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The concept of using the economy as a weapon is not an alien one to most people. Generally, we understand the nature of feudalism and how various groups can be herded onto centralized plantations to be exploited for their labor. Some people see this as a consequence of “capitalism,” and others see it as an extension of socialism/communism. Sadly, many people wrongly assume that one is a solution to the other — meaning they think that crony capitalism is a solution to communist centralization or that communism is a solution to the corruption of crony capitalism. The reality is that this is just another false paradigm.

What is most disturbing is that the majority of the public have no grasp whatsoever of the true solution to the problem of corrupt or totalitarian economies: free markets.

Free markets have not existed within the global economy on a large scale for at least the past 100 years. The rise of central banking has eroded all vestiges of freedom in production and trade. Crony capitalism with its focus on corporate power and monopoly has nothing to do with free markets, despite the arguments of rather naive socialists who blame “free markets” for the problems of the world. If you ever hear anyone making this claim, I suggest you remind them that corporations and their advantages are a creation of governments.

The protections of corporate personhood, limited liability, unfair taxation of small business competition and legislation shielding corporations from civil lawsuits are all generated by government. Therefore, corporations and crony capitalism are much more a product of socialist-style systems, not free markets.

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

These 8 Red Flags Warn Us We’re Speeding Toward an Economic Collapse RIGHT NOW

December 20, 2018

These 8 Red Flags Warn Us We’re Speeding Toward an Economic Collapse RIGHT NOW

This isn’t exactly an article loaded with Christmas cheer, but there’s a very good reason that my family has strictly limited our holiday splurges this year. It’s because all the signs right now seem to indicate the US is hurtling toward an economic collapse.

It’s inevitable, of course. Our economy has been artificially propped up for decades, since abandoning the gold standard. We’re $21 trillion dollars in debt, an unfathomable number. The fact that other countries still lend us money boggles the mind. If the United States was a person with such a high ratio of debt that we aren’t paying off, we wouldn’t even be able to buy a car with one of those 25% interest loans, that’s how bad our credit would be.

Not only that, but there are some parties who seem to want to see the economy go belly up for their own greedy and nefarious purposes.

Here are the red flags that have me concerned about an imminent economic collapse.

The stock market is crashing.

Right now, the market is on track for a month that is equivalent to the crash of 1929, when the Great Depression began. Both the Dow Jones Industrial Average and the S&P 500 are down by 8% during a month that is usually really good. Michael Snyder reported:

The ferocity of this stock market crash is stunning many of the experts, and many investors are beginning to panic. Back in early October, the Dow hit an all-time high of 26,951.81, but on Monday it closed at just 23,592.98. That means that the Dow has now plunged more than 3,300 points from the peak of the market, and many believe that this stock crash is just getting started. (source)

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

Don’t Get Distracted By The Trump/Fed Soap Opera – The Crash Will Continue

November 28, 2018

Don’t Get Distracted By The Trump/Fed Soap Opera – The Crash Will Continue

At the beginning of 2018 I wrote extensively on what was likely to happen under the administration of Jerome Powell, the new Federal Reserve Chairman. In my article ‘New Fed Chairman Will Trigger A Historic Stock Market Crash In 2018‘, published in February, I predicted that the Fed would continue interest rate increases and balance sheet cuts throughout the year and they would knowingly initiate a crash in equities.

To be clear, this was not a very popular sentiment at the time, just as it wasn’t popular when I predicted in 2015 that the Fed would launch interest rate hikes instead of going to negative rates in order to start a catalyst for economic crisis. The problem some people have with this concept is that they just can’t fathom that the central bank would deliberately crash the system. They desperately cling to the notion that the Fed and other central banks want to keep the machine rolling forward at any cost. This is simply not true.

The claim is that the banking elites are “required” to keep the system propped up in a state of reanimation because they are reliant on the system to provide capital and thus “influence.” The people that assert this argument don’t seem to understand how central banks operate.

As most liberty activists should know by now, central banks are essentially a legally protected counterfeiting scheme. Using fractional reserve banking at a ratio that is secret, central banks create their own capital from thin air, and they can infuse capital into international banks at will when it suits their purposes. There is no “profit motive” for the banking syndicate.

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

What Is “Peak Oil” and How Can It Lead to Global Economic Collapse?

November 24, 2018

What Is “Peak Oil” and How Can It Lead to Global Economic Collapse?

Despite a steadily improving economy in the US, the same cannot be said for much of the rest of the world. And while there are strong and growing economies in places like China that can literally give the US a run for its money, there is one undeniable fact that many believe can and will eventually bring the world economies to a devastating state – we are using far more energy than the world’s oil reserves.

