This article was originally published by Chris Martenson at Peak Prosperity
Hell To Pay
The final condition for a market crash is falling into place
By Chris Martenson
Sometimes I wonder if I’m ever going to run out of new things to say about the economy. Nothing interesting has happened in a long time.
Our liquidity-drunk “markets” remain over-priced due to the chronic intervention of the global central banking cartel, which has demonstrated over and over again that it won’t tolerate even the slightest drop in asset prices.
Those familiar with my writing know I put the word “markets” in quotes because we no longer have a financial system where legitimate price discovery is a regular — or even recognizable — feature.
It’s destined to fail. What more can be said about such a flawed system?
Well, a lot as it turns out.
And failure to pay attention at this stage of economic and ecological history will prove to be exceptionally painful.
The Beginning of the End
It’s been a long 7 years for those of us who believe fundamentals matter. For quite some time they have not.
So we reality-based fundamentalists have largely been reduced to pointing at the parade of policy failures and ham-fisted market manipulations and saying, essentially, That’s just dumb.
But ‘dumb’ mistakes have become ‘stupid’, and ‘stupid’ became ‘idiotic’, and now ‘idiotic’ mistakes are piling up, accumulating into a mountain of stored potential energy that will someday topple destructively across the global markets. We’ve all known, deep down, that money printing is not the same as capital formation, and that prosperity never truly results from redistributing wealth from one group to another. And yet, far too many have been willing to play along and place their trust in the central banks.
Well, we’ve finally reached the beginning of the end.
The global experiment with our current flawed economic and monetary models are drawing to a close. The fetish worship of central banks, bankers, and banking is over.
Belief in central bank omnipotence is being chipped away at daily, as it’s becoming increasingly clear that the easing policies of the past seven years have only served to kick a can down the road — a can that can longer be kicked any further.
Once the illusion of central bank control is fully lost, the financial markets will implode in a deflationary wave that has been held at bay for far too long. Asset prices will collapse, companies will fail, and millions of jobs will be lost. People will re-discover that partying too hard for too long earns a massive hangover.
In short: There will be hell to pay.
I’m still not able to predict whether we’re a week away from this or five years. Such is the uncertain fate of living within a nested set of complex systems run by fallible humans. Complexity complicates prediction.
Though while we cannot predict exactly what will happen, to what degree it will manifest, or precisely when, wecan track the ‘fingers of instability’ in the system and note that these are growing longer, and steeper. For instance, total worldwide debt is more than $60 trillion larger than it was before the 2008 financial crisis. So we can make conclusions like “larger” and “sooner” about the probability of the coming correction.
The final remaining bulwark that needs to give way before we a full-blown correction occurs is central bank credibility. The public perception of an “all-knowing, all-powerful” entity needs to be replaced by a more realistic view of what central banks actually have done, and realistically ever can do, which is a whole heck of a lot less than most currently ascribe to them.
Drop Dead, Fed
It helps to start by looking at the actual track record of the central banks over the past 20 years.
By the numbers, central banks have been little more than serial bubble blowers, which is not actually a very impressive trick at all. Dump a bunch of cheap, thin-air money into the markets and that’s pretty much what you get every time: a bubble. Or bubbles, plural (which is what we’re living with now across stocks, bonds, real estate and nearly every other financial asset class)
What the central banks claimed they were after – rapid GDP growth, a set rate of inflation and rising incomes – has not materialized in the way they hoped. After more than tripling their collective balance sheets since 2008 (an increase of nearly $12 trillion) to stimulate the world economy, global GDP growth is still stumbling along at an uninspiring 2.5% — and showing signs of slowing.
As I said: not an impressive track record. But lots of people still treat the Federal Reserve, and ECB, BoJ, BoE, etc., as if they’re doing something terribly sophisticated, important, and worthy of our admiration.
But what have they really done besides flooding the world with cheap and abundant money?
Well, for starters, they’ve created the largest wealth and income gaps on record, over-inflating financial assets and creating conditions ripe for aggressive financial engineering by corporations, both of which reward the top 1% preferentially.
In this first chart we can see the effect of three serial bubbles blown by the Fed on household income broken out by income level.
