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We’ve Arrived At The End Of The Road
We’ve Arrived At The End Of The Road
Decades of central bank intervention have left us with an unavoidable insolvency crisis
When Richard Nixon closed the gold window in August 1971, fully severing the US dollar from its gold standard, the Federal Reserve and other world central banks found themselves liberated. No longer was their ability to provide liquidity constrained by the physical limitations of the gold supply.
The Fed started intervening more and more during times of slowing growth to goose the economy back to vigor. Cheered and further egged on by politicians happy for easy solutions and desperate to avoid having to make tough calls, central banks have been increasingly willing to provide liquidity in good times and bad.
Akin to removing the limit on a teenager’s credit card, with access to so much cheap money, the US went on a debt bender. One that has lasted for nearly half a century:
Here we stand today with the national debt at over $22 trillion, total US debt outstanding of $70 trillion (shown in the above chart), and unfunded national liabilities of over $200 trillion. And we add to this every year with an annual deficit now exceeding $1 trillion.
This gigantic accretion of debt will never be repaid. And as the pile grows higher, the burden of servicing it — even at today’s historically low interest rates — is placing an increasingly heavy drag on economic growth.
To date, the central banks have gotten away with their easy money policies because they could. The day of reckoning could always be pushed further out via a fresh round of liquidity. But, as Brien Lundin says in the video below, the reckoning is “no longer simply inevitable, it is imminent. We are reaching the End of the Road.”
…click on the above link to read the rest of the article…
Extreme Frugality: A needed mindset for the age we live in
Extreme Frugality: A needed mindset for the age we live in
We didn’t have a lot growing up, as my mom had to single-parent three kids. Most anything I wanted required disciplined frugality.
I bought my first fly rod from Orvis at the age of 13, which took the better part of a year to save up for. I hand-tied the first flies drifted from its lines from the hackles of roosters I raised expressly for that purpose.
In my later teens, I took a long cross-country climbing/working road trip where I lived on $5/week (1980s). Doing so was an art form involving dried beans and camping for free on federal lands, including the time I woke up to a large bull pawing and snorting a few yards from my tent. I knew nothing about the behavior of bulls, and still don’t; but I knew that wasn’t a good sign and so I backed away using the tent as a shield and climbed a tree.
Sleeping on the ground, or on sofas doesn’t bother me. I am a remarkably un-picky eater. I’m just easy that way.
All of which is to say that being frugal and ‘making do’ with what’s on hand comes naturally to me. Don’t get me wrong, I can enjoy spending money, and have indulged in some expensive hobbies in my life. But I can also zipper the wallet and not skip a beat.
I’m glad I can, because being frugal is an extremely valuable skill to employ as we get ready for a future of ‘less’.
System Failure
Sometime, much sooner than we’ll be ready for, the systems upon which we rely will fail us.
The weather system is already becoming intolerably wonky. Heat in Europe, crop-ruining rains in the US farm belt, and unprecedented heat in the arctic are all telling us that something is terribly amiss.
…click on the above link to read the rest of the article…
Somebody’ Finally Cares About Gold
Somebody’ Finally Cares About Gold
Grant Williams pithily summed up the situation that has been plaguing gold since 2013: Nobody Cares.
Yes, it’s highly likely that the price has been suppressed. But not enough buyers cared to fight the bullion bank/central bank cartel or make life difficult enough for the politicians — and thus, the regulators — to change things.
So gold languished. For years.
But last August, gold quietly entered a bull market after breaking above $1200.
As the price began rising (for both fundamental & technical reasons), we’ve been tracking its progress closely. We do so on a daily basis via Peak Prosperity’s Precious Metals Daily Commentary updates (outstandingly authored by user davefairtex), as key developments happened via our premium reports (like this prediction), and via expert interviews such as our recent in-depth discussions with TFMetals and Incrementum’s Ronni Stoeferle.
As we entered 2019, the increasingly dovish/desperate policy retracements of the central banks — which now appear will NEVER normalize their balance sheets — have boosted the bull run.
