FINANCIAL RESET INEVITABLE

How many of you read my post “Covid 19 Coupled with a Major Debt Crisis – What’s Next?” dated June 15th 2020? I thought this to be one of my most important posts for 2020. If you have not read it, can I suggest that you do.

In that post some of the best qualified economic/political pundits gave their views on the likely outcome of Covid 19 coupled with the existing debt crisis of most countries. Debt levels are so great that even with interest rates barely above zero, countries cannot pay down the debt. It also means their currencies are next to worthless.

A FINANCIAL RESET IS INEVITABLE WAS THEIR CONCLUSION

In Australia debt is rising fast. No government can stop the inevitable financial crash.

As you would expect, the combination of failing revenue and runaway spending has resulted in a boost to government debt with total government liabilities at $1.3 trillion by the end of May – $300 billion higher than expected.

Net debt has hit a record $463.7 billion compared to $373.6 billion in the previous financial year, virtually destroying the Morrison Government’s stated aim of clearing all government debt by the end of the decade.

The Finance Department numbers are sobering but few are arguing that the Federal Government has been spending too much – indeed much of the economic commentary is urging them to ramp up spending now that interest rates have effectively reached their lower limit and the economy still needs stimulus.

The key to how the Federal Government will react to such calls will be announced by Treasurer Frydenberg in an economic update in late July, with the 2020-21 budget now due to be released in early October.

This is all part of God’s end times scenario. If your trust is in governments, yourself, or anything other than God then it is misplaced. Only He can give you true peace, the peace that comes from realising that He is in control, He has revealed the truth about the world and us in His Word (BIBLE) and we know the end of the story. Jesus will return first to rapture His church and then to rule and reign 1000 years from Jerusalem.

“For the Lord himself will descend from heaven with a cry of command, with the voice of an archangel, and with the sound of the trumpet of God. And the dead in Christ will rise first. Then we who are alive, who are left, will be caught up together with them in the clouds to meet the Lord in the air, and so we will always be with the Lord.” 1 Thessalonians 4:16-17
“when the Lord Jesus is revealed from heaven with his mighty angels in flaming fire, inflicting vengeance on those who do not know God and on those who do not obey the gospel of our Lord Jesus… when he comes on that day to be glorified in his saints, and to be marvelled at among all who have believed, because our testimony to you was believed.” 2 Thessalonians 1:7-10

STOCK MARKET MADNESS

Chart of the Large-cap US Technology Companies. Why is it up 36% in the last two months?

qqq

Christian DeHaemer is the founder of Bull and Bust Report and an editor at Energy and Capital. Christian says he has no idea. As he explains, rational thoughts no longer apply. There was a time when creating money out of thin air was bad, much less creating $6 trillion or 25% of GDP.  

There was a time when 30 million unemployed was bad. One might think a new cold war with your largest trading partner, China, might be bad for stocks. Not to mention, a hundred thousand new dead bodies packing the morgues. But no, it appears that these things are good for stocks. Our thinking has been all wrong. It seems we need more broken stuff and more money printing. Forgive all the student debt. Bailout the universities. Give $2,000 a month to all the folks. A trillion for the airlines –– billions for Ford, Hudson, and Studebaker –– more for Carnival Cruise Lines and Blackrock. Bailout Chicago, Detroit, and West Cucamonga. Heck, all those municipal employees are good hard-working people. People like money and the Fed can just print it! Let’s give the people what they want. It will be fine… 

Christian is right rational thought no longer applies and commonsense tells you the outcome can’t be good. More government control is certain and no longer is the prophesied end times, “Mark of the Beast” fanciful.

HUGE PROPHESIED END TIMES SIGN

Is this how capitalism dies? Through decrees from what once were the ivory towers of capitalism, no less?

The Fed is now up to $6 trillion of liquidity, or free money in the sense that it is taking over the role of large banks at 0% interest.

Go global and we’re approaching $20 trillion of central bank pledges and action.

None of the questions that tempered the start of QE are being raised. There is virtually no one talking about moral hazard. What does it mean for our society that government is pushing so far into what was — and may never be again — the private sector? No one will bother answering.

There is no one standing in the way of the largest transfer of wealth in history. The firewalls built into the system are being torn down, and the free markets are dying with barely a whimper.

