Tag Archives: economy

16 Facts About The Tremendous Financial Devastation That We Are Seeing All Over The World

Greek-Disaster

As we enter the second half of 2015, financial panic has gripped most of the globe.  Stock prices are crashing in China, in Europe and in the United States.  Greece is on the verge of a historic default, and now Puerto Rico and Ukraine are both threatening to default on their debts if they do not receive concessions from their creditors.  Not since the financial crisis of 2008 has so much financial chaos been unleashed all at once.  Could it be possible that the great financial crisis of 2015 has begun?  The following are 16 facts about the tremendous financial devastation that is happening all over the world right now…

1. On Monday, the Dow fell by 350 points.  That was the biggest one day decline that we have seen in two years.

2. In Europe, stocks got absolutely smashed.  Germany’s DAX index dropped 3.6 percent, and France’s CAC 40 was down 3.7 percent.

3. After Greece, Italy is considered to be the most financially troubled nation in the eurozone, and on Monday Italian stocks were down more than 5 percent.

4. Greek stocks were down an astounding 18 percent on Monday.

5. As the week began, we witnessed the largest one day increase in European bond spreads that we have seen in seven years.

6. Chinese stocks have already met the official definition of being in a “bear market” – the Shanghai Composite is already down more than 20 percent from the high earlier this year.

7. Overall, this Chinese stock market crash is the worst that we have witnessed in 19 years.

8. On Monday, Standard & Poor’s slashed Greece’s credit rating once again and publicly stated that it believes that Greece now has a 50 percent chance of leaving the euro.

9. On Tuesday, Greece is scheduled to make a 1.6 billion euro loan repayment.  One Greek official has already stated that this is not going to happen.

10. Greek banks have been totally shut down, and a daily cash withdrawal limit of 60 euros has been established.  Nobody knows when this limit will be lifted.

11. Yields on 10 year Greek government bonds have shot past 15 percent.

12. U.S. investors are far more exposed to Greece than most people realize.  The New York Times explains…

But the question of what happens when the markets do open is particularly acute for the hedge fund investors — including luminaries like David Einhorn and John Paulson — who have collectively poured more than 10 billion euros, or $11 billion, into Greek government bonds, bank stocks and a slew of other investments.

Through the weekend, Nicholas L. Papapolitis, a corporate lawyer here, was working round the clock comforting and cajoling his frantic hedge fund clients.

“People are freaking out,” said Mr. Papapolitis, 32, his eyes red and his voice hoarse. “They have made some really big bets on Greece.”

13. The Governor of Puerto Rico has announced that the debts that the small island has accumulated are “not payable“.

14. Overall, the government of Puerto Rico owes approximately 72 billion dollars to the rest of the world.  Without debt restructuring, it is inevitable that Puerto Rico will default.  In fact, CNN says that it could happen by the end of this summer.

15. Ukraine has just announced that it may “suspend debt payments” if their creditors do not agree to take a 40 percent “haircut”.

16. This week the Bank for International Settlements has just come out with a new report that says that central banks around the world are “defenseless” to stop the next major global financial crisis.

Without a doubt, we are overdue for another major financial crisis.  All over the planet, stocks are massively overvalued, and financial markets have become completely disconnected from economic reality.  And when the next crash happens, many believe that it will be even worse than what we experienced back in 2008.  For example, just consider the words of Jim Rogers

“In the United States, we have had economic slowdowns every four to seven years since the beginning of the Republic. It’s now been six or seven years since our last stock market problem. We’re overdue for another problem.”

In Rogers’ view, low interest rates caused stock prices to increase significantly. He believes many assets are priced beyond their fundamentals thanks to the ultra-easy monetary policies by the Federal Reserve. Fed supporters argue such measures are good for investors, but Rogers takes a different view.

The Fed might tell us we don’t have to worry and that a correction or crash will never happen again. That’s balderdash! When this artificial sea of liquidity ends, we’re going to pay a terrible price. When the next economic problem occurs, it will be much worse because the debt is so much higher.”

Of course Rogers is far from alone.  A recent article by Paul B. Farrell expressed similar sentiments…

America’s 95 million investors are at huge risk. Remember the $10 trillion losses in the crash and recession of 2007-2009? The $8 trillion lost after the dot-com technology crash and recession of 2000-2003? This is the third big recession of the century. Yes, America will lose trillions again.

Especially with dead-ahead predictions like Mark Cook’s 4,000-point Dow correction. And Jeremy Grantham’s warning of a 50% crash around election time, with negative stock returns through the first term of the next president, beyond 2020. Starting soon.

Why is America so vulnerable when the next recession hits? Simple: The Fed’s cheap-money giveaway is killing America. When the downturn, correction, crash hits, it will compare to the 2008 crash. The Economist warns: “the world will be in a rotten position to do much about it. Rarely have so many large economies been so ill-equipped to manage a recession,” whatever the trigger.

Things have been relatively quiet in the financial world for so long that many have been sucked into a false sense of security.

But the underlying imbalances were always there, and they have been getting worse over time.

I believe that we are heading into a global financial collapse that will make what happened in 2008 look like a Sunday picnic by the time it is all said and done.

Global debt levels are at all-time highs, big banks all over the planet have been behaving more recklessly than ever, and financial markets are absolutely primed for a huge crash.

Hopefully things will calm down a bit as the rest of this week unfolds, but I wouldn’t count on it.

We have entered uncharted territory, and what comes next is going to shock the world.


Michael T. Snyder is a graduate of the McIntire School of Commerce at the University of Virginia and has a law degree and an LLM from the University of Florida Law School. He is an attorney that has worked for some of the largest and most prominent law firms in Washington D.C. and who now spends his time researching and writing and trying to wake the American people up. You can follow his work on The Economic Collapse blog, End of the American Dream and The Truth Wins. His new novel entitled “The Beginning Of The End” is now available on Amazon.com.

The Economic Collapse Blog Has Issued A RED ALERT For The Last Six Months Of 2015

push once red alert button

I have never done anything like this before.  Ever since I started The Economic Collapse Blog in late 2009, I have never issued any kind of “red alert” for any specific period of time.  As an attorney, I was trained to be level-headed and to only come to conclusions that were warranted by the evidence.  So this is not something that I am doing lightly.  Based on information that I have received, things that I have been told, and thousands of hours of research that have gone into the publication of more than 1,300 articles about our ongoing economic collapse, I have come to the conclusion that a major financial collapse is imminent.  Therefore, I am issuing a RED ALERT for the last six months of 2015.

To clarify, when I say “imminent” I do not mean that it will happen within the next 48 hours.  And I am not saying that our problems will be “over” once we get to the end of 2015.  In fact, I believe that the truth is that our problems will only be just beginning as we enter 2016.

What I am attempting to communicate is that we are right at the door of a major turning point.  About this time of the year back in 2008, my wife and I went to visit her parents.  As we sat in their living room, I explained to them that we were on the verge of a major financial crisis, and of course the events that happened a few months later showed that I was right on the money.

This time around, I wish that I could visit the living rooms of all of my readers and explain to them why we are on the verge of another major financial crisis.  Unfortunately, that is not possible, but hopefully this article will suffice.  Please share it with your friends, your family and anyone else that you want to warn about what is coming.

Let’s start with a little discussion about the U.S. economy.  Most of the time, when I use the term “economic collapse” what most people are actually thinking of is a “financial collapse”.  And we will talk about the imminent “financial collapse” later on in this article.  But just because stocks have recently been hitting all-time record highs does not mean that the overall economy has been doing well.  This is a theme that I have hammered on over and over again.  It is my contention that we are in the midst of a long-term economic collapse that has been happening for many years, that is happening as you read this article, and that will greatly accelerate over the coming months.

Let me give you just one quick example.  When an economy is healthy, money tends to circulate fairly rapidly.  I buy something from you, then you take that money and buy something from someone else, etc.  In a stable and growing economy, people generally feel good about things and they are not afraid to spend.  But during hard times, the exact opposite happens.  That is why the velocity of money almost always slows down during a recession.  As you can see from the chart below, the velocity of money has indeed gone down during every recession since 1960.  Once a recession is over, the velocity of money is supposed to go back up.  But a funny thing happened after the last recession ended.  The velocity of money continued to go down, and it has now hit an all-time record low…

Velocity-Of-Money-M2-460x306

This is the kind of chart that you would expect from a very sick economy.  And without a doubt, our economy is sick.  Even the official government numbers paint a picture of an economy that is deeply troubled.  Corporate profits have declined for two quarters in a row, U.S. exports plunged by 7.6 percent during the first quarter of 2015, U.S. GDP contracted by 0.7 percent during the first quarter, and factory orders have declined year over year for six months in a row.

If the stock market was connected to reality, it would be going down.  But instead, it has just kept going up.  As I discussed yesterday, this is a classic case of an irrational financial bubble.  If I was writing an economic textbook and I wanted to include an example of what a run up to a major financial crash looks like, it would be hard to come up with anything more ideal than what we have watched unfold over the last six months.  Just about every pattern that has popped up prior to previous stock markets crashes is happening again, and this is something that I have written about so much that many of my readers are sick of it.

And without a doubt, our financial markets are primed for a crash.

Only two times before has the S&P 500 been up by more than 200 percent over a six year time frame.

The first was in 1929, and the stock market subsequently crashed.

The second was in 2000, right before the dotcom bubble burst.

And by just about any measure that you can possibly imagine, stocks are massively overvalued right now.

For instance, just check out the chart posted below.  It comes from Doug Short, and it shows that the ratio of corporate equity prices to GDP has only been higher one time since 1950.  That was in 2000 just before the dotcom bubble burst…

The-Buffett-Indicator-from-Doug-Short-460x335

Let’s take a look at another chart.  This one comes from Phoenix Capital Research, and it shows that the CAPE ratio (cyclically adjusted price-to-earnings ratio) has rarely been higher.  In fact, the only times that it has been higher we have seen stock market crashes immediately afterwards…

CAPE-Phoenix-Capital-Research-460x233

Yale economics professor Robert Shiller is also deeply concerned about the CAPE ratio

I think that compared with history, US stocks are overvalued. One way to assess this is by looking at the CAPE (cyclically adjusted P/E) ratio that I created with John Campbell, now at Harvard, 25 years ago. The ratio is defined as the real stock price (using the S&P Composite Stock Price Index deflated by the CPI) divided by the ten-year average of real earnings per share. We have found this ratio to be a good predictor of subsequent stock market returns, especially over the long run. The CAPE ratio has recently been around 27, which is quite high by US historical standards. The only other times it has been that high or higher were in 1929, 2000, and 2007—all moments before market crashes.

But the CAPE ratio is not the only metric I watch. In my book Irrational Exuberance (3rd Ed., Princeton 2015) I discuss several metrics that help judge what’s going on in the market. These include my stock market confidence indices. One of the indicators in that series is based on a single question that I have asked individual and institutional investors over the years along the lines of, “Do you think the stock market is overvalued, undervalued, or about right?” Lately, what I call “valuation confidence” captured by this question has been on a downward trend, and for individual investors recently reached its lowest point since the stock market peak in 2000.

Other valuation indicators produce similar results.  This next chart is another one from Doug Short, and it shows the average of four of his favorite valuation indicators.  As you can see, there is only one other time when stocks have been more overvalued than they are today according to the average of his four favorite indicators, and that was just before the stock market crashed when the dotcom bubble burst…

Four-Valuation-Indicators-Doug-Short-460x335

Another one of the things that indicates that a financial bubble is happening is the level of margin debt.  Whenever margin debt has gone over 2.25% of GDP a stock market crash has always followed, and today it is far above that level.  As you can see from the chart below, there have been three major peaks in margin debt in modern U.S. history.  One was just before the dotcom bubble burst, one was just before the financial crisis of 2008, and the third is happening right now…

Margin-Debt-Doug-Short-460x335

Something else that we would expect to see prior to a major financial crisis is a decoupling of high yield debt and stocks.  This is something that happened just prior to the stock market crash of 2008, and it is happening again right now.  The following chart comes from Zero Hedge, and it demonstrates this brilliantly…

SP-500-HY-Credit-460x495

Are you starting to get the picture?

And as I discussed yesterday, the smart money is beginning to pull their money out of stocks while they still can.  According to USA Today, mutual fund investors have pulled more money out of stocks than they have put into stocks for 16 weeks in a row

In a sign of stock market nervousness on Main Street, mutual fund investors have yanked more money out of U.S. stock funds than they put in for 16 straight weeks.

The last time domestic stock funds had positive net cash inflows was in the week ending Feb. 25, according to data from the Investment Company Institute, a mutual fund trade group.

In the week ended June 17, the most recent data available, mutual funds that invest in U.S. stocks suffered net outflows of $3.45 billion, according to the ICI.

Since late February, U.S. stock funds have suffered estimated outflows of nearly $55 billion. Those net withdrawals come despite the fact the benchmark Standard & Poor’s 500 hit a fresh record high of 2130.82 on May 21 and the Dow Jones industrial average notched a fresh record on May 19.

But it isn’t just stocks that are going to crash during the next financial crisis.  Bonds are going to crash as well, but what I am concerned about most of all are derivatives.

Derivatives are going to play a starring role in the next major financial crisis.  I cannot emphasize this enough.  In fact, if you want to listen for just one word on the news that will let you know that things have started to really unravel, just listen for the word “derivatives”.  This form of legalized gambling is going to crush “too big to fail” banks all over the planet during the next major financial downturn.  The “too big to fail” banks in the U.S. alone have 278 trillion dollars of total exposure to derivatives, but they only have 9.8 trillion dollars in total assets.  To say that they are being “reckless” is a massive understatement.