Lower real interest rates are gold price-positive. And not only are real rates falling right now, there’s alreadycurrently $12 trillion in negative *nominal* debt trading worldwide right now:
And based on this week’s further dovish announcements from both the Fed and the ECB, we can expect more $trillions to be added to that pile soon.
On Tuesday, Mario Draghi apparently went rogue on his fellow policymakers and launched into a swan song version of his all-time hit “Whatever it takes”. The next day, Jerome Powell at the Fed confirmed his willingness to ease and let the market know he stands ready to cut rates multiple times over the next year.
…click on the above link to read the rest of the article…
Waiting For The Black Swan
Waiting For The Black Swan
War with Iran would be the beginning of the end
Two more tankers were attacked near the Strait of Hormuz on Thursday morning (6/13/19) in the Gulf of Oman, and if hostilities advance we could be facing a ‘black swan’ event. One that changes everything, and divides the world into ‘before’ and ‘after’ periods.
A lot of us are waiting for ‘something’ to happen. We know that there are too many unsustainable trends and practices running and we fall into the “let’s just rip the Band-Aid off” camp. Some, like myself, have lost faith in the political leadership and institutions and doubt they retain any capacity to attend to anything more than their own selfish interests, let alone manage the difficult tasks ahead rooted as they are in systems theory and managing complexity.
So, let’s get on with it already. Bring it on. Black swans are welcome to those who feel a swift kick to the behind is sometimes needed to begin setting things straight.
Like many, I am also conflicted because I also know that getting onto a new path will be disruptive and probably quite economically and financially painful for everyone, myself included. Hoping for ‘something to break’ and hoping nothing breaks hang in an uneasy balance.
Luckily, my hopes and wishes have nothing to do with what’s going to happen, or when. I might as well be performing a secret hand ritual before the TV in my living room to ensure that my team’s basketball free-throw goes in. The dry tinder of the next bonfire was laid down over many years and decades and it will catch fire when it does, no matter how much denial or how many superstitious practices we employ.
…click on the above link to read the rest of the article…
They’ve Stolen Our Future!
They’ve Stolen Our Future!
Collapse is in the cards
It’s time to have a serious conversation. I know we’ve been having it, but maybe there’s another glove hidden beneath the one we’ve already taken off.
Put bluntly, there doesn’t seem to be any hope of avoiding a collapse of civilization. The forces of the Business-As-Usual crowd are just too strong, the narrative machine too honed, the interests too entrenched to allow any sort of meaningful course correction at this time.
But is that the case?
Writing about the outcomes of the recent Australian elections which saw a pro-business, conservative government elected, Australian based reader-member ezlxq1949 said:
“They’ve stolen our future!”
That was the wail of the 11-y.o. daughter of a Greens candidate who cried herself to sleep the night after the astonishing election results came in. It couldn’t be worse; the public have sold themselves into almost complete captivity to the neoliberal élites called the Liberal Party. (Liberal = Conservative. Go figure.) It was supposed to have been a climate change election but became a jobs ‘n growth election.
Mind you, it wouldn’t have been much better if the opposition Labor Party had won; they’ve moved so far to the right that like the US we really have only one party with two heads. For instance, Labor would not commit to stopping the monster Adani coal mine.
So it’s goodbye to:
- the ABC (the excellent government broadcaster which has the gall and temerity to criticise the government of the day; the government badly wants to get even)
- renewable energy (fossil fools rule ok)
- the Great Barrier Reef (sliced and diced to let coal ships cross it)
- our river systems (suck them dry, privatise the water, send the profits to the Cayman Islands — as is already happening)
- the Great Artesian Basin (world’s largest and deepest, to be contaminated by coal mines and fracking)
- public services (cut back yet again to create a damaging government budget surplus)
- public health (to be Americanised)
- public education (to be privatised; maybe high schools this time)
- the Great Australian Bight (a pristine area which may have oil under it; damn the pollution, full greed ahead)
- southern ocean fish stocks (they’ll let the supertrawlers in now).
