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Experts Warn Of Chaos For The U.S. Economy As China Declares That “The Biggest Trade War In Economic History” Has Begun

Experts Warn Of Chaos For The U.S. Economy As China Declares That “The Biggest Trade War In Economic History” Has Begun

Nothing is going to be the same after this.  On Friday, the United States hit China with 34 billion dollars in tariffs, and China immediately responded with similar tariffs.  If it stopped there, this trade war between the United States and China would not be catastrophic for the global economy.  But it isn’t going to stop there.  Donald Trump is already talking about hitting China with an additional 500 billion dollars in tariffs, which would essentially cover pretty much everything that China exports to the U.S. in a typical year.  The Chinese have accused Trump of starting “the biggest trade war in economic history”, and they are pledging to fight for as long as it takes.  As I discussed yesterday, the only way that one side is going to “win” this trade war is if the other side completely backs down, and that simply is not going to happen.  So there is going to be economic pain, and that pain is likely to intensify for as long as this trade war persists.  U.S. businesses that will be affected by foreign tariffs are already cutting back production and laying off workers, and CNN is reporting that 1,300 products have suddenly become more expensive for U.S. consumers.  There will be nowhere that anyone can hide from this trade war, and it will ultimately affect every single man, woman and child in the entire country.

Most Americans are not paying any attention to these ongoing developments, but the Chinese sure are.

Earlier today, the Chinese Ministry of Commerce called the U.S. tariffs “typical trade bullying”, and it warned that this trade war could trigger “global market turmoil”

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

Things Just Went Nuclear In Our Trade War With China, And A Giant Shockwave Is About To Hit The U.S. Economy

Things Just Went Nuclear In Our Trade War With China, And A Giant Shockwave Is About To Hit The U.S. Economy

It is difficult to find the words to describe just how serious America’s trade war with China is becoming.  As you will see below, the two largest economies on the entire planet are on a self-destructive course that almost seems irreversible at this point.  The only way that this trade war is going to come to a rapid conclusion is if one side is willing to totally submit and accept an extremely bitter and humiliating defeat on the global stage, and that is not likely to happen.  So in the short-term, and probably beyond that, we are going to experience a tremendous amount of economic pain.  In fact, if one wanted to create a recipe for economic disaster, it would be hard to beat having the Federal Reserve dramatically raise interest ratesat the exact same time that the U.S. government is starting trade wars with all of the other major economic powers simultaneously.  Unless something drastically changes in the very near future, there is no way that the U.S. is going to be able to get through this without experiencing severe pain.

Many had hoped that President Trump would settle down after the initial salvos in this new trade war, but instead on Sunday evening we learned that he has decided to go nuclear.  The following comes from CNBC

President Donald Trump plans to bar many Chinese companies from investing in U.S. tech and to block additional technology exports to China, The Wall Street Journal reported on Sunday evening, citing people familiar with the matter.

The two measures are set to be announced by the end of the week, and are intended to counter Beijing’s Made in China 2025 — a Chinese initiative to be a global leader in technology.

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

The Stock Market Falls Another 724 Points! What In The World Is Happening On Wall Street?

The Stock Market Falls Another 724 Points! What In The World Is Happening On Wall Street?

We just witnessed the 5th largest single day stock market crash in U.S. history.  On Thursday the Dow Jones Industrial Average plunged 724 points, and many believe that this is just the beginning of another huge wave down for stock prices.  After this latest dramatic decline, the Dow is now down 3.1 percent so far in 2018, and overall it is down 9.99 percent from the all-time high in January.  A 10 percent decline is officially considered to be “correction” territory, and that means that we are just about there.

So why are stock prices falling so much?  Well, USA Today is blaming the potential for a trade war with China, the latest Facebook scandal and “the impact of rising interest rates on the economy”…

U.S. stocks sold off sharply Thursday, with the Dow tumbling more than 700 points amid growing fears of a trade fight between the U.S. and its trading partners after President Trump said he will impose billions of dollars in tariffs on Chinese imports.