Dr. Stephen Leeb, who holds degrees in economics, mathematics, and physics, writes in his book, The Coming Economic Collapse, “The crisis is energy-related and will be brought about by the conflict between rising global demand for energy and our growing inability to increase energy production.” The supply and demand dynamics of oil are so out of balance that Leeb predicts it will not be long before we see crude oil at $200 per barrel!

In Dr. Leeb’s first book, The Oil Factor, which was written several years ago, he predicted the price of a barrel of oil would go to $100. It did reach a high of 113.00 in 2011. And while prices have dropped since then — largely due to stepping up in US production — they are trending back upward and are currently around 75.00 a barrel.

Professor Leeb’s concepts are still valid — oil is still a limited resource. He just may be off by a few years, just like Orwell. 2018 is right now looking a hell of a lot like his “1984.”

Most of us are woefully in denial about how much oil there really is remaining in the world’s oil reserves. We have been lulled into this ridiculous notion that the supply of oil is limitless.

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

The Myth Of The Eternal Market Bubble And Why It Is Dead Wrong

October 12, 2018

The Myth Of The Eternal Market Bubble And Why It Is Dead Wrong

Economic collapse is not an event — it is a process. I’ve been saying this since the initial 2008 crash, and I suppose I will keep saying it until it burns into people’s minds because I don’t think that it is a widely understood concept. When alternative analysts talk about financial collapse, we are not talking about something that suddenly happens out of the blue, we are talking about an ongoing decline that occurs in stages. This decline is happening today in the U.S. and around the world, and it has been accelerating since the chaos of 2008. When we bring up the reality of collapse, we are referring to something that is happening NOW, not something waiting on the distant horizon.

The reason why some analysts can see it and others cannot is most likely due to the delusions surrounding market bubbles. These fiscal fantasy worlds are artificially created by central bank intervention and represent an attempt to mislead the populace on the true health of the system — for a limited time. People with foresight see beyond the false data of the bubble to the core economic reality; other people see only the bubble and nothing else.

When it comes to stock markets, bond markets, forex markets and the general casino economy, much of the public has a terrible inability to look beyond the next month let alone the next year. If the markets appear good now, the assumption is that they will always be good. If the central banks have intervened for the past 10 years, the assumption is they will intervene for the next 10 years.

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

The Great Financial Crisis: Bernanke and the Bubble

September 25, 2018

The Great Financial Crisis: Bernanke and the Bubble

Ben Bernanke responded to Paul Krugman’s post last week, which agreed with my argument that the main cause of the Great Recession was the collapse of the housing bubble rather than the financial crisis. Essentially, Bernanke repeats his argument in the earlier paper that the collapse of Lehman and the resulting financial crisis led to a sharp downturn in non-residential investment, residential investment, and consumption. I’ll let Krugman speak for himself, but I see this as not really answering the key questions.

I certainly would not dispute that the financial crisis hastened the decline in house prices, which was already well underway by September of 2008. It also hastened the end of the housing bubble led consumption boom, which again was in the process of ending already as the housing wealth that drove it was disappearing.

I’ll come back to these points in a moment, but I want to focus on an issue that Bernanke highlights, the drop in non-residential investment following the collapse of Lehman. What Bernanke seemed to have both missed at the time, and continues to miss now, is that there was a bubble in non-residential construction. This bubble essentially grew in the wake of the collapsing housing bubble.

Prices of non-residential structures increased by roughly 50 percent between 2004 and 2008 (see Figure 5 here). This run-up in prices was associated with an increase in investment in non-residential structures from 2.5 percent of GDP in 2004 to 4.0 percent of GDP in 2008 (see Figure 4).

This bubble burst following the collapse of Lehman, with prices falling back to their pre-bubble level. Investment in non-residential structures fell back to 2.5 percent in GDP. This drop explains the overwhelming majority of the fall in non-residential investment in 2009. There was only a modest decline in the other categories of non-residential investment.

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

The Aftershocks of the Economic Collapse Are Still Being Felt

September 20, 2018

The Aftershocks of the Economic Collapse Are Still Being Felt

The Real Confrontation Is Yet To Come

There has been a spate of articles recently on the ten year anniversary of the financial collapse. We wrote about this anniversary two weeks ago, describing the cause of the collapse and the reasons why we are still at risk for another one. Now, we look at how the aftermath of the collapse is shaping current politics, people’s views on the economic system and the conflict that lies ahead to create an economy for the 21st Century.

