MAJOR GLOBAL FINANCIAL CRISIS IMMINENT

Ten indicators that the next major global economic crisis is imminent. The mainstream media in the United States almost entirely ignores Europe, but what is going on over there is key right now.

  1. The 9th largest economy in the world, Italy, is in the midst of yet another financial meltdown. Italian banking stocks crashed really hard this week. Italian two year bond yields are the highest that they have been since the crisis of 2014. In fact, there are fears that it could spread to other areas of the euro zone. Europe could barely handle what happened in Greece, and the Italian economy is many times its size.Deutsche Bank share price graphic
  2. German banking giant Deutsche Bank just announced that it will be cutting another 7,000 jobs as it “seeks to turn the page on years of losses”.  Many are amazed that it has survived for this long.  If Deutsche Bank fails in 2018, it will essentially be a “Lehman Brothers moment for the entire planet.
  3. In the US, the “smart money” is getting out of stocks at a rate that we haven’t seen since just before the financial crisis of 2008.
  4. Moody’s is warning that a “particularly large wave” of junk bond defaults is coming.  Junk bond defaults are often an early warning indicator for a major financial crisis.
  5. According to the FDIC, a closely watched category known as “assets of problem banks” more than tripled during the first quarter of 2018.  What that means is that some really big banks are now officially in “problem” territory.
  6. U.S. Treasury bonds are having the worst start to a year since the Great Depression.
  7. Mortgage interest rates in the US just hit a 7 year high, and they have been rising at the fastest pace in nearly 50 years.  This is going to be absolutely crippling for the real estate and housing industries.
  8. US retail industry debt defaults have hit a record high in 2018.
  9. The US is on pace for the worst year for retail store closings ever.
  10. The two largest economies on the entire globe are on the verge of starting an international trade war.

Once things start unravelling in Europe, the US will be deeply affected as well.  The global financial system is more interconnected than ever before, and at this point the US is even more vulnerable than it was just prior to the crisis of 2008.

When this thing breaks loose, it won’t matter who is in the White House, who is in Congress or who is running the Federal Reserve, there is nothing that anyone will be able to do to stop it.

Global central banks have been able to buy a few extra years of time by engaging in unprecedented levels of intervention, but now they are almost out of ammunition and events are beginning to escalate at a very frightening pace.

Church will need to be like in the Book of Acts where believers shared their resources with those in need. Be prepared, get out of debt, and make sure you have readily available reserves.

 

END TIMES SIGN – ECONOMIC COLLAPSE

A “LAST DAYS” PROPHETIC EVENT IS UPON US AS ECONOMISTS REALISE THE WORLD’S DEBT IS BEYOND RECOVERY. THE WORLD HAS NEVER BEEN AS INDEBTED AS IT IS RIGHT NOW.

 

In the month of October, 2017 alone, the US national debt has soared by nearly a quarter of a trillion dollars.

The government of the largest, most important economy in the world is completely, woefully bankrupt. And its rate of decline is accelerating.

You’d think this would be on the front page of every major newspaper in the world. But it’s not. It’s shrugged off as par for the course, as if accumulating historic levels of debt is somehow consequence-free. And this complacency is what I find the MOST bizarre. Consider the following: the US government spends nearly the ENTIRETY of its tax revenue on Social Security, Medicare, and Interest on the Debt. Throw in national defence spending and the budget deficit is already hundreds of billions of dollars.

The only realistic way out is for the US government to eventually capitulate… and default. 

This could mean selectively defaulting on holders of US debt (for example– the Chinese, Japanese, Federal Reserve, Social Security Trust Fund, etc.);  one day Uncle Sam simply stops paying.

Or it could mean defaulting on promises made to citizens, like providing a strong national defense, maintaining a stable currency, or paying out Social Security benefits as advertised.

Each of these scenarios has its own particular consequences, ranging from steep inflation to a full-blown global financial crisis.

Bottom line, there is no possible rosy scenario here for the USA and Europe is in a worse debt crisis.  As the global economy is interrelated, if major trading blocks like the Eurozone or countries like the US or China go into recession, it’s likely to affect economic growth around the world.

Sadly, as Jesus prophesied  in the last days there would be a great falling away in the church, even the elect being deceived. This is most evident in the denominational church which is compromising with the world on issues such as gay marriage, homosexual leaders in the church, evolution and billions of years.