The heavy selling on Wall Street was exacerbated by continued weakness in shares of Facebook as well as concerns about the impact of rising interest rates on the economy.

Of course the possibility of a trade war between the two largest economies on the planet is certainly the greatest concern that the markets are grappling with at the moment.  According to Ian Winer, any sign of retaliation by China “will really spook people”…

“A global trade war, whether it’s real or perceived, is what’s weighing on the market,” said Ian Winer, head of equities at Wedbush Securities. “There’s this huge uncertainty now. If China decides to get tough on agriculture or anything else, that will really spook people.”

Trump announced tariffs on about $50 billion worth of Chinese imports on Thursday afternoon. It’s not clear which products will be hit, but the action is aimed at curbing China’s troubling theft of US intellectual property.

And we can be quite sure that China will retaliate.

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

Make Your Choice: Change By Pain Or Insight

Make Your Choice: Change By Pain Or Insight

It’s time to make the decision. Choose wisely.

Most experienced investors know the four most dangerous words are: This time is different.

It never is.

And yet one of my key predictions here at Peak Prosperity is that The next twenty years will be completely unlike the last twenty years.

So am I saying that things really will be different this time?

Yes, I am. But to understand why, you have to look closely at the unprecedented moment in history in which we live, as well as how the Three E’s – the Economy, Energy and Environment – all tie together now in a way they never have before.

For those who prefer their conclusions right up front, the simplest summary I can provide is that everything we think we know about “how things work” is just plain wrong.

This explains why, among many other grotesque distortions, the stock and bond markets are spectacularly overpriced and overvalued right now.

This danger is important to be aware of because when things correct, as they inevitably must, the next crash will be incredibly damaging. It could be as profound as that which dethroned Spain as a world power, permanently.

Peak Prosperity user Gyurash put this risk in context within his comment to our recent podcast on Economics for Independent Thinkers:

The mention of Paul Volker was interesting. I remember listening to a lecture given by Mr. Volker played on public radio in the mid 80s. He talked about the Spanish empire in the 16th century and the easy money train they had coming from South American gold and silver. He said that although it seemed to create great wealth it also made for a false economy in Spain.

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

The Dow Jones Industrial Average Falls Another 420 Points As Investors Panic About A Potential Trade War

The Dow Jones Industrial Average Falls Another 420 Points As Investors Panic About A Potential Trade War

Many had been hoping that the financial shaking on Wall Street that we witnessed in February would subside in March, but so far that is definitely not the case.  On Thursday, the Dow fell another 420 points as investors fretted about the potential for a trade war.  Over the past month, we have seen many days when stock prices have been way down and other days when stock prices have been way up.  This is precisely the sort of wild volatility that we would expect to see if a major financial crisis was brewing, and the truth is that our financial system is far more vulnerable today than it was back in 2008.

Many Americans have assumed that the U.S. economy must be in great shape since the stock market has just kept going up for the past several years.  But the reality of the matter is that stock prices are no longer connected to economic reality whatsoever.  The U.S. economy has not grown by 3 percent or more in 12 years, but stock prices have been shooting into the stratosphere thanks to relentless central bank intervention.

But what goes up must eventually come down, and on Thursday we witnessed another stunning decline

The Dow Jones industrial average closed 420.22 points lower at 24,608.98 after rising more than 150 points earlier in the day. The 30-stock index fell as much as 586 points.

The S&P 500 declined 1.4 percent to end at 2,677.67 — erasing its year-to-date gains — with industrials as the worst-performing sector. It also briefly broke below its 100-day moving average, a key technical level. The Nasdaq composite fell 1.3 percent to 7,180.56 and dipped below its 50-day moving average.

So why did this happen?

Well, the mainstream media is placing the blame for Thursday’s decline on Trump’s new tariffs

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

-1,175 Points! We Just Witnessed The Largest One Day Stock Market Crash Ever

-1,175 Points! We Just Witnessed The Largest One Day Stock Market Crash Ever

The mainstream media seems so surprised that the stock market is crashing, but the truth is that it isn’t a surprise at all.  In fact, this crash is way, way overdue.  If the Dow Jones industrial average fell another 10,000 points, stock prices would still be overvalued.  I have been warning and warning and warning that this would happen, because stock valuations always return to their long-term averages eventually.  On Monday, the Dow was down a staggering 1,175 points, which was the largest single day decline that we have ever seen by a very wide margin.  In fact, it shattered the old record by nearly 400 points.

