This report was originally published by Brandon Smith at Alt-Market.com
The summer season is often about renewed hope and revelry in comfort, and this goes for economic comfort as much as anything else. In parallel to the old tale of The Ant And The Grasshopper, we are all tempted to act like the grasshopper, forget about the trials and tribulations of the world and take a vacation from awareness.
I am seeing quite a lot of this in the past month as mounting global tensions appear to have subsided. But appearances can be deceiving…
I am reminded of the summer of 2008 when those of us in alternative economic analysis were warning of the overwhelming evidence of a debt based deflationary disaster. There seemed to be widespread complacency back then as well. September finally struck and reality began to sink in, and the rest is a history we are still dealing with to this day. Right now, economic optimism is desperately clinging to news headlines rather than data fundamentals, but this can just as easily sink markets as it can keep them artificially afloat.
Consider the numerous powder keg events coming our way over the next few months and what they will mean for economic sentiment if they go the wrong way.
Federal Reserve Meeting June 12-13
The next week will be packed with public statements from various Fed officials which may hint at how aggressive the central bank will be for the rest of the year in its tightening program. However, I think I can guess rather easily what they will do. The Fed has been sticking to its policy of interest rate hikes and balance sheet cuts as I predicted they would for the past couple years. Nothing has changed under new Fed chairman Jerome Powell.
I believe the June meeting will mark an important mid-year shift for the Fed into even more aggressive fiscal tightening. The mainstream media has been heavily pushing the idea that stagflation is now a true threat to the U.S. economy. This is a notion I actually agree with and have been warning about for quite some time.
As I mentioned in my article ‘Stagflationary crisis: Understanding The Cause Of America’s Ongoing Collapse’, when the mainstream finally admits to a specific fiscal threat which has been gestating for years, we should be concerned, because this likely means a crisis is already upon us.
The Fed will use talk of stagflation as a springboard for accelerated rate hikes, and more importantly, expanded balance sheet reductions. I have no doubt the Fed will raise interest rates again in June, which will disappoint the contingent of stock market traders who were hoping recent poor economic data would influence the central bank to back off. This is not going to happen.
When new balance sheet data comes in at the end of June I expect reductions will be noticeably higher, triggering renewed instability in equities. The Fed, of course, will not make such a move in a vacuum, though. They will need some form of geopolitical distraction.
International Trade War Will Not Be Denied
Despite rhetoric coming from Treasury Secretary and Goldman Sachs alumni Steve Munchin, the ongoing trade war will not be “taking a break”. Supposed impending deals between China and the US are already falling apart, and Donald Trump is distancing himself from the Mnuchin peace train and indicating discontent with China yet again.
On the surface, trade war escalation seems to have been averted, based on the promise that China will “purchase more U.S. goods” in order to reduce existing trade deficits. Of course, with the climbing dollar (and simultaneous rising prices), purchasing more U.S. goods may be a problem for many countries, including China. The stagflationary crisis building in America does more than just give the Federal Reserve an excuse to pull the plug on its fiat support of stock markets. It will also be the perfect excuse for foreign buyers to further reduce purchases of U.S. goods based on the argument that they are becoming too expensive.
The Chinese offer to buy more from America is an empty offer. There will be little to no follow through and when deficit numbers increase, markets will react negatively.
The focus on the China/U.S. deficit also distracts from further strife in NAFTA trade dealings (of which Mnuchin has said there are “significant issues”), as well as trade with Europe.
Ultimately, this is headed towards bilateral agreements between China and European nations further cutting out the dollar as world reserve. In fact, the Chinese state run media is suggesting just this strategy as a means to counter what they call ‘U.S. trade unilateralism.’
I do not expect the peace and love theater to last through the summer. The trade war will resume well before Fall.
North Korean Peace Summit Farce
As I warned in my article ‘Syria And Iran Prove There’s No Chance For North Korean Peace’, globalists only ever use peace agreements as a staging period for further war. In that article I also suggested that disruptions to the peace summit with North Korea would arise and that the U.S. would make demands North Korea cannot or will not fulfill. Already we are seeing cracks in the facade as North Korea complains about U.S. involvement in South Korean war games as well as potential de-nuclearization.