(Source) http://blogs.wsj.com/economics/2015/01/01/what-we-know-about-inequality-in-14-charts/
The top 1% has gotten all the gains in each of these bubbles. The only defense the Fed has is to claim that“Well, things would have been even worse for the lower 99% if we had done anything different”. But this rings as hollowly as any prove-a-negative defense.
We cannot know how things would have been different for the bottom 99% if the Fed had done things differently. But we can know, with 100% certainty, that if the Fed had not dumped money into the financial system and hadnot targeted rising asset prices that the incomes of the top 1% would not have skyrocketed like this.
It’s really simple: when you financialize an economy, those with the most direct access to the money in that system — which is by definition a tiny elite — are going to benefit the most.
This next chart shows the impact of the Fed’s efforts on household wealth. The bubbles are immediately obvious and I’ve labeled them as ‘unfair’ in varying proportions because nearly all of this ‘wealth’ is financial wealth held in wildly disproportionate amounts with super-heavy concentration in the very upper-most wealthy households:
(Source) http://www.zerohedge.com/news/2016-09-21/195-billion-asset-manager-time-has-come-leave-dance-floor
And it’s not the 1% we’re talking about here, but the 0.1%. The more financialized the system, the more highly concentrated the wealth becomes.
(Source – NYT) http://economix.blogs.nytimes.com/2014/04/02/the-wealth-gap-is-growing-too/?_r=0
This is not some mysterious process. Nor is it new to our era. I wrote about it in the Crash Course back in 2008 saying:
Given this tremendous [wealth] disparity, I’m reminded that Plutarch once cautioned that an imbalance between rich and poor is the oldest and most fatal ailment of all republics.
More immediately, this helps us understand why the great credit crisis of 2008 worse than expected. Just as was true of the wealth gap in the late 1920s before the onset of the great depression, the severity of a crisis does not depend on average wealth, but the distribution of the wealth.
If a large swath of the population lacks the means to weather the storm, then the storm will be longer, and harsher than otherwise would be the case.
So what does it mean that 80% of our population possesses a meager 11% of the total wealth? For one thing it means that the recent efforts by the Fed to provide massive amounts of liquidity support to the biggest and wealthiest banks at the inflationary expense of the lower classes were not only misguided, but they were cruel and unusual.
This leads to an easy prediction to make: The wealth gap in the US will hamper our recovery and deepen the downturn.
>
(Source – Crash Course Chapter 14 Assets and Liabilities)
What is mysterious, are the repeated efforts by the central banks to act dumb and pretend as if their reflation efforts have not created the massive, glaring wealth disparities seen so clearly on every chart of income and wealth available to us.
Janet Yellen has played dumb in the past and the most recent poor job of acting dumb has been brought to us by the German Bundesbank:
WSJ: Germany’s Bundesbank Backs ECB on Concerns Over Inequality
Sept 19, 2016
FRANKFURT—The European Central Bank’s massive bond-purchase program and other easy-money policies probably haven’t worsened inequality in the eurozone, Germany’s Bundesbank said on Monday, hitting back at concerns that central banks are taking on an increasingly political role by redistributing wealth.
In a report, the Bundesbank argued that while recent ECB policies have helped bolster stock and property prices, they have also supported economic growth and employment, thereby helping poorer people.
“It seems very doubtful that [the ECB’s] special policy measures of recent years have increased inequality in an overall context,” the Bundesbank wrote.
(Source)
I’ve never wanted to punch a sentence before, but I do now. I can’t believe how tone-deaf and utterly disconnected from a very obvious and inarguable reality that last statement by the Bundesbank is. I think I was pushed over the edge by the pedantic and meaningless phrase “in an overall context.” I’ll get over it.
But again, we’re supposed to believe that the massive wealth gains of the upper classes are somehow an equal exchange for poor people not losing their jobs? The contest is not even close.
I wonder if the Bundesbank’s “researchers’ have access to the Internet, like we do:
Wall Street’s 2013 Bonuses Were More Than All Workers Earned Making the Federal Minimum
Mar 12, 2013
New figures show that the bonus bonanza of 2013 didn’t disappoint. According to the New York State Comptroller’s office, Wall Street firms handed out $26.7 billion in bonuses to their 165,200 employees last year, up 15 percent over the previous year. That’s their third-largest haul on record.