For much more on the coming derivatives crisis, please see my previous article entitled “Warren Buffett: Derivatives Are Still Weapons Of Mass Destruction And ‘Are Likely To Cause Big Trouble’“.

Of course I am not the only one that is sounding the alarm about what is coming.  Just consider what some very prominent individuals have been saying recently…

Ron Paul has just released a new video in which he warned all of us to “prepare for a bear market in bonds“.

Carl Icahn says that financial markets are “extremely overheated—especially high-yield bonds“.

Max Keiser recently told Alex Jones that a great financial collapse is coming.

Martin Armstrong says that his Economic Confidence Model predicts that the “Big Bang” is coming in “2015.75“.

Jeff Berwick of the Dollar Vigilante says that “we’re getting very, very close to the next crisis collapse” and he has specifically pointed to the month of September.

James Howard Kunstler has predicted that stocks are going to “crater in Q3 as faith in paper and pixels erodes“.

Lindsey Williams recently sent out an email alert in which he warned that his elite friend has told him that “they have a World Wide Financial Collapse scheduled between September and the end of December 2015“.

Gerald Celente has warned about “the Great Panic of 2015“.

Bill Fleckenstein has said that 2015 could be the year of the “big accident“.

Ray Gano has stated that we will see a financial collapse “probably starting in the third quarter of 2015″.

Legendary investor Jim Rogers recently said that he believes that “we will see some kind of major, major problems in the world financial markets” within the next year or two.

Alex Jones recently released a video in which he explained that he recently received “two different calls” from “extremely prominent wealthy people” warning him about what is coming by the end of this year and asking him why he isn’t leaving the United States “before October”.

Bible prophecy expert Joel C. Rosenberg has posted an ominous message on his personal blog in which he warned that “something is coming” and that “we must be ready”…

I feel a tremendous sense of urgency about this column.

The United States is hurtling towards severe trouble, and the events of the past few months — and what may be coming over the next few months — grieves me a great deal.

Something is coming. I don’t know what. But we all must be ready in every possible way.

When I read what Rosenberg wrote, it struck me that it was precisely how I have been feeling too.

In my entire life, I have never had such an ominous feeling about any period of time as I have about the last six months of 2015.  Like Rosenberg, I feel a “tremendous sense of urgency”, and I feel a great need to warn as many people as I can.

And it isn’t just a financial collapse that I am concerned about.  In a previous article, I detailed seven key events that we are going to witness before the end of this September…

Late June/Early July – It is expected that this is when the U.S. Supreme Court will reveal their gay marriage decision.  Most believe that the court will rule that gay marriage is a constitutional right in all 50 states.  There are some that believe that this will be a major turning point for our nation.

July 15th to September 15th – A “realistic military training exercise” known as “Jade Helm” will be conducted by the U.S. Army.  More than 1,000 members of the U.S. military will take part in this exercise.  The list of states slated to be involved in these drills includes Texas, Colorado, New Mexico, Arizona, Nevada, Utah, California, Mississippi and Florida.

July 28th – On May 28th, Reuters reported that countries in the European Union were being given a two month deadline to enact “bail-in” legislation.  Any nation that does not have “bail-in” legislation in place by that time will face legal action from the European Commission.  So why is the European Union in such a rush to get this done?  Are the top dogs in the EU anticipating that another great financial crisis is about to erupt?

September 13th – This is Elul 29 on the Biblical calendar – the last day of the Shemitah year.  Many are concerned about this date because we have seen giant stock market crashes on the last day of the previous two Shemitah cycles.

On September 17th, 2001 (which was Elul 29 on the Biblical calendar), we witnessed the greatest one day stock market crash in U.S. history up until that time.  The Dow plummeted 684 points, and it was a record that held for exactly seven years until the end of the next Shemitah cycle.

On September 29th, 2008 (which was also Elul 29 on the Biblical calendar), the Dow fell by an astounding 777 points, which still today remains the greatest one day stock market crash of all time.

Now we are approaching the end of another Shemitah year.  So will the stock market crash on September 13th, 2015?  Well, no, because that day is a Sunday.  So I guarantee that the stock market will not crash on that particular day.  But as Jonathan Cahn has pointed out in his book on the Shemitah, sometimes stock market crashes happen just before the end of the Shemitah year and sometimes they happen within just a few weeks after the end of the Shemitah.  So we are not just looking at one particular date.

September 15th – The 70th session of the UN General Assembly begins on this date.  It is being reported that France plans to introduce a resolution which would give formal UN Security Council recognition to a Palestinian state.  Up until now, the United States has always been the one blocking such a resolution, but Barack Obama is indicating that things may be much different this time around.

September 25th to September 27th – The United Nations is going to launch a brand new sustainable development agenda for the entire planet.  Some have called this “Agenda 21 on steroids”.  But this new agenda is not just about the environment.  It also includes provisions regarding economics, agriculture, education and gender equality.  On September 25th, the Pope will travel to New York to give a major speech kicking off the UN conference where this new agenda will be unveiled.

September 28th – This is the date for the last of the four blood moons that fall on Biblical festival dates during 2014 and 2015.  This blood moon falls on the very first day of the Feast of Tabernacles, it will be a “supermoon”, and it will actually be visible in the city of Jerusalem.  There are many that dismiss the blood moon phenomenon, but we have seen similar patterns before.  For example, a similar pattern of eclipses happened just before and just after the destruction of the Jewish temple by the Romans in 70 AD.

In addition to everything above, quite a number of economic cycle theories that were developed by secular economists all point to big trouble for America between the years of 2015 and 2020.  For more on this, please see my previous article entitled “If Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Pure Hell For The United States“.

Earlier today, I publicly announced that I was issuing a RED ALERT for the last six months of 2015 on the Alex Jones radio show.  You can watch video of that interview right here.  In this article (which is about three times as long as one of my normal articles) I have only shared a small fraction of the information that has led me to issue this red alert.  But if you want to know more, and you are not afraid to really go down the rabbit hole, I would encourage you to check out a full two hour presentation that I did down in Dallas, Texas on the nightmarish years that are coming.

The period of relative stability that we have been enjoying is ending.  What comes next is going to lead us into the worst period of time in modern American history.  I wish that I was wrong about this.

But the goal is not to scare you.  My wife and I live our lives with absolutely no fear, and that is my desire for all of my readers.  There is hope in understanding what is happening and there is hope in getting prepared.  Personally, my wife and I believe that the greatest chapters of our lives are ahead of us, and I hope that you have a similar outlook.

We need a generation of people that are willing to rise up and do great things even in the midst of all the chaos and darkness that is coming.  It is when times are the darkest that the greatest heroes are needed.

So what will you choose to do when the next crisis comes?

Will you cower in fear, or will you rise up to meet the challenge?

Please feel free to tell us what you think by posting a comment below…


Michael T. Snyder is a graduate of the McIntire School of Commerce at the University of Virginia and has a law degree and an LLM from the University of Florida Law School. He is an attorney that has worked for some of the largest and most prominent law firms in Washington D.C. and who now spends his time researching and writing and trying to wake the American people up. You can follow his work on The Economic Collapse blog, End of the American Dream and The Truth Wins. His new novel entitled “The Beginning Of The End” is now available on Amazon.com.

Greek Referendum On IMF Ultimatum

grexit-vs-austerity_jpg_w560h336

This is a test. Will the internationalist banksters force extraction of their ill-gotten interest payments to bail out their reckless derivative trades gone wrong, or will a sovereign country abandon the chains of financial elite coercion and renounce their IMF and ECB debt? Make no mistake about it, Greece has lived high on the hog for decades and has serious internal problems. There is no free ride. However, the pain from the coming default is necessary to shed the yoke of a failed European Union construct.

So when Greece Invokes Nuclear Option: Tsipras Calls For Referendum, ordinary peoples in every sector should have a voice if the financial deal being imposed upon Greece must go forward.

Well, is this not novel? Allowing citizens to voice their agreement or disapproval has the financial establishment in a tizzy. PM Tsipras lashes out, and Lew urges a deal reveals that stamping out any rebellion against the banksters orbit of dominating individual countries, covering counter party losses and keeping the debit enslavement system intact.

So when the NYT reports that Cash Withdrawals and Hoarding as Default Looms Over Greece the hysteria hype is simply designed to scare the daylights out of world markets. Drops in equities have not induced panic at this point since only an ostrich did not see the Greek confrontation with the EU coming.

Still, the WSJ warns about the coming consequences in Greece’s Banks Give Eurozone Peers Glimpse Into Abyss.

“Greek banks’ emergency funding was frozen at €89 billion by the ECB on Sunday, after having been increased by just €1 billion to €2 billion on an almost daily basis in the week until last Wednesday. That suggests the banks have been operating pretty close to the limits of what they can pay depositors.”

The world will not come to an end if Greek voters reject the EU blackmail. Quite to the contrary, an ultimate exit from the European Union would provide real relief to a country, which has been extorted to pay, not just their own government obligations, but an arbitrary quota of derivative wagers gone awry from financial institution as referenced in the essay, ‘We Are All Greeks’.

“The refusal to write down unpayable debt, by Europe’s bankrupt giant banks and governments, is the fundamental reason the economies of the whole European Union have been dead in the water for seven years. Since the 2008 financial crash, these banks have sat with @eu2 trillion of toxic real estate debt on their books, tangled in tens of trillions in derivatives contracts—unable and unwilling to lend into the European economies, through year after year of economic recession and depression. Anything suggesting bank reorganization to deal with these dead debt securities under Glass-Steagall principles, has been refused, and Europe’s bankrupt megabanks lie, like undead monsters, blocking the road to productive credit, investment, and recovery.”

Entering the picture is an option that the EU technocrats are hardly equipped to handle. Bring on the default because Russia appears to extend aid hand to Greece.

“We will support any solution on regulating the Greek debt crisis that is suggested by Greece and our European partners,” Russian Deputy Prime Minister Arkady Dvorkovich said, according to the state-run TASS news agency. “The most important things for us are investment projects and trade with Greece. If financial support is required, we will consider this question.”

Russian President Vladimir Putin’s office also said Friday that Russia would consider giving loans to Greece, adding such aid should be considered par for the course for countries that are partners. Putin’s office stressed Greece has not yet formally asked for any financial assistance from Moscow.”

There is life after a Grexit. The prospect of Greece not only leaving the EU but withdrawing from NATO should have the Brussels New World Order elites taking pause. Imagine the Russian Bear gaining a Mediterranean port as the Greek duly elected regime opts out of the imperial club.

All things possible, in the cradle of Democracy, might just start with a plebiscite to default on the EU shakedown debt.

This should be the real panic among international finance loan sharks.

Then think about the “so called” UK referendum to leave the EU. Such an effort would certainly gain steam after a successful Greek exist.

Those who doubt that the banksters cannot be defeated, just recall that more than 93 percent of voters said “no” in a referendum ballot during the Iceland’s rebellion, against the financial manipulators.

Let the great European Union fleecing unravel. With the election of Alexis Tsipras, the Greek Vote Pushes EU to Limit. Now with a public referendum scheduled, will Greeks lose their nerve?

The Guardian reports that Tsipras asks for new two year bailout.

“The Greek government today suggested a two-year agreement from the European Stability Mechanism for the full coverage of financial needs and at the same time restructuring of debt.

‘The Greek government until the end will seek a viable solution within the euro. This will be the message of NO to a bad agreement in Sunday’s referendum.”

Is this a ploy to present a credible image that salvages an about face to stay in the EU? Not likely. But the IMF creditor has no interest in taking a loss on their paper loans. The staged demonstration in favor of remaining in the EU has all the signs of a media managed by the monetary hierarchy.

Less one forget, those bond creditors scream load about default; however, these same bankers never sounded a whimper when the private GM bond holders were bypassed in the rescue of government motors.

The big difference is that the IMF banksters think of themselves as the creditor of primary claims. Now that Greece is in technical default, take the next needed step and exit the EU altogether. Break the strangle hold on the continental loan shark scheme and return to a Greek Drachma free of the illicit debit contrived by financial extortion


SARTRE is the pen name of James Hall, a reformed, former political operative. This pundit’s formal instruction in History, Philosophy and Political Science served as training for activism, on the staff of several politicians and in many campaigns. A believer in authentic Public Service, independent business interests were pursued in the private sector. As a small business owner and entrepreneur, several successful ventures expanded opportunities for customers and employees. Speculation in markets, and international business investments, allowed for extensive travel and a world view for commerce. He is retired and lives with his wife in a rural community. “Populism” best describes the approach to SARTRE’s perspective on Politics. Realities, suggest that American Values can be restored with an appreciation of “Pragmatic Anarchism.” Reforms will require an Existential approach. “Ideas Move the World,” and SARTRE’S intent is to stir the conscience of those who desire to bring back a common sense, moral and traditional value culture for America. Not seeking fame nor fortune, SARTRE’s only goal is to ask the questions that few will dare … Having refused the invites of an academic career because of the hypocrisy of elite’s, the search for TRUTH is the challenge that is made to all readers. It starts within yourself and is achieved only with your sincere desire to face Reality. So who is SARTRE? He is really an ordinary man just like you, who invites you to join in on this journey. Visit his website at http://batr.org.

Greece May Become BRICS Member

brics

In May, Russian Deputy Finance Minister Sergey Storchak invited Greek Prime Minister Alexis Tsipras to become the sixth BRICS member – joining Brazil, Russia, India, China and South Africa.

At the time, Tspiras said he was interested – giving Greece access to its $100 billion capitalized New Development Bank (NDB), aiming to break Western dominance and become one of the world’s leading lending institutions.