Shortly after 3 PM, all hell broke loose on Wall Street.  The Dow dropped by more than 800 points in just 10 minutes.  At one point on Monday, the Dow was down nearly 1,600 points, but a brief rally cut those losses roughly in half.  However, the rally did not last long and stock prices collapsed hard as the market closed.  At this moment, the Dow is already down more than 2,200 points from the peak of the market, and we are not too far from officially entering “correction” territory.

Once stocks start falling, it can trigger a massive rush for the exits, and that is what happened on Monday.  In particular, investors started to panic once the Dow broke through the 50-day moving average

“As soon as we broke the 50-day moving average … we saw volatility spike,” said Jeff Kilburg, CEO of KKM Financial. “It’s just been downhill from there.”

Other waves of selling were triggered once the 25,000 and 24,000 barriers on the Dow were breached.  In order to protect against losing too much money, many investors have stop losses set at psychologically-important levels.  The following comes from MarketWatch

 

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

-666 Points: We Just Witnessed The 6th Largest Single Day Stock Market Decline In U.S. History 

-666 Points: We Just Witnessed The 6th Largest Single Day Stock Market Decline In U.S. History 

On Friday, the Dow Jones Industrial Average fell 666 points (665.75 points to be precise), and many are pointing out that this was the 6th largest single day crash that we have ever seen.  This decline happened on the 33rd day of the year, and it was the worst day for the stock market by far since President Trump entered the White House.  I have been repeatedly warning that we are way overdue for a stock market crash, and many are concerned that we may be on the precipice of another great financial crisis.  We shall see what happens on Monday, because that will set the tone for the rest of the week.  If we see another huge decline early Monday morning, that could easily set off full-blown panic selling on Wall Street.

Rising interest rates appear to have been the trigger for the enormous market drop on Friday.  The following comes from the New York Post

“We all know that many bull markets have ended by the Federal Reserve as they raise the rates to the point of slowing the economy down perhaps too much,” Quincy Krosby, chief market strategist at Prudential Financial, told The Post.

“It’s come on quickly and it caught the market off guard,”Krosby said.

The Dow sell-off brought it below the 26,000 plateau — to 25,520.96 — the biggest points drop since Dec. 1, 2008.

It is quite rare for the market to drop this much in a single day.  The largest single daily decline was a 777 point drop in 2008, and overall the Dow has fallen by more than 600 points less than 10 times throughout history

The index posted a loss of nearly 666 points, its sixth-worst decline ever on a points basis.

 

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

This Is What A Pre-Crash Market Looks Like

This Is What A Pre-Crash Market Looks Like

The only other times in our history when stock prices have been this high relative to earnings, a horrifying stock market crash has always followed.  Will things be different for us this time?  We shall see, but without a doubt this is what a pre-crash market looks like.  This current bubble has been based on irrational euphoria that has been fueled by relentless central bank intervention, but now global central banks are removing the artificial life support in unison.  Meanwhile, the real economy continues to stumble along very unevenly.  This is the longest that the U.S. has ever gone without a year in which the economy grew by at least 3 percent, and many believe that the next recession is very close.  Stock prices cannot stay completely disconnected from economic reality forever, and once the bubble bursts the pain is going to be unlike anything that we have ever seen before.

If you think that these ridiculously absurd stock prices are sustainable, there is something that I would like for you to consider.  The only times in our history when the cyclically-adjusted return on stocks has been lower, a nightmarish stock market crash happened soon thereafter

The Nobel-Laureate, Robert Shiller, developed the cyclically-adjusted price/earnings ratio, the so-called CAPE, to assess whether stocks are likely to be over- or under-valued. It is possible to invert this measure to obtain a cyclically-adjusted earnings yield which allows one to measure prospective real returns. If one does this, the answer for the US is that the cyclically-adjusted return is now down to 3.4 percent. The only times it has been still lower were in 1929 and between 1997 and 2001, the two biggest stock market bubbles since 1880. We know now what happened then. Is it going to be different this time?