The $26.7 billion Wall Streeters pocketed in bonuses would cover the cost of more than doubling the paychecks for all of the 1,085,000 Americans who work full-time at the current federal minimum wage of $7.25 per hour.
(source)
You read that right: just Wall Street’s bonuses alone in 2013 were 2x greater than the entire take home pay (pre-tax of course) of every single person in the US working for minimum wage.
So it’s really rather grotesque and unacceptable for the Bundesbank and Yellen et al to attempt to claim that central bank policies have been equally beneficial to all segments of society when taken in an overall context. No, they most certainly have not. They have been massively and disproportionately unfair and the recent populist uprisings across the globe are proving as much.
Central banks, of course, have access to the same wealth charts as everybody else. There’s no room for debate on the matter. Financial asset price inflation has preferentially benefitted the very tippy-top of the wealth pyramid and has done so at the expense of the bottom tiers.
Why it has taken this long for the anger to begin appearing on the political and social landscape is beyond me. But it is finally here, and the central banks are feeling the heat.
As the above article continues:
Monday’s report marks the Bundesbank’s latest effort to defend the ECB and its independence amid concerns voiced by politicians that years of ultralow interest rates are hurting savers and pensioners.
The damage wrought by ZIRP/NIRP extends beyond savers and pensioners to all segments of society in the bottom 99%. This large cohort is increasingly angry, disconnected, and unwilling to simply play along any more.
The fact that the central banks are now “defending” their policy framework from any criticism that their policies have been unfair tells us that we are now at Act Two of this drama. Act One involved ignoring the problem and pretending it didn’t exist. Act Two is to defend the status quo. We’ll know we’re at Act Three when they start acknowledging that the problems are real, and that change is needed.
The current system will do all in its power to delay the arrive of Act Three because it will come with a proper and thorough shredding of central bank credibility, along with a painful downward correction in sky-high asset prices.
The problem with Act Two stage 2, for the central banks, is that their ridiculously out-of-touch defensive statements accelerate the erosion of their credibility, hence hastening the arrival of Act Three
Which is why we have a “Fed cred” problem. Our central banking high priests and priestesses have been doing their rain dance for an uncomfortably long time, and awkwardly, there’s still no rain. Regular people and the cheerleaders in the mainstream media are beginning to take notice. Look for this unease to grow; it won’t be long before you attend a cocktail party and someone pulls you aside to complain about the Federal Reserve’s policies.
The Gates Of Hell
All this matters because once faith in central banks is lost, their power to delay the deflationary day of reckoning goes with it. The stupendous amount of debt they have helped heap onto the financial system since 2008 will start going into default and the only question that will matter is: Who is going to eat the losses?
The daisy chain of bubbles in stocks, real estate and the mother of them all — the bond market — will pop, adding additional losses to the growing bloodbath.
All this will weigh on the already-sluggish growth in the economy, sending us into deep capital-R Recession, or worse.
In Part 2: Prepare For The Global Deflationary Deluge we track where the carnage is most likely to occur and which risks are most important to protect yourself against. A deflationary downdraft is an extremely scary time in the world, nothing appears safe. It’s very important to have come up with a plan to safeguard your capital and taken prudent action beforehand.
Otherwise there will be hell to pay.
Click here to read Part 2 of this report (free executive summary, enrollment required for full access)
POP!!!
I picked October 7th through 17th as the beginning of the Great Unraveling. Everyone pick a week to ten days. Daisy will send the winner a homemade pie.
Right Daisy ??? 🙂
Fine Durango,will go with Oct.8,am sure you will be the one ensuring safe delivery of said pie when things go very wrong,correct?!
WD: USPS Overnight Priority Mail. What could go wrong ??? 🙂
Remember anything written or printed on paper is an IOU Promissory Note. And can be worthless in a default.
A Precious Metal in your hand is what you want to be holding when this all crashes. Tangible Universal Wealth. Besides all your other preps and weapons to protect them.