Make sure you are in a Bible believing church that understands we are in the “last days” and is equipping the Saints to bring in the harvest. As the world gets darker our light will shine brighter. Our joy and hope in the Lord will be evident and the power of God on display with healing and miracles following. Live eternal NOW.

“END TIMES” SIGN – ECONOMIC COLLAPSE

The only other times in U.S. history when stock prices have been this high relative to earnings, a horrifying stock market crash has always followed.  Will things be different for us this time?  We shall see, but without a doubt this is what a pre-crash market looks like.  This current bubble has been based on irrational euphoria that has been fuelled by relentless central bank intervention, but now global central banks are removing the artificial life support in unison.  Meanwhile, the real economy continues to stumble along very unevenly.  This is the longest that the U.S. has ever gone without a year in which the economy grew by at least 3 percent, and many believe that the next recession is very close.  Stock prices cannot stay completely disconnected from economic reality forever, and once the bubble bursts the pain is going to be unlike anything that we have ever seen before.

If you think that these ridiculously absurd stock prices are sustainable, there is something that I would like for you to consider.  The only times in our history when the cyclically-adjusted return on stocks has been lower, a nightmarish stock market crash happened soon thereafter

The Nobel-Laureate, Robert Shiller, developed the cyclically-adjusted price/earnings ratio, the so-called CAPE, to assess whether stocks are likely to be over- or under-valued. It is possible to invert this measure to obtain a cyclically-adjusted earnings yield which allows one to measure prospective real returns. If one does this, the answer for the US is that the cyclically-adjusted return is now down to 3.4 percent. The only times it has been lower were in 1929 and between 1997 and 2001, the two biggest stock market bubbles since 1880. We know now what happened then. Is it going to be different this time?  This insane bubble has been almost entirely fuelled by central bank manipulation, and now that manipulation is being dramatically scaled back. And the guys on Wall Street know what is coming. 

This bubble has lasted for much longer than it ever should have, and everyone understands that a day of reckoning is coming.

In case you don’t remember, in 1987 we witnessed the largest one day percentage decline in U.S. stock market history.

When it finally happens, millions upon millions of ordinary Americans will be completely shocked, but most insiders know that the other shoe is going to drop at some point.

In particular, watch financial stock prices very closely.  Last month, Richard Bove issued a chilling warning about bank stocks…

The Vertical Group’s, Richard Bove warns that the overall market is just as dangerous as the late 1990s, and he cites momentum — not fundamentals — as what’s driving bank stocks to all-time highs.

“If we don’t get some event in the economy or in politics or in somewhere that is going to create more loan volume and better margins for the banks, then yes, they would come crashing down,” Bove said Monday on CNBC’s “Trading Nation.” “I think that the risk in these stocks is very high at the present time.”

It isn’t going to take much to set off an unstoppable chain of events.  Our financial markets are even more vulnerable than they were in 2008, and the right trigger could unleash a crisis unlike anything we have ever seen in modern American history.

extracted from article by  Michael Snyder, a Republican candidate for Congress in Idaho’s First Congressional District,

 

Could this be the END OF AUSTRALIA as we know it?

The End of Australia

Well, Vern Gowdie of Port Phillip Publishing thinks so. Port Philip Publishing was established in 2005 as the Australian outpost of US publisher, Agora Inc. Agora was founded over 25 years ago by best-selling author and entrepreneur Bill Bonner, and is one of the world’s most successful publishers of financial, health and travel newsletters.

Vern’s book THE END of AUSTRALIA is currently available FREE from Port Philip Publishing to subscribers of one of their Financial Services.

Vern firmly believes Australia is headed for the greatest collapse since The Great Depression.

Remarkably the exact week that THE END OF AUSTRALIA was released the great market reversal predicted in the book began. And it has continued just as Vern predicted with the selling led by the banks.

Not even the new Prime Minister could stop the fall. The ASX 200 index closed another 78 points, or 1.5% down. The average Australian share portfolio is now 16% lower than it was just five months ago.

Vern says that is just the beginning. “Far, far greater losses are to follow for investors who fail to take evasive action now.” He says, it won’t happen in a straight line as the Central Banks will do their utmost to stop it. The financial industry will deny it to the end. American stocks are rallying as I write this post and Australian stocks may follow tomorrow but the crash is inevitable says Vern and I agree with him.

As Christians we understand that almost everything is being shaken and at risk – the economic, environmental and social fabric of society is deteriorating. God has called us to be part of the solution for this time! We need to be like the men of Issachar who understood the times and seek God’s YES for our personal and working life.

