crisis

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Oil Is Sinking The Markets

Subprime comparisons are now too obvious to ignore
Monday, January 25, 2016, 6:47 PM

A vast, enormous amount of junk-rated oil debt is in deep trouble. Everybody knows this, but saying so has been taboo up until now, at least in polite conversations.

But the parallels to the sub-prime market's role as the "pin that popped the bubble" in 2008 are now too obvious to ignore. » Read more

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The Deflation Monster Has Arrived

And it sure looks angry
Friday, January 15, 2016, 7:53 PM

As we’ve been warning for quite a while (too long for my taste): the world’s grand experiment with debt has come to an end. And it’s now unraveling.

Just in the two weeks since the start of 2016, the US equity markets are down almost 10%. Their worst start to the year in history. Many other markets across the world are suffering worse.

If you watched stock prices today, you likely had flashbacks to the financial crisis of 2008. At one point the Dow was down over 500 points, the S&P cracked below key support at 1,900, and the price of oil dropped below $30/barrel. Scared investors are wondering:  What the heck is happening? Many are also fearfully asking: Are we re-entering another crisis? » Read more

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Why This Next Crisis Will Be Worse Than 2008

And what you can do to prepare
Friday, January 15, 2016, 7:53 PM

Executive Summary

  • There are too many signs of deflation to deny it's winning the day
  • Why China's weakening will accelerate the global economy's decent
  • Why this next crisis will be worse than 2008
  • What will it look like if things really get out of control (how bad could things get?)
  • The best investments to be making now, before the rout

If you have not yet read The Deflation Monster Has Arrived, available free to all readers, please click here to read it first.

Too Many Warning Signs To Talk About

The deflationary monster is here and there are almost too many warning signs to list, let alone fully describe.

So I’ll just list and link them…you can follow up on the details if you want, it’s the ‘general vibe’ I want to get across.

Here are the signs of a weak economy that we are dealing with:

The pattern here is one of rapidly slowing economic activity and mounting pain starting “from the outside in” as emerging markets and the poor people within the core countries bear the brunt at first. Things always get rolling to the downside starting with the weakest, peripheral elements first.

Copper and oil are providing very clear signs that economic activity is not just slow, but in rapid retreat. Wal-Mart tells us that its shoppers are having trouble. The fresh all-time lows in a variety of currencies, plus massive weakness in others, is telling us that the virtuous portion of the liquidity cycle that the Fed, et al., unleashed on the world has entered the vicious part of the cycle.

The pain will spread to the center with increasing speed. The main question is if the authorities can stop that before the momentum becomes too great to halt? And what will happen if they cannot?

The answer to that is... » Read more

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Markets Are Correcting Hard

An assessment of the risks of things getting worse from here
Friday, January 8, 2016, 12:41 AM

The long-awaited global financial market correction has arrived. We are seeing collapses in all major markets and across all major categories.

As usual, the pain has started at the edges, in the weaker elements (emerging markets, junk bonds, weak companies, etc.) and is rapidly spreading towards the center. » Read more

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Ocean Acidification: An Ecological Nightmare

A far as global crises go, it's a doozy
Monday, April 13, 2015, 8:10 PM

The oceans are facing numerous difficulties including pollution (especially from farm run off), over-fishing, and dragnet methods that ruin innumerable other things besides the targeted catch -- but all of that pales in comparison to the problem of ocean acidification. » Read more

Podcast

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Steve Keen: The Deliberate Blindness Of Our Central Planners

Choosing to ignore the largest risks
Sunday, March 29, 2015, 11:20 AM

The models we use for decision making determine the outcomes we experience. So, if our models are faulty or flawed, we make bad decisions and suffer bad outcomes.

Professor, author and deflationist Steve Keen joins us this week to discuss the broken models our central planners are using to chart the future of the world economy. » Read more

Podcast

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Neil Howe: What To Expect From The Fourth Turning We're Now In

More centralized control, crisis & conflict
Sunday, March 15, 2015, 11:58 AM

Fourth turnings are characterized by a growing demand for social order, yet supply of it remains weak. The emergence of the surveillance state, a perpetual war machine, increased intervention in the markets by the central planners, greater government control of critical systems like health care and the Internet -- all of these are classic signs that we are well into a fourth turning now. » Read more

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The Approaching Great Unraveling - Are You Prepared?

Greece is just the start of the global insolvency crisis
Thursday, February 5, 2015, 3:54 PM

Executive Summary

  • Which countries are next in line to "go Greek"?
  • Which major countries will be hit by deflation next? Which will instead see massive inflation?
  • How individuals should start preparing
  • Why huge massive losses and wealth transfer are inevitable for many

If you have not yet read Part 1: Greece Exposes The Global Economy's Achilles Heel, available free to all readers, please click here to read it first.

At a high level, the suite of predicaments we face are as obvious as they are serious. 

Perhaps the largest predicament we face is that infinite economic growth on a finite planet is an impossibility and yet that's exactly what our monetary and banking systems require.

Not merely because the bankers and politicians want it, which they do, but because that's how the system itself is designed.  When you loan money into existence, you get an exponential increase of that money over time.  Actually you get an exponential increase in debt too, only at a faster pace which translates into larger quantities.

For as long as debts are growing at an exponential pace, everything is fine with the world, the economy hums along, politicians get re-elected and the big banks churn out profits year after year.

However, when the debt growth stops, financial panic sets in, the banking system threatens collapse, and the fiscal and monetary authorities pull out all the stops in their efforts to prevent these various ills from getting any worse.

What the political and banking folks are desperately seeking to prevent is nothing less than a Great Unraveling.

Their task is impossible.

The Great Unraveling will be a set of related economic and financial crises that end up taking inflated expectations and reducing them to match reality.  Perhaps this process will take years, or maybe it will take decades, or maybe it will take months.  Nobody knows.  But the longer that... » Read more

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Deflation Is Still Winning!

OK, folks: this is it
Monday, December 15, 2014, 8:20 PM

As we've written on and warned about before, deflation is winning.  We're starting to see very serious cracks in the façade, beginning with oil, then various peripheral currencies -- especially from emerging market oil exporters -- and now equities. » Read more

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Deflation Is Winning

And central banks are running scared
Wednesday, December 10, 2014, 10:21 AM

Remember in the early part of the last decade, long before he was appointed the Chairman of the Federal Reserve, Ben Bernanke penned an article that caught widespread public attention entitled, “Deflation: It Can’t Happen Here” ?

Bernanke was referring to the deflationary pressures Japan had been dealing with for more than a decade. In the article, Bernanke laid out a game plan for how the Fed would respond if the US ever faced deflationary pressures. His miracle antidote for battling deflation? Printing money. Lots of it.

Little did anyone know at the time that this game plan would become the Fed’s exact response to the credit market crisis and deflationary impulse that erupted in 2008 and 2009. » Read more