At the BOL, The 5 Cu Ft Freezer I added is working like a champ. Only uses 75 Watts, just a blip on the solar system power.. plugged it in, and in 40 mins it was -13 below zero temp. 75 watts is less than a standard light bulb. Now I can freeze fresh vegies, meats, and make ice.. Wild game,… I may practice some trapping. The freezer just opened up another method of a food resource for wild critters. Or buying cheaper meats in bulk.
I just started building a chicken or rabbit coop haven’t decided yet. May go with the rabbits first. I am not a big egg eater. It is suggested 2 males like Californian and 3 females New Zealanders to get the rabbit herd going. Super low maintenance, will have a rabbit run with a wire top. Got to watch out for the hawks. Get off their Grid as much as possible. Transition as fast as you can. Being on the grid is like paying rent. They can jack everything up with inflation when ever they want. Don’t; get squeezed…
~WWTI…
WWTI, We have rabbits and the way I keep hawks out is to string tie wire back and forth across the top about 6 inches apart. They cannot fly in and they can not fly out so they avoid it. If you are letting them run free in a pen make sure you put their shelter in the center, they will dig tunnels and can get out. I have about a foot of fencing folded inward and covered with dirt to discourage them from trying to dig under the fence. Rabbits are super cool and they can be house trained too.
I had a house trained rabbit. Her litter box I filled with wood chips.
Genius,do not worry about tunneling out unless you see the rabbits shelter coming apart for shoring of said tunnels and them using socks and gathering around to scratch tunneled earth into play area!
The strung wire above is a trick too at the beach here to ward off birds, but they use strong fishing line to keep the seagulls from stealing food off the diner’s plates at beach restaurants. I had a seagull steal a half of a sub sandwich out of my hands at the beach when I was sitting in a chair. It flew right up from behind me and snatched it, it then fall into the sand, then it was game on, with a hundred other seagulls. lol Like WTF? Good thing I had the sandwich cut in half when I bought it, and still has the other half to eat.
~WWTI… I will put full chicken coop fencing on top, because the raccoons could slip through the wire. Lots of critters out here. All good tips.
Question ….
Cash out – hold onto cash
or
Cash out – convert to gold/silver?
Bill, Depends on how much cash you have. Try to hold on to 5-6 months of reserve cash for bills, but go with Physical 1 Oz Silver rounds, 999 pure. Pay no more than a buck over spot price. Then find a good place to bury the loot, in PVC, in bank of dirt in backyard.
But do get all your wealth out of all banks, 401K’s IRA’s, cash it out pay off all your debts, and buy Silver and Gold.
~WWTI..
1-2 foot long pvc pipe sealed and dropped into the septic tank not too heavy you want them to float so you can retrieve them. No many going to look there.
I have found that silver rounds are about .50 cents less than silver bars. Silver.com has about the cheapest shipping, orders $299 and below are $5.95 flat rate.
WhoWTFKnows: What model of freezer do you have? I’ve been looking at a few that would be good for solar.
Not if but when
When Trump wins the election!
So which first? Race war, martial law, crash?
CW
Crash the markets and close the banks. No more EBT. Then riots break out and includes racial overtones.
Government clamps down with Martial Law. Then we move to a revolution or civil war.
It is better that the banks go down first. Who do you blame. All the politicians will blame them too. But the Give me dats don’t give a shit who. Only they don’t have their keep quiet money. Then we are off to the races.
JMHO.
There’s NO coincidence, NO feigned incompetence,
it’s ALL intentional. And ‘We The People’ have
been SO dumbed-down it’s pathetic. Wage slavery
funds our very own shackled existence, with its
endless taxation, licensing, imposts, fees, ad
nauseam. Sadly, it appears we have outlived our
utility. Now just add a volatile mix of non-ass-
imilating entitlement-oriented ethnics and there
goes the USA down the drain. All according to the
puppet-masters’ plan, as selectively spoon-fed to
us daily by the network talking-heads. Y U M M Y.
Who,
I’m thinking about getting into rabbits too. Why the mixed-breed instead of going with the same breed for the bucks and the dogs?
Joe that will be very interesting. Could you post a picture when it happens?
Mountain, interesting indeed 🙂
Bad typo.
