It’s already started. Summers speaks concern:
The markets aren’t looking good, but former Treasury Secretary Lawrence Summers says not to panic … yet.
Amid a month of falling stocks, Summers cautioned that “weak markets” don’t necessarily mean “economic disaster is around the corner.” Still, he’s increasing his prediction of a recession from “a bit less than 50 percent” to 60 percent, he tweeted Wednesday.
Not yet… When it’s been noticeably in progress for six to nine months, then they’ll admit it.
Allegedly, we’ve been in a recovery, a boom market for many years now. According to Keynes, this was the time to pay off debts used to jump out of the last downturn. That didn’t happen. As-is, Fed-Gov has been spending the funny money like there’s no tomorrow.
The federal government has added another $1,370,760,684,441.54 to the debt since last December 25, according to numbers published by the U.S. Treasury.
On Dec. 25, 2017, the federal debt was 20,492,874,492,282.58, according to the Treasury.
According to the latest numbers published by the Treasury, which show where the debt stood on Dec. 20, 2018, the federal debt was $21,863,635,176,724.12.
Almost back on track for $40 T by 2024. Not that that really matters anymore.
The next MAJOR recession/depression should ramp the already disastrous federal debt up, heading towards my prediction of $40 Trillion by 2024. Well on the way, now:
According to the U.S. Treasury, the debt of the federal government is currently sitting at $21,854,296,172,540.94, and at our current pace we will likely hit the $22 trillion mark next month. This is a horrifying national crisis, and yet nothing is being done about it. When Barack Obama entered the White House in January 2008, the U.S. was $10.6 trillion in debt, and so that means that we have added 11.2 trillion dollars of new debt to that total in less than 11 years. Needless to say, it doesn’t take a math genius to figure out that we have been adding an average of more than a trillion dollars a year to the national debt for more than a decade. But instead of getting our insatiable appetite for debt under control, Congress is actually accelerating our spending. At this point, there is no possible scenario in which this story ends well.
Meanwhile, the global financial elite are really starting to talk up the possibility of a new financial crisis.
By the time the “elite” start
lying talking about a crisis, it’s already started.
Hey, it’s time. Really, we’re overdue. So says The Goldman Sachs…
A Goldman Sachs Group Inc. indicator designed to provide a “reasonable signal for future bear-market risk” has risen to the highest in almost 50 years. The firm’s Bull/Bear Index, which is based on measures of equity valuation, growth momentum, unemployment, inflation and the yield curve, is now at levels last seen in 1969. While the gauge is at levels that have historically preceded a bear market, Goldman strategists including Peter Oppenheimer wrote in a note last week that a long period of relatively low returns from stocks is a more likely alternative.
Yes, per the graph we are in the longest run in modern history. Also, pay attention to the percentages and when they were the highest.
Enjoy the market highs while they last:
HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence that global markets are in the last stage of their rallies before a downturn in the business cycle.
Analysts at the Wall Street behemoths cite signals including the breakdown of long-standing relationships between stocks, bonds and commodities as well as investors ignoring valuation fundamentals and data. It all means stock and credit markets are at risk of a painful drop.
Ron Paul says the drop could be up to 50%. He and Jim Rogers, etc. have been saying this for a while now. Even the Fed has begun issuing CYA statements. Nothing lasts forever and we’re overdue for a correction. Prepare now if you can.
The stock market, all 22,000+ of it, is but one of many bubbles a bubblin’ away under the economy.
Major U.S. stock-market indexes are trading near record levels, but does that statistic simply mask an ominous picture that’s being painted behind the scenes?
“The good performance of these large companies is masking the fact that many stocks, including REITs and those in the retail sector, have already entered bear-market territory,” Lamensdorf wrote, referring to real estate investment trusts.
Separately, a read on market supply and demand from Ned Davis Research has shown weakening demand for stocks, despite major indexes continuing to grind higher, while the supply metric has started to rise. Rising supply and lower demand could indicate waning enthusiasm for equities at current levels.
There have been other signs of worsening technicals. Currently, 60.4% of S&P 500 components are above their 50-day moving average, considered a positive sign for short-term momentum. In mid-July, nearly 75% were, according to StockCharts. For the Nasdaq Composite Index COMP, +0.16% only 47.3% of components are above their 50-day, compared with 67% in late July, a dramatic swing lower.
Recently, nearly 6% of New York Stock Exchange- and Nasdaq-listed securities hit a 52-week low on a day when the S&P 500 ended at a record, according to data from Sentimentrader that was cited by Lamensdorf, who called this “an alarming percentage.”