It’s headquartered in Shanghai – expected to begin operating in July, according to Russian Deputy Finance Minister Sergei Storchak. Indications are Russia and perhaps China are willing to help Greece financially. So far Greece hasn’t requested it.

Athens is holding talks with other BRICS members on possible membership. They’ll continue during a July 9 and 10 summit in Ufa, Russia.

Deputy Greek Defense Minister Costas Lsychos warned Greece would become a European “economy colony” if it accepts Troika demanded bailout terms.

He called them “unacceptable to our history, to our national pride and sovereignty.” Tsipras urged Greeks to vote no in this Sunday’s national referendum on Troika demanded bailout terms.

He indicated possible snap elections if popular sentiment accepts them. “If the nation wants poverty…we will respect the choice, but will not execute it,” he said Monday.

Troika strategy likely involves exacerbating crisis conditions, letting Greece default on its $1.8 billion IMF payment due June 30, reduce the euro’s value to benefit Eurozone exports, force new elections, replace SYRIZA with new governance amenable to its predatory terms, and/or use default as a reason to ease Greece out of the Eurozone – a so-called Grexit.

Troika officials have no interest in restructuring Greek debt or helping its economy recover. They have every interest in continuing to strip-mine the country of its wealth, assets and enterprises.

They want Greece serving as model for what’s intended for the rest of Europe – thirdworldizing the continent for profit, the same thing planned for America.

Meanwhile, posturing by both sides continues. Troika officials warned Greece of isolation and possible Grexit by rejecting their bailout terms.

Athens frames things as only deciding yes or no on accepting them – not on Eurozone membership. Finance Minister Yanis Varoufakis indicated a possible European Court of Justice injunction to prevent Grexit.

“The EU treaties make no provision for euro exit and we refuse to accept it,” he said. “Our membership is not negotiable.”

On Monday, huge crowds demonstrated outside parliament in Athens supporting a no vote on Troika terms. It’s hard imagining why long-suffering Greeks would vote yes for greater pain.

They’ll have little choice either way. Supporting Tsipras (by voting no) means he’ll negotiate for somewhat less increased austerity than Troika officials demand.

Voting yes means accepting indentured servitude. Grexit assures harder than ever hard times before economic recovery is possible. Remaining trapped in the Eurozone straightjacket assures none at all.


Stephen Lendman lives in Chicago and can be reached at [email protected]. His new book is titled “How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War”. www.claritypress.com/Lendman.html Visit his blog site at www.sjlendman.blogspot.com.

Troika Intends Starving Greece Into Submission

greece-euro-crisis

Eurozone, ECB and IMF officials’ treatment reveal the latest example of predatory capitalist viciousness.

Since Greece’s financial crisis erupted in 2009, imposed austerity diktats incrementally transferred its wealth, assets and enterprises to Western interests at the expense of a 25% GDP drop, mass impoverishment and unemployment (60% for youths), elimination of vital public services, and a brain drain of its best and brightest.

SYRIZA Prime Minister Alexis Tsipras promised austerity relief, caved to Troika demands, then refused further accommodation last week.

Greece is effectively bankrupt. Without bailout help, it’s unable to pay its bureaucrats and keep its economy from collapsing. At the same time, accepting greater debt peonage on Troika terms assures an endless downward cycle to oblivion.

Tsipras announced a July 5 national referendum to allow Greeks to decide up or down whether to accept or reject their demands.

Overnight Saturday, Greek parliamentarians approved holding a plebiscite. Tsipras’ motion easily passed despite opposition from pro-EU parties – notably New Democracy and Pasok.

“We exhausted every limit of concessions so there could be an agreement,” said Tsipras. “Perhaps some saw that as a weakness. The day of truth is coming for the creditors, the time when they will see that Greece will not surrender, that Greece is not a game that has ended.”

He called on all Greeks to reject the Troika “ultimatum” with a “resounding NO.” Based on his 80% approval rating, he’ll likely get it. Then what?

BBC correspondent Robert Peston close to talks said “(t)he European Central Bank is expected to end emergency lending to Greece’s banks on Sunday.”

“The country’s banks depend on the ECB’s Emergency Liquidity Assistance (ELA). Its governing council is meeting later.”

Greece will likely “announce a bank holiday on Monday, pending the introduction of capital controls.”

“Austrian Finance Minister Hans Jorg Schelling said a Grexit now “appears almost inevitable.”

Two years ago, Cyprus declared a bank holiday and instituted capital controls short-term to deal with its banking crisis. Supplies of basic goods dried up instantly because importers had no cash to pay for them. Months later, things still hadn’t returned to normal.

Cutting off Greece’s financial lifeline would cause greater duress than what Cyprus experienced. Yet relief is available by turning East, not West.

Russia and China are likely suppliers. Perhaps other BRICS countries. Staying trapped in the Eurozone straightjacket assures deepening debt peonage – an endless cycle of financial and social disaster for ordinary Greek people already suffering hugely.

Ending Emergency Liquidity Assistance (ELA) is likely Monday or Tuesday when default on a $1.8 billion IMF payment looks certain.

On Sunday, ECB board member Lorenzo Bini Smaghi said “(g)iven the uncertainty over Greece remaining in the euro, the ECB will no longer be able to supply liquidity to the Greek banks, who in turn will be unable to supply euros to their clients.”

ECB governors are meeting Sunday to decide whether to end ELA. A two-thirds governing council majority is needed to approve it.

Irish Finance Minister Michael Noonan expects a Monday bank holiday announcement. “It is not a question of waiting to see what might happen…in terms of a crisis. The crisis has commenced,” he said.

For now, things are in unchartered waters. An ECB statement said it “tried to avoid taking any steps that would push Greece out of the eurozone.”

“But the bank’s rules would make it more difficult for it to continue to support Greek banks without the prospect of an agreement with creditors.”

Troika officials are amenable to more talks without offering meaningful concessions. Whether Grexit looms remains to be seen.


Stephen Lendman lives in Chicago and can be reached at [email protected]. His new book is titled “How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War”. www.claritypress.com/Lendman.html Visit his blog site at www.sjlendman.blogspot.com.

Oh, The Lies We Are Fed

Financial Crisis_FAIL

This is an introduction to our current state of degraded economy, failing financial system and the global ponzi scheme tied to the currency that is floating around our planet.

What is happening is a convergence of events unlike the world has ever seen. The President’s Working Group on Financial Markets, also known as the Plunge Protection Team, has kept the Dow Jones Industrial Average and the S&P 500 on a continually higher moving plane for over five years. If you just look at a chart for either of these two indices you will see an approximate 30 degree angle moving from left to right. This is unnatural; this is unsustainable.

Take a look at these five year charts for the DJIA and S&P:

S&P

Screen-Shot

DJIA

Screen-Shot-2015-06-28-at-4_54_37-AM-300x250

Let’s contrast this with the Gross Domestic Product (GDP) growth over the same time period. Shouldn’t the Gross Domestic Product being moving in the same way the stock markets move? If the stock market is a representation of the companies creating the economy and the GDP is the measurement of what those companies are producing, the charts should “look” about the same, right? Well, take a look

embed
source: tradingeconomics.com

Does the chart measuring Gross Domestic Product (GDP) look anything like the two equities charts? Not even in the same neighborhood. How can this be? Is this a demonstration of propaganda or simply a measure of how completely oblivious the citizens of the U.S. are to the world they live? There is no denying the fact laid bare for all to see, yet, the mass of people in this country believe our economy is nothing but rainbows and blue skies as far as the eye can see.

If rigging one market is beneficial then rigging all markets must be awesome! If we turn our attention to the most important of all the markets, gold and silver, we will see just how the above markets can be rigged without anyone questioning what is happening. Gold and silver act like a kind of thermometer to measure the health of an economy based on the supply of money in the system–all money, including your current debt owed on your “credit” card. If you understand that gold and silver are money, then you understand the money has to perform in a way that reflects the economy. If the money does not reflect what is happening in the economy then everyone would see there is a major problem and the veil would be lifted exposing the truth–that our economy is on life-support and fading fast. Currently, the temperature of our economy, as measured by gold and silver, appears to be low as the prices for these two pieces of money are low. How can that be? How can the charts above, that are suppose to be representations of the U.S. economy, reflect two completely different images? Introducing gold, specifically, and it’s trusted side kick, silver.

For the past several thousand years gold has been money, it still is today, even though most Americans have no concept of this global principal. With all of the most important global markets having been determined to be rigged, in a court of law, it would make sense that the single most important measure of global economic health would be rigged as well.

See, why does the COMEX permit it? – Dr. Roberts

The COMEX is the futures market where silver is traded and the price, globally, is determined. The London Bullion Market Association (LBMA) is where the price, globally, of gold is determined.

Here is a five year chart, the same time frame as used for the GDP, DJIA and S&P above, that clearly shows the exact opposite of the above charts:

au1825nyb-300x183

How many of you have heard of QE (Quantitative Easing)? QE or Quantitative Easing, is nothing more than Orwellian double-speak for money printing. The Federal Reserve has printed well over $3 TRILLION dollars in the past six years in order to keep the too big to prosecute banks alive. These banks, that caused all the problems in 2007-2008, are still insolvent even after six plus years of receiving free money from the Federal Reserve.

So, what does this mean? Well, if you look at the lack of growth in the U.S. GDP, a measure of all goods and services produced in the U.S., you will see the truth about how poorly the economy has been doing over the past five years. While gold, a measure of the health of the economy, has been moving in downward slide. Gold, since it is a “thermometer” and measurement against the amount of paper money in the system, should be moving in an upward fashion, due to the fact that the U.S. economy has been stagnate or slipping since 2007-2008 and the fact that Federal Reserve has given the banks trillions of dollars in new money.

Where do we go from here? If you are able to see, from the information above, that something is completely out of balance then making decisions to protect yourself and your family would be prudent. Discussing with your family a strategy that fits your situation would be wise. If you have questions then you should get busy doing some research. As a suggestion a good starting point would be Mike Maloney’s “Hidden Secrets of Money – Part I” This is an excellent five part series that is simple to follow and explains how money works, why gold and silver are important to possess and will teach you in about two and half what has taken me over seven years to learn. After digesting this information you should have more questions regarding your personal situation and that is where you are going to have to begin taking action. If you begin following The Daily Coin you will be presented with solutions that will, hopefully, fit your needs. Remember, I am just a person, like you, who is trying to protect my family from what seems to be unsustainable global ponzi scheme designed to steal as much of my labor (wealth) as possible. My sole purpose for the remainder of my life is to do all I can to keep these criminals out of my living room, out of my life and out of my wallet.

Don’t forget to follow The Daily Coin on Twitter and like us on Facebook.


Rory Hall has been a daily contributor at SGTReport.com. for more than two years. He has written several original articles and interviewed some of the top precious metals professionals in the industry, as well as top preparedness specialists in the world. His YouTube Channel, The Daily Coin, was launched in February 2014 and his website TheDailyCoin.org was launched April 25, 2014. QUOTE: “As a student of monetary, financial and economic history for the past five years it has taught me to watch the markets with an open mind and a hand on my wallet.”

Expect Fireworks, Gold, Silver And Greece Referendum (VIDEO)

Greece-Debt-Crisis

Our system is corrupt to the core. The Greek people know this first hand. Sunday, Taki, GoldSilverWorlds, and me discussed what is happening in Greece right now and how the Troika, along with the Greek government have kept the citizens ignorant about expectation regarding the debt that has been issued. The upcoming referendum, scheduled for a vote on July 5, has only presented one side to the people and very few people know what Tsipras has discussed with Putin or what it means for Greece to join the BRICS.

We discuss the current state of the precious metals miners and Taki is very upbeat about what is happening and the possibilities for the miners in the coming months and years. This leads to gold and silver and what is happening with the massive short position and open interest on the CRIMEX. Taki provides us with some great insight as what has happened and what may happen within the next few months. Let the fireworks begin!!

 

Don’t forget to follow Don’t forget to follow The Daily Coin on Twitter and like us on Facebook.


Rory Hall has been a daily contributor at SGTReport.com. for more than two years. He has written several original articles and interviewed some of the top precious metals professionals in the industry, as well as top preparedness specialists in the world. His YouTube Channel, The Daily Coin, was launched in February 2014 and his website TheDailyCoin.org was launched April 25, 2014. QUOTE: “As a student of monetary, financial and economic history for the past five years it has taught me to watch the markets with an open mind and a hand on my wallet.”

Does The IMF Actually Want To Cause A Greek Debt Default?

greece euro

When it comes to geopolitics, there are often wheels working within wheels that are working within wheels.  Once in a while we get a peek behind the scenes, but for the most part the machinations of the global elite remain shrouded in mystery most of the time.  And sometimes the global elite appear to be doing things that, on the surface, do not seem to make much sense at all.  What is going on in Europe is a perfect example of this.  If everyone was negotiating honestly, I believe that a Greek debt deal would have been reached by now.  As this endless crisis has stretched on month after month, it has become increasingly apparent that more is going on here than meets the eye.  In particular, the IMF has been standing in the way of a deal time after time.  So what do IMF officials want?  Are they looking for the “unconditional surrender” of this new Greek government in order to send a message to other governments that would potentially defy them?  Or could it be possible that the IMF actually wants a Greek debt default for some other insidious reason?

When the latest Greek proposal was embraced with enthusiasm by EU officials, many hoped that this meant that the crisis would soon be resolved.  But it turns out that there is still one very important player that is not happy, and that is the IMF.  The following comes from the Wall Street Journal

But the IMF is still unhappy with key aspects of Greece’s new economic proposals and German officials were irritated by the speed with which the commission welcomed them, warning that much work needs to be done.

