CRASH2: HOW MANY HORSEMEN MAKE AN APOCALYPSE? LOOKS LIKE THE ANSWER IS FIVE….

apocalypse5ptThe focus was Greece, then it was China. Neither country has a solution to its woes. Now the mainstream seems barren of ideas about what to do. The Slog identifies five data sources that point to an imminent collapse of the globalist fisco-economic myth

1. The Dollars making an escape from stock markets rose from $2.64bn to $3.62bn last week versus the week before. That’s an acceleration rate of 37%, and the more remarkable because we are now bigtime into the summer holidays-lower volumes during which nothing is supposed to happen.

2. Normally calm and all-correct Bill Gross (PIMCO founder, now with Janus) is talking of “a growing debacle” in Sovereign Bonds and the currencies commented upon above.

3. The emerging market (EM) currencies are dying on their feet in the light of Fed QE tapering. The chart below shows how a representative basket (FX) of their currencies has been doing of late:

EMFX7815

The Mexican Peso has fallen 20% versus the Dollar since July…that is, in six weeks.

4. More recently, this has been reflected in disastrous stock market index scores:

EMstocks7815To take just one example, Brazil is  the seventh largest economy  in the world…bigger than Italy. Its private sector output is falling at the sharpest pace since March 2009.

5. Following an unprecedented splurge of QE to arrest its ‘deadly’ deflation, the Bank of Japan is losing the battle:

BoJdeflat7815This is Crash2 in sharp focus: the Big One is not far away. But by ye of good heart, because this chap is one of those in charge:

drivelbloke1We are saved.

32 thoughts on “CRASH2: HOW MANY HORSEMEN MAKE AN APOCALYPSE? LOOKS LIKE THE ANSWER IS FIVE….

  1. Interest rates will go through the roof when the bond bubble bursts, that is when central bankers (planners) will lose control. We are about to go into a deflationary cycle that will last for about 5 to 10 years. Those of you who have purchased a house in the last twenty years and still have a mortgage could find yourself in negative equity. When the bond bubble bursts liquidity will dry up over night which will squeeze the housing market. Then we have the next fiasco that will unwind. Since the Fed has been printing the default currency for like ever, this money has found its way into the emerging markets when they were experiencing commodity booms which encouraged them to borrow around 4 trillion. So when the flight to safety starts, the dollar will rise and these guys are going to get fried. Not to mention that China’s economy has been on a crack debt fuelled expansion like no one has seen before. Bad investment and over supply coupled with the fact that their property bubble is in decline. Thanks to the fed we have property bubbles in NZ, Australia, Canada, Singapore, Israel and then we have most western governments so loaded up with debt that a 2 to 3% change in bond yields would wipe them out. Central Bankers have painted themselves into a corner and their are no exits. What could possibly going wrong? There will be multiple sovereign defaults over the next two years, Japan could be one.

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  2. So…..this is Crash 2 eh? Interesting you quote the “all -correct” Bill Gross as the great soothsayer of the bond market. Would that be the same Bill Gross who made the huge mistaken bond market call in 2011 – which led to him losing his job?

    Plenty of links on this – eg. http://www.latimes.com/business/hiltzik/la-fi-mh-the-moment-bill-gross-days-20140929-column.html

    “The Big One is not far away”. JW – would that be this year? Next year? This decade? You’ve been calling it for the last 4 years at least!! :-)

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  3. Yes, Japan is bust.But, the old commonwealth countries do not have excessive sovereign debt. A point and a half increase in sterling interest rates, which is coming, may yet give Osborne his ‘Healey 1976’ moment, as the next recession lowers tax receipts and the PSBR is still over £90 b. As for central London property prices, when sterling weakens against the dollar, expect a sudden exit by the Chinese speculators and then..

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  4. Martin Armstrong,who use cycles and his Economic Confidence model to track the markets, calls it mid Sept 2015 for the peak and downhill from there.
    The tea leaves are signalling an acceleration downhill. The cautious should be in cash, bullion, collectibles and productive land..
    It is not different this time and QE has multiplied the coming correction/reset.

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  5. It’s clear this fall will be ‘interesting’ as the Chinese say! The real crisis may occur in a year’s time just before the US Presidential election. Look for a three way fight between Clinton, Bush and Trump. It’s a re-run of 1992 when Perot got Clinton W elected. Armstring has been saying for years that the 2016 election would have the biggest ever Third Party challenge.

