AMERICA IS ON THE VERGE OF A BREAKDOWN

Report by Bill Bonner, author of New York Times best-sellers (Empire of Debt, Financial Reckoning Day, Mobs, Markets and Messiahs) and now his latest book (When The ATMS Go Dark).

A meeting with Greenspan (centre), myself, Bill Bonner (left from centre), and other experts at my office

In Baltimore, the stadium loudspeakers sounded again: “Ladies and gentleman, due to an ongoing public safety issue, the mayor of Baltimore and the Baltimore County Police Department have asked all fans to remain inside the ballpark until further notice.”

Then silence… Except for a distant white noise… the sound of an enraged mob tearing through stores, police, and bystanders…just outside the stadium walls.

Something had gone terribly wrong in the city that night…

Image result for picture of riots on the streets of Baltimore

By that time, the cell networks had started to go down.

In New York City, a man wearing a red Make America Great Again hat was choked on the subway as fellow passengers did nothing to help.

In Chicago, a 50-year-old man was dragged from his car and beaten. Instead of helping, onlookers accused him of voting for the wrong political candidate.

In Washington, a young woman who showed up to support the new president had her hair set on fire by “black bloc” radical leftist protesters.

In Berkeley, California, a Patriots Day rally turned into a battle for the streets between black-clad anarchists and a right-wing militia group.

A website by the anarchist group “black bloc” (the same ones who smashed windows, threw Molotov cocktails at police, and set Berkeley on fire) asks for donations to “send reports to uprisings and rebellions in so-called North America.”

Another “resistance movement” lists 5,983 local cells spread across the country – and they’re not just confined to the coasts, either, as you can see… The red dots are for upcoming “actions”, the blue dots are locations of the cells.

Now, we’ve had unrest before in this country. Many times.

During Holy Week 1968, the assassination of Martin Luther King, Jr., set off riots across the country.

In 1991, the Rodney King riots resulted in 1 billion dollars’ worth of damage, 50 deaths, and a vicious attack on an innocent truck driver.

But this is different. There is an anger brewing here. One I have never seen in my lifetime.

We have protesters caught on camera saying: “people have to die”…

Meanwhile, protected elites like Maxine Waters and Chelsea Clinton, safe in their million-dollar homes, egg the crowds on…

As of writing this, I count at least seven mass political actions scheduled in the next few months alone. Which of these will explode into a riot, I don’t know. Hopefully none will.

But a recent conversation among members of an extreme resistance group on the social media site Reddit shows an alarming trend…

Here’s a sampling of what they said:

  • “I honestly think we need a campaign to get more [of us] armed.”
  • “A shocking number of comrades went in there with absolutely no combat training.”
  • “We need more than flags and bats. […] I know getting firearms in states and cities we have a presence is usually a hassle, but even handguns would help.”

Is it any wonder then, that these same groups are setting universities on fire, while students who refuse to go along with the crowd are threatened with violence?

And it’s not just happening in “dangerous” cities like Baltimore and Chicago. Violent crime is now rising in places like Denver, Salt Lake City, and Louisville. In the small town of Tiburon, California, a 74-year-old conservative radio host and his 12-year-old dog were assaulted and knocked to the ground while out grabbing a bite to eat. In Ohio, another 74-year-old man was murdered live on Facebook, as he walked home from Easter lunch, young kids are putting police officers in the hospital. People are broadcasting racist attacks and murders live on Facebook.

And here’s the thing…

I think what we’re seeing here is merely Act One

As the magazine Foreign Policy recently explained:

“There appears to be…a sense that these are not just scattered outbursts, that all this is escalating somewhere.”

What it’s all escalating to…the magazine’s editors aren’t so sure.

In this report, I’m going to tell you what’s really causing this unrest…

…and why it’s leading to a disturbing conclusion…sooner than anyone expected.

  • I see nearly half the population paying no taxes and dependent on aid from the federal government,
  • I see more Americans are dying of drug overdoses than ever before and suicides just hit a 30-year high.
  • I see a majority of Americans favouring wealth redistribution and higher taxes…which is probably why a Congress full of Republicans is unwilling to guard the rest of us against these things.
  • And I see the increasingly vocal and even violent opposition to traditional American values in our streets.

Sadly, Bonner like John Adams has got it wrong by thinking that the root cause is economic mismanagement alone.