…click on the above link to read the rest of the article…
Pain Is Inevitable; But Suffering Is Optional
Pain Is Inevitable; But Suffering Is Optional
How to avoid becoming collateral damage in the coming crash.
Sometimes you really do find enlightenment at the top of the mountain.
I spent this week hiking in Montana’s Bitterroot mountain range, as a participant in the pilot run of a new personal-growth-through-adventure-travel startup.
In our group was a famous professional cyclist, who had been a superstar on the Tour de France for many years.
He has a fascinating life story, both on and off the bike. His tales of the super-human efforts required to prevail at the most elite level of this punishing sport are mind-blowing.
The relentless and gruelling training covering thousands and thousands of kilometers. The near-starvation state cyclists exist in to maximize their power-to-weight ratio. Endless travel. Horrific crash injuries. Sponsor pressures. The money and politics driving the sport. Overbearing regulators. Cut-throat teammates. And of course, the pervasive doping.
When we asked him how he managed to persevere at the top of such a demanding sport for so long, despite the huge toll it took on his health and his marriage, he thought for a moment then said: “I suppose I’m just really good at suffering”.
It’s clear that, in addition to some truly amazing experiences, his cycling days have left him with a legacy of damage that he’s still working through.
As he shared this with us, one participant wisely advised him to remember: Pain is inevitable. Suffering is optional.
Yes, he’ll still need to deal with the aftereffects of his racing years. But it’s up to him how much power he wants to give them over his happiness and life path from here.
From Mountains To Markets
I’m struck by how relevant the above advice is to investors right now.
It’s becoming increasingly clear that the end of the ten-year bull market has arrived.
…click on the above link to read the rest of the article…
The Company Store
The Company Store
Leaves almost nothing to live on
In the song Sixteen Tons by Merle Travis (and made famous by Tennessee Ernie Ford), the idea of the ‘company store’ referred to a system of debt bondage that effectively trapped workers within an unfair system designed to harvest all of their labor at very low cost.
You load sixteen tons, what do you get?
Another day older and deeper in debt
Saint Peter don’t you call me ’cause I can’t go
I owe my soul to the company store
Sixteen Tons – Merle Travis
How exactly did the company store system operate?
Under a scrip system, workers were not paid cash; rather they were paid with non-transferable credit vouchers that could be exchanged only for goods sold at the company store. This made it impossible for workers to store up cash savings.
Workers also usually lived in company-owned dormitories or houses, the rent for which was automatically deducted from their pay.
This model was simple enough to understand. “Pay” your workers with scrip vouchers, then sell them your marked up goods at the company store, pocketing a nice profit. On top of that, force your employees to live in company housing, too, also at terms very favorable to the company.
Add it all up and the workers found themselves in perpetual service to their employer. No matter how hard and long they toiled, there was nothing left for their own private benefit after all was said and done. The company succeeded in skimming off any and all ‘excess’ for itself.
This vast unfairness eventually led to the formation of unions as well as to regulations providing protection to the workers.
…click on the above link to read the rest of the article…
The Bull(y) Rally
The Bull(y) Rally
Something unnatural is going on.
“A bully is always a coward.”~ Thomas Chandler Haliburton
The current market rally is like a playground bully; shoving to the ground anyone in its path.
But like all bullies, the braggadocio belies an underlying cowardice.
Those in charge of the status quo must be absolutely terrified to resort to the unnatural lengths they are going to right now to keep the current rally intact.
Unnatural Acts
In reaction to the brief market correction that occurred at the end of 2018, emergency measures were enacted to get stocks moving higher again.
Notably among the scramble to rescue the markets, the Fed pulled a very public and embarrassing policy U-turn, abandoning its short-lived program of planned interest rates hikes designed to start ‘normalizing’ its balance sheet after a decade of flooding the economy with stimulus. Quantitative Tightening, we hardly knew ya …(sniff)
In response to the efforts of the Plunge Protection Team, the Fed, its siblings in the global central banking cartel, the cheerleading media, and the Trump administration, the markets roared back strongly at the start of 2019.
