Home » Posts tagged 'john rubino'

Tag Archives: john rubino

Because “fiscal dominance”…

So that recession I keep whining about still hasn’t arrived. What’s going on out there to keep “inevitable” from becoming “imminent”?

It might be as simple as a government borrowing insane amounts of money and giving it to arms makers, banks, and AI companies.

This “fiscal dominance” strategy invokes some serious unintended consequences, including stubborn inflation and rising interest rates. New car loans, for instance, are now more expensive than they were prior to the 2008-2009 crash:

While bank credit is falling into pre-crash territory:

Offices are emptying out:

But unemployment is ridiculously low. With everyone working, how can growth possibly turn negative? Well, if everyone is working multiple part-time jobs and still unable to make ends meet, that might do it:

Meanwhile, lots of under-the-surface stats support the gloom-and-doom thesis. The next chart compares the stock prices of a major shipper and a major pawn shop chain:

According to financial analyst Danielle DiMartino Booth, we might already be in a recession:

The Day We Stopped Trusting Media

April 27, 2024

The Day We Stopped Trusting Media

Imagine future election campaigns

One of the first posts in this newsletter’s Shrinking Trust Horizon series was about how “deep fake” technology will make fake images, videos, and audio recordings almost indistinguishable from the real thing. This will kill millions of modeling and acting jobs, while weaponizing audio and video in all kinds of disturbing ways.

That day has apparently arrived:

Baltimore high school teacher arrested over deepfake audio of principal

A Maryland high school teacher has been arrested for allegedly using AI to deepfake a bogus recording of his principal making racist comments.

Dazhon Darien, 31, is accused of creating the hoax audio of Pikesville High School Principal Eric Eiswert.

Mr Eiswert was placed on leave and had police outside his home amid death threats he received over the fake clip.

Mr Darien was held at an airport after a security check over a gun in his bag found an arrest warrant against him.

He faces charges of stalking, theft, disruption of school operations and retaliation against a witness.

Baltimore County Schools Superintendent Myriam Rogers said the school, as well as the Baltimore County Police Department, launched an investigation on 17 January when they were made aware of the voice recording.

Detectives requested a forensic analysis of the audio, which found it was not authentic.

In the recording, Mr Eiswert’s deepfaked voice is heard making disparaging comments about black students’ test scores, black teachers and Jews.

Police believe Mr Darien, the Baltimore-area school’s athletic director, made the recording to retaliate against Mr Eiswert because he was pursuing an investigation into potential mishandling of district funds.

Mr Darien had authorised a payment of nearly $2,000 (£1,600) to his roommate, falsely claiming the roommate was an assistant coach for the Pikesville girls’ soccer team, reports the Baltimore Sun newspaper.

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

How Far Can The Yen Fall Before Japan Goes Bankrupt?

April 27, 2024

How Far Can The Yen Fall Before Japan Goes Bankrupt?

We may be about to find out

Japan’s ongoing march to national bankruptcy has been a recurring theme here. See:

Japan Is In That Box
Japan Takes Another Step Towards the Cliff
How a Country Goes Bankrupt, In 10 Steps

Now the death spiral has entered a new phase, with the yen/dollar exchange rate heading straight down:

To restate the “Japan collapse” thesis, soaring government debt will eventually cause the yen to crater and/or interest rates to spike. The Bank of Japan will then face an impossible choice: Support the yen with even higher interest rates and watch government interest expense rise to national bankruptcy levels. Or push interest rates down to keep a lid on debt costs and cause the yen to collapse.

As the above chart illustrates, the “cause the yen to collapse” part of the story seems to be happening. Interest rates, meanwhile, are now spiking in a mirror image of the yen’s collapse.

Decision Time

So it’s decision time for Japan’s leaders. What will they choose? And — more importantly — what happens when the global financial system realizes that it no longer matters?

Japan is a big country, so its impending crisis creates risks for the global economy. But it’s more important as a signal to the US, Europe, and China that we’re heading in exactly the same direction.

In other words, the Fed is in the same box as the Bank of Japan, and that box is shrinking with every new trillion dollars of debt.

