They can distort the markets by encouraging investors to put money into big companies — simply because they're big names — regardless of their market fundamentals. ETFs cause markets to be more reactive and have less resilience.
6. The rise of populism. Britain’s exit process from the EU, Donald Trump’s presidency in the US, and Emmanuel Macron's presidency in France indicate a rise in populism. While it hasn’t yet destabilized financial markets, the level of uncertainty will remain high with such power brokers. Prior to the last decade, the only comparable rise in populism started in the 1920s and culminated in WWII. The rise increases the risks to the current world order and could set off a financial crisis at some point soon.
7. The "Great Unwind" - Central banks around the world are pulling back from the incredibly loose monetary policy that has characterized the years since the last crisis. In the USA, the Fed has increased rates and is beginning the unwinding of its balance sheet, in the eurozone the ECB is starting to taper QE, and in Britain, the Bank of England could be on the verge of its first rate hike in over ten years. If the unwind stalls, or central banks get cold feet ,or if the economy unexpectedly weakens, it would create unprecedented global financial instability. Governments around the world, since deregulation, are now unable to cope with or control any downturn, meaning a recession could quickly snowball into a major crisis.
I guess I could find more, but I think the point is made that serious and experienced economists with access to all the figures are agreeing that the major global economies are teetering in a position of high risk. Governments themselves no longer have control, and the global financial systems are interlinked via a complex web of private multinationals and blocks of entities with competing interests who are unlikely to want to co-operate with each other.
The wise prepper would probably aim to eliminate all personal debt and develop the means to earn and survive as independently as possible.
WM BARR . =ABSOLUTE TRASH 