Even Deutsche Bank, undoubtedly a major beneficiary, seems concerned about where this is going. George Saravelos, global head of Deutsche Bank’s foreign exchange research, just wrote in a report entitled “The end of the free market: impact on currencies and beyond that:

“In a matter of weeks, policymakers have become a backstop for private-sector credit markets. At the extreme, central banks could become permanent command economy agents administering equity and credit prices, aggressively subduing financial shocks. It would be a bi-polar world of financial repression with high real economy volatility but very low financial volatility. A ‘zombie’ market‘.”

The Fed’s most recent announcement — $2.3 trillion in greatly expanded funding — goes as far as dipping into the junk bond market through buying up ETF shares.

A free market this is not. There is no version of capitalism that can divorce risk from profits. There is no version of this that forces society to shoulder the burden while a select few capture the profits.

Never before have we seen such centralised control. For the first time ever, can we see the world being set up for the prophesied Man of Sin (Antichrist) who speaks PEACE and PROSPERITY as long as you take his mark and give him control. Church do you realise where we are in Biblical history. When Jesus told us in the the Olivet Discourse, how it will end before His second coming, He specifically ended with, “SEE, I HAVE TOLD YOU BEFOREHAND” (Matthew 24:25). He told us beforehand so we would not be caught out and be taken in by this man of PEACE.

BIBLE PROPHESIES “END TIMES” CATASTROPHES

Even before this coronavirus outbreak, the global economy was really starting to slow down.  Economic numbers were absolutely dismal all over the world, and many experts were warning that we were right on the verge of the next global recession.

Now that this outbreak has erupted, we definitely have much more momentum in a downward direction. Very challenging times are ahead, although most people still don’t understand what is happening.

We are moving into a time when everything that can be shaken will be shaken.  The global financial system is on the precipice of utter disaster, we we witnessing great civil unrest and political shaking all over the world, the drumbeat of war grows louder and louder, weather patterns are going absolutely crazy and seismic activity is on the rise all over the planet. For born again, Bible believing saints, as events unfold exactly as predicted in God’s Word, it is confirmation that our Heavenly Father’s plan for Jesus to return and rule and reign on this planet for 1000 years is on track and not too far distant. Saints are you preparing to rule and reign with Jesus in the Millennium?

Japan’s biggest contraction in more than five years adds to escalating concerns among policymakers about the length of a likely recession in the world’s third-largest economy as the impact of the coronavirus and a plunge in oil prices causes markets to slide and the yen to gain.

Japan’s gross domestic product was already contracting badly in 2019. It had shrank at an annualised pace of 6.3 percent from the previous quarter in the three months through December, 2019. Economists surveyed had predicted a fall of 3.8 percent, flagging the adverse impact of a sales tax increase, weak global demand and typhoon disruption.

Consumer spending fell 11.1% after the national sales tax was raised in October to 10% from 8%. During the same month,Typhoon Hagibis ravaged a large swathe of the country.

Capital spending declined 14.1% and exports slipped 0.4% due to the fallout from the U.S.-China trade war.

“I’m getting ready for another contraction in Japan’s first quarter. There just aren’t any positive factors to build a positive growth forecast,” said Mari Iwashita, chief market economist at Daiwa Securities Co., flagging her view that the economy is likely falling into recession.

“There is a good chance of Japan’s economy falling into a recession,” Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute, said before Monday’s data was released. He flagged the risks of supply chains being affected if the outbreak was prolonged.

The coronavirus is taking a toll on the number of Chinese tourists to Japan and manufacturing activity due to the economy’s close ties with China, prompting some economists to forecast a contraction lasting two quarters.

The following is how Zero Hedge summarised the recent economic data that we have seen come out of China…

While not perfect, and certainly not a comprehensive view of what is really taking place “on the ground”, the above data is a useful real-time indicator of how the people in China perceive the threat of the coronavirus pandemic, and one thing is abundantly clear: as the pandemic spreads further without containment, and as the charts above flatline, so will China’s economy, which means that while Goldman’s draconian view of what happens to Q1 GDP is spot on, the expectation for a V-shaped recovery in Q2 and onward will vaporise faster than a vial of ultra-biohazardaous viruses in a Wuhan virology lab.

As far as the coronavirus is concerned, the key will be what happens to the number of confirmed cases outside of China.  Over the past week that number has roughly doubled, and if that keeps happening every week we will soon have a full-blown global pandemic on our hands.

THE MARK OF THE BEAST IS NOT TOO FAR OFF

The biggest asset bubble in history and booms always bust.

U.S Household Net Worth As A Percent of GDP - 11-07-19

In expectation of the next bust, there was this warning from the ‘central bank of central banks’…

Bank for International Settlements (BIS) chief Agustin Carstens has urged top central banks to preserve their ammunition for more serious economic downturns rather than deplete it chasing higher growth.