Eventual Financial Death Spiral Now Imminent – John Rubino

March 11, 2024

Eventual Financial Death Spiral Now Imminent – John Rubino

Analyst and financial writer John Rubino warned nearly four months ago of a “U.S. Financial Death Spiral.” This past week, Bank of America caught up to Rubino and issued a warning about a “US dollar death spiral” because the federal government was going deeper in the red by creating “$1 trillion in new debt every 100 days.” Maybe this is why gold and Bitcoin have been hitting new all-time highs day after day. Rubino says, “When a building was worth $200 million and someone sells it for $48 million, that means there is a loss that someone has to take. Those losses are mostly on the books of regional and local banks. So, they are in big trouble financially. . . . You will get these massive bank runs that the government will have to step in and bail out. This is one of many things that will happen in the not-so-distant future. This will impact government finances in a scary way that will send people’s attention to the currency. In other words, if we have another $3 trillion bailout on top of everything else that’s going on . . .what is that going to do to the dollar? . . . . Currencies are being inflated away with all these bailouts, deficits, wars and all these things that are going on that are bad for the currency. So, people start selling government bonds, which push up interest rates and blows up even more bad real estate and paper . . . until you get a debt spiral, a real live financial death spiral than cannot be fixed. . . . I was talking to a real estate guy the other day, and he said this is not just inevitable, it is imminent. It is happening now. It is happening quickly, and it is going to hit the headlines. . . . In this case, what is inevitable in commercial real estate is also looking imminent.”

…click on the above link to read the rest…

U.S. Financial Death Spiral – John Rubino

November 20, 2023

U.S. Financial Death Spiral – John Rubino

Analyst and financial writer John Rubino has a new warning about being fooled into thinking the economy is improving because inflation and interest rates have fallen some recently. Rubino says, “If the U.S. government is running crisis level deficits, which it is right now, borrowing money and paying interest on it means we are in a financial death spiral. The debt goes up, the interest on the debt goes up and that raises the debt even further, and you just spiral out of control. We are there right now. The official U.S. debt is $33.5 trillion. It’s growing by $1.7 trillion a year, and $1 trillion of that is interest costs. Interest costs are rising as the overall debt goes up. Then throw in this incredibly reckless military spending in the guise of foreign aid, and you get a society that has completely lost control. That’s where we are now. We are in the blowoff stage of a 70-year credit super-cycle. Those things do not end with a whimper, and they certainly do not end with a soft landing. They end with a bang, and the bang is going to be centered on the currency. People are going to look at this and say, ‘Do I really want to hold the currency or bonds of a country that is destroying its finances at this trajectory and this scale?’ The answer will be ‘No.’ At that point, it is game over for a deeply indebted economy. We are headed that way fast, and these wars are taking us that way even faster.”

If the Fed keeps raising interest rates, the economy tanks, but you protect the dollar. If you cut interest rates, you spike inflation even more, and the U.S. dollar tanks. Rubino says in the end, we get a “massive reset,” and the everything bubble explodes.

…click on the above link to read the rest…

The Long Wave Versus the Printing Press

August 7, 2023

The Long Wave Versus the Printing Press

Winter has been coming for a very long time. Here’s why

The fascinating thing about “long wave” analysis (broadly defined to include Kondratieff waves, Elliott waves, and William Strauss and Neil Howe’s Fourth Turning) is that while each theory uses its own indicators and terminology to show how societies move through recurring cultural/psychological/financial stages, they’ve all reached the same conclusion: we’re toast.

The first decade of this century marked the theoretical end of an Elliott Wave Grand Supercycle — and of an even bigger wave that began in the Dark Ages…

…the start of Kondratiff winter…

…and the beginning of a Fourth “Crisis” Turning. As Strauss and Howe put it in 1997:

Around the year 2005 [give or take a few years], a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire.…Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression and World War II….The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. If there is a war, it is likely to be one of maximum risk and effort – in other words, total war…

But a funny thing happened on the way to the Greater Depression: We’ve somehow kept it together, inflating the 2000s housing bubble and, when that burst, replacing it with the everything bubble. Policymakers, talking heads, and most investors (judging by the past year’s stock market action) seem to think that a normal recovery is underway and that a crash remains a low-probability event.

…click on the above link to read the rest…

Is The Aristocracy’s Next Psyop … Alien Invasion?

February 14, 2023

Is The Aristocracy’s Next Psyop … Alien Invasion?