The Aftershocks Of The Collapse Are Still Being Felt

Jerome Roos of ROAR Magazine writes that the response to the 2008 crash – bailing out the banks but not the people – led to unrest across the globe, beginning with the Arab Spring, and a growing anti-capitalist sentiment. He goes on to say, “It has recently begun to consolidate itself in the form of vibrant grassroots movements, progressive political formations and explicitly socialist candidacies that collectively seek to challenge the untrammeled power and privileges of the ‘1 percent’ from below.”

The stagnant economy, austerity measures and resulting increased debt have opened a space for people to search for and try out alternative economic structures that are more democratic. They have also created conditions for a rise of nationalism on the right. Roos concludes that the “real confrontation is yet to come.”

In the United States, the economic conditions have revived populist movements on both the right and the left. Gareth Porter explains the Democratic and Republican parties are aware of the great dissatisfaction with their failed policies and know they need to try to appease the public by trying new policies, but they don’t know how.

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

The Bailouts for the Rich Are Why America Is So Screwed Right Now

September 15, 2018

The Bailouts for the Rich Are Why America Is So Screwed Right Now

Did they prevent a full-scale collapse? Yes. Was it necessary to do it the way we did? Not at all.

These guys got off pretty easy. (Photo by Scott J. Ferrell/Congressional Quarterly/Getty Images)

In 1948, the architect of the post-war American suburb, William Levitt, explained the point of the housing finance system. “No man who owns his own house and lot can be a Communist,” he said. “He has too much to do.”

It’s worth reflecting on this quote on the ten-year anniversary of the financial crisis, because it speaks to how the architects of the bailouts shaped our culture. Tim Geithner, Ben Bernanke, and Hank Paulson, the three key men in charge, basically argue that the bailouts they executed between 2007 and 2009 were unfair, but necessary to preserve stability. It’s time to ask, though: just what stability did they preserve?

These three men paint the financial crisis largely as a technical one. But let’s not get lost in the fancy terms they use, like “normalization of credit flows,” in discussing what happened and why. The excessively wonky tone is intentional—it’s intended to hide the politics of what happened. So let’s look at what the bailouts actually were, in normal human language.

The official response to the financial crisis ended a 75-year-old American policy of pursuing broad homeownership as a social goal. Since at least Franklin Delano Roosevelt, American leaders had deliberately organized the financial system to put more people in their own homes. In 2011, the Obama administration changed this policy, pushing renting over owning. The CEO of Bank of America, Brian Moynihan, echoed this view shortly thereafter. There are many reasons for the change, and not all of them were bad. But what’s important to understand is that the financial crisis was a full-scale assault on the longstanding social contract linking Americans with the financial system through their house.

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

Global Economic Warning: “A Day Of Reckoning Is Coming”

September 10, 2018

Global Economic Warning: “A Day Of Reckoning Is Coming”

The world is awash in debt – some $233 Trillion is currently outstanding on a global scale. And though stock markets have seen unprecedented growth in recent years, cracks have started to appear. Just this week analysts at Goldman Sachs warned that a crash is coming, a sentiment echoed by JP Morgan Chase, which recently said that the next economic collapse could very realistically lead to social unrest and chaos on the streets of America that has “not been seen in half a century.”

Patrick Donnelly, a director at Harvest Gold Corp, suggests that it won’t be long now. In an interview with SGT Report Donnelly warns that the day of reckoning is rapidly approaching:

Countries like Greece are teetering… and that’s just a tiny little country… it’s going to take them 75 years to climb out of their debt…

You look at a country like Canada, the United States or China… the amount of debt is just staggering…

…For these tech stocks, the valuations we’ve seen… the multiples they trade at are ridiculous.

The markets are supposed to be rational… but the markets are totally irrational.

It’s frightening… there’s going to be a day of reckoning…

Watch Full interview:

(Watch at Youtube)

There’s no question that what goes up must come down, and given that stock market growth over the last decade has been fueled not by revenue and profit, but by central bank money printing, the coming crash will send shockwaves across the globe.

The crash of 2008 will look like a small correction compared to what’s coming next.

And when the bottom finally falls out amid panic selling unlike anything we’ve ever witnessed before, Donnelly says that capital will begin to flow into historical safe haven assets of last resort.