John Adams said at the Constitutional Convention of 1787:

All the perplexities, confusion and distress in America arise not from defects in the Constitution or Confederation, not from a want of honour or virtue so much as from downright ignorance of the nature of coin, credit and circulation.”

Universities espousing a godless worldview, based on a totally false evolutionary theory of origins, has produced a younger generation that has no fear of their Creator God, nor respect for His values.

If there is no purpose or meaning in life, then what else would you expect but a ME generation of self centred, self serving young people prepared to do whatever it take to wrest control from the previous largely corrupt generation that has racked up debt that is unsustainable by providing services that cannot be maintained. This is the recipe for disaster that we see being played out. Moreover, this “end times” scenario is prophesied in the Bible, the book our Creator provided for us.

As I have pointed out in two recent posts, the reestablishment of the State of Israel back in 1948 (and its miraculous ( Six day War) retaking control of Jerusalem in 1967) is the first and major sign Jesus gave of His second coming, His return to earth at the place He left it, a little over two thousand years ago.

The Bible provides more prophecies of His second coming than His first. All of those were fulfilled, so you can be sure those of His second coming will be as well. Are you prepared for His second coming? Is your church prepared for His second coming? The Bible tells us there will be a great falling away in the “last days”. Even the elect deceived. As persecution intensifies, and it will if you take a stand against abortion,  gay marriage and transgender issues, will you stand firm. Sadly, much of the church has already given up on Biblical inerrancy particularly on issues such as Creation, adopting evolution, homosexuality, gay marriage and the related issues of God given roles for male and females in the family and church.

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.

 

A World in Crisis with No Way Out.

In March this year some of the world’s biggest financial thinkers gathered in Melbourne for a two-day investment summit entitled WORLD WAR D – Money, War & Survival in the Digital Age. Below is an abbreviated report on the outcome of the conference by one of the conference organizers. It would be humorous except it is factual and reveals a world in crisis. “NO WAY OUT” was the rather sobering conclusion to Satyajit Das’ 90 minute presentation at the World War D conference. Das was dressed for the occasion, wearing all black. And it was a fitting conclusion given he spent the entire presentation explaining exactly why the exits are closed. In a word, it’s because of debt. There is simply too much of it, and we’re trying to create more of it in the belief that it’s some kind of solution. No wonder Das thinks there’s no way out; we’re trying to exit through the roofWhat about going the other way? Back down the stairs and out the front door? That’s not likely. The way Das tells it, downstairs is completely flooded. Or as he put it:The low rates, mispricing of risk and excessive debt levels that were the causes of the crisis are now considered the ‘solution’. Ultimately, the policies being used to manage the crisis punish frugality and thrift, instead rewarding borrowing, profligacy, excess and waste. A new study from Princeton and Northwestern Universities concluded that the US government represents not the interests of the majority of citizens but those of the rich and powerful. ‘The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while mass-based interest groups and average citizens have little or no independent influence,” says the peer-reviewed study.  Yes, dear reader, the elite run things.  That’s why we have QE (quantitative easing), for example. The banking cartel is perhaps the most powerful group in America. Its oligarchs want to make a profit. How better to do so than to lend themselves money for practically zero interest…then use that money to lend to Washington at a higher rate?  Everybody wins, right? Washington gets the cheap funding it needs to continue handing out billion-dollar contracts for things we don’t need…and banks earn a fat margin on the newly created money. Hey, and maybe the ‘wealth effect’ will drip a few shekels onto the poor schmucks who still think their votes decide things.   ‘Last week’s budget debate showed how little difference there lies between the parties when it comes to preserving the warfare-welfare state. One side may prefer more warfare while the other prefers more welfare, but neither side actually wants to significantly reduce the size and scope of government. Now we know: There is nothing ‘wrong’ in Washington. There is nothing we can fix. No one is making a mistake. This is just the way government operates: It rewards the people who control it…and punishes everyone else.

Whilst this report refers mainly to the US Economic Crisis, the Conference presenters stated the European situation is no better and in fact worse because the levels of unemployment are much higher particularly below the age of twenty five; countries such as Spain and Italy over fifty percent are unemployed. A level at which anarchy is imminent.

The Bible predicts events such as these in the end times. A time when Christians will have unprecedented opportunities to present the GOOD NEWS and that the King is returning to put things right. At that time every knee will bow and every tongue confess that JESUS CHRIST is Lord regardless of whether they want to or not.