He added that it was the second-highest level going back as far as 1965, and that “Similar spikes occurred in 1973 and 1999, both directly preceding significant corrections.”
History. Read it.
Fed Chair Janet Yellen said Tuesday that banks are “very much stronger” and another financial crisis is unlikely anytime soon.
Speaking during an exchange in London with British Academy President Lord Nicholas Stern, the central bank chief said the Fed has learned lessons from the financial crisis and has brought stability to the banking system.
She also made a bold prediction: that another financial crisis the likes of the one that exploded in 2008 was not likely “in our lifetime.” The crisis, which erupted in September 2008 with the implosion of Lehman Brothers but had been stewing for years, would have been “worse than the Great Depression” without the Fed’s intervention, Yellen said.
I think I know what “no crisis like 2008 in our lifetime” means. The poor woman must be terminally ill. That or maybe she/they know the next one will be worse than 2008.
“Had been stewing for years….” Maybe that’s why, as the article later pointed out, it caught the Fed completely off guard.
I do like her giving the Fed credit for preventing the Greater Depression. Rich.
The Fed, if you recall actual history, prolonged a downturn, a recession, into the Great Depression of the 1930’s. They have experience wrecking the economy. And it’s really too soon to tell about the Greater Depression, although I’ve seen stats from two economists that show the 2008 crisis was every bit as bad as that of the 30’s and that we have yet to recover from it.
Wait! Now I know what she means. She knows the 2008 crisis never really ended. Therefore its continuation this year or next coupled with a new worsening crash technically won’t be another crisis – it’ll be the same one.
That or she’s sick.
Thoughts and prayers.
It always starts with a change of tone. Somewhere a guilty admission creeps in as the creeps creep out.
Then: “Things are great! Never better.”
Next: “Recovery in full swing. Economy strong. Never stronger.”
And: “Strong enough to weather another recession.”
Finally: “Global recession coming with a vengeance.”
A new financial crisis is brewing in the emerging economies and it could hit “with a vengeance”, an influential group of central bankers has warned.
Emerging markets such as China are showing the same signs that their economies are overheating as the US and the UK demonstrated before the financial crisis of 2007-08, according to the annual report of the Bank for International Settlements (BIS).
Claudio Borio, the head of the BIS monetary and economic department, said a new recession could come “with a vengeance” and “the end may come to resemble more closely a financial boom gone wrong”.
China sees surprise boost to exports but concerns remain over economy
The BIS, which is sometimes known as the central bank for central banks and counts Bank of England Governor Mark Carney among its members, warned of trouble ahead for the world economy.
It predicted that central banks would be forced to raise interest rates after years of record lows in order to combat inflation which will “smother” growth.
If things are so great, better, and strong, why the vengeance? And, no, it won’t be limited to China and developing nations; the “global” part means everyone.
People from CNBC to the layman on the street conflate the stock market with the economy. It’s a part but not the whole – more of a barometer. Sensing the storm, Charles Hugh Smith proposes a crash scenario (with possible profit opportunities):
After 8+ years of phenomenal gains, it’s pretty obvious the global stock market rally is overdue for a credit-cycle downturn, and many research services of Wall Street heavyweights are sounding the alarm about the auto industry’s slump, the slowing of new credit and other fundamental indicators that a recession is becoming more likely.
Few have taken the risk of projecting a date for the crash, this gent being a gutsy outlier: Hedge Fund CIO Sets The Day When The Next Crash Begins.
Next February is a good guess, as recessions and market downturns tend to lag the credit market by about 9 months.
My own scenario is based not on cycles or technicals or fundamentals, but on the psychology of the topping process, which tends to follow this basic script:
All economies move in cycles. They always have and always will. Any period of growth or stability, real or imagined, is always followed by a period of correction, sometimes painful. We’re now due, statistically. Maybe overdue.
This time around may be different, of a rarer breed. Like economies, societies move in cycles. See Plato’s essays. America and most of the West have undergone a sea change the past generation. They’re far less Western than they were. And that is brewing some major systemic problems, problems that are likely to be displayed prominently during the coming downturn.
Today Pat Buchanan offers a preview of what we may all look forward to: the examples of Puerto Rico and Illinois.
Across the West, social welfare states are threatened by falling revenues, taxpayer flight, rising debt as a share of GDP, sinking bond ratings and proliferating defaults.
Record high social welfare spending is among the reasons that Western nations skimp on defense. Even the Americans, who spent 9 percent of GDP on defense under President Kennedy and 6 percent under President Reagan, are now well below that, though U.S. security commitments are as great as they were in the Cold War.