So strongly, in fact, that 2019 has seen the best start to the year for stocks EVER IN HISTORY.
At this point, the major indices have recouped all of their losses from their December lows and are now back touching their all-time highs.
So…mission accomplished, right? Surely the financial swat team deployed at beginning of the year can stand down and go celebrate over a few well-deserved brewskis?
Not if you’re watching closely. In fact, the efforts to prop up stocks continue to become more frequent, more overt, and more extreme.
Daily Fed Jawboning
As mentioned, the Fed has executed a complete 180-degree policy turnaround in light of the market’s feinting swoon last year. Suddenly, it can’t appear dovish enough:
…click on the above link to read the rest of the article…
Ted Siedle: The Greatest Retirement Crisis In The History Of The World
Ted Siedle: The Greatest Retirement Crisis In The History Of The World
The pension crisis is even worse than we imagine.
“We are on the precipice of the greatest retirement crisis in the history of the world. And that makes perfect sense because, first of all, we have the largest elderly population in the history of the world.
Just focusing on the United States: our elderly are woefully unprepared to retire. And in the decades to come we will witness millions of elderly American’s, Baby Boomers and others, slipping into poverty. ‘Too frail to work, too poor to retire’ will become the new normal for many elderly Americans.”
So warns pension fraud whistleblower Ted Siedle.
Siedle’s firm, Benchmark Financial Services, Inc. has pioneered over $1 trillion in forensic investigations of the money management industry. He’s nationally recognized as an authority on pensions and investment management matters, having testified before the Senate Banking Committee regarding fund scandals and is an expert in various Madoff-related and other litigations.
In 2017, he secured the largest SEC whistleblower award in history of $48 million, and in 2018, the largest CFTC award in history at $30 million.
Siedel rings a loud warning bell regarding the solvency of today’s public pension system. Specifically, his investigations show that most of them:
- Are much too under-funded to meet their future payout obligations (e.g., Kentucky’s state pension plan is only 12% funded)
- Are experiencing annual returns far below the required 7% average the plans assume in their forecasts
- Have oversight boards making portfolio allocation decisions that are staffed by individuals with zero experience managing financial securities (e.g., policemen, kindergarten teachers)
- Have little transparency. Many are rarely audited. And many have moved their capital off-shore without accounting for where it’s been moved to.
…click on the above link to read the rest of the article…
The Lab Rat That Survives Is The One Who Escapes
vinepair.com
The Lab Rat That Survives Is The One Who Escapes
To prosper, break free of society’s efforts to control you.
If you’re feeling like a lab rat in a science experiment, manipulated by shadowy forces for unknown purposes, that’s because you’re waking up to the reality of the situation.
We are a nation of lab rats.
Tough news to hear, I know. But it’s true, nonetheless.
We’re subjected to daily doses of propaganda and social conditioning, reinforced by technology, designed to:
- distract and burden us by keeping us consuming as much as possible, preferably while taking on debt to do so
- keep us isolated and socially fractured, to prevent any effective organization against the existing system of power and control
- block information that might make awaken us to the various manipulations in play
I’ve written consistently about these forces over the years seeking to help you see the structure of the cultural walls that contain us all. I’ve been doing this because achieving success, as well as finding deeper meaning and purpose in life, rests upon increasing our awareness of the forces shaping our beliefs and actions.
This includes being aware of the propaganda, the sophisticated marketing ploys, and the controlling nature of our dominant cultural belief system. Once you can recognize them for what they are, you free yourself from their influence over you.
These systems of diversion and distraction have gotten orders of magnitude more potent over the recent years, pacing with advances in technology. Our brains’ biological wiring is so well-understood now that it’s routinely used against us.
For example, at one particular video gaming company, as part of their orientation, newly-hired developers are required to attend a “dopamine boot camp” in which they learn the best ways to deliver paced rushes of “brain pleasure” chemicals to video game players.