How much interest rate ammo does the IMF think the average central banker should have in reserve?

Severe recessions have historically required 3–6 percentage points cut in policy rates.

And as if we didn’t already know, the IMF tells us…

If another crisis happens, few countries would have that kind of room for monetary policy to respond.

Without the three–six percentage point buffer, how do our central banker bandits get out of this pickle?

Back in February 2019, the IMF released a paper titled…

Cashing In: How to Make Negative Interest Rates Work

The obvious problem with negative rates is that no one wants to be charged to deposit their funds with a bank…it goes against everything we’ve grown up with.

Better to take out the cash out and keep it under the mattress or in a safe-deposit box.

The banks are well aware that customers have this option…and have used this option.

This has been the experience in Europe. In their efforts to discourage customers from withdrawing cash, banks have been caught in a real bind.

The banks have elected to not pass on the negative rates to customer accounts…instead, they’re absorbing the costs. Not good for the bottom line. Hence, we can expect to see more Deutsche Bank scenarios; “European banking giant axes 18,000 jobs” BBC News,  10th July 2019.

The system has become so dependent on debt and central bank intervention that it’s incapable of functioning on its own.

The dire economic and social consequences of a collapsing system will force policy makers to act…do something, do anything.

And that something and anything, is most likely going to be deeply negative rates and the monetising of government deficits.

Modern Monetary Theory is nothing more than printing money to finance government deficits…allowing governments to go on an unlimited spend-a-thon.

Of course, we’ll be told this officially counterfeited money will be spent responsibly. The chaos we see unfolding in our time is exactly what God has told us in His Word will happen in the “end times”. Jesus said, “See, I have told you beforehand.” Matthew 24:25

Much of this post was taken from the article; “A Glimpse into the Future… It’s nor pretty” 10th July, 2019 by Vern Gowdie editor of The Rum Rebellion.

LIVING IN LA LA LAND

The World Economic Forum reported that in 2015, worldwide pensions were underfunded by $70 TRILLION. That is larger than the top 20 economies in the world, combined.  In the US alone, federal, state, and local government pensions are $7 trillion short on the funding they need to pay what they have promised.  And none of this includes Social Security’s almost $50 trillion of unfunded obligations.  And the private sector isn’t in great shape, either. US corporate pensions are a combined $553 billion in the hole. And one quarter of those funds are expected to go broke within a decade.” Simon Black Wall Street Journal

Well, as we enter 2019 the situation is worse and those in the know are preparing for a recession so may I suggest you prepare likewise. Get out of debt as quickly as you can.

There is much political turmoil across the world; the battle between globalism and nationalism is on centre stage and nationalism has clearly gained the upper hand.  There are many internal and external international conflicts going on at the same time, and even more agendas.

VENEZUELA: In the first few weeks of 2019, the US recognised the Venezuelan opposition leader who, along with the Venezuelan parliament, declared the current leader Maurado a usurper and himself to be the legal and rightful leader of the country.

GREECE: Greece is edging toward political uncertainty with the Macedonia agreement which is being rejected by various factions and is resulting in many internal conflicts.

Image result for pictures of political turmoil in France

FRANCE: French citizens have been demonstrating in mass for the last nine weeks and the government has capitulated to their demands.

ITALY: Italy ignored the EU and passed a budget which the EU condemned.

MIDDLE EAST: US sanctions on Iran is crippling the economy and could trigger drastic action. Israel has been carrying out military strikes on Iranian targets, and there is mass public unrest and demonstrations against the Iranian government. The US withdrawal of troops from Syria may only embolden Iran to step up its hostile actions. Beginning with Trump recognising Jerusalem as the capital of Israel and moving its embassy there, tensions in the middle east have escalated with direct missile attacks on Israel by Iran from Syria, provoking a stronger response from Israel. Iran sponsored attacks by Hezbollah from Lebanon and Hamas from Gaza will only heighten the tension and bring on the prophesied war in Daniel 8. For more on this, I suggest Mark Davidson’s book Iran’s Great Invasion.

CHINA: China has declared war on both its Christian & Islamic populations, attempting to eradicate these faiths, and if they deem it necessary, even the citizens who hold them.