 

 

‘Overdoing It’ All the Way to Hell

Carnival Rio

by Bill Bonner in Sao Paulo, Brazil

Best selling investment author Bill Bonner is the founder of Agora Publishing, one of the world’s most successful consumer newsletter companies. Today’s article  in Daily Reckoning says a lot about where the world is heading.

Buttocks must be subject to the same law of declining marginal utility as everything else, we concluded, just after midnight. There must have been 10,000 of them, sweating, shaking, quivering, and vibrating in the Sambadrome last night.

The costumes were over-the-top, unrestrained, immodest as you might imagine. The idea seemed to be to put on as many sequins and as many feathers as possible. Then, amid the gaud and glitz of the get-up, typically, the rear end was left open, to reveal the shimmering cheeks.

As we made our way to the Sambadrome, we began to suspect that this was not going to be just like any other night out. Crowds filled the streets and pavements all over town. One young man was retching on the curb. A young woman had passed out; her friends were slapping her to try to get her back to consciousness. A little further, another man was being loaded onto a stretcher, ailment unknown. And on a back street outside the stadium, two women had gotten into a fight, cause likewise unknown.

Carnival in Rio: the whole city has let its hair down.

We were in the elite section of the Sambadrome. Our fellow spectators looked a bit like the crowd you’d find at one of Baltimore’s slick eateries in Cambden; young, professional, good looking. The men looked like they might be stockbrokers during the week. The women might have been models. Sleek, attractive… some trophies, many still competing.

Scarcely had we arrived when the music began. We missed the bombing of Dresden and the collapse of the World Trade Centers, but it’s hard to imagine that the decibel level was much higher.

Meanwhile, waiters circulated with trays of drinks. They were determined to give you one, whether you wanted it or not. The idea seemed to be to increase the noise and inebriation level throughout the night; no one should wake the next day without thinking he had a good time the night before. Everyone would have the pounding head to prove it!

The music was so loud our ear drums almost popped. The drummers pounded out an unrelenting rhythm without missing a beat or granting a moment of tranquillity. One after the other they came in groups of 50…100…10,000…

The parade took a long time to reach us. And then…wowee!

Baffling, outrageous and over-the-top, maybe Carnival isn’t as far from finance as I thought.

Readers are still puzzled — as we are — by how the modern money system works and what it means. One reader managed to put his finger on it:

So let me see if I understand this! First the feds removed any real-money restrictions on their spending by voiding the convertibility of dollars to gold AND now they have removed any free market restrictions on spending (and selling debt) through an insidious process of selling their debt to themselves. They have shifted the paradigm without telling anyone. I guess their message is: if you can’t figure it out for yourself that’s too bad?

Yes, that’s right. There is no longer any obvious, effective limit on the amount of ‘money’ the central bank can create or ‘lend’ to the government.

We put those key words in quotation marks, simply to indicate that it would take whole volumes to understand what they actually mean.

There, of course, is the problem. The system is so novel and so nuanced that nobody really knows what is going on, least of all the people who claim they have it under control.

Yes, it’s a funny old world. Among the funniest things about it, circa 2015, is that the smarter you are, the harder it is to understand our money system. Martin Wolf, Paul Krugman, Joseph Stiglitz, Larry Summers — ‘brilliant’ men, we are told, every one of them — don’t have a clue. They are victims of their own brainpower, confident that they can figure it out as they go along, adjusting monetary policy to the needs of the moment.

Is that the way it works, dear reader? Can you just make it up as you go along, reacting first to one event, then to another?

We don’t think so. What happens is that one conceit leads to another. You are like Napoleon on his way to Moscow, Gideon Gono on his way to hyperinflation, or a wayward husband on his way to a noonday tryst. One decision seems pardonable, under the circumstances. Then, the circumstances trap you. You would prefer that it were different. You’d like to back up. You’d like to take a different course. But it is too late. ‘Under the circumstances’ you do what you have to do. Then, finally, you find yourself in Hell. You’ve overdone it.

Bill’s report shows a world out of control. A world that has rejected God and His rule. A world under judgment.

 

What’s ahead for us all in 2015.

Vern Gowdie of the “The Daily Reckoning” produced by Port Phillip Publishing (Financial News and Analysis Publications) wrote this article today “Its an Upside Down World”. He certainly tells it like it is and paints a bleak future, no a catastrophic future ahead.