These guys are just crazy enough to try it

In a January 12 post titled What Will The Aristocracy Try Next? I listed some manufactured crises that might further enrich the 1% at the expense of the rest of us. But our elites are a crafty bunch, and instead of a food shortage or cyber-attack, they’re apparently trying something more exotic: alien invasion.

Real or fake? If it’s real, and we’re in a shooting war with hyper-advanced visitors from a distant star, then there’s a decent chance that we’re done as a species (which we deserve if we’re really this stupid).

But regular people can’t do much about interstellar war, so let’s move that scenario to the back burner and focus on the much higher probability that the global deep state needs an excuse to cut interest rates back to zero and introduce central bank digital currencies, and thinks hostile aliens might be useful for quelling the unrest that spiking inflation would otherwise cause.

This is a scenario we can work with because it’s pretty much the question we were already trying to answer, i.e., how to protect our money and freedoms from a rapacious billionaire/political/corporate/military class that wants to take everything.

So … accelerate the prepping. Increase stacks of cash, gold, and silver, pay off more debt, expand the garden, and fill in the gaps in your arsenal (I’m shopping for a concealed carry pistol as this is written). An article about bug-out strategies is in the works here for next week.

As for stock market timing, one would think that the government saying “yep, we’re shooting extraterrestrials on sight” would ignite a tsunami of selling…

…click on the above link to read the rest…

Global Debt & Death Spiral – John Rubino

February 14, 2023

Global Debt & Death Spiral – John Rubino

Analyst and financial writer John Rubino says we’re are in a “debt and death spiral” that will force dramatic changes on the world. Rubino explains, “The debt spiral part of this means things from here continue to get worse and worse for the big currencies of the world until they die. In other words, until people lose faith in them, refuse to use them and hold them anymore until their value falls to their intrinsic value, which is zero. That manifests to hyperinflation. The value of the currency falls as opposed to the things you buy with it. . . . Things feel basically okay for a long time as long as governments could force interest rates down to really low levels. The side effects of that are massive money creation and, eventually, inflation. That’s what we are dealing with now. So, here we go. Welcome to the end game for the world’s big currencies.”

Rubino contends things have gotten so out of control that there is no stopping what is coming. Rubino says, “We are in the part of the cycle now where things just get worse, and there is nothing we can do about it. You are going to see companies that have borrowed huge amounts of money to buy back their stock, and now they see their interest costs explode. Governments around the world have the same problem, and there is nothing central banks can do about this. The next stage of this is when everybody realizes that there is no fix. Daddy is not going to come home and take care of all of this, and there is no adult supervision. The financial markets are basically on their own with so much debt that there is nothing left to do…

…click on the above link to read the rest…

Gold And The Shrinking Trust Horizon

January 31, 2023

Gold And The Shrinking Trust Horizon

Last week I posted an article on the implosion of the official vaccine narrative. That’s a controversial topic so not surprisingly it generated some heat on both sides. And a few readers expressed the wish that I’d stay in my lane (precious metals investing) and avoid venturing into unrelated and less well understood territory.

But believe it or not, the public health establishment losing its credibility is related to precious metals, via something called the trust horizon. It works like this: When things are good and the people in charge of big systems seem to be running them well, we’re content to trust the experts. We keep most of our money in banks, brokerage houses, and crypto wallets that exist for us only as websites. We buy produce that’s grown in a different hemisphere and shipped via boats, trains, and trucks to corporate chain grocery stores. We vaccinate ourselves and our kids according to the schedules set by the NIH or the CDC. We pop pills on our doctor’s orders without doing any research. We eat processed foods on the assumption that the FDA keeps them free of dangerous additives. And we believe what we see on cable news.

In other words, our trust horizon, defined as the distance from ourselves at which we’ll believe what we’re told, is global. We assume everything everywhere is working for our benefit and we’re thus willing to put our welfare in those distant hands.

But let some big systems fail to take proper care of us and we pull back, finding people and institutions closer to home that we can see and judge first-hand. We move our money out of distant banks and brokers and into local credit unions whose managers live down the street…

…click on the above link to read the rest…

Gold Or Silver?

January 21, 2023

Gold Or Silver?

You want both, obviously, but how much of each and why?