Greece’s plan calls for reducing the deficits in its pension system and government budget by relying heavily on raising taxes and social-security contributions, whereas the IMF wanted bigger spending cuts.

The Washington-based IMF has said Greece’s economy is already too heavily taxed and that too many additional tax increases would hurt economic growth, making it harder to pay down Greece’s debt.

It is still short of everything that should be expected,” IMF Managing Director Christine Lagarde said Monday, suggesting Greece will have to modify its proposals significantly to win the IMF’s backing.

So what would make the IMF “happy”?

Would anything short of total capitulation by the Greek government suffice?

Meanwhile, members of Syriza are expressing a high level of frustration with the compromises that Greek Prime Minister Alexis Tsipras has already agreed to.  At this point, there is even doubt whether the current Greek proposal could get through the Greek parliament.  The following comes from Bloomberg

Greek Prime Minister Alexis Tsipras is facing the first signs of dissent within his own party over his latest plan to end a five-month standoff with creditors.

Some of Syriza’s more radical and populist lawmakers expressed opposition Tuesday to the proposal as the deal’s backers called on members to see the bigger picture.

Personally, I cannot support such an agreement that is contrary to our election promises,” Dimitris Kodelas, a Syriza lawmaker associated with former Maoists, said in an interview. “I do not care about the consequences of my decision.

Despite all of the optimism that we have seen this week, the odds of a Greek debt deal getting pushed through are looking slimmer by the day.

And even if a deal somehow miraculously happens, all it would really mean is that the can has been kicked down the road for a few more months

Assuming Tsipras can force the deal through the Greek parliament, and that key creditors such as the IMF and Germany accept it too, it will do little more than buy time for negotiations on yet another rescue.

The final tranche of cash from the existing bailout should be enough to meet repayments due to the IMF and European Central Bank through the end of August. But the Greek government will then have to find more than two billion euros for both institutions in September and October.

If this week concludes with agreement between Greece and its creditors, it won’t be long before the next chapter in this drama,” said Angus Campbell, senior analyst at FxPro.

And no matter what happens by the end of this month, it is a virtual certainty that the economic depression in Greece will just continue to deepen.

At this point, normal economic activity in the nation has pretty much ground to a halt.  Just consider the following excerpt from a recent Zero Hedge article

“Business-to-business payments have almost been paused,” one Athens businessman says. “They are just rolling over postdated cheques.”

For Greek banks, mortgage loans left unserviced by strategic defaulters have become a particular headache, especially since the Syriza-led government says it is committed to protecting low-income homeowners from foreclosures on their properties

“There’s a real issue of moral hazard . . . Around 70 percent of restructured mortgage loans aren’t being serviced because people think foreclosures will only be applied to big villa owners,” one banker said.

For a long time, I have been warning that the next major economic crisis would begin in Europe before spreading across the entire globe.

Greece has a relatively small economy, but Italy, Spain and France are going down the exact same road that Greece has gone.

And what IMF officials are doing right now is that they are setting a precedent for future debt negotiations that they know are almost certainly coming with other countries in the future.

Sadly, most of my readers (being Americans) don’t really grasp the importance of what is going on over in Europe.  We are watching a horrific train wreck unfold in slow-motion, and what is going to happen over the next few weeks is going to have massive implications for the entire planet.


Michael T. Snyder is a graduate of the McIntire School of Commerce at the University of Virginia and has a law degree and an LLM from the University of Florida Law School. He is an attorney that has worked for some of the largest and most prominent law firms in Washington D.C. and who now spends his time researching and writing and trying to wake the American people up. You can follow his work on The Economic Collapse blog, End of the American Dream and The Truth Wins. His new novel entitled “The Beginning Of The End” is now available on Amazon.com.

The Greek Bank Holiday: This Is What An Economic Collapse Looks Like

greek banks on holiday

A “bank holiday” sounds like such an innocuous thing, doesn’t it?  Playful, a well-deserved rest, maybe even fun. If you’d like to learn more about the fun of such a holiday, look no further than the streets of Greece, where people have been informed the banks will be closed for the next week. Why? Because the European Central Bank has stopped sending in the money that was keeping the Greek financial system afloat. Had people been able to go to the bank and withdraw their money, the banks would be unable to function. So, the banks said, “Nope, you can have $60 if you want to wait in line for long enough to get it.” Yes, you’re understanding this correctly: the banks are keeping afloat using the money from people’s accounts. The Greek stock markets did not reopen today. This is a last-ditch effort from the Greek government to prevent total economic collapse. The situation there is dire, and much like Venezuela, it’s a case study for anyone who believes that an economic collapse of our own financial system is imminent here in America. We need to pay attention to what’s going on in Greece. This is what a real economic collapse looks like. It isn’t a Mad Max scenario or a scene from some other post-apocalyptic movie. It’s quiet desperation, long lines, and a sick feeling in the pit of your stomach as you wonder how you’ll feed your kids and keep a roof over their heads. It’s the discovery that you thought you had been doing the right thing financially, but you were deceived. It’s the realization that everything you worked for your whole life is gone, The lesson in one sentence: if you don’t have your money in your hand, you’d better have tangible assets like a pantry full of food and the supplies needed for complete self-reliance.

Here’s how it affects the citizens of Greece

First of all, this article isn’t about the poor financial decisions of the Greek government, whether social aid programs should exist, or if a bailout should have occurred in the first place. It’s about the real-life ramifications of an economic collapse on ordinary citizens who depend on fiat currency, consumer goods, and the availability of their wages when they need them. A decree published by Greek Prime Minister Alex Tsipras cited “the extremely urgent and unforeseen need to protect the Greek financial system and the Greek economy due to the lack of liquidity caused by the Eurogroup’s decision on June 27 to refuse the extension of the loan agreement with Greece.” The following restrictions will be in place:

  • All banks are closed until July 6
  • ATM withdrawals are limited to 60 Euros per day (the equivalent of about $60 USD)
  • People using bank cards from other countries will not be limited to 60 Euros per day (so this won’t affect tourists aside from the long lines.)
  • The Athens stock exchange is closed today.
  • Pensions and wages will be unaffected – which means they’ll still be electronically deposited into the accounts that no one can access.
  • Debit and credit card payments will continue to work.
  • Online transactions within the country will continue to work
  • Foreign transactions will be prohibited without Ministry of Finance approval
  • Urgent expenditures ““necessary to safeguard a public or social interest” must be approved by a banking commission
  • Interest surcharges for this week are prohibited
  • Banks that break these rules will be charged a fine of 10% of the value of the transaction

The statement issued by the prime minister allows for the bank holiday period to be shortened or extended by his discretion.

Greeks are scrambling to stock up on food and fuel.

Despite the fact that Greece has been clinging to the lifeline cast to them by the European Central Bank for several years now, people are still hit hard by the bank closures.  It’s easy to say, “Why on earth do they have money in the bank?” However, their system is much like ours – it’s nearly impossible to function without a bank account. For example, pension payments and wages are nearly all paid by automatic deposits directly into one’s bank account. If you have a car payment or a mortgage payment, it comes out of your bank account – you don’t go and pay cash for it. The system is designed so that access to your money is not your own. An article on Zero Hedge featured Tweets with photos of the long lines for grocery stores, ATM machines, and fuel stations as people desperately try to turn their Euros into tangible assets.

This is affecting stock markets everywhere.

This isn’t just a problem that affects Greece. Stock markets across the globe are plummeting in the aftermath of the bank holiday. In London, the FTSE dropped by 2%.  The French and German markets dropped by 4%, and the European banking shares dropped by a hefty 10%. Tokyo lost 3% and Hong Kong dropped by 2.5%. Michael Hewson, chief markets analyst at CMC Markets UK, said we can expect the effects to be far-reaching. “The Greek butterfly looks set to cause a tornado in financial markets.  In the process we could well also find out if this event turns out to be the equivalent of the butterfly flapping its wings in New Mexico, going on to cause a hurricane in China.” This far-reaching effect is probably because Greece can be expected to default on $1.77 billion dollars in debt to the IMF.

What we can learn from the collapse of the Greek economy

If you’ve been paying attention to the goings-on in Greece, you probably recall the 2010 riots, when a harsh austerity program was introduced as part of the terms of a bailout from the IMF (International Money Fund) the European Commission, and the European Central Bank (ECB). In actuality, the country has been floundering financially since 2007, when their first recession hit. This most recent crisis has occurred because the bailout money, which was divided into four major payments, may not be continued, which will result in massive debt defaults. Does any of this seem familiar? Our own government has been working on a deficit for may years, except instead of taking money from loan sharks entities like the IMF, our government has opted to just print more up and pretend it’s backed by something besides dreams and fairy dust. If things progress on our current route, what you’re seeing in Greece right now could be our future. And not a distant 20-years-down-the-road future. Our near future. How do you prepare for something like this? Well, first things first, you don’t leave your money in the bank. It’s perfectly understandable to have your paychecks deposited and your payments withdrawn, but once your bills are paid, the rest of it needs to come out. Then, keep enough on hand to meet your bills for a few months and invest the rest in tangible assets like preps, tools, and information. I personally don’t keep more than the bare minimum needed for monthly bills in the bank. I have a serious mistrust of these establishments, especially after what we witnessed a couple of years ago in Cyprus when the government there took money directly from people’s accounts, triggering panic and bank runs across Europe. We aren’t protected here in the United States either – it is blatant that the banking industry is setting us up for the potential of a similar situation. Deposit accounts are no longer legally protected and the Federal Reserve passed a policy that in the event of an economic crisis (think “bank run) that accounts can be frozen to preserve the liquidity of the banks. All of this seems to point in the direction of what we’re seeing in Greece, doesn’t it? It seems like the game pieces are being moved around the chessboard to be able to legally seize or control whatever you have in the bank. Most folks who are paying attention to the financial news in our country are not big fans of fiat currency, but at this point in time, it’s a necessary evil. Please don’t clog the comments section raving about the fact that cash is not real money. While I realize it is backed by nothing but happy thoughts, it’s still important to remember that in the world that exists today, government issued currency is most likely to be the unit of trade needed.  Most mortgage companies don’t accept payments in gold ingots, and your mechanic might look at you funny if you present him with a pile of silver coins to pay for a car repair. I recommend that you keep at least one month of expenses physically on hand, in cash.  This is instantly available, easily recognizable as money to those who are uniformed, and simple to trade for goods or services.

What do you need to survive the end of the consumer lifestyle?

Once you have the money set aside to keep you afloat, it’s time to go hard into preps.  Think about what you need for self-reliance: what if you could never again just go to the bank, get money, then purchase the things you need? Look no further than the collapse of Venezuela to see the items that are extremely scarce there. “What can you store?” is not the right question to ask. “What can you make?” – that’s the right question. Your focus has to be on long-term sustainability, frugality, and self-reliance.  Don’t get me wrong – a stockpile is sensible and an essential course of action. It should definitely be part of your preparedness plan. However, you need to also be ready for the time when the supplies in your well-stocked pantry are no longer available.  You need to be able to meet as many of your own needs as possible or you’ll end up being one of those people wearing dirty clothes because you can’t find laundry soap or going hungry because you can’t find any food at the stores – or can’t afford it if you can find it. You need to be ready for the end of a consumer-driven lifestyle, because quite frankly, there may soon come a day when there are no consumer goods to be had. Here are some ways to work on your self reliance:

It’s only by reducing your need for the things sold in stores that you can exempt yourself from the chaos and desperation that will erupt when or if an economic collapse situation occurs here. Knowledge and skills are among the most important things you can “collect” to prepare for an economic collapse. However, if you haven’t been at it your entire life, it’s difficult to remember everything. Create a library of references to help you in your quest for self-reliance.  These are some of my favorites:

Once you have an amount saved that is greater than your one month of cash, and once you have all the tangible preps you can store, only then should you consider investing in precious metals. Gold and silver retain their value far better than the dollar, and the metals are easily liquidated if an emergency arises and it becomes necessary to change them to fiat currency. This being said, metals are harder to spend, and it takes a little bit of effort to cash them in, so it can help deter you from spending unwisely if you tend to have difficulty saving money. Reputable companies exist that allow you to do all of your transactions online and have the metals shipped to your home, taking the hassle out of acquiring them if you happen to live in a remote area.

World events are our crystal ball

I’ve been warning specifically about this impending financial doomsday since the beginning of the year. In my New Year’s Day post, I wrote:

Not only would your money be worthless, here a few more ways the current economic trends may still affect you.

Prices will go up. We’ve seen an almost unprecedented increase in the price of food over the past couple of years, even as the quality of the food available plummets. This is due to massive droughts, early freezes, and basic cost-of-living increases.

Unemployment will continue to ripple through the country.  Those without jobs now are equal to the number of unemployed during The Great Depression. As the economy plummets, that number will almost certainly exceed the previous highs.

Obamacare mandates will continue to impoverish the middle class.  The most ill-conceived policy in history, Obamacare has increased monthly payments while decreasing coverage for nearly every person who is gainfully employed.  And, if you refuse to procure coverage through Obamacare, expect attempts to penalize you into compliance. This is adding to the unemployment rate as employers struggle to keep their doors open and drop full time staff to avoid having to pay their portion of the O-care payments.

Rents will increase.  If you don’t own your home, prepare to pay higher rent as landlords try to cover their losses of income in other sectors. Foreclosures will be on the rise, which means there will be fewer homes available.

The bottom line is, income will remain the same, decrease, or even disappear entirely for many of us.  Meanwhile, the price of darn near everything will go up.  Expect to pay more for things like keeping your utilities on, feeding and clothing your family, keeping a roof over your heads. Aside from that, those dollars you are carefully saving? They are only providing you with the illusion of security.