Among NATO nations, the U.S. is among the least socialist, with less than 40 percent of GDP consumed by government at all levels. France, with 57 percent of GDP siphoned off, is at the opposite pole.
Yet even here in America we no longer grow at 4 percent a year, or even 3 percent. We seem to be nearing a point of government consumption beyond the capacity of the private sector to provide the necessary funds.
Some Democrats are discovering there are limits to how much the government can consume of the nation’s wealth without adversely affecting their own fortunes. And in the Obamacare debate this week, Republicans are running head-on into the reality that clawing back social welfare benefits already voted may be political suicide.
Patrick BuchananHas democratic socialism passed its apogee?
Native-born populations in the West are aging, shrinking and dying, not reproducing themselves. The cost of pensions and health care for the elderly is inexorably going up. Immigration into the West, almost entirely from the Third World, is bringing in peoples who, on balance, take more in social welfare than they pay in taxes.
Deficits and national debts as a share of GDP are rising. Almost nowhere does one see the old robust growth rates returning. And the infrastructure of the West – roads, bridges, tunnels, ports, airports, subways, train tracks – continues to crumble for lack of investment.
The days of interstate highway systems and moon shots seem to be behind us. Are Puerto Rico and Illinois the harbingers of what is to come?
Probably. Washington can bail out Illinois today. Tomorrow, who will bail out Washington? And/or Beijing? London?
On the football field, quarters of poor execution and foolish play have a consequence: the game is lost. A similar phenomenon happens with cultures and economies.
Look at the rats and see them preparing to flee. Take a wider look at the ship and see it listing. Look at nothing, to include that damned glowing screen on the wall, and go under.
Might be time to make some plans.
Like your First World unmolested? Then prepare to join Perrin Lovett on Patreon. Your support will continue the defenses. Coming soon.
The Federal Reserve system is truly amazing.
Built, in secret in a dark room at Jekyll Island, Georgia, it was foisted on the American people more than 100 years ago. It is patently illegal; Congress abdicated its Article I authority to control the currency to a private, unelected, and uncontrollable bank. It destroyed the value of the dollar. It necessitated the 16th Amendment and the income tax (as a prop).
It institutionalized the normal business (boom, bust, boom,…) cycle – privatizing the gains and socializing the loses. It allows for concentration of wealth in the dirty hands of a few bankers and closely associated persons. It places all responsibility and liability on the public. It allows for unlimited government: spending, debt, programs, and wars. It works in conjunction with other central banks and the Bank for International Settlements to maintain a global system of debt slavery.
That this greatest and most evil of ponzi schemes has lasted for 104 years is a testament to either the wiles of its creators and operators or to the blind stupidity of the people. It could be both. And it could signal the completely corrupted nature of the American political class. None of it unfathomable…
Those who rule the economy like gods, even in the midst of preparing for a likely transition in leadership next February, are already plotting and planning their actions for the next American recession:
While in recent weeks there has been a material increase in Fed balance sheet normalization chatter, according to a new report from Deutsche Bank analysts, it may all be for nothing for one simple reason: should the US encounter a recession in the next several years, the most likely reaction by the Fed would be another $1 trillion in QE, delaying indefinitely any expectations for a return to a “normal” balance sheet.
As a reminder, as of this month, the duration of the latest expansionary cycle – as defined by the NBER – has reached 93 months, surpassing the 92 months of the 1982-1990 cycle, and is now the third longest in history. Should the cycle persist for another 27 months, or just under two and a half years, it would be the longest period of “economic growth” in history.
It’s like they know. Like they do this on purpose. “QE”means quantitative easing. That’s fancy banker talk for printing money. In this case, the U.S. Treasury will announce a sale of $1 Trillion in federal bonds. That’s more debt and interest for the taxpayers to work off. The Fed will then “expand its balance sheet” by buying the Treasuries. These are on sale at the Treasury but the Fed will buy them through their favorite middleman, Goldman Sachs.
Goldman will mark up the price, to give the people the worst deal possible and to make a profit. Goldman will finance the initial purchase from the Treasury with a fake money loan from guess who… And how will the Fed obtain the money for the Goldman loan and for the secondary Treasury purchase? By printing money! A lot of money. $1 Trillion for Goldman. And $1 Trillion plus Goldman fees for the Fed. Wait. There’s more (and more and more): the Treasury and the government now have an extra Trillion. That’s the multiplier effect. $3 Trillion+ in extra fake money in circulation.
I do not know what Goldman’s markup is. Let’s say it’s 10%. So $3.1 Trillion is created out of thin air. Poof! The money came from nowhere but it still has an effect. And it has to be paid for despite not being real.