At first glance, gold and silver seem pretty fungible. They’re both hypnotically pretty. Their prices tend to rise and fall according to the same financial/political forces. They’re both seen as real money by a tiny (very wise) fraction of the population and as atavistic relics by the vast, ignorant majority. And – most important – they will both preserve their owners’ purchasing power when today’s fiat currencies evaporate like the fever dreams they always were.

So you definitely want some (and maybe a lot) of each. But gold and silver are not identical. They have different strengths and weaknesses in various “monetary reset” scenarios. And their prices don’t move in lockstep. Sometimes one is cheap relative to the other.

So how much of each should we own now, and how quickly should we plan to load up the truck? The answer is different for each person, but a few things are generally true.

The gold/silver ratio
The relative prices of gold and silver tend to fluctuate within a broad but discernable range. This gold/silver ratio is expressed as the number of ounces of silver it takes to buy an ounce of gold and tends to rise and fall along with the emotional state of precious metals investors. When those investors don’t foresee imminent inflation or other monetary disruptions, they gravitate towards gold’s safety and stability, and shy away from silver’s volatility. Gold’s price rises relative to silver’s, producing a high gold/silver ratio.

When investors expect rising inflation or other kinds of currency instability, they buy precious metals generally, but gravitate towards silver’s greater upside potential. Gold and silver both rise but the gold/silver ratio falls as buyers push silver’s price up more quickly than gold’s.

…click on the above link to read the rest…

Why Recession Is Imminent, In Three Charts

January 20, 2023

Why Recession Is Imminent, In Three Charts

Any one of these would be enough to make the case

The idea that the world’s central banks can inflate the biggest financial bubble in human history — appropriately called the everything bubble — and then deflate it gently into a soft landing is mathematically and philosophically impossible. So the question is not if but when we get a bust that’s commensurate with the boom.

Based on the following three indicators, that bust is imminent.

Massively inverted yield curve
When short-term interest rates rise above long-term rates, a slowdown usually follows. That’s because traditional banks (though not necessarily the monstrous hedge funds that the biggest banks have evolved into) make most of their money by borrowing short and lending long. In normal times, long-term rates are higher than short-term, reflecting the higher risk of lending into the distant future, so the spread between a bank’s borrowing and lending rates produces a nice spread, which translates into a decent profit.

Invert the yield curve by pushing short-term rates above long-term rates, and this business model breaks down. Banks stop making suddenly-unprofitable loans, their customers have less money to spend and invest, and the economy shrinks.

Note two things on the following chart, which depicts the spread between 10-year and 2-year Treasury bond yields. First, when this spread went slightly negative (i.e., 2-year rates higher than 10-year) in 2000 and 2007, recession followed within a year or so. Second, today’s yield curve is a lot more than slightly negative. It is, in fact, one for the record books, implying that the credit markets expect a dramatic slowdown.

Shrinking money supply
A Ponzi scheme needs ever-greater amounts of money flowing in to avoid collapse. Today’s global economy is a classic example of a Ponzi scheme. Therefore, it needs an increasing money supply to function.

…click on the above link to read the rest…

Confronted with a Nightmare Scenario – John Rubino 5.8.2021

May 11, 2021

Financial writer John Rubino says there is no easy way out for the financial and political mess the United States has created for itself. Rubino starts with the economic problems and explains, “Now, inflation is starting to spread. . . . Look at lumber. If you are trying to build a house, it’s $35,000 more now than it was two years ago just because of lumber. Iron ore, house prices, grains, food and you name it, we’ve got inflation going on. At the same time, we have an apparent labor shortage. All these companies are coming out and saying we would love to take on all the business we are being offered to us, but we don’t have enough people. Even Uber and Lyft cannot find enough drivers. It’s weird it is happening this soon, but we should not be surprised since we dumped tens of trillions of dollars into the economy over the past year. This is what you would expect if you get the money supply going up 30% or 40%, which it did. This is what you get. The economy overheats. Now, we are confronted with the nightmare scenario in a fiat currency system. Inflation starts to pick up, which it is. That sends interest rates higher, which is happening. That threatens all the heavily indebted people out there because as rates go up, their costs rise. Then they go bankrupt in increasing numbers, and the system collapses. We are in the early stages in that kind of a process, and I don’t think anybody knows what to do about it.”