NK has now let fly statements on Vice President Michael Pence’s “stupidity” while threatening a nuclear showdown. Trump has openly stated that the summit could be delayed or may not happen at all. Those who argued with me that a successful summit was a “done deal” and Trump was on his way to a Nobel Peace Prize should now reconsider their positions and not quit their day jobs. Again, North Korean denuclearization will NEVER happen; not without a war.
The optimism building around the North Korean summit was rather bewildering to me. The idea that even in the liberty movement people were actually buying into this as viable is disconcerting, because it shows a lack of awareness of the bigger picture.
What we have here, folks, is a carrot and stick approach for the American collective psyche. Tensions are ratcheted up around the world, economically and politically, and then we are given a short reprieve, a moment to take a breath. But, this generally does not last very long as these moments are usually based on false information and assumptions, and the tension is increased yet again. Eventually, something breaks.
Even if the North Korea summit actually takes place and concludes without incident (that’s a BIG “if”), and even if the Trump administration declares “mission accomplished,” there will be no follow through on the part of North Korea as far as disarmament. Count on it.
Beyond that, consider the timing. The original time for the summit to take place was on the same day as the Federal Reserve’s June meeting. Would it not be rather convenient for a failed summit outcome to occur while the Fed hits stock markets with another interest rate hike and a large balance sheet cut? Once again, the Fed will dodge blame for stocks plunging another 1200 points or more as international politics takes center stage.
Iranian Peace Agreement Merely A Pause For War Prep
The Iranian peace agreement is now in tatters with Israel on the war path in the region and the U.S. supporting assertions of Iran nuclear development that are still backed by no evidence whatsoever. Many of us remember the outright lies of WMD’s in Iraq which led to the second Gulf War, and the Iranian situation smells of the same exact deception. In fact, some of the same neo-con players from those days are lurking in the White House now, including John Bolton.
With the destabilization of Syria well on the way after western intelligence agencies funded, armed and trained insurgents who would later form ISIS and wreak havoc in the country, Iran’s primary strategic partner is now on the verge of collapse. The direct targeting of the Assad regime is next as the war on ISIS con game has subsided. Russia is also conveniently pulling many of its troops out of Syria opening the door to invasion by other interests.
Any invasion of Syria with the intent to unseat Assad will likely cause an Iranian response, and perhaps this is the goal; to lure Iran into an aggressive posture, thus justifying war.
The timing of growing conflict with Iran should not be overlooked. We have oil prices now rising despite a strong dollar index and continuing oversupply, which adds to the stress over stagflation concerns. And, we also have a potential geopolitical disaster which could provide perfect cover for central banks to continue their decoupling from stock markets without receiving any blame for the consequences. The Summer of 2018 continues to look like a staging period for considerable economic volatility to come, much like the summer of 2008 was 10 years ago.
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Mac, why is that vile photo of Bill and Hillary still here trashing this site?
Infidel your lucky, all I see is two Pictures of Obama, one hugging some guy and the other with a tear in his eye. Trekker out
DITTO that! But will never be prosecuted.
AND while we are at it, why is that f*ing black piece of chit still on this website? I hope his HI mansion is covered in lava.
Using free ad block…what picture? 🙂
the fed changed its bank rate recently and its speculated they did that because the economy as a whole cant take actual rate hikes and given that so many people cannot afford $400 emergencies, i’d say that’s true.
despite the problems outside the economy, it’s all on the fed. if they raise rates two more times and stay on their liquidity extraction schedule, you will have a recession in 2019.
whatever happens this summer will just cast short term doubt, but it’s not going to cause the crash.
Mullins, the greatest researcher into the core of our banking system, wrote the original book and the Bible on The Federal Reserve System, its conspiratorial beginning and its method for keeping us all poor while enriching a small group of people, those whom created it and their descendants.
I think you nailed it boss.
I CANT PROVE IT JUST TELLING YOU WHAT I HEARD.
Before you all start attacked me as fake poster, you better hear me out for a minute, that’s all I am asking.