…click on the above link to read the rest of the article…
The One True Thing
wikimedia
The One True Thing
Until you understand it, it will rule your life.
Until you see clearly how the rules of society work, you will be trapped within a system of control.
What you mistake for reality is instead a fabricated simulation, designed to keep you trapped right where the system wants you.
Your social conditioning, education, and family structures program you with a set of beliefs, values and norms — often unexamined — that “properly” align you in such a way that you focus your life and labor on keeping the existing social hierarchy in place and that you never deeply question this arrangement.
Put visually, your culture is in the shape of a pyramid. And what keeps you pinned to your particular layer is your belief system.
Every civilization has its own defining narratives that, while beautifully diverse, all generate exactly the same structure: a pyramid consisting of many more people at the bottom than at the top.
Every civilization throughout history had One True Thing that determined each person’s position on that pyramid.
In some past eras, it was royal bloodline. In ancient Egyptian culture, it stemmed from being a direct descendent of the Sun god Ra. And today, it’s a function of how much money you have.
No matter the marker, the pecking order is held in place because everyone accepts the rules. They’re fully understood by the citizenry, and are only rarely questioned (usually at great personal risk).
But even though accepted as “100% true” by the participants of one culture, social markers often don’t translate when applied to another.
For instance, if you traveled back in time to the height of the Aztec empire with $1 billion in cash, your paper bills wouldn’t have any accepted value. You’d probably have trouble acquiring even a single tortilla with them.
Your modern currency just wouldn’t be money to that ancient culture.
…click on the above link to read the rest of the article…
David Stockman: The Undrainable Swamp & The Inevitable Recession
David Stockman: The Undrainable Swamp & The Inevitable Recession
What the future of the post “Peak Trump” era holds.
Love it or hate it, the potency of the Trump Administration is on the wane, soon to be stuck in the mire of the Swamp it has deepend instead of drained, while the economy falls into one hell of a recession — so claims former Regan-era Cabinet member and Congressman David Stockman.
In his new book Peak Trump, Stockman notes how the wide divergence between Trump the campaigner and Trump the president appears to be proving to be his undoing.
Rather than fight to dismantle the institutions he railed against as a candidate — most notably the Deep State and the Federal Reserve — Trump has embraced them.
Now, when this latest asset bubble bursts (and Stockman believes the markets saw their peak back in Fall 2018), Trump will ‘own’ that. Having chosen to tie his administration’s success to the rising price of the S&P 500 since taking office, he won’t be able to foist the blame of a market crash on his predecessors.
Similarly, the Deep State — especially the military industrial complex — is experiencing a bonanza under the Trump administration. As a result, the Swamp is deeper than it has ever been:
I learned a long time ago as Budget Director and even before that as a member of Congress that the real deep end of the Washington swamp is on the Pentagon side of the Potomac. What Trump has done is basically taking a defense budget at $600 billion that was already swollen with waste and extending it far beyond anything you need for a homeland defense.
I have a whole section in the book about how a homeland of defense wouldn’t cost $600 billion that he inherited or now the $700 billion that we have. $720 billion actually, that after two huge Trump increases.
…click on the above link to read the rest of the article…
A Survival Guide For 2019
A Survival Guide For 2019
How to safely navigate the ‘Year Of Instability’
As the first month of the year concludes, it’s becoming clear that 2019 will be a very different kind of year.
The near-decade of ‘recovery’ following the Great Financial Crisis enjoyed a stability and tranquility that suddenly evaporated at the end of 2018.
Here in 2019, instability reigns.
The world’s central banks are absolutely panicking. After last year’s bursting of the Everything Bubble, their coordinated plans for Quantitative Tightening have been summarily thrown out the window. Suddenly, no chairman can prove himself too dovish.
Jerome Powell, the supposed hardliner among them, completely capitulated in the wake of the recent -15% tantrum in stocks, which, as Sven Henrich colorfully quipped, proved what we suspected all along:
The global tsunami of liquidity (i.e. thin-air money printing) released by the central banking cartel has been the defining trend of the past decade. It has driven, directly or indirectly, more world events than any other factor.
