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Well, 2019 is here and it’s time to consider what sort of growth is possible. Speaking from a macro’est viewpoint, it’s helpful to acknowledge that 90% of the wealth/ income/ savings and nearly 90% of global energy is consumed by the high and upper middle income nations of the world (those with per capita incomes ranging from nearly $90k/yr all the way down to $4k/yr). This is the high income nations of the US/Canada, most of the EU, Japan/S. Korea, Aus/NZ, etc. plus the upper middle income nations of China, Russia, Mexico, Brazil, Turkey, Thailand, Iran, etc (as defined by World Bank…previously detailed HERE). In 2019, this represents about 3.85 billion of earths approximate 7.7 billion population…or about half of earths population (50% consume 90%, while the other 50% consume just 10%).

So, let’s examine the primary fuel source available in 2019…the growth among the 0 to 69yr/old global consumer population. The blue line in the chart below shows the total 0 to 69yr/old population which includes the potential working age population (20 to 69yr/olds?) and child bearing population (15 to 45yr/olds) versus the annual change in that population (red columns). Astute chart watchers will note that population growth has decelerated by 30 million annually, a 75% reduction, since the 1988 peak. 2025 is the year growth ceases entirely and by 2035 this population is estimated to be declining by <10> million annually.

Consider that upon the completion of every business cycle since 1960 and onset of recession, (highlighted by the blacked out columns in the chart below), there was still significant growth (fuel) among the global consumer population. That population growth coupled with the Federal Reserves rate cuts and federal governments stimulus restarted not just domestic but global economic growth. The macro population cycle among the global high/upper middle income nations consumer base expanded anywhere from 30 to 40 million persons annually from 1960 through 1990, but growth slowed to about 20 million annually from 1995 though 2015.

…click on the above link to read the rest of the article…

Three Things That Will Definitely Happen In 2019

January 4, 2019

Three Things That Will Definitely Happen In 2019

Much about 2019 is uncertain. But a few things are pretty much guaranteed, including the following:

Government debt will rise at an accelerating rate
Like a life-long dieter who finally gives up and decides to eat himself to death, the US is now committed to trillion-dollar deficits for as far as the eye can see. And that’s – get this – assuming no recession in the coming decade. During the next downturn that trillion will become two or more, but in 2019 another trillion-plus is guaranteed.

But the US debt binge is downright orderly compared to much of the rest of the world.

After Paris nearly burned to the ground last month, president Macron responded – surprise! – with massively higher spending:

Macron Bets Spending Binge Can Save His Plan to Transform France

(Bloomberg) – Emmanuel Macron is rolling the dice with France’s public finances to keep his grand plans for the economy alive after weeks of protests on the streets.

Macron’s government will set out a raft of measures to try to calm the so-called Yellow Vest protests on Thursday and they will almost certainly see France breach the European Union’s budget deficit ceiling next year.

The 40-year-old president is arguing the concessions are necessary to maintain public support for his efforts to make the economy more efficient.

“Macron is now facing an impossible trilemma,” said Bernhard Bartels, associate director at Frankfurt-based Scope Ratings. “You can’t have have popular support, ongoing structural reforms and fiscal consolidation all at the same time.”

Macron’s announcement Monday that he’ll raise the minimum wage, abolish taxes on overtime, and get rid of a controversial tax on pensions will send next year’s budget deficit to about 3.5 percent of output, up from a previous target of 2.9 percent, according to media reports. That’s well beyond the 3 percent limit imposed on members of the euro zone.

…click on the above link to read the rest of the article…

The “Stock Market Crash Of 2018” Is Rapidly Transforming Into “The Financial Crisis Of 2019”

January 4, 2019

The “Stock Market Crash Of 2018” Is Rapidly Transforming Into “The Financial Crisis Of 2019”

Stock markets are crashing all over the world, we are seeing extremely violent “flash crashes” in the forex marketplace, economic conditions are slowing down all over the globe, and fear is causing many investors to become extremely trigger happy. The stock market crash of 2018 wiped out approximately 12 trillion dollars in global stock market wealth, but things were supposed to calm down once we got into 2019. But clearly that is not happening. After Apple announced that their sales during the first quarter are going to be much, much lower than previously anticipated, Apple’s stock price started shooting down like a rocket and by the end of the session on Wednesday the company had lost 75 billion dollars in market capitalization. Meanwhile, “flash crashes” caused some of the most violent swings that we have ever seen in the foreign exchange markets…

It took seven minutes for the yen to surge through levels that have held through almost a decade.