Bloggers like Michael Snyder and Mac Slavo concur that we are right on he edge of a crisis the likes of which our generation has never seen. Pay attention to the breaking news out of Greece. On July 5, the decision will be made whether any further bailouts will be headed their way. If none are forthcoming you can expect the bank holiday to be extended indefinitely. Also note that:

The events occurring in the European banking systems (Cyprus and Greece in particular) are a glimpse into our future. I can’t ring the warning bell any louder than this. Our way of life is about to change, and you can prepare for the new reality or be one of those desperate people in long lines, hoping for some mercy from the people who put us in this situation.


Daisy Luther is a freelance writer and editor who lives in a small village in the Pacific Northwestern area of the United States. She is the author of The Pantry Primer: How to Build a One Year Food Supply in Three Months. On her website, The Organic Prepper, Daisy writes about healthy prepping, homesteading adventures, and the pursuit of liberty and food freedom. Daisy is a co-founder of the website Nutritional Anarchy, which focuses on resistance through food self-sufficiency. Daisy’s articles are widely republished throughout alternative media. You can follow her on Facebook, Pinterest, and Twitter, and you can email her at [email protected]

The U.S. And EU Will Collapse Regardless Of Economic ‘Contagion’

circus train economic collapse

In order to understand what is really going on around the globe in terms of the collapsing economy, we must set aside false mainstream versions of reality. When it comes to the EU and its current fiscal turmoil, it is very important to, in some respects, ignore Greece entirely. That’s right; forget about all the supposed drama surrounding Greek debt obligations. Will they find a way to pay creditors? Will they default? Will they make a deal with Russia and the BRICS? Will there be last-minute concessions to save the system? It doesn’t matter. It’s all a soap opera, an elaborate Kabuki theater run by international financiers and globalists.

It is most important to remember the fundamentals. Greece will default on its debts. Period. There is no way around it. Maybe Greece makes a deal today, maybe it makes a deal tomorrow; but eventually, the country’s ability to stretch out its resources in order to meet its exponential liabilities will end. It is inevitable, and no last-minute “deal” is going to change the math at the core of it all.

Why are so many economists so worried about a little country like Greece? It’s all due to a great lie: a dishonest narrative being perpetuated by the establishment that if Greece falls, defaults or leaves the EU, this could trigger a domino effect of other nations hitting a debt wall and following suit. The lie embedded in this narrative is the claim that Greece will cause a “contagion” through the act of default.  Let’s be clear – there is no contagion. Multiple countries within the EU have developed their own debt problems in spite of Greece over the past couple of decades, not because of Greece. Each of these countries, from Italy, to Spain, to Portugal, etc. has its OWN sovereign debt disasters to deal with caused by its own fiscal irresponsibility. The only legitimate reason for a so-called contagion is the fact that these countries have been forced into socialist interdependency through the EU structure.

Never forget this: The EU is in trouble not because of Greece, but because of forced supranational interdependency. The EU by all rights should not exist, nor should any centralized supranational single currency system.

I would also point out that globalist institutions like the International Monetary Fund are highly motivated to initiate disaster in the EU, despite some people’s assumptions that the EU is some kind of representative model of globalization. It’s not. If this were the case, then the IMF would not be stiffing Greece on debt aid while continuing to help Ukraine despite Ukraine’s similar inability to pay.

Why would the globalists want a partial breakup of the EU? What would they gain from such an event? That’s easy; they gain crisis, chaos and an opportunity to present a false dialectic.

Europe is not at all representative of what globalists really want in terms of economic and political structure, no matter what many people assume. It is a, rather, a kind of facsimile; a half measure. When Europe hits the bottom of the financial abyss and the bewildered public begins asking what the hell happened, the elites will be there with an immediate explanation. They will claim that it was not the EU’s interdependency that was the problem. Instead, they will assert that the EU was actually not centralized ENOUGH. They will claim that in order for a supranational economy and currency to work, we must also have supranational governance. In other words, the system failed because it needs to be stabilized by global government.

The Fabian socialists will argue that it was the barbaric and outdated institution of national sovereignty that caused the full-spectrum crisis. They will completely gloss over the negative effects of an interdependent economic system and the fact that a lack of redundancy leaves cultures simpering and impotent. We’re all one big human village after all, so we should accept the idea that we all succeed or fail together. Free markets and individual innovation apparently have nothing to do with a thriving economic structure. What we really need is a hive mind amalgamation that turns us all into easily replaceable parts in a massive rumbling lawnmower that chews up our heritage, history and principles for the sake of some arbitrary greater good and the promise of alchemical floating cities in the sky where no one has to work anymore.

The fall of the EU is a means to an end for globalists. There is almost no nation or institution they will not sacrifice if that sacrifice can be exploited to further their goal of total global political and economic dominance. They don’t just want a completely centralized system; they want all of us to BEG them to put that system in place. They want the masses to think it was all our idea. This is the most pervasive and effective form of slavery, when the slaves are manipulated into demanding their own enslavement.  When the slaves are fooled into believing their enslavement is something to be proud of — a badge of honor in service of the collective, if you will.

The fall of the U.S. will be no different in this regard. We do not necessarily have a supranational structure like the EU. So our narrative for collapse will be slightly different, and the engineered lesson we are meant to learn will be carefully crafted.

You see, Americans are meant to play the role of the spoiled imperialists who are finally getting what we deserve, an economic punch in our tender parts. We are the new Rome, bread and circuses and all. And when the U.S. comes crashing down like Europe, the Fabians will be there yet again to admonish the greed inherent in national sovereignty and the destructive aspirations of power that must be squelched by a more evenhanded global political system. I don’t really know how many people out there realize this, but we are meant to play the bad guys in the global theater being put on by the elites. Americans are the villains, the rest of the world plays the role of innocent victim, and globalist centers like the IMF and the BIS are meant to play the heroes, coming to the rescue of humanity when all appears lost.

Our debt generation by far outmatches that of the whole of EU nations combined, a fact I outlined in Part 3 of my series One Last Look At The Real Economy Before It Implodes.  Unlike Greece, though, the U.S. has the direct option to print fiat at will in order to prolong punishment for our massive debt spending. However, as we have seen with recent market reactions to the very notion of an interest rate hike by the Federal Reserve in September, such an event will trigger extensive outflows from stock markets and herald the end of the “new normal.” Again, why would the banksters do this? Why not keep interest rates at a constant near zero?  It is not as if there is any public pressure to raise rates; in fact, it’s quite the opposite. Why is the Fed ignoring the hundreds of signals showing that the U.S. is in a recession and pushing ahead with discussion of interest rate hikes despite what one might logically conclude would be in the Fed’s best interest?

The Fed knows that the only things propping up American markets are free money and blind faith by the public that banks and government will act to stop any pain or economic suffering, should such a potential for crisis arise. When the free money is gone and that faith disappears, then we will have an epic catastrophe on our hands. The globalists within the Fed know this, and they want this – at least , they want a controlled version of this. The elites NEED the fall of the current U.S. system exactly because this will make way for the rise of what they often term the “great economic reset.”  This reset is the next stage in the plan for total global economic centralization.

This is not about contagion. There is no such thing. It is an excuse, a scapegoat designed to distract from the real problem. This is about a concerted effort over the past several decades by internationalists to maneuver Western cultures into a position of vulnerability. When people are weak and frightened, they become malleable. Social changes you would have never thought possible today become very possible tomorrow in the midst of a crisis. I believe we are now seeing the onset of the next great crisis, and the fundamentals of economy support my view. When the entire European system hangs by the thread of Greek debt and the entire U.S. system hangs by the thread of near zero interest rates and blind market faith, something is about to shatter. There is no going back from such a condition. There is only the path forward, and the path forward is not pleasant or comfortable and it cannot be ignored.

We cannot forget that crisis is in itself a distraction as well. Whatever pain we do feel tomorrow, or the next day, or the next decade, remember who it was that caused it all: the international banks and their globalist political counterparts. No matter what happens, never be willing to accept a centralized system. No matter how reasonable or rational it might sound amid the terror of fiscal uncertainty, never give the beast what it wants. Refuse to conform to the dialectic. This is the only chance we have left to get back to true prosperity. Once we cross the line into the realm of worldwide institutionalized interdependency, we will never know prosperity or freedom again.

If you would like to support the publishing of articles like the one you have just read, visit our donations page here.  We greatly appreciate your patronage.


Brandon Smith is the founder of the Alternative Market Project, an organization designed to help you find like-minded activists and preppers in your local area so that you can network and construct communities for barter and mutual aid. Join www.Alt-Market.com today and learn what it means to step away from the unstable mainstream system and build something better. You can contact Brandon Smith at: [email protected].

Signs Of Financial Turmoil In Europe, China And The United States

 global-financial-crisis

As we move toward the second half of 2015, signs of financial turmoil are appearing all over the globe.  In Greece, a full blown bank run is happening right now.  Approximately 2 billion euros were pulled out of Greek banks in just the past three days, Barclays says that capital controls are “imminent” unless a debt deal is struck, and there are reports that preparations are being made for a “bank holiday” in Greece.  Meanwhile, Chinese stocks are absolutely crashing.  The Shanghai Composite Index was down more than 13 percent this week alone.  That was the largest one week decline since the collapse of Lehman Brothers.  In the U.S., stocks aren’t crashing yet, but we just witnessed one of the largest one week outflows of capital from the bond markets that we have ever witnessed.  Slowly but surely, we are starting to see the smart money head for the exits.  As one Swedish fund manager put it recently, everyone wants “to avoid being caught on the wrong side of markets once the herd realizes stocks are over-valued“.

I don’t think that most people understand how serious things have gotten already.  In Greece, so much money has been pulled out of the banks that the European Central Bank admits that Greek banks may not be able to open on Monday

The European Central Bank told a meeting of euro zone finance ministers on Thursday that it was not sure if Greek banks, which have been suffering large daily deposit outflows, would be able to open on Monday, officials with knowledge of the talks said.

Greek savers have withdrawn about 2 billion euros from banks over the past three days, with outflows accelerating rapidly since talks between the government and its creditors collapsed at the weekend, banking sources told Reuters.

All over social media, people are sharing photos of long lines at Greek ATMs as ordinary citizens rush to get their cash out of the troubled banks.  Here is one example

greece tweet economy

And if there is no debt deal by the end of this month, the Greek debt crisis is going to totally spin out of control and financial chaos will begin to erupt all over Europe.  But instead of trying to be reasonable, EU president Donald Tusk “has delivered an ultimatum to Greece”, and it almost appears as if EU officials are more concerned about winning a power struggle than they are about averting financial catastrophe…

EU president Donald Tusk has delivered an ultimatum to Greece, claiming the country must ‘accept an offer or default’ at an emergency summit set for Monday – in a last-ditch effort to stop the debt-stricken nation crashing out of the euro.

‘We are close to the point where the Greek government will have to choose between accepting what I believe is a good offer of continued support or to head towards default,’ Mr Tusk said today.

His comments come as Greek Prime Minister Alexis Tsipras warned that his country’s exit from the eurozone would trigger the collapse of the single currency.

‘The famous Grexit cannot be an option either for the Greeks or the European Union,’ he said in an Austrian newspaper interview.

‘This would be an irreversible step, it would be the beginning of the end of the eurozone.’

While all of this has been going on, the obscene stock market bubble in China has started to implode.  Just check out the following numbers from Zero Hedge

As the carnage began last night in China we noted the extreme levels of volatility the major indices had experienced in recent weeks. By the close, things were ugly with the broad Shanghai Composite down a stunning 13.3% on the week – the most since Lehman in 2008 (with Shenzhen slightly better at down 12.8% and CHINEXT down a record-breaking 14.99%).

Under normal circumstances, numbers like these would be reason for a full-blown financial panic over in Asia.  But these are not normal times.  Even with these losses, stock prices in China are still massively overinflated.  For example, USA Today is reporting that the median stock over in China is “trading at 95 times earnings”…

Margin debt in China has soared to a record $363 billion, according to Bloomberg, and the median stock in mainland China is now trading at 95 times earnings, which even tops the price-to-earnings multiple of 68 back at the 2007 peak.

That is absolutely ridiculous.  When a stock is trading at 25 or 30 times earnings it is overpriced.  So these numbers that are coming out of China are beyond crazy, and what this means is that Chinese stocks have much, much farther to fall before they get back to any semblance of reality.

Meanwhile, in the U.S. money is flowing out of bonds at a staggering pace.  The following quote originally comes from Bank of America

“High grade credit funds suffered their biggest outflow this year, and double the previous week (and also the biggest since June 2013). High yield outflows also jumped to $1.1bn, the biggest since the start of the year. However, government bond funds suffered the most amid the recent spike in volatility, with outflows surging to the highest weekly number on record ($2.7bn). This brings the total outflow from fixed income funds to almost $6bn over the last week, the highest since the Taper Tantrum and the third highest outflow ever.”

What this means is that big trouble is brewing in the bond markets.  This is something that I warned about in my previous article entitled “Experts Are Warning That The 76 Trillion Dollar Global Bond Bubble Is About To Explode“.

For the moment, U.S. stocks are doing fine.  But just about everyone can see that we in a massive financial bubble that could burst at any time.  Presidential candidate Donald Trump says that what we are witnessing is a “big fat economic and financial bubble like you’ve never seen before”

Yesterday during an interview on MSNBC, presidential candidate Donald Trump said he has some big names in mind for the Treasury secretary if he wins the White House. “I’d like guys like Jack Welch. I like guys like Henry Kravis. I’d love to bring my friend Carl Icahn.” He also opined on the economy and the stock market, admitting that the Fed has benefited people like him but that the economy and is in a “big fat economic and financial bubble like you’ve never seen before.