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

The Mainstream Media Is Talking About A Coming Middle East War That Could Involve Saudi Arabia, Iran, The U.S. And Israel

The Mainstream Media Is Talking About A Coming Middle East War That Could Involve Saudi Arabia, Iran, The U.S. And Israel

People better start waking up and paying attention to what is happening in the Middle East, because the situation is becoming quite serious.  If things go badly, we could be facing a major regional war which would involve not only Saudi Arabia and Iran, but also potentially the United States and Israel.  Yesterday, I quoted an article in the New York Times that warned that tensions between the Saudis and the Iranians were raising “the threat of a direct military clash between the two regional heavyweights”.  And now Jake Novak of CNBC is saying that a “direct conflict between Saudi Arabia and Iran, as opposed to the proxy war they’re fighting in Yemen, looks inevitable.”

I put those last two words in bold so that there wouldn’t be any confusion.  In fact, Novak is warning that the Saudis “are marching ever closer towards a wider regional war”.  Novak understands the dynamics of the Middle East, and he realizes where things could be headed if cooler heads do not prevail.

Saudi Arabia and Iran have already been fighting proxy wars against one another in Syria and Iran for quite a while, but a direct military conflict between the two could literally be a nightmare scenario.

One of the primary characters in this ongoing drama is Saudi Arabia’s extremely hawkish crown prince Mohammed bin Salman.  He hates Iran with a passion, and he has already said that he believes that a peace dialogue with Iran is impossible.

And over the past several days, events in Saudi Arabia and Lebanon have moved talk of war to the front burner

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

Is Saudi Arabia Heading For War With Iran?

Is Saudi Arabia Heading For War With Iran? 

Is a major war in the Middle East looming on the horizon?  Most of us living in the western world simply do not realize how much Saudi Arabia and Iran truly hate one another.  Saudi Arabia is the global center for Sunni Islam, and Iran is the global center for Shia Islam, and the two major sects of Islam have a history of bad blood that literally goes back for over a thousand years.  The Saudis and the Iranians are already engaged in “proxy wars” in Syria and in Yemen, and now a missile that was fired at Riyadh’s international airport threatens to turn the conflict between the two regional powers into a hot war.

If you are tempted to think that I am exaggerating one bit, just consider what the New York Times is saying about this…

Saudi Arabia charged Monday that Iran had committed “a blatant act of military aggression” by providing its Yemeni allies with a missile fired at the Saudi capital over the weekend, raising the threat of a direct military clash between the two regional heavyweights.

The accusations represent a new peak in tensions between Saudi Arabia and Iran at a time when they are already fighting proxy wars in Yemen and Syria, as well as battles for political power in Iraq and Lebanon.

And Yahoo is reporting that the Saudis are saying that this missile attack “may amount to an act of war”…

On Monday, a Saudi-led military coalition battling Tehran-backed rebels in Yemen said it reserved the “right to respond” to the missile attack on Riyadh at the weekend, calling it a “blatant military aggression by the Iranian regime which may amount to an act of war”.

Saudi Foreign Minister Adel al-Jubeir also warned Tehran.

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

How The Elite Dominate The World – Part 4: They Buy Politicians, And Incumbents Almost Always Win

How The Elite Dominate The World – Part 4: They Buy Politicians, And Incumbents Almost Always Win

Once we wake up to how the game is being played, then we will have a real shot at changing things.  For decades, the elite have been pulling the strings behind the scenes in both major political parties.  That is why nothing has ever seemed to change very much no matter which party has been in power.  The agenda of the elite has always seemed to march forward, and ordinary people like us have always been frustrated that we can’t seem to make a difference.  But now a shift seems to be taking place.  Donald Trump took on the establishment in both major parties, and he miraculously won the presidency.  Down in Alabama, the elite spent more than 30 million dollars to defeat Roy Moore, and he still defeated Luther Strange.  A political awakening is taking place, and I can’t wait to see what happens during the mid-term elections in 2018.