In those wild minutes from about 9:30 a.m. Sydney, the yen jumped almost 8 percent against the Australian dollar to its strongest since 2009, and surged 10 percent versus the Turkish lira. The Japanese currency rose at least 1 percent versus all its Group-of-10 peers, bursting through the 72 per Aussie level that has held through a trade war, a stock rout, Italy’s budget dispute and Federal Reserve rate hikes.

This is the kind of chaos that we only see during a financial crisis.

Investors are also being rattled by the fact that China just experienced its first factory activity contraction in over two years…

The People’s Bank of China said on Wednesday evening it had relaxed its conditions on targeted reserve requirement cuts to benefit more small firms.

…click on the above link to read the rest of the article…

2019: The Beginning Of The End (Free Premium Report)

January 2, 2019

2019: The Beginning Of The End (Free Premium Report)

What will happen next & what to do now

Welcome to our new readers and a very Happy New Year to everyone!

Now that it’s 2019, we’re going to start the new year here at Peak Prosperity by responding to the wishes of our premium subscribers and making our most recent premium report free to everyone.

For those unfamiliar with our work, it’s based on the idea that humanity is hurtling towards a disaster of our own making. Several powerful and unsustainable trends are all converging towards an ever-narrowing gap in the future.

Because of this, the individual and collective choices we make today take on ever-increasing importance. Our collective choices — around such issues as rampant money-printing by central banks, the failure to wean ourselves off of fossil fuels, and tossing an entire younger generation under the bus because that’s most convenient for an older generation afraid of living within its actual means — are all pointing to a diminshed and disappointing future. We need to make better choices that align ourselves with these (and many other) looming realities.

This is our work here at Peak Prosperity.

For ten years now, we’ve been pointing out the many predicaments society faces. And we will continue our vigilance. No because we enjoy crisis, or that we relish delivering hard messages, but because these are the times in which we live — and those, like you, who are awake to reality, need unvarnished facts and data to make informed decisions.

So we offer to you, today, a peek behind our premium subscription curtain. The people who subscribe to our work do so to make themselves more resilient, as well as to support Peak Prosperity financially as we carry on our mission of “Creating a world worth inheriting”, which invoves bringing difficult messages to reluctant audiences.

…click on the above link to read the rest of the article…

2019 MARKET MELTDOWN: What The New Year Brings

January 1, 2019

2019 MARKET MELTDOWN: What The New Year Brings

If history is our guide, we are on track for a severe market meltdown in 2019. While the U.S. broader indexes remained in record territory for most of 2018, December turned out to be a complete disaster for stocks. So, even though the markets have reversed higher from their Christmas Eve lows, this is nothing more than a bear market rally.

It’s really that simple. Thus, all the hype about “Fed Market Rigging” to push the markets up a record 1,000 points following the Christmas Eve massacre, becomes white noise as markets always correct higher after a massive selloff, with or without the Plunge Protection Team (PPT). Furthermore, the notion put forth by members of the Alt-Media suggesting that the Fed rate hikes will cause another market crash, and wealth transfer makes no sense in an EROI Collapse (Energy Returned On Investment).

As the EROI of the oil industry falls even lower with the addition of oil sands and shale oil, there will come a time when the economy and market will disintegrate due to a lack of profitable net energy. In this future net-energy-starved economy, most ASSETS will become LIABILITIES. So, the lousy conspiracy that the Fed is using their “rate hike policy” for the “grand elite wealth transfer,” needs to be thrown in the waste-bin for good.

Folks, it’s time to stop focusing on lousy conspiracies and figure out what you are going to do when energy becomes a real problem.