Ive been raising rabbits since I was in grade school. The ones I have today are distant off spring of the first pair of easter rabbits I got when I was Ten yers old. The ones I have now are crosses of New Zeland White ,Black and Reds and checkered giants and califorians. They Grow fast are disease resistant and don’t consume great amounts of feed. I feed corn oats sweet grain and alfalfa pellets equally mixed. I feed the adult breeders what they will clean up in a hour. In addition they have grass hay & salt minerals available at all times. The fryers are fed all they can eat.
New Zealand’s and Californians are both good meat rabbits for meat to bone ratio and feed conversion. Both breeds work well for that goal, so they are a popular cross. When I get my rabbit set up, I’m going for black, white and red New Zealands.
It gets hard to kill them. I think chickens for eggs is the way to go. Eat the rosters.
Spot on Old Guy, The New Zealands all white, and California with the brown Ears and Noses reproduce fast and put good weight on. Had some of those as pets as a kid. Looking to raise them for the meat.. Lots of great articles out there on raising rabbits.
~WWTI.. Pound for pound, opposed to like beef, rabbits bulk up fast, reproduce fast, I should never run out of meat for the pot after the first year raising them. Just one more line of food I can produce pretty cheap. Butcher and throw them in the freezer. They will probably reproduce faster than I can build the cages. lol
There was a youtub clip about two guys living in the hills of Appalachia dirt poor. A woman went up their to interview them. They had been living up there for years. Looked like the cabin of time forgot. These guys had no electric at all. They had a crank radio. They live totally free and completely unaware of their poverty. As far as they were concerned they were doing fine. It was a definite eye opener to how much of our personal freedom we’ve given up to corporations. They didn’t look to be healthy though but one man was senior in age and the younger man was probably somewhere in his 40s. Society says we have to visit doctors home remedies are not acceptable. Society says we need clothes that don’t have patches sewn over holes. If we raised our children this way state agencies would be at your door to take your children. You don’t get your kids vaccinated agency’s get involved.
Plant these trees for survival.
Lemon, apricot, walnut, almond, fig, avocado.
Your health is paramount. These trees provide the best health anti-Cancer, and nutrient value. Use the seed inside the pit of the apricot. Drink the juice of one lemon with warm water daily. Avacodos and walnuts have essential oils for brain function. Avacodos aid men’s sex organs. Figs keep the colon healthy. Almonds have magnesium, which is essential to strong bones and teeth, aids sleep, relaxation, elimination and works hand in hand with calcium. Most Americans get enough calcium but are magnesium deficient.
I have all of the above plus peach, pear, oranges, and olive. I need Apple and Brazil nut. Apple is well known for its health benefits. Like the seed of the apricot; the apple seed contains powerful anti-Cancer cyanide. Consume in limited quantities. Brazil nuts contain selenium. Eat as many as you want. Selenium activates iodine which prevents breast and ovarian and prostate and thyroid Cancers, and is generally health requirement for thinking survivalists of all stripes.
_
Here in the South, Brazil nuts are called nigger toes, even by black people.
Most of those trees won’t grow here. Walnuts and pears will. And you can’t have a garden anywhere near a walnut tree, especially black walnut. See this article: ht tp://www.extension.iastate.edu/news/2005/jul/070701.htm
The peach trees have to be poisoned constantly to get any fruit in my area.
I’ll stick with apples and pecans.
I heard you can buy those on the side of the interstate in Charlotte downtown
Oh no. I’ve been censored because I gave the southern name of Brazil nuts.
If I recall, Brazil nut trees take a darn long time to mature.
How long are you gonna be around? 🙂
Yes Archivist you will be censored for calling them nigger toes, but if you were to talk about joo joo beans you would go right to the front of the class and all the snakes will come right out of the bushes. There are a lot of joo joo bean hater on this site.
That’s terrific if you live in California; what do you recommend for Maine? Usually it doesn’t go much below minus 20F in my area, but this year the Old Farmers Almanac is predicting possible lows down to minus 40, so I’m not sure the avocado and lemon trees would really thrive…..