Ron Paul also believes that this financial bubble is going to end very badly.  Just check out what he told CNBC earlier this week

Despite record highs in the market, former Rep. Ron Paul says the Fed’s easy money policies have left stocks and bonds are on the verge of a massive collapse.

“I am utterly amazed at how the Federal Reserve can play havoc with the market,” Paul said on CNBC’s “Futures Now” referring to Thursday’s surge in stocks. The S&P 500 closed less than 1 percent off its all-time high. “I look at it as being very unstable.”

In Paul’s eyes, “the fallacy of economic planning” has created such a “horrendous bubble” in the bond market that it’s only a matter of time before the bottom falls out. And when it does, it will lead to “stock market chaos.”

Yes, this financial bubble has persisted far longer than many believed possible, but all irrational bubbles eventually burst.

And you know what they say – the bigger they come the harder they fall.

When this gigantic financial bubble finally implodes, it is going to be absolutely horrifying, and the entire planet is going to be shocked by the carnage.


Michael T. Snyder is a graduate of the McIntire School of Commerce at the University of Virginia and has a law degree and an LLM from the University of Florida Law School. He is an attorney that has worked for some of the largest and most prominent law firms in Washington D.C. and who now spends his time researching and writing and trying to wake the American people up. You can follow his work on The Economic Collapse blog, End of the American Dream and The Truth Wins. His new novel entitled “The Beginning Of The End” is now available on Amazon.com.

Currency Crisis: How Much Longer Until It Hits The US? (VIDEO)

The coming Currency Crisis is a mathematical certainty, and it may come sooner rather than later. The dollar has sunk and confidence has been destroyed to the point of no return.

The coming Currency Crisis is a mathematical certainty, and it may come sooner rather than later. The dollar has sunk and confidence has been destroyed to the point of no return.

A currency crisis is coming to the US … and it’s only a matter of when, not if. Many have been warning about it for years, from politician Ron Paul to economist Peter Schiff to many other voices in the alternative media. It’s a mathematical certainty, and a question of when, not if. Recent events, within the US and abroad, are beginning to indicate that it’s going to happen sooner rather than later. No one knows exactly when; there are way more predictions that don’t come true than those that do. However, making an accurate prediction of the exact date when the currency crisis hits is not as important as getting spiritually, mentally, financially and physically prepared for it.

Currency Crisis Rather than an Economic Collapse

When I use the term currency crisis to describe what’s coming, I don’t necessarily mean an economic collapse. There was an economic collapse in 2008 when the stock market crashed and the real estate/housing bubble burst (just as other bubbles have burst in the past like the dot.com bubble), but many ordinary Americans were unaffected by that. I am saying that a currency crisis will occur and that it will affect everyone, even people living outside the US, but especially those living inside the US and holding the majority of their wealth in US dollars. By currency crisis I mean the destruction of confidence in the US dollar to the point where people and nations do not trust it anymore as a safe storage of value, and do not want to use it any longer to transact.

Watering Down the Dollar to Escape Debt

Ever since the end of World War 2, the US has enjoyed tremendous prosperity, partly due to the US dollar acting as the world’s reserve currency, and also partly due to the institution of the petrodollar, the system whereby nations must trade oil in US dollars. However, both of these are starting to break down. The US has gone from the world’s largest creditor nation to the world’s largest debtor nation. Since all this debt is denominated in US dollars, the elite cabal in charge of the US dollar, the Rothschild-Rockefeller Federal Reserve cartel, decided to do what any criminal would do: water down the debt so as to not have to pay back as much. Think about it: if you owed money in a certain currency to someone, and if you were in charge of determining the value of that currency, and if you had no scruples, wouldn’t you just make the value of that currency worth less to save yourself money?

This explains the disastrous rise in the US money supply we have witnessed in the last 10 years or less, so extreme it is without historical precedent in America. The money supply has increased exponentially since around 2006. The US national debt stands at around US$18.271 trillion; the first $8.5 trillion of debt took 216 years to accrue (from 1790 – 2006), whereas the next $8.5 trillion of debt took only 8 years to accrue (2006 – 2014). As Michael Snyder writes, the US national debt is now more than 5000 times larger than it was when the Federal Reserve was created back in 1913!

The big consequence of the US Government trying to escape its debts is that people begin to see all these excess dollars in circulation. They realize that each dollar is now worth less, because there are way more of them. That’s inflation. With the watering down of a currency come the inevitable watering down of confidence. And confidence has been all that has been backing the US dollar ever since 1971 when Nixon suspended the convertibility of dollars to gold, or took the US dollar off the gold standard. Once confidence is gone, it is very difficult or impossible to regain.

BRICS and a New Reserve Currency

That is why nations around the world are starting to make other arrangements. Iraq’s Saddam Hussein and Libya’s Muammar Gaddafi both tried to break away from the domination of the petrodollar in attempting to sell their oil in other denominations. Sadly, both were demonized by the elite-owned western mainstream media, had their countries invaded on false pretenses and were ultimately assassinated. However, the game has changed since then, and now a group of powerful nations known as BRICS (Brazil, Russia, India, China and South Africa) have begun making their own trading arrangements. China has even come out urging the IMF to consider its currency the Renminbi as the new world reserve currency, and recently founded a new international development bank in an attempt to create an alternative to the Anglo-American dominated IMF and World Bank. Even traditional American allies like Australia and Britain jumped right on board with this new bank, much to the dismay of the US.

For far too long, the US has been living in a fake, fantasy economy. The coming currency crisis represents the tipping point we are about to reach when a critical mass of people, investors and nations completely lose confidence in the dollar. At that point, the cost of financing the debt becomes too much, interest rates start to rise again, prices skyrocket, there is hyperinflation and – all of a sudden – people’s life savings are worth a portion of what they used to be worth. It’s a scary scenario but the natural, inevitable consequence of the reckless borrowing and money-printing the US Government has engaged in for the last decade or so. Remember, the US Government can declare fiat or paper money as legal tender, but it can’t legislate confidence or generate trust in it.

Official Stats Show True, Sickened State of the American Economy

Official US Government statistics paint a true picture of the state of American finances (see Stefan Molyneux’s video embedded above). More people than ever are on food stamps and welfare; the Government is fudging the figures to hide the real number of unemployed; and the Government has no real way to pay pensions and social security going into the future. When the currency crisis does hit, the dollar will either crash to zero or be severely devalued – and it could all happen in a matter of hours, not days, weeks or months. It could get ugly. When prices skyrocket, pensioners and others on a fixed income will be the worst affected, since the same amount of income will only buy a fraction of what it used to. A bank holiday may be declared to stop a run on the banks; ATMs and other ways to access cash may be shut down; there may be riots and social unrest; martial law may be declared.

Will the Currency Crisis Occur in 2015?

Will the currency crisis occur in 2015? No one knows, but if so, it might explain why the elite have scheduled Operation Jade Helm 15 for this year. In politics, nothing happens by chance, as FDR once said. See this article for more on the deeper implications and causes for concern regarding Jade Helm, but basically, it violates the centuries-old legal principle of Posse Comitatus (an Act passed in 1878) which forbids the US military from being deployed on US soil. It declares certain states as hostile – especially Texas, which just so happens to be home to a massive number of gun owners, patriots and secessionists who would fight the Federal Government to the death (Texas, by the way, just passed legislation to build its own gold depository and demanded US$1 billion of its gold back from the NY Federal Reserve!). It further blurs the distinction between the police and military. It encourages the US military to become a guard-dog and private army of the elite, able to be deployed against anyone whom the elite declare “an enemy of the State”. Is this all just a coincidence? Citizen journalists have caught copious video footage of military vehicle movements around America in the last few months. Is it just a coincidence that some of this is happening in Jade Helm states, such as California, Nevada and Texas?

We don’t know why all this is happening, but one thing’s for sure: you need to get informed and prepared. The writing is on the wall. Knowing about all these possibilities helps you connect the dots together and make better decisions from an informed state. Forewarned is forearmed. On a practical level, invest in tangible things such as food and water reserves, gold and silver, survival supplies, and real estate or farmland. Use the upcoming currency crisis and Jade Helm as a wake-up call – the fantasy economy can’t go on forever.

 

Sources:

http://www.usdebtclock.org

https://en.wikipedia.org/wiki/National_debt_of_the_United_States

http://theeconomiccollapseblog.com/archives/on-the-100th-anniversary-of-the-federal-reserve-here-are-100-reasons-to-shut-it-down-forever

http://www.wsj.com/articles/momentum-builds-to-label-chinese-yuan-a-reserve-currency-1427926918

http://www.nytimes.com/2015/03/29/world/asia/australia-to-join-regional-development-bank-led-by-china.html?_r=0

http://www.wsj.com/articles/u-k-to-join-china-backed-development-bank-1426211662

http://www.zerohedge.com/news/2015-06-16/gold-bullion-worth-1-billion-be-“repatriated”-ny-fed-new-texas-bullion-depository


Makia Freeman is the editor of The Freedom Articles and senior researcher at ToolsForFreedom.com, writing on many aspects of the global conspiracy, from vaccines to Zionism to false flag operations and more, and also including info on natural health, sovereignty and higher consciousness.

The Next Great European Financial Crisis Has Begun

euro

The Greek financial system is in the process of totally imploding, and the rest of Europe will soon follow.  Neither the Greeks nor the Germans are willing to give in, and that means that there is very little chance that a debt deal is going to happen by the end of June.  So that means that we will likely see a major Greek debt default and potentially even a Greek exit from the eurozone.  At this point, credit default swaps on Greek debt have risen 456 percent in price since the beginning of this year, and the market has priced in a 75 percent chance that a Greek debt default will happen.  Over the past month, the yield on two year Greek bonds has skyrocketed from 20 percent to more than 30 percent, and the Greek stock market has fallen by a total of 13 percent during the last three trading days alone.  This is what a financial collapse looks like, and if Greece does leave the euro, we are going to see this kind of carnage happen all over Europe.

Officials over in Europe are now openly speaking of the need to prepare for a “state of emergency” now that negotiations have totally collapsed.  At one time, it would have been unthinkable for Greece to leave the euro, but now it appears  that this is precisely what will happen unless a miracle happens…

Greece is heading for a state of emergency and an exit from the euro following the collapse of talks to agree a bailout deal, senior EU officials warned last night.

Europe must be prepared to step in otherwise Greek society would face an unprecedented crisis with power blackouts, medicine shortages and no money to pay for police, they said.

In the past, the Greeks have always buckled under pressure.  But this new Greek government was elected with a mandate to end austerity, and so far they have shown a remarkable amount of resolve.  In order for a debt deal to happen, one side is going to have to blink, and at this point it does not look like it will be the Greeks

The world’s financial markets are facing up to the possibility that Greece could soon become the first country to crash out of Europe’s single currency. Talks between Athens and its eurozone creditors have collapsed in acrimony just days before a final deadline for Greece to unlock the €7.2bn (£5.2bn) in bailout funds it needs to avoid a catastrophic debt default.

The Greek Prime Minister, Alexis Tsipras, accused the creditor powers of hidden “political motives” in their demands that Greece make further cuts to public pension payments in return for the financial aid. “We are shouldering the dignity of our people, as well as the hopes of the people of Europe,” Mr Tsipras said in a defiant statement. “We cannot ignore this responsibility. This is not a matter of ideological stubbornness. This is about democracy.”

As we approach the point of no return, both sides are preparing for the endgame.

In Greece, members of parliament have been studying what happened in Iceland a few years ago.  Many of them believe that a Greek debt default combined with a nationalization of Greek banks and a Greek exit from the euro could set the nation back on the path to prosperity fairly rapidly.  The following comes from the Telegraph

The radical wing of Greece’s Syriza party is to table plans over coming days for an Icelandic-style default and a nationalisation of the Greek banking system, deeming it pointless to continue talks with Europe’s creditor powers.

Syriza sources say measures being drafted include capital controls and the establishment of a sovereign central bank able to stand behind a new financial system. While some form of dual currency might be possible in theory, such a structure would be incompatible with euro membership and would imply a rapid return to the drachma.

The confidential plans were circulating over the weekend and have the backing of 30 MPs from the Aristeri Platforma or ‘Left Platform’, as well as other hard-line groupings in Syriza’s spectrum. It is understood that the nationalist ANEL party in the ruling coalition is also willing to force a rupture with creditors, if need be.

Meanwhile, in a desperate attempt to get the Greeks to give in at the last moment, Greek’s creditors are preparing to pull out all the stops in order to put as much financial pressure on Greece as possible

Germany’s Suddeutsche Zeitung reported that the creditors are drawing an ultimatum to the Greeks, threatening to cut off Greek access to the European payments system and forcing capital controls on the country as soon as this weekend. The plan would lead to the temporary closure of the banks, followed by a rationing of cash withdrawals.

For a long time, most in the financial world assumed that a debt deal would eventually happen.  But now reality is setting in.  As I mentioned at the top of this article, the cost to insure Greek debt has risen by an astounding 456 percent since the beginning of this year

Given these dramatic stakes, the risk of a Greek default has gone way up. One way to measure that risk is by looking at the skyrocketing price of insurance policies that would pay out if Greek bonds go bust. The cost to insure Greek debt for one year against the risk of default has skyrocketed 456% since the start of the 2015, according to FactSet data.

These insurance-like contracts, known as credit default swaps, imply there is a 75% to 80% probability of Greece defaulting on its debt, according to Jigar Patel, a credit strategist at Barclays.

The probability of a Greek default soars to a whopping 95% for five-year CDS, Patel said.