In Part I and Part II of this series, I talked about how the elite use debt as a tool of enslavement.  In Part III, I went over how the elite use the colossal media corporations they own to control what we think.  Today, I want to talk about their influence in the realm of politics.

In Washington D.C., it is well understood that the game of politics is all about the money.  If I win my election, and online polling suggests that there is a ton of enthusiasm for my campaign, I will be expected to spend most of my time on the phone raising money.  As a freshman member of Congress, at orientation it will be explained to me that I am supposed to spend approximately four hours a day doing fundraising, and that is why the House and Senate floors are so empty most of the time.

By law, members of Congress cannot make fundraising calls from their offices, and so both parties have huge call centers just across from the Capitol.  Especially around lunch and dinner times (because those are some of the best times to reach people), those call centers are packed as members of the House and Senate run through lists of potential donors.

And it isn’t just about raising money for their own campaigns.  As a freshman member of Congress I would be expected to raise at least $200,000 for the NRCC (the National Republican Congressional Committee).  If I don’t pay my dues, I would get into big trouble with party leadership.

But you know what?  I have already pledged that I am not going to participate in this very corrupt system.  If I am sent to Congress, I am going to spend my time doing the job that the people of Idaho sent me there to do.

So will Paul Ryan and the others in leadership get very upset with me for not “paying my dues”?

Of course.

But it is time for some of us to take a stand and do what is right.  Congress has become a cesspool of filth and corruption, and it is time to flush the toilet.

Because if we don’t fight this corrupt system, the influence of money in politics will just get worse and worse.  Today, the elite pour millions upon millions of dollars even into small campaigns, and in 2016 it took an average of more than 10 million dollars to win a U.S. Senate seat

Global Leaders Rattle Their Sabers As The World Marches Toward War

Global Leaders Rattle Their Sabers As The World Marches Toward War

The World Marches Toward War - Public DomainIran just conducted another provocative missile test, more U.S. troops are being sent to the Middle East, it was just announced that the U.S. military will be sending B-1 and B-52 bombers to South Korea in response to North Korea firing four missiles into the seas near Japan, and China is absolutely livid that a U.S. carrier group just sailed through contested waters in the South China Sea.  We have entered a season where leaders all over the globe feel a need to rattle their sabers, and many fear that this could be leading us to war.  In particular, Donald Trump is going to be under the microscope in the days ahead as other world leaders test his resolve.  Will Trump be able to show that he is tough without going over the edge and starting an actual conflict?

The Iranians made global headlines on Thursday when they conducted yet another ballistic missile test despite being warned by Trump on numerous occasions…

As tensions between the U.S. and Iran continue to mount, the semi-official news agency Tasnim is reporting that Iran’s Revolutionary Guard has successfully conducted yet another ballistic missile test, this time from a navy vessel.  Called the Hormuz 2, these latest missiles are designed to destroy moving targets at sea at ranges up to 300 km (180 miles).

Reports on the latest test quotes Amir Ali Hajizadeh, commander of the IRGC’s Aerospace Force, who confirmed that “the naval ballistic missile called Hormuz 2 successfully destroyed a target which was 250 km away.”

The missile test is the latest event in a long-running rivalry between Iran and the United States in and around the Strait of Hormuz, which guards the entrance to the Gulf. About 20% of the world’s oil passes through the waterway, which is less than 40 km wide at its narrowest point.

So how will Trump respond to this provocation?