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

The 11th Hour: 8 Examples Of Mainstream Media Sources Warning Us Of Imminent Economic Disaster

September 8, 2018

The 11th Hour: 8 Examples Of Mainstream Media Sources Warning Us Of Imminent Economic Disaster

Are we on the verge of another great financial crisis, a devastating recession and a horrific implosion of the global debt bubble? On my website I have been relentlessly warning my readers about the inevitable consequences of our very foolish actions, but now the mainstream media is beginning to sound just like The Economic Collapse Blog. The coming crisis is so close now that a lot of them are starting to see it, and of course economic disaster is already a reality for much of the rest of the planet. For years, the mainstream media told us that things would get better, and in a lot of ways we did see some improvement. But now the tone of the mainstream media has become quite ominous, and that is definitely not a positive sign. The following are 8 examples of mainstream media sources warning us of imminent economic disaster…

#1 Forbes: “Disaster Is Inevitable When America’s Stock Market Bubble Bursts”…

As shown in this report, the U.S. stock market is currently trading at extremely precarious levels and it won’t take much to topple the whole house of cards. Once again, the Federal Reserve, which was responsible for creating the disastrous Dot-com bubble and housing bubble, has inflated yet another extremely dangerous bubble in its attempt to force the economy to grow after the Great Recession. History has proven time and time again that market meddling by central banks leads to massive market distortions and eventual crises. As a society, we have not learned the lessons that we were supposed to learn from 1999 and 2008, therefore we are doomed to repeat them.

The purpose of this report is to warn society of the path that we are on and the risks that we are facing.

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

If the Economy is So Good, Why are Wages Flat?

August 4, 2018

If the Economy is So Good, Why are Wages Flat?

Photo by Nathaniel St. Clair

We are supposedly seven years into a “recovery” from the global economic collapse that commenced in 2008. The latest evidence offered to promote this oft-peddled mantra is that U.S. gross domestic product showed a strong uptick for the second quarter of 2018, an annualized rate of 4.1 percent, nearly double that of the first quarter.

Coupled with the ongoing decline in unemployment (although standard unemployment rates greatly underestimate the true rate of employment), orthodox economists, conservative propagandists and apologists for the Trump administration would have use believe happy days are here again.

So why aren’t our wages increasing?

In part, it is because the true unemployment rate is not nearly so low as the “official” unemployment rate used by governments around the world, and thus the ranks of unemployed and underemployed are sufficiently large that there is no upward pressure on wages. Orthodox economists, dedicated as they are to ignoring any evidence that doesn’t match their models designed to “prove” that all manners of capitalist excess are as natural as the tides of the ocean — and thus in practice the professional wing of conservative propagandists — have various excuses for stagnant wages and ever increasing inequality. A favorite among these is an alleged “skills mismatch” — too many unskilled workers and a shortage of skilled workers for the high-tech jobs of today.

The data tells a different story, however. A 2014 report by the National Employment Law Project found that low-wage jobs were created at a faster pace than higher-paid jobs were lost in the first years to that point. The Project reported this breakdown:

* Lower-wage industries ($9.48 per hour to $13.33) constituted 22 percent of the 2008-2010 losses, but 44 percent of jobs gained since then.

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

The Yield Curve Is The Economy’s Canary In A Coal Mine

July 7, 2018

The Yield Curve Is The Economy’s Canary In A Coal Mine

The economy has hit a wall and is now sliding down it. I don’t care what bullish propaganda may or may not be bubbling up in the headlines from the financial media and Wall Street, the hard numbers I look at everyday show accelerating economic weakness. The fact that my view is contrary to mainstream consensus and political propaganda reinforces my conviction that my view about the economy is correct.

As an example of the ongoing underlying systemic decay and collapse conveyed by this week’s title, it was announced that General Electric would be removed from the Dow Jones Industrial Average index and replaced by Walgreen’s. GE was an original member of the index starting in 1896 and was a continuous member since 1907.

GE is an original equipment manufacturer and industrial product innovator. It’s products are used in broad array of applications at all levels of the economy globally. It is considered a “GDP company.” GE was iconic of American innovation and economic dominance. Walgreen’s is a consumer products reseller that sells pharmaceuticals and junk. Emblematic of the entire system, GE has suffocated itself with poor management which guided the company into a cess-pool of financial leverage and hidden derivatives.

As expressed in past issues (the Short Seller’s Journal), I don’t put a lot of stock in the regional Fed economic surveys, which are heavily shaded by “hope” and “expectation” metrics that are used to inflate the overall index level. These are so-called “soft” data reports. But now even the “outlook” and “expectations” measurements are falling quickly (see last week’s Philly Fed report). The Trump “hope premium” that inflated the stock market starting in November 2016 has left the building.

