Tag Archives: Martenson Report

  • Blog

    Dangerous Ideas

    by Chris Martenson

    Wednesday, February 22, 2012, 2:51 PM

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    We are at a key turning moment in history. The actions that we will soon decide to take will be determined by the beliefs we hold. At a time like this, holding the wrong set of beliefs can destroy your wealth, sap your joy, and even prove to be life-shortening.

    Knowing the ‘right’ sets of beliefs to hold is never easy, but it is especially difficult at large turning points because, by definition, most people are holding onto old beliefs. Running against the crowd is difficult for everyone and impossible for many.

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  • Blog

    Gold Gets a Growth Scare

    by Gregor Macdonald

    Monday, February 13, 2012, 2:19 PM

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    An emotional, jubilant hooray! could be heard earlier this month when the Bureau of Labor Statistics (BLS) released its latest jobs numbers for January 2012, showing the addition of 243,000 net new jobs. That’s the kind of news both the financial markets and the political complex were yearning for, because it implies that growth is finally greater than the rate at which new workers enter the labor force due to US population growth alone.

    But the report was not without controversy. Significant revisions to BLS sampling were introduced in this report as a result of the recent integration of the 2010 census data. Recalibrated, this altered the size of the workforce, and thus changed the number of Americans either working, looking for work, or dropped out of the workforce altogether. And so the cries of Foul! began.

    Those who see politics in the numbers are perhaps overreaching. Likewise, those who see the dawn of a new era of resumed job growth are also likely premature in their celebration.

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  • Blog

    Why Our Currency Will Fail

    by Chris Martenson

    Wednesday, February 8, 2012, 2:18 PM

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    The idea that the very same economic forces that are currently plaguing Greece, et al., are somehow not relevant to the United States’ circumstances does not hold water.  As goes the rest of the world, so goes the US. 

    When we back up far enough, it is clear that money and debt are there to reflect and be in service to the production of real things by real people, not the other way around. With too much debt relative to production, it is the debt that will suffer. The same is true of money. Neither are magical substances; they are merely markers for real things. When they get out of balance with reality, they lose value, and sometimes even their entire meaning.

    This report lays out the case that the US is irretrievably down the rabbit hole of deficits and debt, and that, even if there were endless natural resources of increasing quality available at this point, servicing the debt loads and liabilities of the nation will require both austerity and a pretty serious fall in living standards for most people. 

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  • Blog

    The Price of Growth

    by Gregor Macdonald

    Monday, January 30, 2012, 5:38 PM

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    Growth. It’s what every economist and politician wants. If we get ‘back to growth,’ servicing debts both private and sovereign becomes much easier. And life will return to normal (for a few more years).

    There is growing evidence that a major US policy shift is underway to boost growth. Growth that will create millions of new jobs and raise real GDP.

    While that’s welcome news to just about everyone, the story is much less appealing when one understands the cost that come with such growth. Are we better off if a near-term recovery comes at the expense of our future security? The prudent among us would disagree.

    Resurrecting American Export Strength

    It’s easy to be skeptical that America could once again be a titan of global exports.

    For a very long time, that role has mostly been relegated to countries in the developing world. America as an export economy? Somewhere along the 50-year transition from industrial manufacturer to voracious consumer, Americans have lost touch with such a remote possibility. Indeed, this phase of America’s economic history is now quite settled.

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  • Blog

    Searching for the Bottom in Home Prices

    by charleshughsmith

    Monday, January 23, 2012, 1:47 PM

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    A substantial percentage of many households’ net worth is comprised of the equity in their home. With the beating home prices have taken since 2007, existing and soon-to-be homeowners are keen to know: Are prices stabilizing? Will they begin to recover from here? Or is the “knife” still falling?

    To understand where housing prices are headed, we need to understand what drives them in the first place: policy, perception, and price discovery.

    In my December 2011 look at housing, I examined systemic factors such as employment and demographics that represent ongoing structural impediments to the much-awaited recovery in housing valuations and sales. This time around, we’re going to consider policy factors that influence the housing market.

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  • Blog

    Iran: Oh, No; Not Again

    by Chris Martenson

    Wednesday, January 11, 2012, 2:04 PM

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    In each of the years 2008, 2009, and 2010, significant worries emerged that Western nations might attack Iran. Here again in 2012, similar concerns are once again at the surface.