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

This Region Of The World Is Being Hit By The Worst Economic Collapse It Has Ever Experienced

This Region Of The World Is Being Hit By The Worst Economic Collapse It Has Ever Experienced

South America On The Globe - Public DomainThe ninth largest economy in the entire world is currently experiencing “its longest and deepest recession in recorded history”, and in a country right next door people are being encouraged to label their trash so that the thousands upon thousands of desperately hungry people that are digging through trash bins on the streets can find discarded food more easily.  Of course the two nations that I am talking about are Brazil and Venezuela.  The Brazilian economy was once the seventh largest on the globe, but after shrinking for eight consecutive quarters it has now fallen to ninth place.  And in Venezuela the economic collapse has gotten so bad that more than 70 percent of the population lost weight last year due to a severe lack of food.  Most of us living in the northern hemisphere don’t think that anything like this could happen to us any time soon, but the truth is that trouble signs are already starting to erupt all around us.  It is just a matter of time before the things currently happening in Brazil and Venezuela start happening here, but unfortunately most people are not heeding the warnings.

Just a few years ago, the Brazilian economy was absolutely roaring and it was being hailed as a model for the rest of the world to follow.  But now Brazil’s GDP has been imploding for two years in a row, and this downturn is being described as “the worst recession in recorded history” for that South American nation…

Latin America’s largest economy Brazil has contracted by 3.6 percent in 2016, shrinking for the second year in a row; statistics agency IBGE said on Tuesday. It confirmed the country is facing its longest and deepest recession in recorded history.

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

The Russian Love Affair With Donald Trump Sours As The U.S. And Russia Move Toward War

The Russian Love Affair With Donald Trump Sours As The U.S. And Russia Move Toward War

NATO Seasparrow surface missile is launched from the aircraft carrier USS George H.W. Bush - Publc DomainIn recent months Donald Trump has been severely criticized by both Democrats and Republicans for not being sufficiently “anti-Russia”, but the truth is that the Trump administration has not been working hard enough to repair a relationship that is now souring very rapidly.  When Donald Trump won the election in November, the Russians celebrated tremendously, because they greatly preferred Trump over Hillary Clinton.  But just because Trump was victorious does not mean that our relationship with Russia will automatically improve.  Trump and Russian President Vladimir Putin both have huge egos, and it is quite easy to imagine a scenario in which things between them go very, very badly.

In fact, we may already be starting to see such a scenario play out.  As you will see below, under President Trump U.S. troops are being deployed to a very sensitive area of Poland, and they are also being sent to key areas of Bulgaria and Romania.  That is not sitting well with the Russian government, but they were much more upset when Trump insisted that Russia must give the Crimea back to Ukraine.  This is something that the Russians would never do, and they were quite stunned that Trump would even suggest such a thing.

On the flip side, the Pentagon was quite annoyed when Russian fighter jets buzzed a U.S. warship in the Black Sea just a few days ago, and when a Russian spy shipset up shop just off the coast of Connecticut recently, President Trump told Secretary of State Rex Tillerson that “the greatest thing I could do is shoot that ship that’s 30 miles off shore right out of the water”.

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

It Is About Time That We Had A President That Was Willing To Go To War With The Mainstream Media

It Is About Time That We Had A President That Was Willing To Go To War With The Mainstream Media

Donald Trump Waving - Public DomainThursday afternoon’s press conference was perhaps the most memorable moment of Donald Trump’s presidency so far.  Trump’s blistering attack on the media was quite a spectacle, but the truth is that it was desperately needed.  For decades, the mainstream media has dominated political discourse in this country no matter who has been in control of the White House or Congress.  They have become masters of guiding and shaping public opinion, and in recent years they have completely discarded any pretense of being “unbiased” or “objective”.  These monolithic media organizations relentlessly push the progressive agenda of their owners (the global elite), and that is why the “news” always seems to be just about the same no matter which network it is coming from.  Their monopoly is slowly being broken by the rise of the alternative media, but the truth is that most Americans still rely on just a handful of ultra-powerful media organizations for their news.

So when Trump brutally attacked the mainstream media at his press conference on Thursday, millions upon millions of Americans greatly rejoiced, because they finally got what was coming to them.  And then on Friday, Trump posted a message to Twitter calling the New York Times, NBC, ABC, CBS and CNN “the enemy of the American people”…


The FAKE NEWS media (failing @nytimes@NBCNews@ABC@CBS@CNN) is not my enemy, it is the enemy of the American People!

Olduvai IV: Courage
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Olduvai II: Exodus
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