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The Outlook For The Markets Is Deteriorating Fast

Countries all over the globe are suddenly failing
Friday, August 31, 2018, 7:57 PM

Executive Summary

  • The evidence that the dominant social narrative is breaking down
  • The Emerging Market spark may ignite a broad market conflagration
  • Financial market complacency is completely unprepared for such a risk
  • And escalating risk of conflict in the Middle East threatens to make the situation a whole lot worse

If you have not yet read The Whole System Is Rigged, available free to all readers, please click here to read it first.

An Emerging Nightmare

About the kindest thing I can say about the reckless $trillions the central banking cartel flooding the world with is that they gave us more time to get our preparations in order. I certainly hope you used that time wisely.

So what happens when every financial market around the globe has been dangerously inflated by massive money printing?

Those enormous flows that were virtuous on the way out will be vicious on the way back in. 

And don't forget: as a combined group, the big central banks are still expanding their balance sheets today.

Yet despite that, the weaker players on the board are beginning to flounder severely:

Every single country on that list that is the proud holder of US denominated debt is now facing serious difficulties.  Worse, the situation compounds itself as all of the debt holders have to sell their local currency in increasing amounts to buy the dollars with which they will pay off these debts. 

The more they sell, the weaker their local currency gets.  The weaker it gets the more they have to sell. It's this dynamic that then bleeds over into their local stock markets.  Companies being crushed by external dollar-denominated debts see their interest costs spike higher and higher.  Very rapidly this crushes their income stream, so their stocks fall in price.

The contagion is spreading, quite rapidly too.  It’s well beyond a single story that we can confine to the particulars of Turkey or Argentina.  It now involves India, for heaven’s sake!

Next up is the big kahuna – the debt crisis that results when the individuals and companies toss in the trowel and declare bankruptcy or simply stop paying off their loans or debts.  This is when the debt crisis starts.

The ramifications of all this are... » Read more

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2017 Year In Review

Markets fiddle while Rome burns
Friday, December 22, 2017, 4:15 PM

Every year, friend-of-the-site David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. As with past years, he has graciously selected PeakProsperity.com as the site where it will be published in full. It's quite longer than our usual posts, but worth the time to read in full. A downloadable pdf of the full article is available here, for those who prefer to do their power-reading offline. -- cheers, Adam

Introduction

“He is funnier than you are.”

~David Einhorn, Greenlight Capital, on Dave Barry’s Year in Review

Daily Digest

Image by Ray Devlin, Flickr Creative Commons

Daily Digest 4/1 - Life Without Banks In Rural China, Israel Taps Offshore Gas Field

Monday, April 1, 2013, 10:40 AM
  • US news media has devolved to 'carnival act' - Hedges
  • As Banks in Cyprus Falter, Other Tax Havens Step In
  • China Releases New Measures to Restrict Housing Sales
  • Ancient Kingdoms in Land of War
  • For China's Rural Poor, Life Without Banks
  • WTI Oil Falls First Time in Six Days as Exxon Shuts Line
  • Israel Taps an Offshore Natural Gas Field
  • Total Dumps Canadian Oil Sands Project for $1.65bn Loss