Tag Archives: Chris Martenson’s Blog

  • Blog

    Get Ready: We’re About To Have Another 2008-Style Crisis

    by Chris Martenson

    Wednesday, May 16, 2012, 12:30 PM

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    Well, my hat is off to the global central planners for averting the next stage of the unfolding financial crisis for as long as they have. I guess there’s some solace in having had a nice break between the events of 2008/09 and today, which afforded us all the opportunity to attend to our various preparations and enjoy our lives.

    Alas, all good things come to an end, and a crisis rooted in ‘too much debt’ with a nice undercurrent of ‘persistently high and rising energy costs’ was never going to be solved by providing cheap liquidity to the largest and most reckless financial institutions. And it has not.

    Forestalled is Not Foregone

    The same sorts of signals that we had in 2008 are once again traipsing across my market monitors. Not precisely the same, of course, but with enough similarities that they rhyme loudly. Whereas in 2008 we saw breakdowns in the credit spreads of major financial institutions, this time we are seeing the same dynamic in the sovereign debt of the weaker European nation states.

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  • Blog

    Acknowledging the Arrival of Peak Government

    by charleshughsmith

    Monday, May 14, 2012, 4:38 PM

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    Most informed people are familiar with the concept of Peak Oil, but fewer are aware that we’re also entering the era of Peak Government. The central misconception of Peak Oil — that it’s not about “running out of oil,” it’s about running out of cheap, easy-to-access oil — can also be applied to Peak Government: It’s not about government disappearing, it’s about government shrinking.

    Central government — the Central State — has been in the expansion mode for so long that the process of contracting government is completely alien to the nation, to those who work for the State, and to those who are dependent on the State. Thus we have little recent historical experience of Peak Government and few if any conceptual guideposts to help us understand this contraction.

    Peak Government is not a reflection of government services or the millions of individuals who work in government; it is a reflection of four key systemic forces that drove State expansion are now either declining or reversing.

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  • Blog

    Tom Murphy: Time to Be Honest With Ourselves About Our Looming Energy Risks

    by Adam Taggart

    Friday, May 11, 2012, 11:26 PM

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    I want to take the lowest risk approach to the future. So much is riding on it.

    Personally I feel that the scientific progress we have made over the last few hundred years is astounding. I don’t want to lose that. I think that is a gift to the future and I don’t want to run the risk of a collapse that could destroy all that we have.

    Even if you think the collapse is a low probability — let’s say it’s 5%, 10% probability — it is an asymmetric risk. The downsides of not treating it seriously are huge.

    I mean, you buy fire insurance for your house even if it is a 0.1% probability that your house will burn down in your lifetime. But the consequences are so negative that you do it. And when you are talking about the accomplishments of all civilization, you need to buy insurance and treat that with the respect it deserves.

    Tom Murphy — associate professor of physics at the University of California, San Diego — has mapped the distance between the earth and the moon to within a millimeter, and built instruments to study colliding galaxies. We feel comfortable saying he’s a pretty smart guy, as well as an optimist about what human ingenuity and technology can do for the advancement of society.

    In 2004, he became intrigued with the global energy situation and brought his disciplined, empirical approach to bear. He set out to determine which new sources were going to pick up the slack once fossil fuels began becoming scarce. Looking back, he says the theme underlying his findings was “disappointment.”

    The math showed him that there simply will not be nearly enough BTU yield from alternative energy sources to meet the rising global demand. In fact, if anything, his investigation made him realize how few minds today are truly aware of the extraordinary energy throughput we are getting from fossil fuels.

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  • Blog

    ‘Cornucopians in Space’ Deliver a Dangerously Misguided Message

    by Gregor Macdonald

    Wednesday, May 9, 2012, 4:44 PM

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    Once a year the very chic and exclusive TED conference takes place in Southern California, bringing together entrepreneurs, inventors, and thought leaders from every corner of the world.

    There, gathered around a stage, a kind of hive mind begins to unfold in which the most cutting edge ideas in healthcare, energy, social development, and behavioral psychology are shared from a very plugged-in, big-screen podium. It’s extremely well done.

    And despite the reflexive criticism from outside the conference — that the gathering is inward-looking and elitist — TED usually does manage to disturb the zeitgeist, a little, with its unveilings in technology and innovation. It is plainly good that next-step advances in solar technology, data collection, and developing world health initiatives are explained and broadcasted from TED. Especially given that policy makers, or those who have the ear of policy makers, are also often in attendance.

    A better charge to level against the TED conference, however, is that it’s routinely, if not unfailingly, optimistic.

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  • Blog

    Alasdair Macleod: Why The Europe Situation is Certain to Get Worse

    by Adam Taggart

    Friday, May 4, 2012, 11:52 PM

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    Alasdair Macleod, publisher of Finance and economics.org, sees little room for a happy ending to the worsening European credit crisis.