Unfortunately, hype and conspiracies sell a lot of books and subscriptions because they are more exciting than facts, data, and information. It seems to me that a large number of the Alt-Media followers are being misled just as much as their Mainstream media counterparts. However, they don’t realize it… LOL.

Okay, let’s get back to the 2019 Market Meltdown.

…click on the above link to read the rest of the article…

A Couple of Thoughts on 2019

January 1, 2019

A Couple of Thoughts on 2019

The story of the 21st century is debt is soaring while earned income is stagnating for the bottom 95%.

Best wishes to all my readers and correspondents for a safe, healthy and productive 2019. Thank you, longstanding supporters, for renewing your financial support at the new year without any pathetic begging on my part. (The pathetic begging will commence shortly.)

While I don’t have any predictions for 2019 (why look any dumber than I have to?), I do have a couple of thoughts on the economy, markets, globalization, etc. Here are a few of the key issues confronting humanity:

1. The war being waged by Corporate Power (Globalization / Open Borders) to eradicate democracy and the power of nation-states to control their own destiny. Democracy ceases to exist in a corporate-controlled globalized system of governance; the sole structure that enables a citizen to have political and economic agency is the nation-state.

Try voting for a U.N. resolution or E.U. regulation. Sorry, pal, there are no elections or representation of the rabble in globalized governance. Globalization destroys democracy and the agency of the citizenry. That’s its goal.

Global corporations seek to destroy any and all barriers to their power and profits, and globalization / tax havens / Open Borders are the means to co-opt, marginalize and neuter nation-states and the political and economic agency of the citizenry. The net result of Corporate Power controlling the machinery of governance is neofeudalism.

2. Energy and capital flows. The status quo holds that energy flows don’t matter very much because energy represents a shrinking percentage of economic activity. In other words, capital is what matters, not energy, because capital can always buy whatever it wants.

…click on the above link to read the rest of the article…

Forecast 2019: Ding Ding ! Margin Call USA

January 1, 2019

Forecast 2019: Ding Ding ! Margin Call USA

Welcome to the American hall of mirrors… and mind the broken glass all over the floor. That’s Nature’s way of saying the country has run out room to punk itself. 2018 was the consolidation of bad faith in everything we do: politics, the news media, economics & finance, show biz, regular biz, jurisprudence, medicine, education, and relations between men and women — the year of peak dishonesty and self-deception. Of course, the trouble with dishonesty is that it doesn’t comport with Reality, and Reality being Mother Nature’s husband, bats in the cleanup position. Entering 2019, the bases are loaded with delusions, misdirections, and turpitudes. I shall get right to it without further throat-clearing.

Trumpology

The nation’s focus remains clamped to the mercurial character in the White House. If you subscribe to Strauss and Howe’s theories about The Fourth Turning, then you might see president Donald J. Trump playing the archetypal role they call “The Gray Champion,” an elder figure of the “transcendental” Boomer generation sent by fate to rescue a floundering society at a grave moment in the seasons of history. Yes, I know: we might have been better off calling Ghostbusters. A cardinal precept at this blog is that fate is a trickster. You order a Gray Champion and room service sends up a Golden Golem of Greatness.

To put it mildly, Mr. Trump has failed to charm at least half the country. They are embarrassed at his physical presence: his lumbering gait, like unto a behemoth land mammal of the Oligocene; that swaying bay window stomach half-concealed by the flaps of his suit-jacket and bisected by the oddly elongated necktie; the pained smile he puts on for the photo-ops; his man-spreading when seated with the world’s poohbahs, and that strange confection of sculpted hair, like the spun sugar on a Croquembouche, or the pouf on some horrifying plastic dashboard figurine.

…click on the above link to read the rest of the article…

2018 Was The Worst Year For The Stock Market Since The Financial Crisis Of 2008

January 1, 2019

2018 Was The Worst Year For The Stock Market Since The Financial Crisis Of 2008 Now that the year is finally over, we can officially say that 2018 was the worst year for stocks in an entire decade. Not since the last financial crisis have we had a year like this, and many believe that 2019 will be even worse. And of course the truth is that stocks are still tremendously overvalued. Stock valuation ratios always return to their long-term averages eventually, and if the Dow Jones Industrial Average plunged another 8,000 points from the current level that would begin to get us into that neighborhood. Unfortunately, the system is so highly leveraged that it will not be able to handle a price decline of that magnitude. The relatively modest drops that we have seen already have caused a tremendous amount of chaos on Wall Street, and a full-blown meltdown would quickly result in a nightmare scenario potentially even worse than what we experienced in 2008.

