An inevitable economic collapse has been warned about since this website began over four years ago…[ based on the following] 3 key economic points [that] have been consistent since its beginning. Here they are:
- There is no recovery – nor can there be a recovery – without a massive economic reset, a collapse.
- Government interventions over the last several decades have put us into this position.
- Government is now trapped and, like a wounded animal, will do anything to survive including harming the economy and those dependent on it.
So says Monty Pelerin (EconomicNoise.com) in edited excerpts from his original article* entitled Economic Collapse Ahead.
[The following is presented by Lorimer Wilson, editor of www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here). The excerpts may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Pelerin goes on to say in further edited excerpts:
A bias that we all carry is that assuming people who agree with us are smart and that is an indirect form of reinforcement and self-aggrandizement that can be dangerous…At the risk of committing this error, I recommend an article by Captain Hook who expresses sentiments in line with my own.
Here are some excerpts which are perilously close to what I have expressed:
- We are getting close to the day of reckoning… [of the] fiat currency economy suicide mission the Fed(s) has engineered for us so you [had] better get ready, because they will not ring a bell at the top of the stock market to warn [that] the party is over.
- … the end of the line in QE debt monetization-related economic growth is almost here with diminishing returns in money printing and central bank balance sheet growth re-accelerating. While it’s true central authorities can still increase QE to offset diminishing returns, and in fact have stated they intend to do just that in Europe and Japan early next year, … the effects of all this money printing will be negligible. Before it’s all over, [however,] don’t be surprised to see QE in the States moving from $1 Trillion per year where we are now to $1 Trillion per month, and to infinity essentially. (I think a collapse will occur before they get close to Captain Hook’s monthly projection.)
- …QE will never stop until the system blows-up…
- Add to this picture a new and naive Fed chair, with visions of sugar cookies in her head, and one needs to wonder how US Treasury yields [can] remain sanguine in coming years because, once confidence is lost, a negative spiral can grip macro-conditions quickly given the hollow nature of the much talked about economic recovery…
- … its not just the bubble in Treasuries one should be worried about. Up until this point that has been no trouble at all with the QE backstop but there are also stocks and real estate to worry about as well where, as you know, a problem exists when the speculators are speculating on the degree of speculation. There is no free lunch despite what lying bureaucrats would like you to believe.
- … this lunacy can obviously continue for longer than anybody with a whisper of common sense could conceive. The sad part of this entire mess is the crazier it gets, the more anxiety is created, the more people will hold back, the more the Fed will have to print money, the more stocks will go up until we reach the point of heart attack for the over-drugged junkie. Then, the bond market is going to blow up, and its all over.
- We are caught in a liquidity trap that demands the Fed monetize some 70% of all net bond supply; meaning rates would be considerably higher if they were not doing so….[This] taper talk…is just…BS because key debt markets are becoming increasingly stressed.
- … the Fed(s) have no choice but to keep accelerating the craziness which will become a problem for the bond market once rigging efforts on the part of the bureaucracys price managers begin to fail noticeably. You will know this is the case when they can’t keep credit markets supported anymore, which will tip diminishing returns into free-fall and, in turn, re-accelerate the need for more money printing as things spiral out of control.
- … don’t be fooled by taper talk which has the effect of catching offside short sellers when weak data points come out, causing a short squeeze. ( that’s what happened last week post the Fed minutes release.) What market participants don’t realize yet is [that] such talk is just expectation management on the part of the Fed so that people are not surprised when it happens…
- Who needs gold when the traditional stock market is going up…especially when Da Boyz are making copious amounts of fiat currency… which means stocks are likely going much higher and gold could remain in the doghouse for some time yet – well into next year.
- Gold will of course be the place to be in the end, when all the Ponzi finance has collapsed… Better buy some gold so you can eat when inflation goes through the roof bailing out this ship of fools.
I disagree somewhat on the margins with a few of the comments presented above, but this disagreement is minor and could be seen as nitpicking.
In general, the statements presented are very much in line with my thinking. As always, the critical question is how long the economic fraud can continue.
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
*http://www.economicnoise.com/2013/12/12/inching-toward-economic-collapse/ (© 2013 Monty Pelerin’s World. All rights reserved. Monty Pelerin’s World)
More Articles by Monty Pelerin:
I read many hundreds of articles every week looking for writers who have an in-depth understanding of our economy and who are not reticent to tell it like it is. Monty Pelerin (a pseudonym) does just that week after week, year after year. This post includes introductory paragraphs and links to 25 of his most enlightening and current articles. Take a look. There are bound to be several that will grab your interest. Read More »
Other Related Articles:
These 5 red flags will give you anywhere from a few days to a few months of warning that things are about to change drastically…and well before those around you grasp the full extent of what is going on. This is hopefully a scenario that never happens as this will truly be the end of the world as you knew it. Read More »
There is one vitally important number that everyone needs to be watching right now, and it doesn’t have anything to do with unemployment, inflation or housing. If this number gets too high, it will collapse the entire U.S. financial system. The number that I am talking about is the yield on 10 year U.S. Treasuries. Here’s why. Words: 1161; Charts: 2 Read More »
New research shows that forecasters tend to underestimate the expected outcome of anticipated economic data for several months in a row, and then overestimate it for several months in a row thereafter. Why does that matter? Read on. Read More »
If yields on U.S. Treasury bonds keep rising, things are going to get very messy. What we are ultimately looking at is a sell-off very similar to 2008, only this time we will have to deal with rising interest rates at the same time. The conditions for a “perfect storm” are rapidly developing, and if something is not done we could eventually have a credit crunch unlike anything that we have ever seen before in modern times. Let me explain. Read More »
Is there going to be another crisis? Of course there is. The liberalised global financial system remains intact and unregulated, if a little battered…The question therefore becomes one of timing: when will the next crash happen? To that I offer the tentative answer: it may be imminent…[This article puts forth my explanation as to why that will likely be the case.] Read More »
Last Wednesday, Fed Chairman Ben Bernanke promised to end his bond-buying addiction – cold turkey – in mid-2014. That is, as long as the economy is strong enough. As a result, investor fortitude was pushed to the brink. Stocks sold off hard, sending the S&P 500 Index down 1.4%. Before you head for the exits, too, let’s get a little perspective. Read More »
What does it look like when a 30 year bull market ends abruptly? What happens when bond yields start doing things that they haven’t done in 50 years? If your answer to those questions involves the word “slaughter”, you are probably on the right track. Right now, bonds are being absolutely slaughtered, and this is only just the beginning. So why should the average American care about this? Read More »
The global financial system is potentially heading for massive amounts of trouble if interest rates continue to soar. So what does all this mean exactly? [Let me explain.] Read More »
The U.S. government is in what is known as a “debt death spiral”. They must borrow money to repay prior debts. It is as if they are using their Visa Card to make an American Express payment. The rate of new debt additions dwarf any rate of growth the economy can possibly achieve. The end is certain, only its timing is unknown, and, once interest rates begin to rise, and they will, it’s game over. Read More »
The financial markets were in distress lately because of Fed Chairman Ben Bernanke’s suggestion that the Fed might taper off its quantitative easing programs starting at the end of this year and ending in 2015. Here are five reasons why markets shouldn’t worry too much about the Fed leaving the stage: Read More »
It seems that the past few years of falling interest rates have lulled a big part of theInterest-Rates global economy into financing with variable-rate debt…[As such,] when interest rates go up (as they did last week), there’s a world-wide reset in interest costs that, best case, amounts to a tax increase on individuals and businesses and, worst-case, threatens to blow up the whole system. Read More »