    In this interview, he builds on his excellent synopsis from earlier in the week that detailed how the crisis originated, essentially embedding a fundamental structural shortcoming into the entire Eurozone construct starting back in 1997. This flawed monetary model was exploited for temporal gain and it worked very well as long as the pie was expanding and nobody was looking too carefully at the mounting imbalances created as it chugged along beautifully. Everybody was getting rich on their Mediterranean villas going up in price almost daily.

    This whole thing was bound to work until, mathematically, it couldn’t work.

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  • Blog

    The Europe Crisis from a European Perspective

    by Alasdair Macleod

    Tuesday, May 1, 2012, 12:35 PM

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    [This week, we introduce a new contributing editor to ChrisMartenson.com, Alasdair Macleod. He will mostly be contributing commentary focused on the situation in Europe, where he’s located. The credit crisis underway there is not Europe’s problem alone; it has the potential to send crippling financial shockwaves to the US and elsewhere around the world. Please join us in extending a warm CM.com welcome to Alasdair. — Adam] 

    The purpose of this report is to give readers the essential background to the economic problems in Europe and to bring you up-to-date in what has become a fast-moving situation. At the time of writing, there has been a lull in the news flow, but that does not mean the problems are under control. Far from it.

    Flawed from the Start

    When we talk about Europe today in an economic context, we really mean the Eurozone, whose seventeen members are the core of Europe and share a common currency, the euro. The euro first came into existence thirteen years ago, on January 1, 1999, replacing national currencies for eleven states; Greece joined two years later. In theory, the idea of a common currency for European nations with common borders is logical, and it was Canadian economist Robert Mundell’s work on optimum currency areas that provided much of the theoretical cover.

    However, the concept was flawed from the start.

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  • Blog

    Bill Black: Our System is So Flawed That Fraud is Mathematically Guaranteed

    by Adam Taggart

    Friday, April 27, 2012, 7:09 PM

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    “When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.”

    Frederic Bastiat

    Bill Black is a former bank regulator who played a central role in prosecuting the corruption responsible for the S&L crisis of the late 1980s. He is one of America’s top experts on financial fraud. And he laments that the US has descended into a type of crony capitalism that makes continued fraud a virtual certainty – while increasingly neutering the safeguards intended to prevent and punish such abuse.

    In this extensive interview, Bill explains why financial fraud is the most damaging type of fraud and also the hardest to prosecute. He also details how, through crony capitalism, it has become much more prevalent in our markets and political system. 

    A warning: there’s much revealed in this interview to make your blood boil. For example: the Office of Thrift Supervision. In the aftermath of the S&L crisis, this office brought 3,000 administration enforcements actions (a.k.a. lawsuits) against identified perpetrators. In a number of cases, they clawed back the funds and profits that the convicted parties had fraudulently obtained.

    Flash forward to the 2008 credit crisis, in which just the related household sector losses alone were over 70x greater than those seen during the entire S&L debacle. So how many criminal referrals did the same agency, the Office of Thrift Supervision, make?

    Zero.

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  • Blog

    Room For Ten More

    by Chris Martenson

    Friday, April 27, 2012, 2:54 AM

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    Here’s a last minute offer for anyone who lives near Greenfield MA…

    Are you interested in what to say to your kids about what is going on in the world? Are you wondering about how kids should be educated given what we know (and don’t know) about the future?

    This weekend, on Sunday April 29, from 11 a.m. to 1:00 p.m. I will be speaking at a fundraiser for a local education center that offers self-directed learning for teens. It’s not really a ‘school’ in the traditional sense of the word, as it operates just fundamentally differently from a typical school.

    All three of my children have attended, and two are currently enrolled.

    If you have any interest in the topic of education in this environment, or would like to see how one program is addressing the idea of doing things differently, then this is an opportunity to join in a conversation on the topic and meet kids and staff that are actively pioneering and practicing a novel approach to education.

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  • Blog

    What Data Can We Trust?

    by charleshughsmith

    Wednesday, April 25, 2012, 5:33 AM

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    Modern investing offers the promise that investors who “do their homework” and use data more intelligently than the herd can gain a valuable edge. But what if the underlying data available to the investing public is fundamentally flawed? 

    The federal government agencies that issue headline data and the mainstream media that reprints the data without skeptical analysis would have us believe that these indicators — the unemployment rate and the consumer price index (CPI), for example — accurately reflect economic realities.

    The other indicator that is implicitly or explicitly assumed to reflect the economy’s health is, of course, the stock market, generally represented by the S&P 500 index.

    That the government indicators and the stock market are both suspect is now a given.

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  • Blog

    Chris speaking at The Commonwealth Club of California TOMORROW 4/24

    by Adam Taggart

    Monday, April 23, 2012, 3:22 PM

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    To those of you in the San Franscisco Bay area: Chris is speaking at the Commonwealth Club of California tomorrow night.

    This marks Chris’ return to the CWC, where he spoke to a standing-room-only crowd three years ago. Tomorrow, they’re giving him a bigger venue and the event will be televised for future broadcast.

    Chris and I will remain after the main interview is completed to meet with any CM.com members that are able to attend. If you live close enough to make the event, we’re looking forward to meeting you.

    Here are the details on the event from the CWC’s website:

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