For investors that had become accustomed to large gains year after year, 2018 was a brutal wake up call. The following comes from Fox Business…

2018 may be remembered as the year the Grinch stole your retirement or stock investment account.

December was the worst month for the Dow Jones Industrial Average and the S&P 500 since 1931, as tracked by our partners at Dow Jones Market Data Group. The S&P 500, the broadest measure of stocks, lost 9 percent and the Dow over 8.5 percent.

For the year, stocks turned in the worst performance since 2008.

According to the bulls, this wasn’t supposed to happen. In the middle of the year, they were projecting that a “booming” U.S. economy would continue to drive stock prices higher, but instead we just witnessed the worst three month stretch for stocks since the 4th quarter of 2008, and the month of December was the most painful of all…

…click on the above link to read the rest of the article…

Murky 2019 Could Be In Store for U.S. Economy Thanks to Fed’s Monetary Policy

December 31, 2018

murky 2019 thanks to fed

Murky 2019 Could Be In Store for U.S. Economy Thanks to Fed’s Monetary Policy

December 19 marks the day the Fed may have decided it’s going “all in” on the idea of a “strong U.S. economy.”

The Fed locked in an increase of the Federal Funds Rate from 2.25% to 2.40%, and it will increase the primary credit rate to a full 3.00%. These December increases were pretty much anticipated back in early November.

The increases came in spite of commentary by Jeffrey Gundlach from Doubleline, who said the Fed shouldn’t have raised rates:

I don’t think they should… The bond market is saying there’s no way the Fed should be raising interest rates.

From here on out, things get murky, and that uncertainty could very well set the tone for 2019.

Let’s start with the Fed’s now-infamous “dot plot,” below (sourced from their December projections document):

fomc dot plot

As you can see in the “dot plot” above, chances are Federal Fund rates will be soaring over 3 percent in 2019. In 2020, there is still a good chance rates will soar even higher, nearing 3.75 percent. It also looks as though rates will stay at or above 3 percent for the foreseeable future.

That means credit is about to get (and stay) more expensive. Growth is likely to slow down, and the cost of commodities could rise dramatically.

In fact, according to the Bureau of Labor and Statistics, food and most energy prices are already on the rise (emphasis ours):

Food prices increased 1.4 percent for the year ended November 2018. Prices for food at home increased 0.4 percent, while prices for food away from home rose 2.6 percent. In November 2018, prices for cereals and bakery products rose 1.3 percent, the largest 12-month increase among the six grocery store food groups.

…click on the above link to read the rest of the article…

The Recline and Flail of Western Civilization and Other 2019 Predictions

December 31, 2018

The Recline and Flail of Western Civilization and Other 2019 Predictions

Darts in a Blizzard

Today, as we prepare to close out the old, we offer a vast array of tidings. We bring words of doom and despair. We bring words of contemplation and reflection. And we also bring words of hope and sunshine.

Famous stock market investment adviser Field Marshal D. Trump [PT]

After all, the New Year’s nearly here. What better time than now to turn over a new leaf? New dreams, new directions, and new delusions, are all before us like a patch of ripe strawberries. Today’s the day to make a double-fisted grab for all of them – and more.

Rest assured, 2019 will be the year that everything happens precisely as it should. Some good. Some bad. Indeed, each day shall unfold before you in symbiotic disharmony. You can count on it.

But what else? What are the essential anticipations as we embark on a new voyage around the sun? What about stocks, the 10-Year Treasury note, gold, and everything else? Are we fated for complete societal breakdown? Will this be the year the Fed put finally bites the dust?

Today we attempt to answer these questions – and many others – with meekness and modesty. Predicting the future, like Fed monetary policy, is primarily guesswork. But unlike the Fed, we acknowledge we’re merely throwing darts in a blizzard.