Even avocado tree takes like 7 years to produce fruit. I lost most all my trees in the 2004 Hurricanes in the city, Lemon tree, tangerine, most of a grape fruit tree. Avocado leaves entirely blown off that tree died. Lost about 85% of 100+ pineapple plants. It sucks trying to start over, then an occasional freeze.
Out here in the boonies, any nut trees would be picked clean by the squirrels, Same with a garden, 8 ft fence to keep the deer out. I tried blueberries, the birds ate them too. Not much meat on the squirrels here in FL. Hard to eat something, that looks hungry itself.. lol
~WWTI..
Excellent article.
Prep Tip of the Day. Going back in time at SHTFPlan.
May 1,2013
“Building Your SHTF Gunshot Survival Kit.”
By Brandon Smith.
Pull it up. Read it. Get the stuff. You may not need but have it if you do. Might need it for a family member.
With what is happening today you could have one in your place of work. Your car or BOB. So if your not going to be wearing body armor all the time. At least have something to plug you up and keep you from bleeding out.
Please read the article. It may save yours or a loved one’s life.
Yes, I have one.
Thanks for this tip. Fascinating…
B from CA… yeah in California you can grow those trees but not all of them in every state successfully. I’ve lived there, fruits and nut trees and veggies are prolific, better prices there also compared to the east coast. It is the best state to grow all that good stuff. I did read once that in the productive areas the pesticide and chemical use over decades has poisoned the ground deeply.
Alijamo:
What you said is true. California is expensive for a reason. The weather is temperate. There are only two or three days of year, usually in February, when temperatures reach freezing. It never goes below 32-33. And in the summer it’s usually around 80. Of course sometimes there will be summer hear in the 90’s. In middle CAlifornia it gets very hot. Bakersfield gets to 110 and you must have air conditioning. Northern California near Mount Hood gets snow. The home prices are lower in areas where temperatures reach extremes.
As for the chemical poisoning of soils. I don’t know a lot about it, but I am definitely a concerned citizen. If we are to survive, we must be wise about the long term effects of our actions. Organic farms and healthy lifestyles are popular, especially among the educated. Where I live there are beautiful, fit, and healthy people for the most part. It’s nice to see people taking care of themselves. You don’t see hardly any obese. I guess wearing bikinis is what motivates. But mostly it is the emphasis on health. Kale actually tastes good once you get used to it. It took me about ten years to acquire a taste for it. ?
__
B, umm, Mt. Hood is not in Northern California.
Oregon.
You meant Shasta?
He meant Shasta. Nobody is that geography challenged and reads this site. (I hope!)
I am a native Northern Californian, and proud of it. We raised our ifs in SoCal and got out ten years ago and haven’t looked back. I am disgusted by how my homeland has been turned into a political pimpage of ProgressivePlantationSlaves.
I hope and pray that ONE DAY, California can be broken up into reasonable states, instead of being controlled by the ProgressivePlantation!asters from the metro areas.
California farmland is getting pretty well ruined. The top soil runs deep, but it’s a desert. When they piped in water the farms blossomed. The water contains minerals and salts. A lot of water went up in evaporation, leaving the minerals and salts. After almost a century of wash rinse repeat, this the crap in the soil is reaching toxic levels. Heavy metals levels of chromium cadmium lead etc are so high it’s getting into the food.
It is unsustainable and our food supply is becoming toxic.
B from Ca,
I grew up in southern California and your description of the climate only applies to costal regions, the mountains, deserts, and most all the Serrias get snow not just Shasta, ever been in Weed Ca, in November? or Mt Baldy?, or in the high desert like Anza?
Your home prices are cheap compared to where I now live, the Bay area however is nuts, but there is a bubble economy supporting it.
As for the beautiful people, you must not get around much other than the beaches. The Venice and Santa Monica strand that is on all the shows, is just that, a strand. Go hang out at a grocery store in Compton, Norwalk, or San Berdo, I could go on, you’ll see some real people. I used to live in the “real” California.
With all due respect to Nailbanger I can’t stand Kale, I’ll stick to Spinach.
Native NorCal boy, and I also loathe kale. It is nasty.
I was born and raised north of Sacramento, and it gets extremely cold in the winter time especially in the valleys. The humidity makes the threat of hypothermia very real, even without the presence of snow.