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

Military Seizes Control Of Water Supplies As Venezuelan Infrastructure Collapses

June 29, 2018

Military Seizes Control Of Water Supplies As Venezuelan Infrastructure Collapses

If there’s one group that has benefited from Venezuela’s economic collapse, it’s the country’s military, which has been handed control over much of the country’s remaining industry as the collapse has intensified. Venezuela’s army, about 160,000 strong, controls the mineral-rich Arco Minero del Orinoco, and some of its top officers are also serving as executives of Venezuela’s state-run oil company.

And as the collapse of social services has caused water supplies to dwindle, the military has recently hijacked what spigots remain, transforming access to water into a luxury that most Venezuelans can’t afford. Many of the pipes and reservoirs have fallen into disarray – or seen their supplies drastically diminished – the military is stepping in to take charge of the “equitable distribution” of what little remains. As part of the government’s socialist policy program, the cost of water is supposed to be subsidized – at least in theory. But with the state-owned water utility, known as Hidrocapital, has effectively abdicated its responsibilities, the military is increasingly stepping in, commandeering trucks and vans used by private individuals who have tried to step in and service parts of the capital, according to a Bloomberg report.

Venezuela’s military has come to oversee the desperate and lucrative water trade as reservoirs empty, broken pipes flood neighborhoods and overwhelmed personnel walk out. Seven major access points in the capital of 5.5 million people are now run by soldiers or police, who also took total control of all public and private water trucks.Unofficially, soldiers direct where drivers deliver — and make them give away the goods at favored addresses.

Rigoberto Sanchez, who runs a water tanker that ferries water from the El Paraiso water-filling station in Caracas to an array of customers in the city, says his No. 1 business hazard is being intercepted by the military.

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

Crash & Burn & the Sixth Wave

June 19, 2018

Crash & Burn & the Sixth Wave

QUESTION: Martin, as all members do, I really do thank you and appreciate you for your knowledge and insight. I am a business owner – Real Water and do approximately $10 million in annual sales right now. As a concerned citizen, I have also run for political office and was elected to the Nevada State Assembly in 2015. With Republican control, our legislature pushed through the largest tax increase in our State’s history in the name of more money for education (I led the opposition against the tax, but failed in preventing it). Of course, our latest school ratings came out and we are still ranked at the bottom – 50th. More government is NOT the solution!

I completely understand we are headed for a financial crash and burn. You have frequently stated that the only reason you are doing what you are doing is for your posterity. Other than personal preparation, extra food, don’t be in bonds, etc., what do you believe is the most beneficial thing we can do to help our country come out of the crash and burn with more freedom and limited government (like our Founders so emphatically intended) as opposed to the other potential of totalitarianism that you frequently warn us about? What is the most effective way to rally the troops so to say to help push our civilization in the proper direction?

To an elevated lifestyle,

ANSWER: The Government always thinks that throwing more money at something make it better. I have NEVER seen where that has EVER corrected any such trend. The problem lies in the total mismanagement. Governments are simply incapable of operating even a bubblegum machine. They completely fail to understand the economy, human nature, or society as a whole. The only way to actually correct such a problem is to privatize. That installs actual management and employees must actually perform. Government unions demand benefits and they negotiate with themselves. This is why the entire socialist agenda is collapsing.

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

Eric Peters: “China’s Best Play Is To Let The US Stock Market Crash”

April 23, 2018

Eric Peters: “China’s Best Play Is To Let The US Stock Market Crash”

As excerpted from the latest Weekend Notes from One River CIO, Eric Peters.

“China’s best play is to let the US stock market crash,” said the CIO. “Trump is right, they can’t win a trade war.” So they won’t try. “But Xi can consolidate if things get rough in terms of markets, but for Trump it is the opposite.” The US is far more exposed to a bear market.

“And just like US debt ceiling standoffs or just about any political standoff for that matter, the game is that things always have to get worse before they get better.” And he sighed, deeply. “But I truly hate having to trade by playing game theory. It’s just an awful way to live your life.”

“I like to do the kind of analysis that involves looking at one group of companies that are starting to make money,” continued the same CIO. “And then from that observation, I can make reasoned forecasts about how their improving fortunes will impact others, and so on and so forth.” The same process works in reverse of course. Economies have a way of spiraling up and down, like corkscrews. “I like the kind of analysis that captures the actions of tens of thousands, or millions of people.” And he sighed, again. “But now, we’re just trading late night tweets.”

And a bonus anecdote from Peters’ note

“The polls say I won the debate,” said the candidate, “but you and I know all about polls.” Perry Parker’s a good friend, we worked together for a decade, buying low, selling high. And having won in finance, he headed home to give back to Mississippi. When the 3rd congressional district seat opened up he made a bid.

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

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