By all accounts, our methodology is as unscientific as prophecy via tarotology. We shun common forecasting techniques for a conjectural approach. First, we engage all matters of fact, fiction, fakery, and fraud. Then, through induction, deduction, biased interpolation, gut check filtration, and metaphysical reduction, we arrive at precise, unequivocal answers.

…click on the above link to read the rest of the article…

This Is Exactly The Kind Of Behavior That You Would Expect During A Stock Market Implosion…

December 28, 2018

This Is Exactly The Kind Of Behavior That You Would Expect During A Stock Market Implosion…

If a doctor tells you that his patient’s condition is swinging up and down wildly, is that a good sign or a bad sign? Of course the answer to that question is quite obvious. And if a doctor tells you that his patient’s condition is “stable”, is that a good sign or a bad sign? Just like in the medical world, instability is not something that is a desirable thing on Wall Street, and right now we are witnessing extreme volatility on an almost daily basis. On Thursday, the Dow was already down several hundred points when I went out to do some grocery shopping with my wife, and at the low point of the day it had fallen 611 points. But then a “miracle happened” and the Dow ended the day with an increase of 260 points. As I detailed yesterday, this is precisely the sort of behavior that you would expect during a chaotic bear market.

As Fox Business has noted, bear market rallies are typically “sharp, quick and usually short”. I figured that the momentum from Wednesday would carry over into the early portion of Thursday, so I was surprised when the Dow was down by so much as we neared the middle of the day. But then around 2 PM we witnessed an extraordinary market surge…

The Dow Jones Industrial Average posted a 865-point swing in less than two hours. The blue-chip index had been down in mid-afternoon more than 500 points to cut the previous session’s gains in half, before bargain hunters and short covering turned a big decline into a modest gain.

An 865 point swing in less than two hours is not “normal”.

…click on the above link to read the rest of the article…

U.S. Stocks Just Had Their Best Day Ever – And Here Is Why That Is A REALLY Bad Sign…

December 27, 2018

U.S. Stocks Just Had Their Best Day Ever – And Here Is Why That Is A REALLY Bad Sign…

The Dow Jones Industrial Average just posted its biggest single day point gain ever. On Wednesday, the Dow shot up 1,086 points, which shattered the old record by a staggering 150 points. It truly was a remarkable day, and this is the sort of “Santa Claus rally” that investors had been hoping for. Many are convinced that this rally is an indication that the crisis of the last three months is over, but as you will see below, this sort of extreme volatility is actually a really bad sign. But for the moment, the mainstream media is pushing the narrative that everything is once again peachy keen in the financial world. Just consider the following quote from CNN…

“Investors went bargain shopping the day after Christmas, where stocks just got too cheap relative to earnings, future earnings, any reasonable assessment of earnings,” said Chris Rupkey, managing director of MUFG. “The coast is clear, back up the truck, investors are saying enough already, the world is not ending.”

The coast is clear?

Really?

Do you think that they were saying the same thing on October 13th, 2008? On that day, the Dow Jones Industrial Average rose 936 points, and at the time it was the biggest daily point increase that Wall Street had ever seen by a very wide margin.

Of course that was right in the middle of the last financial crisis, and stocks just kept on tumbling after that massive rally.

But then on October 28th, 2008 the Dow Jones Industrial Average rose 889 points. Up until Wednesday, that was the second biggest daily point increase in U.S. history.

Was the crisis over then?

No way. Subsequently, the Dow kept on falling until it eventually bottomed out in early 2009.

…click on the above link to read the rest of the article…

GOLD, SILVER & THE MARKETS: What’s Next For 2019

December 6, 2018

GOLD, SILVER & THE MARKETS: What’s Next For 2019

The big question on the minds of most investors is what will happen to the markets and precious metals in 2019. Well, the answer depends mainly on two factors, the oil price and overall weakness in the economy. If the oil price continues to decline, it will indicate a deflationary outcome for the economy and markets.