Vern Gowdie The Daily Reckoning

A man secure in his faith need not fear the words of a blasphemer. A fanatic must hide from the truth wherever he suspects it.’  Author unknown

The US markets may have risen overnight but the world is very much poorer for the events that have occurred in Paris.

Slaying 12 people because they had the ‘temerity’ to express an opinion is barbaric. Freedom of expression and the sharing of opinions (whether you agree or disagree with them) is what gives rise to a richer society. One that is rich in knowledge, tolerance and ideas.

Using fear and intimidation to stifle the robust exchange of views has the capacity to make our society more insular. It is our hope that the brutal and cruel actions of a tiny minority do not succeed in this objective. Sadly, I think people will, at least in the near term, be more guarded in their views for fear of becoming the next victim.

Our thoughts and prayers are with the families and loved ones of the victims of this senseless atrocity. We stand with you and with the ideals of free expression— whatever that expression may be— that the journalists and cartoonists of Charlie Hebdo fought and died for.

At The Daily Reckoning, we will not succumb to fear…and promise to continue bringing you our uncensored views, from business and finance to geopolitical events.

The opening quote, by the way, was sent to me by Bernd Struben, the DR’s Managing Editor. It’s from a newspaper cut-out his mother kept tacked to the family refrigerator when he was growing up. It makes you wish more people were secure in their faith. And it tells you the three cowardly terrorists in Paris are riddled with doubts about their own fanatical dogma.

Now let’s move on from these events to something closer to home.

Maybe I’ve become a grumpy old man, but the world makes less sense to me these days.

People pay good money and endure pain to permanently disfigure themselves by putting indelible ink all over their bodies. Then, some pay even more good money and endure even more pain to have the ink (partially) removed.

People with no other talent other than blatant self-promotion make millions from narcissism. What does it say about society that these people attract an audience?

People turn a baseball cap backwards, mumble into a microphone and get paid millions for pumping out (c)rap. Reality TV creates instant fame for the most obnoxious people.

Some people have no shame or manners for that matter, yet society puts them front and centre, on magazines, TV promos etc., and the crowd goes wild. What sort of message are we sending?

Political leaders who dare mention the concept of living within our means and paying down debt see their approval ratings plummet to a level that’s on a par with Ivan Milat.

I don’t get it.

The world is being dumbed down in oh-so-many ways. Experienced teachers are voicing concern over the watering down of curriculum content, not to mention the lack of respect and discipline from a growing percentage of the student body.

A dumb society makes dumb choices and accepts dumb decisions.

Perhaps this explains why the financial world no longer makes sense to me.

A 22 year old invents a virtual reality headset that enables people to play more realistic games and Facebook pays him US$2.8 billion for it. What’s the going rate for the cure for Alzheimer’s?

Twitter (a narcissist’s must-have) is valued at US$23 billion. I wouldn’t give you a hundred bucks for it. I’ve never used it and my life is none the poorer for not knowing what self-absorbed people are doing every minute of the day.

My grumpy old man rant could go on — Uber, Facebook, Alibaba. Sure these companies have a value, but not the stratospheric ones that are currently — and I stress, currently — applied to them.

This is the upside down, valueless society we currently — and again I stress, currently — live in.

There’s a scene in Remember the Titans where Gerry Bertier (the white captain of the football team) accuses Julius Campbell (one of the African American players) of having a bad attitude. Campbell replies, ‘Attitude reflects leadership, captain.’

And so it is with the attitude of today’s society.

For forty years, the Western world lived beyond its means, borrowing to fund a lifestyle we had not earned. The GFC was the moment when the natural order of the universe had had enough.

Instead of heeding this call, our leaders put on earmuffs, hummed loudly and continued on as if nothing had happen.

Were those responsible for bringing the financial system to its knees held accountable? Hell no, they were given trillions to recapitalise and go back to business as usual (and along the way pay the token billion or three in fines from the multi-billion dollar profits they’ve been making).

Politicians continue to think money grows on trees (and to a large degree, the central bankers confirm it) and go on making promises that in the longer term cannot be met.

Japanese PM Shinzo Abe is the pin-up boy for spendthrift politicians. Abe-san knows no bounds on how to conjure up money to pay for mounting interest, welfare, health and energy costs. Given the lacklustre turnout at the recent Japanese elections, my guess is most Japanese realise they are damned if they do and damned if they don’t. So what the heck? — let Abe write his name in the ‘Catastrophic Disasters’ chapter of the economic history books.