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

Another Nail In The Coffin Of Big Cities

January 9, 2021

Another Nail In The Coffin Of Big Cities

The riots, political turmoil, and other banana republic embarrassments seem to be ending – for now. So let’s get back to examining the real problems of this hyper-leveraged, dangerously-complex world. Like how big cities might soon be obsolete:

Pretend it’s 2019 and you’re living in a major US city. You, your spouse and two kids have a fairly nice (though admittedly very expensive) apartment in a relatively safe neighborhood, and life is pretty good. There’s a park nearby, dozens of great restaurants within walking distance, and plenty of interesting friends. And of course your high-paying jobs are right there.

Then comes 2020. A pandemic causes your mayor to panic and lock down the city. There go the park, friends, and restaurants. And before the horror of this new normal has a chance to sink in, civil unrest explodes and turns your once-iconic neighborhood into a Mad Maxian war zone of burned-out cars and boarded up storefronts.

If it was just you, you might stick it out. But with a family, this life is now untenable. So you look into moving, preferably to somewhere semi-rural where neither a lockdown nor riots will ever be a problem and the kids can actually play outside. Maybe it’s time to indulge your fantasy of working remotely from a homestead in a gorgeous place.

But you immediately hit a technological speed bump: Broadband Internet, which up to this point had seemed both ubiquitous and a basic human right, isn’t available on the homesteads you now covet. The only option out there is low-tech, unreliable, molasses-slow satellite Internet that, if the reviews are to be believed, is worse than nothing at all.

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

2021 A Year of Mass Bankruptcy – John Rubino

October 29, 2020

2021 A Year of Mass Bankruptcy – John Rubino

Financial writer John Rubino says, “2021 is going to be a pivotal year” in the debt markets. Rubino says lots of debt will either be bailed out or defaulted on in some way. Because of CV19, there is no getting around this. The debt clock has been pushed forward by years. One too huge to hide debt problem are heavily indebted U.S. states and cities. Rubino says, “You have to call this a scam because years ago, they decided to offer wildly over generous pensions to public sector unions. In return for that, the public sector unions elected people who would keep on doing that and keep the gravy train going. . . . Back then, it worked . . . but now they are all retiring, and these states and cities are heading for some version of bankruptcy at an accelerated rate. It was always going to happen in the next 10 years, but with the pandemic, the time frame has been moved way up. So, probably 2021 will be a year where a lot of these guys hit a wall where they have no choice but to default on a lot of their obligations. That’s going to throw the financial system into turmoil.”

Rubino points out, “If they can’t pay their bills, they can’t pay their bills. If it can’t happen, it won’t happen. So, you get effective bankruptcy via defaults for a lot of these places. That means massive layoffs of city and state workers and turmoil in the bond market. That kind of thing alone is enough to send the U.S. back into recession assuming we are out of recession when it happens.

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

World on Verge of Spinning Out of Control – John Rubino

July 29, 2020

World on Verge of Spinning Out of Control – John Rubino

Financial writer John Rubino says gold is at new all-time highs, silver is vaulting upward and there is no end in sight for the massive money printing around the world. Rubino say’s if you look deeper, you can see the “real message” in the unfolding events. Rubino explains, “It’s fun to be a gold bug and see your stacks getting more valuable, but the real message here is the world is on the verge of spinning out of control. That’s what gold and silver are signaling. We’re just a mess with no way out of this because even before the pandemic hit, we were running deficits in the U.S. of a trillion dollars a year. That is an emergency level of government borrowing, but we were doing it in the 10^th year of a recovery or expansion. Normally, everybody is back at work, paying taxes, government debt goes way down and sometimes it even turns into surpluses, but that wasn’t happening this time, which is a sign the monetary experiment that began in 1971 when we went off the gold standard and went to all fiat currencies everywhere was ending. We are no longer able to manage economies with this much debt just by printing new currency and borrowing more money. The system was going to break down anyway, but the pandemic has come along and accelerated the process.”

Rubino goes on to say, “So, now people ask: Is there a pain free way of getting out of this and getting back to normality? And the answer is probably no. We have to get rid of this debt somehow. I think the global debt to GDP is in the 350% to 400% range, which is the highest ever.

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

Tag Archives: john rubino

Content

Post categories

Economic Links

Energy/Resource Links

Environmental Links

Geopolitical Links

Liberty Links

News Links

Other Links

Survival Skills

Post Archives by Category

Post navigation

Latest Posts