While this sounds counter to the notion that falling oil prices will drive higher consumer demand, we also must remember that it will negatively impact the U.S. shale oil industry. A lower sustained oil price, as I wrote about in my previous article, IT BEGINS… Rapidly Falling Oil Prices First Guts Tar Sands, Then Shale Oil will begin to destroy the oil industry, especially the unconventional oil industry. I don’t believe Americans or the investors realize the tremendous amount of economic activity it takes to produce shale oil.

Now, the last U.S. economic bubble in 2007-2008 was based on a highly leveraged housing market. However, the present economic bubble is being propped up by the U.S. Shale Oil Ponzi Scheme. Some energy analysts don’t believe the U.S. shale oil industry has that much of an impact on the market, but I disagree. Since the 2008 market crash, the U.S. shale oil industry has brought on nearly 7 million barrels per day (mbd) of tight oil. U.S. oil production has surged from 5 mbd in 2008 to 11.7 mbd currently.

So, to understand what happens to the markets in 2019, we need to focus on the number one driver of the economy… THE OIL PRICE. In my most recent video, GOLD, SILVER & MARKETS: What’s Next For 2019, I discuss what is taking place in the broader markets, gold-silver, and the oil price:

…click on the above link to read the rest of the article…

The Psychological Bubble That Has Been Propping Up The U.S. Economy Is Starting To Implode

December 4, 2018

The Psychological Bubble That Has Been Propping Up The U.S. Economy Is Starting To Implode

Optimism can be a very powerful thing. For a long time Americans believed that things would get better, and that caused them to take action to make things better, and that actually resulted in things moving in a positive direction. But now things have abruptly shifted. In late 2018, an increasing number of Americans believe that an economic downturn is coming, and they are taking actions consistent with that belief. As a result, they are actually helping to produce the result that they fear. And without a doubt, any rational person should be able to see that signs that the U.S. economy is slowing down are all around us. So it isn’t as if those that are preparing for the worst are being irrational. It is just that when large numbers of people all start to move in the same direction, it has a very powerful effect. We witnessed this in the stock market in recent years when people just kept buying stocks even though they were massively overvalued. The collective belief that there was money to be made in the stock market became a self-fulfilling prophecy which pushed stock prices up to absurd heights. But now that process is beginning to reverse as well, and ultimately the unwinding of that bubble will be quite painful.

Over the past couple of years the dominant economic narrative that the mainstream media was pushing was that the U.S. economy was “booming”, and this encouraged businesses to expand and consumers to go out and spend money.

But now the dominant economic narrative has changed, and businesses are starting to take actions that are consistent with the new narrative.

…click on the above link to read the rest of the article…

Australia’s Economy Is A House Of Cards, Set For Sharp Downturn In 2019

November 23, 2018

Australia’s Economy Is A House Of Cards, Set For Sharp Downturn In 2019

Damien Boey, a research analyst at Credit Suisse, has warned that economic growth in Australia could slow quite sharply next year, raising the prospect that a slowdown could be immient.

Boey expects the recent growth spurt driven by strong infrastructure investment, could fade in the first half of 2019, and the risks associated with housing construction and household spending from the downturn in real estate could signal that the Reserve Bank of Australia’s rate hike cycle would have to be put on hold.

“Our view is that the economy is overshooting,” Boey said.

“We believe that growth will eventually slow as timely leading indicators [such as PMIs] are suggesting.”

Boey said infrastructure investments had driven the recent surge in economic activity.

“We think that the [economy] is still being supported by infrastructure,” he said.

“The latest Access Economics data for Q3 suggest that growth in the stock of infrastructure spending has re-accelerated. And recently, project spending growth has been remarkably positively correlated with the cycle in domestic demand.”

While actual infrastructure investment has been substantial, Boey did not expect the trend to last due to the lack of new projects in the pipeline.

“In 2018 to date, actual project spending growth has accelerated, even as the project pipeline has thinned out,” he said.

“It is in this sense that we think infrastructure spending growth has been overshooting, contributing to the overshooting we are also seeing in domestic demand growth relative to leading indicators,” Boey added.

“However, the more growth in spending we experience today, the more we also eat into future growth, unless policy makers are able to adequately top up the project pipeline.

“As the saying goes, ‘serenity now, insanity later’.”

…click on the above link to read the rest of the article…

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