Karl Denninger, who forecasted the breakdown in stock markets a couple of weeks before the crash of 2008, says that all hell is now breaking loose:
You’ve once again had your 401k and IRA whacked by the incessant lies and scams promulgated by your government and the “financial wizards” who seduced you back into the markets with half-truths and siren songs.
The market opened this morning down 300+ DOW points and the VIX slammed through the 40 level. There will clearly be bounces along the line but as things stand right now the underlying financial conditions have not changed one iota from where they were in 2007. Instead of allowing those who were overlevered to go bust and have capitalism do what it does best – creative destruction of the foolish – we instead took private effectively-defaulted risk and transferred it to the public balance sheet.
But that’s a scam – it simply moves the deck chairs on the economic Titanic, because governments can only raise funds through two means: They can borrow money (increasing leverage) or they can tax it (decreasing consumption or investment by private parties.) The obvious “borrow it” choice was made here in the US and elsewhere, but just as with private borrowing government borrowing has limits and we’re now running into them, and deficit spending creates false demand signals in the economy that must eventually end.
Recognition that you’ve been scammed can be a truly ugly thing. It is usually violent at an emotional and financial level, and more often than one would like it has a habit of being violent in the physical sense as well.
Well, America (and the world), you’ve been scammed by the financial institutions and governments for the last 30 years. 2008 was the first spasm of recognition but was short-circuited by…. you guessed it…. even more scams. Rather than demand truth and an end to the games the American consumer lapped up the frauds and schemes of the politicians on both sides of the aisle who conspired with the financiers to rip you off once again.
The opportunity to address these issues as I have been tirelessly attempting to do, was ignored by those in policy roles in Washington DC. Those who have been reading The Ticker are well-aware of my efforts going back into 2007 and through the 2008 Presidential campaign on both sides of the aisle, along with my efforts since.
They’ve been ignored with the political establishment choosing to knob-job the banks and lie to you, the public, rather than address the fact that the entire last 30 years have been one gigantic economic scam and that what they were attempting to do could not, as a matter of mathematics, succeed.
Now recognition of that fact is dawning on people in a convulsive fashion, and markets of all sorts are reacting as one would expect when their entire worldview is exposed as having been a gigantic and intentional pyramid scheme constructed of debt layered upon debt thatcannot be paid down. The wrong thing was done in 2008 and there is zero evidence that our government has changed one iota in their singular focus on misdirection and lies in this regard.
Welcome to awareness; I hope you’ve taken the last couple of years to become prepared.
Source: Market Ticker
Denninger has for years put forth mathematically undeniable empirical evidence that shows not only how unsustainable our system is, but the lunacy in the government’s purported solutions and response.
Our debt load is too high. Our production capacity has been decimated. Our GDP growth is negative and has been for a decade (if you look at the real data).
It may very well all be coming to a head. While we opined earlier that the triggers for the meltdown of the last 24 hours may not have been a loss of confidence in the US dollar, that doesn’t mean it won’t happen as a result of what will play out in coming weeks and months.
It’s clear that stock markets world wide are in panic mode, and this will not bode well for investors, as Denninger suggested in a commentary yesterday:
I’ll go ahead and make the prediction now: This time will be worse than 2008 and we’ll measure from SPX 1370, which makes the minimum downside target under 600. And no, this time it won’t recover with more “hopium” and fraud – that card has already been played which means the pension funds and annuities across this nation are going to get smoked, exactly as I warned about four years ago.
Consider the implications of what led to the collapse of 2008, our failure to resolve the problem, the obscene debt we created in the last three years, and the economic disaster that is the American job market.
Many have been holding out hope that “they” will do something to keep everything from normal.
So if you haven’t spent the last two or three years preparing, then we’d recommend you get into high gear right now. Not tomorrow. Not next week. Now.
The world as we have come to know it, in one way or another, is going to crumble over coming years. It may happen overnight in a rapid waterfall collapse, or it may deteriorate over several years. Regardless of how it happens or exactly how long it takes, we’re running out of time and the outcome will be the same. Here’s historical proof exists that this can happen in America. In The Redline: A Tale of Collapse, Brandon Smith depicts a scenario that may not be too far off from what reality will look like in America in the not too distant future.
Suffice it to say that if you want to avoid, or at least insulate yourself from, living in a world of poverty, violence, and despair, consider how you can become more self reliant today.
- What will you do if commerce stops due to a currency collapse and the banks are closed- how will you buy food, medicine and bare essentials?
- Can you grow your own food or raise micro livestock?
- Do you have the ability to protect yourself at home or in public?
- What skills do you bring to the table that will be of use when the service industry in America collapses – what are you capable of producing?
- How prepared are you to sustain your family in the event of a hyperinflationary or hyperdeflationary collapse – what will you use to pay your monthly mortgage and bills if traditional currencies collapse or you lose your primary income stream?
All of these questions and many more should be at the top of your list of things to do right now.
Obviously, mainstream media, government and central bankers have been lying to us about the state of our economy and financial markets. Perhaps preparedness minded web sites like SHTFplan are wrong.
But what will you do if we’re right?