    Why revisit this topic again? Simply because if actions against Iran trigger a shutdown of the Strait of Hormuz, through which 40% of the world’s daily sea-borne oil passes, oil prices will spike, the world’s teetering economy will slump, and the arrival of the next financial emergency will be hastened. Even if the strait remains open but Iran is blocked from being an oil exporter for a period of time, it bears mentioning that Iran is the third largest exporter of oil in the world after Saudi Arabia and Russia.

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  • Blog

    A Punch to the Mouth: Food Price Volatility Hits the World

    by Gregor Macdonald

    Tuesday, January 3, 2012, 5:48 PM

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    Perfect Storms

    2011 was an abysmal year for the global insurance industry, which had to cover yet another enormous increase in damages from natural disasters. Unknown to most casual observers is the fact that during the past few decades the frequency of weather-related disasters (floods, fires, storms) has been growing at a much faster pace than geological disasters (such as earthquakes). This spread between the two types of insurable losses has moved so strongly that it prompted Munich Re to note in a late 2010 letter that weather-related disasters due to wind have doubled and flooding events have tripled in frequency since 1980. The world now has to contend with a much higher degree of risk from weather and climate volatility, and this has broad-reaching implications.

    And critically, it has a particular impact on food.

    Many factors seen over the past decade have produced higher food prices: population growth, urbanization, the decline of arable land per person, and the upgrading of diets for example. But more damaging than food inflation has been the pushing of global food prices out of their long, quiet envelope of stability. From the recently released UN Report on the World Food Situation:

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  • Blog

    Are Commodities Topping Out?

    by charleshughsmith

    Tuesday, December 27, 2011, 1:34 PM

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    The past several years have seen a growing backlash against “paper” investments as more and more investors consider hard assets to be a safe haven against the implications of central bank money printing. But as the global economy visibly slows, this question arises in many minds: Are commodities, which have been on a tear since the March 2009 bottom, finally topping out?

    The question requires both a fundamental economic response as well as a technical chart analysis.

    We can start by observing the common-sense connection between demand for commodities such as copper, cement, steel,etc. and economic expansion. When demand rises faster than supply, prices rise. Since supplies of commodities face all sorts of restraints in terms of extraction rates, energy costs, and declining reserves, increased demand quickly pushes prices higher.

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  • Blog

    Worse Than 2008

    by Chris Martenson

    Wednesday, December 21, 2011, 3:00 PM

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    There are clear signs of a liquidity crunch in the asset markets right now, and the question I keep hearing is, Is this 2008 all over again?

    No, it’s worse. Much worse.

    In 2008 there was a lot more faith and optimism upon which to draw. But both have been squandered to significant degrees by feckless regulators and authorities who failed to properly address any of the root causes of the first crisis even as they slathered layer after layer of thin-air money over many of the symptoms.

    Anyone who has paid attention knows that those “magic potions” proved to be anything but. Not only are the root causes still with us (too much debt, vast regional financial imbalances, and high energy prices), but they have actually grown worse the entire time.

    As always, we have no idea exactly what is going to happen and when, but we can track the various stresses and strains, noting that more and wider fingers of instability increase the risk of a major event. Heading into 2012, there’s enough data to warrant maintaining an extremely cautious stance regarding holding onto one’s wealth and increasing one’s preparations towards resilience.

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  • Blog

    Why Oil Prices Are Killing the Economy

    by Gregor Macdonald

    Monday, December 19, 2011, 7:55 PM

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    “Oh, that was easy,” says Man, and for an encore goes on to prove that black is white and gets himself killed on the next zebra crossing.” ― Douglas Adams, The Hitchhiker’s Guide to the Galaxy

    Have rising oil prices just put the final coffin nail in the entire 2009-2011 economic recovery?

    Given the slowdown in China, the new recession in Europe, and the rocky bottom in the US economy, it certainly seems that way. 

    Oil’s Relentless March Higher

    Oil prices emerged from their spider hole over two and half years ago. Having fallen from the towering heights of $148 a barrel in the summer of 2008, the early months of 2009 saw a return to prices in the $30s. Interestingly, during that great oil crash, the price of West Texas Intermediate Crude Oil (WTIC) spent only 20 trading sessions below $40. That is the exact price that most analysts only three years prior believed oil could never sustain as the world would pump “like crazy” should prices ever reach such “impossibly high levels.”

    Given the enormous debt troubles the West is currently facing and the fact that oil has averaged over $100 during several months this year, it does seem reasonable to suggest that, once again, the economy has been pushed off a ledge by oil. Let’s take a look at oil prices over the past several years.

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