In Northern California, the soil of the northern Sacramento Valley is in far better shape than our cousins in Central Valley and in Kern County. Thanks to the whores of Sacramento, they place far more value on a few hundred guesstimated Delta Smelt, than in feeding the world.
Typical ProgressiveDumbButts.
Mountain,
Yes indeed, that would be interesting. Of course I meant “doe” not “dogs.” Thanks for pointing that out to me. 🙂
I can last for years Your wants And needs aren’t the same.
I can last for years Your wants And needs aren’t the same.
Read J. Johnson’s piece on the internet surrender on Oct 1. Located on the side bar below.
I met Chris Martensen at a talk once. I wish my dick wasn’t so small.
Thats alright Cuz imposter, cause you’ve been called a big prick.
REMEMEBER: NONE of this applies to Hilary!
Legal experts such as retired Louisiana State University law professor John Baker say, “There is no one in the United States over the age of 18 who cannot be indicted for some federal crime… That is not an exaggeration.” One reason is because more than 4,500 federal laws exist. These laws crisscross 50 titles and roughly 27,000 pages of the U.S. Code. And to complicate matters, at least another 10,000 regulations from dozens of disparate federal offices and agencies carry severe and criminal punishments. Adding to this volatile mix is the established trend that government seeks to “criminalize nearly every aspect of our lives,” says The Heritage Foundation.
For Example: You Could Go To Prison for Five Years By Making a Clerical Error
Here’s how: A Heritage report states, “The Pipeline and Hazardous Materials Administration (PHMSA), an agency within the Transportation Department, recently proposed a regulation that would make filing duplicate applications to transport fireworks a crime punishable by up to five years’ imprisonment.”
In other words, if you’re overly cautious and submit more than one application, you could go to federal prison. And we’re not talking here about nuclear material, hazardous waste, or toxic chemicals. We’re talking about firecrackers and bottle rockets used by patriotic Americans to celebrate what’s left of our independence.
The report continues: “Why such a severe punishment for merely filing a duplicate application?” To quote PHMSA, “The submission of duplicate applications under both processes may result in confusion, slower processing, and diminished safety.”
Traditionally, we have a separation between civil and criminal law. The reason is so punishments fit the crime. Also, for a crime to exist, there ought to be criminal intent. None of these factors fits the example above, because common sense and decency by central powers have been thrown out the window.
In another example from the report, under current law, if you’re negligent and drop a banana peel on the floor, and a customer slips on it and gets injured, the customer has the right to sue for monetary damages. That’s fair. No one gets locked up in jail; it was just a mistake.
But under The Clean Water Act, simple, unintentional accidents are crimes. You can get charged with a felony and sent to prison for three years because your employees accidentally installed the wrong water filter. This happened to Mr. James Hong [United States v. James Ming Hong].
If your employee drives heavy equipment and accidentally punctures a buried petroleum pipe, and the contents spill into a waterway, you’ll have a felony on your personal record for life, and also sit in prison for six months, just as it happened to Edward Hanousek, Jr. [Edward Hanousek v. United States].
No reasonable person would expect regulations like these to be rolled back under Hilary. In fact, they’re likely to grow in both number and severity.
Civil forfeiture (as opposed to criminal forfeiture) happens when law enforcement agencies “seize property upon the mere suspicion that it may have some connection to criminal activity,” says president and general counsel of the Institute for Justice, Chip Mellor. “Under civil forfeiture, police and prosecutors can seize your car or other property, sell it and use the proceeds to fund agency budgets–all without… charging you with a crime… with civil forfeiture, owners need not be charged with a crime… to lose homes, cars, cash or other property.”
While I was in Santa Fe for a few weeks I saw a lot of police activity; local cops pulling over drivers left and right. I was surprised that I didn’t get pulled over since I had out of state plates.
I saw a really nice toyota SUV with a sign on it that read to the effect: “This vehicle use to belong to a driver convicted of DUI”.
WOW !!! 🙁
Any vehicle on the road is a potential revenue source. People being pulled over left and right gets citizens conditioned to being stopped and required to produce identification.