Mac, my scientist buddy just told me last week that the volcanoes will breach the water table, and that his sources said that the water table (IN HAWAII) will breach for certain, meaning that and SHTF commense type end result is a certainty, that the island must be evacuated now because if they wait another month until the ring of fire activates, ( water table is finished, done)which the Ocean floor off cali will collapse any minute now, then Hawaii will have to purge and let off steam. Any one in Hawaii reading my post, get on and air plane this week and leave the island.
Sorry troll Jim in Va, and your buddies John stiner, and other trolls. You will have your asses handed to you all in another 2 months. You guys talked too soon. THE WATER TABLE BREACHED AND HAWAII’S WATER SUPPLY IS NOW COMPLETELY CONTAMINATED, THE WATER SUPPLY IS GONE NOW.
Two massive fault line will have to slip to change the surface, crust of the planet to form new island in the middle of the Atlantic and Pacific, followed by collapse of inland regions globally.
How exactly will anyone have “their asses handed to them” in 2 months? And yes, I think you’re batshit crazy, but at least this post was readable.
Steiner (sp?) said something clever about mortgages.
imo, there has always been one long crash, so you have to borrow yourself out of it, at an arbitrary price point.
Not one person, reading, in our lifetime, has bought (“earned”) a new house or car, independently, free and clear of any encumbrances, by the sweat of their brow.
There he goes again……..
“my scientist buddy?”
HCKS, you’re as bad as MSM with these un-named sources.
The end is always near.
Speaking of ends, Brandon, which summer are we supposed to see an economic crash this time? This summer? Next summer? The one after that?
His “scientist buddy” is the kid next door who got a chemistry set last christmas. They play with it in his basement, so they are experts at everything now.
I live on the Big island known as Hawaii.
Have done so for the last 18 years.
I know a thing or two about the Geology of this place.
I don’t need the water table as I live on catchment
as does a significant portion of the people here.
The water “table” is actually more like a water “lense”.
basically at sea level so most wells here go to sea level.
I live on a lower slope of Mauna Kea,
the worlds tallest mountain at well over 33,000 feet
as it goes all the way down
to the sea floor.
It is a big rock. It isn’t going anywhere soon.
It is not in the ring of fire.
Closest ring of fire volcano
to us is over 2700 miles away.
Local volcano Kilauea is acting up, but
it has been erupting since 1983. It is
doing different things these days,
but nothing different than what it has
done in the past, 1924 for example.
I see no reason to leave.
HCKS; Listen to Rellik,he lives there,knows the land and quit calling everybody who disagrees with you a troll…..
HCKS did you sniff glue as a kid?
Ate lead paint chips…
Trump better hustle and get the southern wall built asap. To keep piss poor Americans from fleeing south out of the collapsing hyper police state USA. Making America Great Again! For the Amero. Threaten loudly and carry the biggest nukes.
Jeremiah 51:7-9 King James Version (KJV)
7 Babylon hath been a golden cup in the Lord’s hand, that made all the earth drunken: the nations have drunken of her wine; therefore the nations are mad.
8 Babylon is suddenly fallen and destroyed: howl for her; take balm for her pain, if so be she may be healed.
9 We would have healed Babylon, but she is not healed: forsake her, and let us go every one into his own country: for her judgment reacheth unto heaven, and is lifted up even to the skies.
“let us go every one into his own country”
They say it of their own free will. Let’s evacuate. Not because they are being forcibly removed.
Now look at this, they are attacking the man who wrote facts about the economy. You guys are trolls, 100% FACT HERE. In two more months, the Hawaii island will be completely inhospitable for living conditions. Go head call bullshit on what I just posted. The preppers on this site are the ones who watch you attack me, they are the ones who will call you out, I already did. You fools will not be able to talk to me in person like this if you were sitting across the table from me. I promise you that, your nothing by mouth.
Go on Jim in Va, put it in writing right now. tell shtf that Hawaii is good and that the island will not be evacuated. Go ahead, say it right now. let me see you tell posters the facts. You wont dear write that. Your ass will be handed to by posters on this site, not even by me. As for your dmonic, your handle is a interesting one. You have a very smart mouth, you in shape buddy. Been practicing haven’t you. Batshit crazy, when I saw my city of Houston flood the fuck out and turn into a lake with 5,000,000,000 of damages to Houses and I am in the housing and banking business. You talking to me fool. fuck you. I know it didn’t happen, Houston never had a disaster. Its all fake news.