“Default is looking more and more likely,” Peter Boockvar, chief market analyst at The Lindsey Group, wrote in a note to clients on Tuesday.

And in recent days, we have also seen Greek stocks and Greek bonds totally crash.  The following comes from CNN

The Greek stock market has plummeted 13% over the past three trading days, including a 3% drop on Tuesday alone.

In the bond market, the yield on Greek two-year debt has skyrocketed to 30.2%. A month ago, the yield was only 20%. Yields rise as bond prices fall.

Of course if there is a Greek debt default and Greece does leave the euro, it won’t just be Greece that pays the price.

As I have written about previously, there are tens of trillions of dollars in derivatives that are directly tied to currency exchange rates and 505 trillion dollars in derivatives that are directly tied to interest rates.  A “Grexit” would cause the euro to drop like a rock and interest rates all over the continent would start to go crazy.  The financial chaos that a “Grexit” would cause should not be underestimated.

And there are signs that some of Europe’s biggest banks are already on the verge of collapse.  For example, just consider what has been going on at the biggest bank in Germany.  Both of the co-CEOs at Deutsche Bank recently resigned, and it is increasingly looking as if it could soon become Europe’s version of Lehman Brothers.  The following summary of the recent troubles at Deutsche Bank comes from an article that was posted on NotQuant

Here’s a re-cap of what’s happened at Deutsche Bank over the past 15 months:

  • In April of 2014,  Deutsche Bank was forced to raise an additional 1.5 Billion of Tier 1 capital to support it’s capital structure.  Why?
  • 1 month later in May of 2014, the scramble for liquidity continued as DB announced the selling of 8 billion euros worth of stock – at up to a 30% discount.   Why again?  It was a move which raised eyebrows across the financial media.  The calm outward image of Deutsche Bank did not seem to reflect their rushed efforts to raise liquidity.  Something was decidedly rotten behind the curtain.
  • Fast forwarding to March of this year:   Deutsche Bank fails the banking industry’s “stress tests” and is given a stern warning to shore up it’s capital structure.
  • In April,  Deutsche Bank confirms it’s agreement to a joint settlement with the US and UK regarding the manipulation of LIBOR.   The bank is saddled with a massive $2.1 billion payment to the DOJ.  (Still, a small fraction of their winnings from the crime). 
  • In May,  one of Deutsche Bank’s CEOs, Anshu Jain is given an enormous amount of new authority by the board of directors.  We guess that this is a “crisis move”.  In times of crisis the power of the executive is often increased.
  • June 5:  Greece misses it’s payment to the IMF.   The risk of default across all of it’s debt is now considered acute.   This has massive implications for Deutsche Bank.
  • June 6/7:  (A Saturday/Sunday, and immediately following Greece’s missed payment to the IMF) Deutsche Bank’s two CEO’s announce their surprise departure from the company.  (Just one month after Jain is given his new expanded powers).   Anshu Jain will step down first at the end of June.  Jürgen Fitschen will step down next May.
  • June 9: S&P lowers the rating of Deutsche Bank to BBB+  Just three notches above “junk”.  (Incidentally,  BBB+ is even lower than Lehman’s downgrade – which preceded it’s collapse by just 3 months)

And that’s where we are now.  How bad is it?  We don’t know because we won’t be permitted to know.  But these are not the moves of a healthy company.

For a very long time, I have been warning that a major financial crisis was coming to Europe, and for a very long time the authorities in Europe have been able to successfully kick the can down the road.

But now it looks like we have reached the end of the road, and a day of reckoning is finally here.

Nobody is quite sure what is going to happen next, but almost everyone agrees that it isn’t going to be pretty.

So you better buckle up, because it looks like we are all in for a wild ride as we enter the second half of this year.


Michael T. Snyder is a graduate of the McIntire School of Commerce at the University of Virginia and has a law degree and an LLM from the University of Florida Law School. He is an attorney that has worked for some of the largest and most prominent law firms in Washington D.C. and who now spends his time researching and writing and trying to wake the American people up. You can follow his work on The Economic Collapse blog, End of the American Dream and The Truth Wins. His new novel entitled “The Beginning Of The End” is now available on Amazon.com.

GDP Is An Insufficient Measure Of True Economic Growth

Poverty_and_Progress_in_Latin_America_and_the_Caribbean

(The Real Agenda) High levels of economic growth are not enough to eradicate poverty.

Economic growth has bee at zero percent or lower for two or three years in a row in most of the western world. Cooked government numbers say that most so-called western powers have grown at 0.2% and that the recession that began in 2009 is over.

In Europe, the Spanish government has been short of organizing a parade, because according to its officials, the crisis has ended and economic growth is an imminent outcome.

In the United States, the Obama adminstration continues to publish unreal emloyment figures that celebrate the creation of a few thousand jobs while tens or hundreds of thousands of people lose theirs every quarter.

But perhaps the direst economic situation is taking place in Latin America, a region that has historically been punished on two fronts.

First, imperialist policies imposed by Europe and the United States whose consequences are widespread poverty and misery, and second, stratospheric levels of corruptiion carried out by so-called leaders who present themselves and their fraudulent agendas as the only solution to imperialism.

Economic growth has always been measured by how high the growth domestic product of a country is or will be in the near future, however, this is a flawed strategy.

Although GDP is a reflection of Consumption, Private Investment, Government spending, Exports and Imports, it leaves out an even more important factor that must be considered when measuring real economic growth: distribution of growth.

Distribution of growth is the only figure that faithfully represents whether a country has experienced a balanced period of grwoth, with everyone, not only the large investors, speculators, importers or exporters getting a significant piece of the pie.

Because GDP leaves out distribution of growth as an important factor of economic growth in a country, a region or even a whole continent, it is not possible to measure the real levels of inequality and poverty. That is why it is common to read that a country had a strong economic growth, even though the number of unemployed people rises or the amount of people living below the poverty line increases.

For example, since 1979, the bottom 20% of the population experienced an 18% economic growth, while the top 20% enjoyed a 65% rate. During the same period, the top one percent saw their incomes increase by an astonishing 277%.

The diferences pointed out above are more apparent in Latin America than in any other place in the western world.

Despite the low economic growth that the region has had for decades, it is common to hear that such a low economic growth is ‘acceptable’ and in many cases politicians -incumbents or newly elected ones- gain the favor of the electorate when they proudly display growth rates of 1% or 2%.

After little more than a decade of what financial entities call ‘decent growth’, Latin American economies are entering a phase of strong slowdown.

The bonanza helped to achieve what politicians would say is ‘significant progress’ in social areas, but even such a progress is not enough to get tens of millions of people out of poverty. This is why GDP is a flawed starting point to measure real economic growth. Sadly, even if GDP were the correct starting point, current growth rates would make it even more evident that the type of growth we have seen in Latin America, for example, is not enough and that, therefore, it is necessary to rethink how to have economies that naturally improve the distribution of growth.

From 2003 to 2014 growth in Latin America averaged 4.6% annually, but this seemingly high percentage is skewed by unsustainable peaks experienced in a handful of nations where foreign capital flooded in after the recession that began in the early 2000s. That’s right. The recession began back then and not in 2009.

Furthermore, the figure above masks wide disparities in the performance of individual countries. On the one hand, Panama had a growth rate of 8.4% and Peru 6%. On the other hand, El Salvador had a meager 1.8% growth rate and Mexico only 2.6%.

Overall, in this decade the region benefited from macroeconomic factors, but never really broke free from being a raw material provider for the developed nations. As soon as the demand for oil, copper and soybeans, among other products, decreased, most Latin American economies plunged and real economic growth was revealed. It should be noted that the effect of revenue growth may be neutralized if the population of a country increases at a similar or higher rate than the economy.

In per capita terms, Panama and Uruguay are the countries where the average income increased more steadily, but in none of the two countries income per capita was able to compete with real inflation. Meanwhile, worse off nations such as Guatemala had a 1% increase in income and Mexico had a 1.3% increase. This distinction is obviously very relevant when determining real economic growth, which is something GDP does not show.

A recent World Bank report titled The Forgotten, 2015, documents how the growth of the last decade had almost no impact in social indicators in Latin America. Despite the fact that poverty fell by 16 percentage points between 2003 to 2012, according the the Bank’s figures, and that extreme poverty decreased from 24% to 12.3%, the study indicates that  there are still 130 million chronically poor people in the region, who did not benefit from what politicians and foreign banks would call an ‘economic expansion’.

This demonstrates once again that GDP does not provide a realistic reflection of true economic growth and that not even high levels of economic growth are enough to eradicate poverty.


Luis R. Miranda is an award-winning journalist and the founder and editor-in-chief at The Real Agenda. His career spans over 18 years and almost every form of news media. His articles include subjects such as environmentalism, Agenda 21, climate change, geopolitics, globalisation, health, vaccines, food safety, corporate control of governments, immigration and banking cartels, among others. Luis has worked as a news reporter, on-air personality for Live and Live-to-tape news programs. He has also worked as a script writer, producer and co-producer on broadcast news. Read more about Luis.

Falling Off A Cliff

falling off cliff

It appears that, once again, we find ourselves in a situation where the mainstream media is in pure spin mode and pumping lie after lie about how well the economy is doing. Since the beginning of this year I have been paying close attention to two strong indicators of just how well our global economy is doing. Time for another blue pill.

Earlier today I was speaking with Dave and we were discussing our upcoming interview with Wolf Richter. (to be recorded and released in the early part of July) and we fell into a conversation about the “ties-that-bind”. It has been shown time and again that actions always have a reaction. This is a simple law of nature. If you are looking at the Baltic Dry Index, which is one of my favorite charts, as it can not be rigged due to the fact it is based on what people get paid. Most people don’t like getting their pay jacked-around, so, in my opinion, this is a pretty “clean” set of numbers. One of charts that Mr. Richter likes to look at is the Shanghai Containerized Freight Index. Once again, this has a direct impact on an individuals livelihood, so the odds of it being rigged are greatly diminished.

Example of a cargo ship that would be counted in the BDI:

liwa_v-9489039-oil_products_tanker-ship-1045-300x200

Quick explanation for those that are new:

Baltic Dry Index (BDI) is the cost to lease a container ship that specifically carries raw materials (sand, iron ore, silver ore and the like). Items you would make another “finished” product that would then be sold at wholesale or retail markets. The more demand for these ships, thus creating tighter supply, the price goes up. The exact opposite happens when the supplies are good and the demand is low–the price goes down. You have to keep in mind these ships are not leased for a day or two; a lot of the contracts are for six to eight months or more.

Example of a containerized ship as measured by SCFI:

cargo_ships_638x393-300x185

Shanghai Containerized Freight Index (SCFI) is a measure of the number of ships that sail around the world delivering the “finished” products to the wholesale and retail market places. The two largest markets for containerized shipments, which gives us a great read on what is happening globally, is the EuroZone and the United States. If these two vast markets are doing well, there is a greater demand for containerized ships.

As you can see these two ships are quite different with completely different functions. When you cross reference the two different charts that measure the traffic associated with moving products around the world you can get a pretty good read as to what is happening, especially in the longer term view. Raw materials (BDI) have to be processed and made into another material to create a finished product. This could take a few hours, a few days or few weeks depending on what is being processed and for what purpose. So, a look at the BDI chart paints a picture for the next several months not just what is happening today and tomorrow. You can get a sense of what is happening on the “channel stuffing” of the global economy based on this information.

The containerized ships (SCFI), which haul the actual finished products, is a great measure of what is going to happen in the upcoming few months. This also paints, in my opinion, a realistic view of “channel stuffing”. As the shipments pick up or decline you can get a measure of how full the shelves will be during the next “sales” cycle. If shipments are declining, as they are currently, this is an indication of a slumping economy. Dare I say, an economy falling off a cliff is what is seen from where I sit.

Let’s take a look at the two charts and see what they are telling us at this time.

First the Baltic Dry Index (BDI)

Screen-Shot

This next chart shows the all time low, attained in February 2015, since the inception of the BDI:

Screen-Shot-2015-06-08-at-2_57_43-PM-300x266

This is the most recent SFCI chart showing that, once again, ships are not hauling finished products to market:

China-Containerized-Freight-index-2015-06-05-300x131

If you compare the three you see there is little movement in the way of raw materials that are needed to make “stuff” and there is not a lot of finished “stuff” being shipped out. This also indicates either the shelves are completely full or there is no need to order more of anything.

I am of the belief this paints one of the truest pictures of what is happening with our globally economy. As stated, the EuroZone and the United States are the two largest markets for Chinese finished goods. If there is no need for more goods coming from the worlds manufacturer, being China, something is out balance with all other indicators that are discussed on the mainstream media. How can unemployment shrink if there is nothing to stock? How can people generate an income if there are no jobs? How can the housing market be “recovering” if there are no jobs and there is no income? I’m a simple man, with a simple mind. If you are processing raw materials to manufacture finished products and you are not shipping out finished products that equals “look out below”.

Don’t forget to follow The Daily Coin on Twitter and like us on Facebook.


Rory Hall has been a daily contributor at SGTReport.com. for more than two years. He has written several original articles and interviewed some of the top precious metals professionals in the industry, as well as top preparedness specialists in the world. His YouTube Channel, The Daily Coin, was launched in February 2014 and his website TheDailyCoin.org was launched April 25, 2014. QUOTE: “As a student of monetary, financial and economic history for the past five years it has taught me to watch the markets with an open mind and a hand on my wallet.”