Then we come to the leadership of our central bankers. These folks have enough letters after their names that you’d think they’d know better. Unfortunately, none of those letters spell c-o-m-m-o-n s-e-n-s-e.

Central bankers, in their effort to keep in play an economic model well past it use-by date, have turned the world of asset values upside down. Economic growth derived from wanton, credit funded spending is not sustainable.

In our upside down investment world, Japanese 10-year bonds are paying a measly 0.3% while Japan’s inflation rate is averaging around 1.5%. The Bank of Japan’s (BoJ) ability to print an unlimited amount of yen to finance Abe’s grand plans has completely distorted the bond market. Is this phenomenon permanent or temporary?

Likewise, we see the US share markets (S&P 500 and Dow Jones) soar to record highs during the most anaemic economic recovery since WWII. The wind beneath the market’s wings has been the Fed’s provision of plenty of cheap dollars to Wall Street. This is why multi-billion dollar valuations can be placed on tech companies that offer questionable value to society.

The following extremes in long term valuation metrics indicate how far from the norm we have strayed.

Valuation metric Current Historical Mean Year historical Mean measured from Deviation from Mean
Shiller PE 10 27.2x 16.6x 1870 +64%
Market Cap/GDP (the Buffett Index) 123% 69% 1950 +78%
Tobin Q Ratio 1.14 0.68 1900 +68%

The average deviation from mean is 70%. This is in the seriously over-valued territory where only the rarest and most infamous of markets have ventured — 1929, 2000 and 2007.

We may currently live in an upside down world, but the laws of mathematics remain the same — reversion to the mean is tried and true. The euphoria of ’29, ’00, and ’08 was short lived; the stratospheric prices soon returned to earth with a resounding thud.

The dumbing down of society has enabled our political and financial leaders to carry out this fraud in broad daylight. Mainstream economists not only endorse but actually encourage these hare-brained stimulus strategies.

Far too many people have little idea what is actually going on. So long as they can continue to buy tattoos, watch reality TV, play mindless computer games and listen to (c)rap while enjoying free health coverage and collecting welfare then all is okay with the world and woe betide anyone who wants to turn the world right side up.

Well folks, a reversion to the mean is coming, and when it does, the world is going be far meaner to a lot of people.

My gut feeling is the corrective activity the universe has destined for us will be of such a magnitude that it will change society for generations to come.

And when it does, this grumpy old man will be a lot happier.

Financial Crisis Inevitable – going to end badly say the experts

If this dialogue between two well known and respected financial experts doesn’t convince you we are in the Biblical end times nothing will.

Chris Martenson of Peak Prosperity interviews John Rubino author of two best sellers “The Crash of the Dollar” and “The Money Bubble”.

You need to listen to these two experts because they know that whilst the 2008 Economic Crisis was bad, the next one is going to be humungous. Why, because governments have allowed those that created the problem which was ‘out of control debt’ to try and fix it with more debt. People who should have been jailed are still there creating another big debt bubble which is then fixed with more debt. We see the smart architects of the problem get out and sound the warning of impending disaster. They caused the problem but now want to be seen as the voice of sanity. People like Greenspan write best selling books and still earn a fortune on the author circuit.

It can only end badly says John Rubino. “Debt is growing beyond all reason, it is going to end badly, it is beyond our control”.

Governments are already preparing for civil unrest and domestic terrorism. During the 2008 crisis the government was days away from instituting martial law. Well, the debt situation is exponentially larger with no fix possible because the complexity of the deregulated financial markets is such that even the experts can’t predict what will happen, let alone governments. They will have difficulty working out what happened and who was responsible even after the collapse. Listen to some of the descriptions: “Moral corruption in governments”, “Financial markets devolving into a branch of the Mafia”, “Sound money is a moral issue”, “Need to impose financial morality on governments”.

John Rubino suggests a good solution for each of us at the end of the interview. Get together with your local community and start preparing now for the inevitable.

As Christians we know what is coming and we know the ultimate solution – Jesus ruling and reigning on this earth. In the meantime we should be doing what He taught us to pray for “Your Kingdom come, Your will be done on earth as it is in heaven”. Let us play our part in bringing His Kingdom to bear in our sphere of influence. Let our church and our families be examples of what His Kingdom looks like.