Only a fool does not know fear.
Consider it said HCKS! what has Houston have to do with Hawaii?
I guess I’m going to be a troll now also, for this next comment.
Y’all think Bobane had a love child with Chicken Little, and we now call that off-spring HCKS?
Y’all enjoy the weekend. 🙂
You read very carefully what Brandon Smith wrote, because I just did, and he in 1,000% on the money. You fools are on her attack Mr Smith.
I don’t deny that there is anything happening on Hawaii,there is and it’ll be there next week…two months. You’re giving yourself a stroke over this. You just can’t handle the fact that somebody disagrees with you…and thats on you. Maybe you ought to go to Hawaii and see for yourself and not believe everything somebody tells you or you see on the internet. You made a mountain out of a mole hill.
“Maybe you ought to go to Hawaii and see for yourself and not believe everything somebody tells you or you see on the internet.”
NO, no, no.
Although if HCKS were to show up I’d buy him a breakfast at Cafe 100 just for grins.
Rellik; I’d buy him one too but he’d swear I was trying to poison him…..
Rellik; I’d buy him one too but he’d swear I was trying to poison him…..
Hey guys go easy on HCKS he’s my Cuz DBH’s alter ego. And if you ain’t ate lead paint chips you don’t know what your missing, although they do lay kinda heavy on your stomach.
thanks for the laugh NG
More fake news. Take a look at this. So my scientist buddy is 100% right.
Maybe this is what he’s being told about
The system is dead for most people. Reboot will be even more painful but it’s needed.
A good leading economic indicator is the price of gas. The world relies on cheap energy to grow. Look at the price of gas today.
I thought looney tunes Hicks was leaving and not coming back? Hicks you lied. you promised to leave and here you are back posting looney stuff. No one cares or believes you. On better news My garden is doing great. already have squash ,kale andaspargus.
Has the “summer of disappointments” begun? The Han Solo flick is “crashing” at the box office. Does that qualify?
Hey guys, lay off Hcks for one reason: instead of attacking the poster, bring reason to your post, cite evidence or data if you can.
You certainly have the right to disagree or agree to whomever posts whatever, but do so by asking, challenging, engaging in healthy debate. That is far preferable to name-calling, bashing, and personal attacks. If you have no data to cite but strongly disagree, then by all means disagree but do so without attacking the poster.
Each of us is engaged in a search for truth. Bashing other truth seekers (instead of bringing reason and data to the task to dispute and challenging with respect) will distract you from that search.
We’re already drowning in and distracted by the filth and deceptiveness and falsehoods lamestream media brings us every day. Why sink to their level? We’re more truth-oriented than they are.
So yes, agree all you want, or disagree all you want! And if you engage in a spirited debate with class (respectfully challenging, using data if possible, admitting what you do not yet know, etc.) then your posts will carry a lot more weight.
– the Lone Ranger
“In a world of universal deceit telling the truth is a revolutionary act.” – Orwell
Hcks is a lunatic and you cant reason with lunitics, by presenting facts. Just ignore chicken little twit. His sky falls everday after she is all liquored up and a shot of meth.
My scientist friend= Booboo the Meth cooker.
Chicoms invading Houston= spiders crawling on Hcks arms.
The world is blowing up= Thats when Hcks falls and does a face plant on the pavement after tripping over her cardboard box house BOL.
Hcks = Scitsophrenic
Roses are Red
Violets are Blue
And so am I. – Hcks.
There is too much name calling, I agree.
I will however challenge people for sources.
I have been corrected on my “bad”.
I worked for years with people with PhD’s
and I will mention names, if they are published
on a subject.
This is a comment site, you aren’t going to read
an abstract and a multi page paper with footnotes.
I’ve been complained about my trying to
make things readable.
My favorite comment guy here, best comment
Tell Brandon Smith that the US government will spend 2.7% more than the last year of Obama, the markets will steadily rise to new all time highs.
There can never be any cuts in the total US governmental spending. Expect DOW 100k and S&P 20k by 2040. All on debt spending.
Why? Because it must.
Look at any 2 year chart of any major US indices, the current market price is in line with the incline!! Not decline.