The Chinese technology company Huawei and the Chinese government have been universally condemned, their business executives arrested in many nations for espionage, and the use of their services declared illegal.  Forbes wrote: “The arrest of Huawei CFO Meng Wanzhou in Canada last month for breaking U.S. sanctions law, followed by the firing of Huawei sales executive Wang Weijing in Poland last week shows China can be a bad actor, exactly as Washington believes. The Poland story centres around spying allegations, where Wang allegedly sought trade secrets from the government.’  China is losing the PR battle, for years, U.S. companies have been complaining that China does not honour intellectual property rights. Washington believes tech powerhouses like Huawei owe much of their growth to IP theft.” 

China’s growth estimates don’t look good and are getting worse.  They are clearly losing the trade war and its about to get a lot worse for them.  Quite simply, 90% of China’s GDP comes for exports, so the US affecting 90% of their trade with our country and exports account for only 15% of US GDP, thus China is only affecting 15% of our trade with them.  No matter how you look at it, the US easily wins any trade war between China and the US.

RUSSIA: The Russians and the Chinese have been pushed together into an uneasy alliance, something the US has always tried to strategically prevent.  The US has always attempted to work with China against Russia or Russia against China.  President Trump tried to do this with Russia to prevent an ever aggressive China from gaining more ground, but was prevented from doing so, by Congress and the inept Mueller investigation.

“And you will hear of wars and rumours of wars. See that you are not troubled; for all these things must come to pass, but the end is not yet. For nation will rise against nation, and kingdom against kingdom. And there will be famines, pestilences, and earthquakes in various places. All these are the beginning of sorrows.” Matthew 24: 6-8

The current world situation, with an unprecedented economic crisis, governments now unable to resolve the mounting political unrest, increasing God ordained natural disasters, apostasy in the church, all indicate we are in the Biblical prophesied “end times” Can I suggest you prepare for Jesus return by going to my other website http://www.powerpointsermons.net  and download the Power Point Sermon Are We Ready for Jesus – How to Prepare for His return.

 

CHURCH – PREPARE FOR ECONOMIC CRASH

Further to my previous post which looked at who owns global assets, this post looks at the appetite for investment and the fact it is heading into panic territory.

The Global Risk Appetite Index compares the performance of 64 global assets to judge how willing or unwilling investors are to take additional risk. The index last entered panic territory in October of 2015, when global recession seemed a threat as China’s capital markets threatened to meltdown.

This time around, the issues are manifold: trade disputes, the Italian budget, Fed tightening and emerging market turbulence all “contend to be the main driver of this risk appetite slump”, the Credit Suisse analysts write.

Some big investors are taking action. Check out this chart:

It shows that some very big guns are starting to cut exposure to stocks.

According to the AFR this week, the behemoth that is Australian Super just cut back on local and international equities. Could this be the start of the giant, global ‘risk-off/sell off

Church are you preparing for what’s coming? It will be church as described in the Book of Acts that will be a blessing.

“Now when the multitude of those who believed were of one heart and one soul, neither did anyone say that any of the things he possessed was his own, but they had all things in common. And with great power the apostles gave witness to the resurrection of the Lord Jesus. And grace was upon them all. Nor was there anyone among them who lacked; for all who were possessors of lands, of houses sold them and brought the proceeds of the things that were sold, and laid them at the apostles feet; and they distributed to each as anyone had need.” Acts 4: 32-34

FAMINE & ECONOMIC COLLAPSE – END TIMES SIGNS

Famine in Yemen

The famine in Yemen in the spring of 2017 is threatening over 7 million[1] people; over 3.3 million children and pregnant or lactating women suffer from acute malnutrition.[2] Over 100,000 affected children are in Al Hudaydah Governorate with the city of Al Hudaydah worst affected area of the province.[3] According to the Norwegian Refugee Council the famine in Yemen will soon reach “biblical proportions”.[4]

The famine is being compounded by an outbreak of cholera which is causing 5000 new cases daily.[5]

“It will be the largest famine the world has seen in many decades, with millions of victims.” Al Jazeera English

Yemen facing massive famine, says chief

Not just Yemen, the world faces the largest humanitarian crisis since the United Nations was founded in 1945 with more than 20 million people in four countries at risk of starvation and famine, the UN humanitarian chief has said.

Stephen O’Brien told the UN Security Council on Friday that “without collective and coordinated global efforts, people will simply starve to death” and “many more will suffer and die from disease”.

He urged an immediate injection of funds for Yemen, South Sudan, Somalia and northeast Nigeria plus safe and unimpeded access for humanitarian aid “to avert a catastrophe”.