The government gets to spend their Trillion in debt immediately – on war, healthcare, a mission to Mars – literally the sky is the limit (or space). Later the taxpayers will pay that back to the Fed, with interest (on money that never existed). Goldman will instantly pay off its $1 Trillion loan from the Fed through the subsequent sale to the Fed. They keep their 10% – $100 Billion! Good to be them.
Now the Fed will have on the crooked books: the asset of the Treasuries, and: the liability for the $1.1 Trillion to buy them. The balance went to Goldman, remember. Given enough time and hard work and sweat from the taxpaying saps, this liability and associated asset would balance out – back to zero. But, in the meantime, the Fed has that $1 Trillion asset just sitting there! They won’t let it go to waste.
They will use it as an asset to loan more fake money to more commercial banks (in America and abroad). More multiplying. More debt based on something that doesn’t exist.
All of this excess fake money floating around drives down the value of existing money – Gresham’s Law. This makes the taxpayer’s hard-earned money – that little money they’re allowed to keep when not repaying debt and interest via taxes on loans that never really existed – less valuable even as the prices of the things they must buy rise (monetary inflation). In other words, while the globalist instantly profit, the taxpayers take it in both ends for the duration.
Yes, even as the banks instantly get richer for doing nothing, the people get poorer. And this crazed debt cycle runs parallel to the usual business cycle (boom, bust, growth, contraction, …) until the next recession, depression, or downturn – when it will all be repeated.
That’s partly the nature of these bars on the graph from Zero Hedge:
We’re at the end of the red bar (2009-present). That’s supposed to be a boom market or good times. For most they haven’t felt so good. And that’s because the people have struggled with the debt and inflation and lose of buying power from the last round of QE, circa 2008-09.
Cozy, huh? This cycle will keep repeating until the economy totally collapses or until the people finally wake up and rise up (or both).
From the graph one can also see we are, by historical average, overdue for a recession right now.
Additionally from the graph one might catch a glimpse of the Depression of 1921. It was the one immediately prior to the Great Depression. And it only lasted for six months. That’s because it was the last major depression/recession before the Fed really got the game up and running.
Cycles naturally come and go. They naturally correct themselves in very rapid fashion. It takes a central bank and a government, working together, to prolong their effects – and to build upon the cycle for the next time.
It seems the next time is coming and the criminals are already planning for it. If you don’t mind flirting with utter disaster and if you’re not ready to wake up yet, then at least heed the warnings. They’ve already told you so. If you’re caught off guard, that’s on you. Hell, it’s all going to be on you anyway…
Trump is making major changes at warp speed. The markets and the general economy seem to respond favorably. Still, there are forces at work which even a maverick president my find difficult to stop. From Zero Hedge and LRC:
Paul noted that he thinks U.S. policy has created a “failed system” in the country. “All empires end and we’re the empire. It’s going to end and it’s going to be for economic reasons…we’re going to fail because we’re working within a failed system…this is a monetary problem…a spending problem…it’s going to be financial,” Paul emphatically claimed, once again stating the collapse of America is imminent. “We have something arriving worse than 2008, 2009, much worse…It was the fault of the Federal Reserve,” Paul said, adding, the Keynesian economic model contributed greatly to the first bubble burst. Paul said the left will blame Trump for it like the right did to Obama, but he says it’s bigger than the office of the president, and blames the federal reserve and the previous 17 years of governmental spending.
If you think Ron Paul’s comments hold no water, think again. As the Free Thought Project reported last year, even the former chairmen of the Federal Reserve is predicting this crisis.
We are in very early days of a crisis which has got a way to go,” asserted Alan Greenspan to Bloomberg last year. “This is the worst period, I recall since I’ve been in public service. There’s nothing like it, including the crisis — remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away. I’d love to find something positive to say…..I don’t know how it’s going to resolve, but there’s going to be a crisis.”
When the man who used to run the very central bank Ron Paul says is responsible for the collapse, also says there’s going to be a collapse – it’s time to pay attention.
Watch the RP video interview. I agree that Trump is doing everything (almost) humanly possible to avert disaster. However, late in the fourth, one Hail Mary (or two or three) may not be enough.
Perhaps, in a worst case scenario, he can ease us down as gently as possible. I still maintain that the best solution to the Imperial end game was to elect Paul in 2008 (not 2012). It’s a little late for that; Trump is who we have and all we have.
The difference between Trump and Obama or Bush is that Trump will not take the unjust blame lying down. And given his ability to keep the press, the opposition, and the GOP barking and clapping like trained seals, this will be interesting, even entertaining – even in the event of calamity.