And one of its more notorious legacies is the massive disparity and wealth and income resulting from its favoring of the top 0.1% over everyone else. The mega-rich have seen their assets skyrocket in value, while the masses have been mercilessly squeezed between similarly rising costs of living and stagnant wages.
How have the tone-deaf politicians responded? With tax breaks for their Establishment masters and new taxes imposed on the public. As a result, populist ire is catching fire in an accelerating number of countries, which the authorities are anxious to suppress by all means to prevent it from conflagrating further — most visibly demonstrated right now by the French government’s increasingly jack-booted attempts to quash the Yellow Vest protests:
Meanwhile, two other principal drivers of the past decade’s ‘prosperity’ are also suddenly in jeopardy.
…click on the above link to read the rest of the article…
Global Collapse Accelerating Buy Gold Now – Chris Martenson
Global Collapse Accelerating Buy Gold Now – Chris Martenson
By Greg Hunter’s USAWatchdog.com
Futurist and economic researcher Chris Martenson says a collapse is “a process, not an event.” Martenson contends the long awaited global collapse, on many fronts, has not only started, but is picking up speed. Martenson says, “Our prediction at PeakProsperity.com is these collapse trends, we have been following for 10 years now, are accelerating and continuing. None of them are reversing at this point in time. These will impact people’s future in a huge way. Environmentally, we see these signs, but we also have $245 trillion of debt in the global economy. We have been accelerating that debt cycle as if we could just keep that trend going forever—we can’t. So, what we see are all these unsustainable trends converging. They are going to happen . . . and people need to be ready.”
Martenson lays out the case to blame central banks for much of the geopolitical and economic friction in the world today. Martenson says, “The economic pie is not expanding anymore. It’s kind of stagnant. So, if you have one tiny group taking their fair share and the pie isn’t growing, it means they are taking from somebody else. This is the essence of central banking. They don’t create wealth, they redistribute wealth. When the Federal Reserve crams rates to zero, the savers lose out, but lose to who? The winners and losers are being picked by the central banks, and they have decided that the .01% should be the winners in this story and everybody else should be the losers. . . . Central bank policies have really benefited the elites at the expense of everybody else. This brings up the most important point and that is central banks are not our friends. They are redistributive organizations.”
…click on the above link to read the rest of the article…
Collapse Is Already Here
Collapse Is Already Here
It’s a process, not an event.
Many people are expecting some degree of approaching collapse — be it economic, environmental and/or societal — thinking that they’ll recognize the danger signs in time.
As if it will be completely obvious, like a Hollywood blockbuster. Complete with clear warnings from scientists, politicians and the media. And everyone can then get busy either panicking or becoming the plucky heroes.
That’s not how collapse works.
Collapse is a process, not an event.
And it’s already underway, all around us.
Collapse is already here.
However, unlike Hollywood’s vision, the early stages of collapse cause people to cling even tighter to the status quo. Instead of panic in the streets, we simply see more of the same — as those in power do all they can to remain so, while the majority of the public attempts to ignore the growing problems for as long as it possibly can.
For both the elite and the majority, their entire world view and their personal sense of self depends on things not crumbling all around them, so they remain willfully blind to any evidence to the contrary.
When faced with the predicaments we warn about here at PeakProsperity.com, getting an early start on prudently shifting your own personal situation is of vital strategic and tactical importance. Tens of thousands of our readers already have taken wise steps in their lives to position themselves resiliently.
But most of the majority won’t get started until it’s entirely too late to make any difference at all. Which is sad but perhaps unavoidable, given human nature.
If everybody around you is saying “Everything is awesome!”, it can take a long time to determine for yourself that things in fact aren’t:
Real collapse happens slowly, and often without any sort of acknowledgement by the so-called political and economic elites until its abrupt terminal end.
…click on the above link to read the rest of the article…
