Tag Archives: Ka-Poom

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    The Ka-POOM! Survival Guide

    How to end up on the winning side of the Wealth Transfer
    by Chris Martenson

    Saturday, March 11, 2017, 5:02 AM

    22

    Executive Summary

    • Understanding the details of the Ka-POOM! theory
    • The end game: hyperinflation
    • Transitioning to tangible (vs paper) assets
    • The critical importance of timing as things switch from deflation to runaway inflation

    If you have not yet read Part 1: When This All Blows Up,  available free to all readers, please click here to read it first.

    Ka-POOM!

    Now it’s time to revisit the Ka-POOM theory which posits that bubbles will be blown, then they will deflate (or threaten to, more precisely), and that will then be met with more money printing.  Our view is that this cycle will continue until the entire system is utterly ruined, the underlying currencies destroyed.

    What the 2008 financial crisis made clear is that when natural market forces work to purge the oversupply of poor-quality debt from the system. The bad mortgages (think subprime), the bad sovereign debts (think Greece), and the loan portfolios of over-extended financial institutions (think Citibank) represented ‘poor quality debt.’  When the market (finally) figured out that those debts would never be repaid at face value, or perhaps at all, turmoil erupted.

    During times like these a vicious sequence begins: the market demands higher interest rates for the increased risks it sees. This makes debts harder to service, ultimately triggering defaults, which only compounds the difficulties as interest costs and defaults spiral ever upwards until the system is purged.  Think of it as nature’s way of removing bad credit from the world, the way a lion chases the lamest antelope first.

    Because in our fiat currency system ‘all money is loaned into existence’ (see chapters 7 and 8 of The Crash Course on-line video series), during periods of high debt default, the money supply shrinks. Money is created when a loan is made and, conversely, money disappears when a debt defaults (or is paid back). This is the textbook definition of deflation—a common symptom of which is falling prices the cause of which is that there’s just less money (and/or credit) available to chase goods and services.

    As a reminder, money is a claim on real wealth and debt is a claim on future money.  All that happens when we borrow more and more is that we push our problems of paying for what we want out into the future.  Which means that…

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    When This All Blows Up…

    Understanding the how & when of the next economic crash
    by Chris Martenson

    Saturday, March 11, 2017, 5:01 AM

    23

    This report marks the end of a series of three big trains of thought. The first explained how we’re living through the Mother Of All Financial Bubbles. The next detailed the Great Wealth Transfer that is now underway, siphoning our wealth into the pockets of an elite few.

    This concluding report predicts how these deleterious and unsustainable trends will inevitably ‘resolve’ (which is a pleasant way of saying ‘blow up’.)

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    Deflation Warning: The Next Wave

    The global economic slump is accelerating
    by Chris Martenson

    Thursday, October 1, 2015, 4:36 AM

    10

    The signs of deflation are now flashing all over the globe. In our estimation, the possibility of an associated financial crisis is now dangerously high over the next few months.

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    Deflation Is Winning – Beware!

    Expect the ride to get even rougher
    by Chris Martenson

    Friday, July 24, 2015, 3:03 PM

    14

    Deflation is back on the front burner and it's going to destroy all of the careful central planning and related market manipulation of the past 6 years.

    Clear signs from the periphery indicate that a destructive deflationary pulse has been unleashed. Tanking commodity prices are confirming that idea. 

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    First The Fall…

    A Special Report: Deflation is here
    by Chris Martenson

    Tuesday, February 24, 2015, 5:41 AM

    37

    One of the models of the future that I favor is the Ka-Poom theory put out by Erik Jansen of iTulip.com back in 1999.

    Basically it states that the end of a bubble era begins with a sharp deflationary event (the ‘Ka’ part of the title), but ends in a highly inflationary blow-off, (the ‘Poom’).

    It’s a one-two punch. Down then up.

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