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  6. Dada & OAH

    He called German bunds and made more in a week than any of us make in a lifetime. Money isn’t everything, but at that rate I quite fancy the idea if being a wanker.

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  7. The flaw with your argument is the last few years have shown that interest rates are no longer set by normal market pricing – they are set by central bank manipulation of market pricing. They will happily continue with this, pushing the base rate down into negative territory (as the scandinavians have done) and deploy more QE to keep borrowers afloat, house prices rising and the economy from going into a tailspin. Eventually of course it will all go down the drain but i think they’re capable of blowing the bubble quite a lot bigger first.

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  8. Weimar Germany, Argentina, Zimbabwe, Russia etc all had printing presses too, used them, and still defaulted. Sometimes a “solution” worsens the problem.

    Fortunately, the solution to your current state of uninformed-ness can be rectified by reading. Lots.
    [Warning – potential side effects of reading more include depression and anger as it becomes clear how incredibly stupid and deliberately ignorant most humans are.]

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  9. c.1958
    This always used to worry me about the now long-dead American actor Richard Conte. Of Italian origin…& thus must surely have known what his surname meant. Put forename/surname together, & it gets worse….

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  10. Perhaps a better option than Dick Trickle, the US Nascar racing driver.
    Richard Tilt & David Ramsbottom formerly of Uk Prison Svc….?

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  11. In this joined up world of apocalyptic horemen JW you could have used different coloured dominoes just waiting for someone to knock one down when nobody is looking.

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  12. “So loaded up with debt etc”. This is nonsense for a monetary sovereign country like the UK. (but not euro countries) The Uk has their own bank in effect (BoE) that can create money to spend without limit. Going overboard might cause inflation or currency depreciation. So a small rise in interest rate will not wipe them out. But this is fairly basis economics that unfortunately few economists understand

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  13. @ Phil

    “So loaded up with debt etc”. This is nonsense for a monetary sovereign country like the UK. (but not euro countries) The Uk has their own bank in effect (BoE) that can create money to spend without limit. Going overboard might cause inflation or currency depreciation. So a small rise in interest rate will not wipe them out. But this is fairly basis economics that unfortunately few economists understand

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  14. @ william

    Japan is not bust. Govt debt is not an issue. especially as most of the Govt is held by Japanese residents. But even if it wasn’t it makes no difference. Euro countries. Yes Govt debt is important. Just like a household or company.

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  15. @ rowan

    These countries were not monetary sovereign (google it) . Japan is. You need to do lots of reading on informed sites (the misinformation sites – there are a lot – can cause either depression or anger. One suggestion – the mandatory reading on Warren Moslers site).

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  16. “He called German bunds and made more in a week than any of us make in a lifetime. Money isn’t everything, but at that rate I quite fancy the idea if being a wanker”

    The clincher in this sentence is the word “but”. Any fule kno that it means the preceding clause (in this case “Money isn’t everything”) are actually considered by the writer to be bollox.

    PS I don’t want to pour water on your assessment of Bill ‘King of Bonds’ Gross, but remember your assessment of Jimmy ‘King of the Belle Vue’ Savile as a character “……..was Jimmy Savile a predatory rapist paedophile? I very much doubt it.”.

    Horlicks indeed!

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  17. Many people have tried to manipulate the markets and have got burnt doing it. You can not change the trend\cycle, the markets ALWAYS win. All they have done with all this manipulations is winded the spring even more and when it breaks it is going to hurt everyone.

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  18. I follow Armstrong too. The problem is that central bankers have distorted the markets or I would say, there are no markets anymore. Central Bankers have destroyed any type of price discovery and no one is pricing in risk anymore. The winds have changed the last few months, China’s stock market, commodities down to 2001 price, liquidity issue in the bond markets and finance is being revoked for investment. Capital has begun to batten down their hatches.

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  19. News from the US. Mark Mitchell former TIME magazine editor, was working on a story for that bastion of journalistic ethics the Columbia Journalism Review when a hedge fund, subject of a story Mark was writing, made a HUGE donation of stolen money to the review. Mark felt unable to write about the people he was no working for and moved on. That story and the fruit of a further ten years of research can be found here https://www.deepcapture.com/ These people, I mean the financial “journalists” and others named on Mark’s website are also the stars of the upcoming awesome upcoming “CRASH TWO: Even Stupider!” the much dreaded sequel they said would never happen. Does it open with a devalues renminbi? We will all have to wait and see.

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