Golden Propaganda

golden propaganda

Gold. What is it good far? Absolutely nothing, say it again! Gold. What is it good for? This has become the mantra, as pointed out on several occasions by Dave Kranzler, InvestmentResearchDynamics.com and Taki T., GoldSilverWorlds.com, of the mainstream media (MSM). The mainstream media, which is a dying dinosaur the same as a hard copy newspaper has been dying off for more than a decade, would have the few remaining “old-schoolers” believe that gold is nothing more than, at best, jewelry and at times reminds people that it is a terrible investment. By using the words “gold” and “investment” in this manner it trains people to see gold, not as money (which it has been for more than 4,000 years), but as just another investment instrument akin to their 401k. If their mind goes to their 401k, which is the goal when the MSM uses language in this manner, the viewer immediately sees how fantastic their stocks and bonds have been performing for the past several years. Can you say stock buy-backs via QE? Sure you can.

When the MSM publishes nonsense like what eFXnews published on June 3 you know the market is saturated with “gold is bad” news.

In a note to clients today, UBS dissected the traditional market view on Gold’s safe haven appeal noticing a big change in the dynamics and correlations constituting this special status of the yellow metal.

“Gold has traditionally been considered a safe haven, an asset that investors turn to in times of uncertainty. Indeed, history has shown that gold is well-positioned to benefit in scenarios when risks are elevated. But the dynamics have clearly shifted over the last several years and gold’s reaction function to risk-off scenarios is no longer the same as it was in previous decades,” notes UBS.

“In many ways, this shouldn’t come as a surprise – the gold market itself has experienced quite a transformation over the past 15 years in the midst of broader changes in the global financial landscape. The degree to which gold responds positively to risk-aversion seems to have declined over the last few years,” UBS argues.

“There are likely many different elements that have contributed to this change in gold’s reaction to uncertainty and elevated levels of risk. Much of it could simply be down to the transformation in the gold market as a whole, as it shifted out of a decade-long bull-run,” UBS adds.

“There is now relatively more gold being held by a larger number of market participants – that those positions have already been put on suggests that there would be less scope for safe-haven buying on the back of fresh catalysts than there was before,” UBS concoludes.

What rubbish!! Any person that visits sites like The Daily Coin, Silver Doctors and SGTReport or any host of other websites that do all they can to educate people about gold, understand this is a propaganda hit piece. By publishing the above information, not as “investment advice” but more importantly to train people away from gold, UBS is merely exposing itself as the criminal, banking cabal that it has become. These “too big to prosecute/jail/fail” banking monsters are all over exposed to the dark waters of derivatives. You never read or hear about UBS “in a note to clients…” regarding their gambling addiction in the derivatives market. If people knew what was happening in this smokey back-room, they would immediately sell all their stocks, bonds and pull every dime out of the banking industry and swap it all for gold and silver. If people knew and understood the purpose of gold and silver, as money and as a true measure of wealth, these criminal banking behemoths would no longer exist due to a lack of capital and a lack of business.

It is one of my goals that everyone that visits this site begins to understand that gold and silver are still part of the economy, still a member of the ongoing global currency trade and most importantly, still play a vital role in backing currencies the world over. While gold and silver play less of role, and certainly are not discussed as such in most of the media (alternative or otherwise) you can hear it in what former Federal Reserve Chairman, Alan Greenspan said in October of 2014:

Why did Central Banks put money into an asset which has no rate of return, but cost of storage and insurance and everything else like that; why are they doing that? If you look at the data, with very few exceptions, all of the developed countries have gold reserves. Why?” – Alan Greenspan, October 29, 2014

“…intrinsic currencies like gold and silver are acceptable without a third party guarantee”

Gold serves a very important place in monetary reserves…

Those few words spoken in October 2014 are proof positive, from one of the main architects of this current economic and financial nightmare, that gold and silver are very much part of our ongoing global monetary system. Got physical?


Rory Hall has been a daily contributor at SGTReport.com. for more than two years. He has written several original articles and interviewed some of the top precious metals professionals in the industry, as well as top preparedness specialists in the world. His YouTube Channel, The Daily Coin, was launched in February 2014 and his website TheDailyCoin.org was launched April 25, 2014. QUOTE: “As a student of monetary, financial and economic history for the past five years it has taught me to watch the markets with an open mind and a hand on my wallet.”

The Central Banks Are Losing Control Of The Financial Markets

Dollars-And-Euros-Public-Domain-460x306

Every great con game eventually comes to an end.  For years, global central banks have been manipulating the financial marketplace with their monetary voodoo.  Somehow, they have convinced investors around the world to invest tens of trillions of dollars into bonds that provide a return that is way under the real rate of inflation.  For quite a long time I have been insisting that this is highly irrational.  Why would any rational investor want to put money into investments that will make them poorer on a purchasing power basis in the long run?  And when any central bank initiates a policy of “quantitative easing”, any rational investor should immediately start demanding a higher rate of return on the bonds of that nation.  Creating money out of thin air and pumping into the financial system devalues all existing money and creates inflation.  Therefore, rational investors should respond by driving interest rates up.  Instead, central banks told everyone that interest rates would be forced down, and that is precisely what happened.  But now things have shifted.  Investors are starting to behave more rationally and the central banks are starting to lose control of the financial markets, and that is a very bad sign for the rest of 2015.

And of course it isn’t just bond yields that are out of control.  No matter how hard they try, financial authorities in Europe can’t seem to fix the problems in Greece, and the problems in Italy, Spain, Portugal and France just continue to escalate as well.  This week, Greece became the very first nation to miss a payment to the IMF since the 1980s.  We’ll discuss that some more in a moment.

Over in Asia, stocks are fluctuating very wildly.  The Shanghai Composite Index plunged by 5.4 percent on Thursday before regaining all of those losses and actually closing with a gain of 0.8 percent.  When we see this kind of extreme volatility, it is a very bad sign.  It is during times of extreme volatility that markets crash.

Remember, stocks generally tend to go up during calm markets, and they generally tend to go down during choppy markets.  So most investors do not want to see lots of volatility.  Unfortunately, that is precisely what we are witnessing all over the world right now.  The following comes from the Wall Street Journal

Volatility over the last days has been breathtaking, especially in bond markets,” said Wouter Sturkenboom, senior investment strategist at Russell Investments. He said that it rippled through equity and currency markets, which overreacted.

The yield on the benchmark German 10-year bond touched 0.99%, its highest level since September, before erasing the day’s rise and falling back to 0.84%. The 10-year U.S. Treasury yield, which hit a fresh 2015 high of 2.42% earlier Thursday, recently fell back to 2.33%. Yields rise as prices fall.

Sometimes when bond yields go up, it is because investors are taking money out of bonds and putting it into stocks because they are feeling really good about where the stock market is heading.  This is not one of those times.  As Peter Tchir has noted, the huge moves in the bond market that we are now seeing are the result of “sheer panic in the market”

In a morning note before the open, Brean Capital’s Peter Tchir wrote: “It is time to reduce US equity holdings for the near term and look for a 3% to 5% move lower. The Treasury weakness is NOT a ‘risk on’ trade it is a ‘risk off’ trade, where low yields are viewed as a risk asset and not a safe haven.” And Tom di Galoma, head of fixed-income rates and credit at ED&F Man Capital Markets, told Bloomberg, “This is sheer panic in the market from the standpoint of what’s been happening in Europe … Most of Wall Street is guarded here as far as taking on new positions.”

But this wasn’t supposed to happen.

After watching the Federal Reserve be able to successfully use quantitative easing to drive down interest rates, the European Central Bank decided to try the same thing.  Unfortunately for them, investors are starting to behave more rationally.  The central banks are starting to lose control of the financial markets, and bond yields are soaring.  I think that Peter Boockvar summarized where we are currently at very well when he stated the following…

I’ve said this before but I’m sorry, I need to say it again. What we are witnessing in global markets is the inherent contradiction writ large that is modern day monetary policy where dangerously ZIRP, NIRP and QE are considered conventional policies. The contradiction is simply this: the desire for higher inflation if fulfilled will result in higher interest rates that central banks are trying so hard and desperately to suppress.

Outside of the short end of the curve, markets will always win for better or worse and that is clearly evident now. The ECB is getting their first taste of the market talking back and in quite the violent way. In the US, the bond market is watching the Fed drag its feet (its never-ending) with wanting to raise interest rates and finally said enough is enough. The US Treasury market is tightening for them. Since mid April, the 5 yr note yield is higher by 40 bps, the 10 yr is up by 55 bps and the 30 yr yield is up by 65 bps.

And if global investors continue to move in a rational direction, this is just the beginning.  Bond yields all over the planet should be much, much higher than they are right now.  What that means is that bond prices potentially have a tremendous amount of room to go down.

One thing that could accelerate the global bond crash is the crisis in Greece. Negotiations between the Greeks and their creditors have been dragging on for four months, and no agreement has been reached.  Now, Greece has missed the loan payment that was due to the IMF on June 5th, and it is asking the IMF to bundle all of the payments that are due this month into one giant payment at the end of June

Greece has asked to bundle its four debt payments to the International Monetary Fund that fall due in June so that it can pay them in one batch at the end of the month, Greek newspaper Kathimerini reported on Thursday.

The request is expected to be approved by the IMF, the newspaper said. That would mean Greece does not have to pay the first tranche of 300 million euros that falls due on Friday.

Greece faces a total bill of 1.5 billion euros owed to the IMF over four installments this month.

Of course that payment will not be made either if a deal does not happen by then.  And with each passing day, a deal seems less and less likely.  At this point, the package of “economic reforms” that the creditors are demanding from Greece is completely unacceptable to Syriza.  The following comes from an article in the Guardian

Fresh from talks in Brussels, Tsipras faced outrage on Thursday from highly skeptical members of his own Syriza party. A five-page ultimatum from creditors, presented by the European commission president, Jean-Claude Juncker, was variously described as shocking, provocative, disgraceful and dishonourable.

It will never pass,” said Greece’s deputy social security minister, Dimitris Stratoulis. “If they don’t back down, the country won’t be lost … there are alternatives that would cost less than our signing a disgraceful and dishonourable agreement.”

Ultimately, I don’t believe that we are going to see an agreement.

Why?

Well, I tend to agree with this bit of analysis from Andrew Lilico

The Eurozone does not want to make any compromise with the current Greek government because (a) they don’t believe they need to because Greek threats to leave the euro are empty both because internal polling suggests Greeks don’t want to leave and because if they did leave that doesn’t really constitute any threat to the euro; (b) because they (particularly perhaps Angela Merkel) believe that under enough pressure the Greek government might collapse and be replaced by a more cooperative government, as has happened repeatedly before in the Eurozone crisis including in Italy and Greece itself; and (c) because any deal with Greece that is seen to involve or be presentable as any victory for the Greek government would threaten the political positions of governments in several Eurozone states including Spain, Portugal, Italy, Finland and perhaps even the Netherlands and Germany.

Furthermore, it’s not clear to me that the Eurozone creditors at this stage would have much interest in any deal based upon promises, regardless of how much the Greek had verbally surrendered.  Things have gone too far now for mere words to work.  They would need to see the Greeks deliver actions — tangible economic reforms and tangible, credible primary surplus targets and a sustainable change in the long-term political mood within Greece that meant other Eurozone states might eventually get their money back.  That is almost certainly not doable at all with the current Greek government.  The only deal possible would be with some replacement Greek government that had come in precisely on the basis that it did want to do a deal and did want to pay the creditors back.

On the Syriza side, I see no more appetite for a deal.  They believe that austerity has been ruinous for the lives of Greeks and that decades more austerity would mean decades more Greek economic misery.  From their point of view, default or even exit from the euro, even if economically painful in the short term, would be better than continuing with austerity now.

You can read the rest of his excellent article right here.

Without a deal, the value of the euro is going to absolutely plummet and bond yields over in Europe will go through the roof.  I am fully convinced that this is the beginning of the end for the eurozone as it is currently constituted, and that we stand on the verge of a great European financial crisis.

And of course the financial crisis that is coming won’t just be in Europe.  The global financial system is more interconnected than ever, and there are tens of trillions of dollars in derivatives that are tied to foreign exchange rates and 505 trillion dollars in derivatives that are tied to interest rates.  When this giant house of cards collapses, the central banks won’t be able to stop it.

In the end, could we eventually see the entire central banking system itself totally collapse?

That is what Phoenix Capital Research believes is about to happen…

Last year (2014) will likely go down in history as the “beginning of the end” for the current global Central Banking system.

What will follow will be a gradual unfolding of the next crisis and very likely the collapse of the Central Banking system as we know it.

However, this process will not be fast by any means.

Central Banks and the political elite will fight tooth and nail to maintain the status quo, even if this means breaking the law (freezing bank accounts or funds to stop withdrawals) or closing down the markets (the Dow was closed for four and a half months during World War 1).

There will be Crashes and sharp drops in asset prices (20%-30%) here and there. However, history has shown us that when a financial system goes down, the overall process takes take several years, if not longer.

We stand at the precipice of the greatest economic transition that any of us have ever seen.

Even though things may seem very “normal” to most people right now, the truth is that the global financial system is fundamentally flawed, and cracks in the system are starting to appear all over the place.

When this system does collapse, it will take most people entirely by surprise.

But it shouldn’t.

All con games eventually fall apart in the end, and we are about to learn that lesson the hard way.


Michael T. Snyder is a graduate of the McIntire School of Commerce at the University of Virginia and has a law degree and an LLM from the University of Florida Law School. He is an attorney that has worked for some of the largest and most prominent law firms in Washington D.C. and who now spends his time researching and writing and trying to wake the American people up. You can follow his work on The Economic Collapse blog, End of the American Dream and The Truth Wins. His new novel entitled “The Beginning Of The End” is now available on Amazon.com.