The markets are the last sector of our society producing any wealth. If the markets collapse the economy collapses. The markets have become too big to fail.
Until a crash is the desired outcome, the FED and Treasury simply won’t let it happen, they can flood the markets with puts and calls to make it go wherever they want.
For them to lose control will take a significant event. Hurricanes, volcanos, earthquakes, even a regional war in the Middle East can’t seem to move the markets.
Yup, been reading (along with most here), that it’s coming. And like a lot of Christmas’s has come and gone. We’ll be reading the same articles here if the internet allows it, ten years from now. If however a gun confiscation event materializes, all bets are off and I’ll meet up with some of you in the “sweet by and by”.
I’ve been investing for a couple decades. It was easy to make money in the 90’s with the Tech bubble. It made us all feel soo smart! Find the next hot idea and throw money at it.
I saw it coming and got out when the bubble popped. The markets changed, they went back to a boom bust cyclic market. If you could anticipate the cycles that followed standard historical patterns and pick stocks with good fundamentals, you could keep making money.
I saw the 2008 crash unfolding and got out with minimal losses. I got back in very near the bottom and did well, by finding stocks that were over beaten, but had solid finances.
Now we entered the years of direct government manipulation. The markets became too big to fail. I picked stocks because they politically supported Obama’s communist regime, had reasonable fundamentals and appeared to be on the list of stocks the government was actively manipulating upward.
Now I’m out of those stocks because the Obama regime is at an end (hopefully). I can’t be sure of what will happen when the next president takes over.
If Trump gets in and sees there is massive illegal market manipulation underway, what will he do? Continue the criminal activity, taper it off trying to ween the markets off, or pull the plug on the whole criminal enterprise. None of the above is without massive risk. Even just the uncertainty of what Trump might do, might trigger a market crash. If Obama bots in the government see Trump has won, will they between Election Day and inauguration, continue to illegally manipulate the markets, or rather distance themselves from potential prosecution?
Uncertainty is the word of the day.
I do agree with the author in that “we no longer have a financial system where legitimate price discovery is a regular,” and that fundamentals do not seem to be in alignment with prices. Additionally it is just a matter of when the economy will have to correct itself into a new territory. This goes beyond just a market correction. The entire economic and market system will be forced to reconfigure into a new realm of equilibrium that has not been seen before due to market fallacies historically being constructed as market efficiencies. Like Martenson said “[he is] still not able to predict whether we’re a week away from this or five years.” I feel the same. I am unsure if this will occur very soon or 10 plus years out. Knowing the intertwinement of systems I would say a new equilibrium should manifest itself within the next 5 to 10 years in phases.
Yup!
nope!
Anyone know anything bout this?
DK. What’s up with this?
h ttps://www.youtube.com/watch?v=bFbxOzU6O78
Kevin,doubt global currency release but if so,same as any other disaster hitting the country/globe,act accordingly and best of luck to you and all others!
Kevin2
Well it is getting close to, “Show Time”.
All these agreements made behind closed doors. Exec. Orders by the jerk in the white house. Positioning of military hardware and war games.
Has me a bit agitated. But I would not put it past them to do it.
Desperation is in the air.
It seems more likely that this will occur in measured stages. I have been hearing, “The sky is falling”, for 8 years while I have been witnessing kicking the can, quite successfully down the road, in the same timeframe.
You are surprised that Wall Street hands out huge bonuses ???
Shucks. I have been telling SHTF precisely how Wall Street is embezzling $3-6 billion DAILY for the past three years. They have to do something to get rid of the money and keep their secret hidden. Ref. http://www.scribd.com/doc/48194264/rip-off-by-the-Federal-Reserve-revised.
I pick 7-17 YEARS !!
The Federal Reserve must keep equity/bond value up because that is where the .01% has their store of wealth.
But the GDP (reflected in P/E of stock/bond value) is an indication of commodities purchased by the middle class.
But the middle class of the US is being destroyed by Wall Street.
And we see the snake eating its tail.
The Fed has been “stimulat(ing) the world economy” you say.
Isn’t than an euphemism for Wall Street rescuing European banks (under threat of law suit for fraud ?) who had purchased (misrepresented ?) Wall Street bonds ?