Thursday, September 17, 2015

Has the Crash Already Started?

Let me state up front, I'm not an economist or monetary theorist, or anything of that sort.  I rely upon a wide variety of those people (their writings & interviews) for information; that variety stretches all across the political spectrum.  This is not a "Right-Left" issue.  Also, any conclusion from anyone regarding an economic crash really is nothing more than an educated guess; no one knows for certain (despite what they might say) until after the fact.  Nevertheless, things are not looking good, as follows.

1.  China already has started dumping the dollar.
2.  Japan (one of our staunchest allies) is setting up a currency swap agreement with Russia...totally by-passing the dollar.  Trade between those countries will be in rubles and yen.
3.  Several other Asian countries are setting up currency swap agreements amongst themselves...totally by-passing the dollar.
4.  The BRICS countries have launched their own development bank.
5.  China and Australia have set up a currency swap the dollar.
6.  India and Japan have done the same.
7.  China has set up currency swap agreements with several countries.
It seems clear that many countries are sick & tired of the U.S. Govt's Financial & NeoImperalist Hegemony.  This could very well mean the end of world reserve currency status for the dollar.

In addition---

1.  All the analysts I've read or heard agree that stocks & bonds here are highly overvalued; to a slightly lesser degree, so is real estate.  These same analysts say that the Fed Reserve has been propping up the financial & real estate assets for years with QE and essentially ZERO % interest rates, but now the Fed basically is out of tricks.  If they raise rates to where they should be, the Recession will slide into a full-blown Depression; if they don't, the Asset Bubble will all bubbles eventually do.
2.  The Fed Reserve is monetizing our debt.  Since the Crash of 2008, it's the Fed who has been buying the majority of U.S. Treasury Bonds.  Foreign gov'ts no longer are as interested in financing our debt as they once were.  Monetizing our debt is not sustainable.
3.  As stated in a previous post, the prices of gold and silver (to a lesser degree) are being manipulated by Mega Banks and Mega Hedge Funds in order to give the dollar the appearance of being strong.  Some evidence suggests that Gov'ts also are involved in this price manipulation.  Keeping the prices low via manipulation of the Futures Market is a priority for the Oligarchs.
4.  The real unemployment rate in the USA is estimated to be somewhere around 20%, not the 5.X% reported by the Gov't & the Corporate Media.
5.  Most of the money pumped to banks via QE is either still sitting in the banks OR it was invested in no-job-producing ventures, such as foreign currencies, bizarre financial derivatives, physical gold, and physical well as the Futures Market.  Put simply, the Fed saved the Mega Banks rather than the economy.
6.  The Global Debt Bubble now is about $200 trillion...and ready to burst.
7.  It's estimated that the Financial Derivatives Bubble is about $1.25 quadrillion... a bomb that may or may not eventually explode.

None of the above is good news.  The global economy appears to be imploding.

Even if the dollar's world reserve currency status ends, though it would collapse our economy, it wouldn't be the end of the world (so to speak); however, the road to recovery would be long and extremely difficult.  A few analysts are predicting that we will be bartering in commerce for a time; I think that could happen, but it's not for certain.  Nevertheless, just to be safe, I see a few things that people would be wise to do.
1.  Get out of any MEGA Bank, ASAP.  As pointed out in a previous post, in the event of a crisis they will be BAILED-IN.  Your money will be confiscated..."legally".  That's according to the latest G-20 Agreement signed by President Obama...late last year.
2.  Keep some amount of ready cash stored at home...or somewhere nearby & always accessible.
3.  As much as you can, accumulate some amount of commodities*** (including food) that might be used for trade.  That's not to say you need to go to the extremes of some of the "Preppers" out there, but it seems prudent to position yourself so that you could survive for at least a few months.  IF there is a huge Crash, it might take that long (or longer) to get some sort of monetary system up & running...some consumer liquidity in place.
***Commodities for barter would include:  OTC medicines, water filters, food seeds, long shelf-life foods, firewood, toiletries, gasoline & oil, silver, common calibers of ammunition, various tools (hoe, shovel, etc.), warm clothing, solar energy components (if possible), fresh produce (if possible), blankets, alcoholic beverages, & yes, even tobacco, food animals if possible (chickens, goats, etc.), & others.  Pick & choose.  Some, such as seeds, toiletries & water filters, take up little space.  [I suspect that I've missed some of the best items for some research on your own.]

I realize all this sounds rather pessimistic.  I see it as being realistic.  Many economists, monetary theorists, money/portfolio managers, financial analysts, etc. agree that we are facing the distinct possibility of a major financial/economic Crash much worse than 2008 sometime relatively soon.  Some of them predict no later than the end of 2016.  These people span the entire political spectrum, so I don't believe this is political, partisan propaganda.  Most of the works I've studied are not by people selling gold or silver...or anything else, not even a book.  That suggests we should pay attention to what they're saying.  Again, though, remember that it's all an educated, best guess.  No matter what they say, none of this is guaranteed to happen.  Nevertheless, it very well could happen.  As the Boy Scouts say, "Be Prepared".

Not only my opinion.  Be Well