Signs Jesus gave of His second coming in the Olivet Discourse

  • 1. DECEPTION BY FALSE MESSIAHS.
  • 2. BLOODSHED, WARS & CHAOS.
  • 3. FAMINE AND ECONOMIC COLLAPSE.
  • 4. ABOMINATION AND DEATH
  • 5. MARTYRDOM AND APOSTASY.
  • 6. CELESTIAL SIGNS
  • 7. JESUS RETURN IN THE CLOUDS WITH ANGELS.

What about ECONOMIC collapse? 

Article in the Financial Post:

Eight signs a global market crash is imminent as central banks lose control

LONDON – When the banking crisis crippled global markets seven years ago, central bankers stepped in as lenders of last resort. Profligate private-sector loans were moved on to the public-sector balance sheet and vast money-printing gave the global economy room to heal.

Time is now rapidly running out. From China to Brazil, the central banks have lost control and at the same time the global economy is grinding to a halt. It is only a matter of time before stock markets collapse under the weight of their lofty expectations and record valuations.

1. CHINESE SLOWDOWN:

2. COMMODITY COLLAPSE:

The China slowdown has sent shock waves through commodity markets. The Bloomberg Global Commodity index, which tracks the prices of 22 commodities, fell to levels last seen at the beginning of this century.

3. RESOURCE PRICE CRISIS:

Billions of dollars in loans were raised on global capital markets to fund new mines and oil exploration that was only ever profitable at previous elevated prices.

4. DOMINOES FALLING:

The great props to the world economy are now beginning to fall. China is going into reverse. And the emerging markets that consumed so many of our products are crippled by currency devaluation. The famed Brics of Brazil, Russia, India, China and South Africa, to whom the West was supposed to pass on the torch of economic growth, are in varying states of disarray.

5. CREDIT ROLLOVER:

As central banks run out of silver bullets then, credit markets are desperately seeking to reprice risk.

6. INTEREST RATE SHOCK:

Interest rates have been held at emergency lows in the UK and US for around six years. The U.S. is expected to move first, with rates starting to rise from today’s 0 to 0.25 per cent around the end of the year. Investors have already starting buying dollars in anticipation of a strengthening U.S. currency. U.K. rate rises are expected to follow shortly after. Borrowers have not factored in an interest rate rise and will be caught out.

7. BULL MARKET RECORD:

The U.K. stock market is in its 77th month of a bull market, which began in March 2009. On only two other occasions in history has the market risen for longer. One is in the lead-up to the Great Crash in 1929 and the other before the bursting of the dotcom bubble in the early 2000s.

8. OVERVALUED U.S.

U.K. markets have been a beneficiary of the huge balance-sheet expansion in the U.S. US monetary base, a measure of notes and coins in circulation plus reserves held at the central bank, has more than quadrupled from around US$800 billion to more than US$4 trillion since 2008. The stock market has been a direct beneficiary of this money and will struggle now that QE3 has ended. In the U.S., Professor Robert Shiller’s cyclically adjusted price earnings ratio — or Shiller CAPE — for the S&P 500 stands at 27.2, some 64 per cent above its historic average of 16.6. On only three occasions since 1882 has it been higher — in 1929, 2000 and 2007.

 

DERIVATIVES – $552.9 TRILLION BUBBLE WILL BURST

This video reveals the big USA banks are set to fail, by gambling in the derivatives market (casino). Take a look at their exposure to derivatives compared to their assets. (average 50 x their assets). “A bubble to end all bubbles.”

Back in 2003, the world’s most famous investor, Warren Buffet, famously called derivatives “a mega-catastrophic risk”, “financial weapons of mass destruction” and a “time bomb”.

Our Australian banks exposure to derivatives is also of concern at 5 times their asset value, particularly NAB and Westpac but nothing like the USA big banks at 50 times.

2016 is the year the big banks will topple. Trump says you heard it here.

Those that know God and His Word, know the times we are living in, so should not be surprised at these coming events. It is a a time for the church to reach out to their communities, as did the early church (Acts), when persecution came. A time for fasting and prayer, to seek God on what you need to do, to prepare for this USA banks triggered economic collapse. It will impact Australia and the rest of the world.

Read Why Vern Gowdie wrote END OF AUSTRALIA

Dear Ronald,
Making dire and what appear to be apocalyptic predictions on the future of Australia contrasts with my normal optimistic disposition.
However, after a decade of research and analysis, the reality is what it is.
There’s no point trying to gloss over the overwhelming evidence that we are in the midst of the greatest debt crisis in history by saying ‘she’ll be right mate’.
Of course, this would be a far more comforting message, but one that would be highly irresponsible.
Government, institutional economists, real estate agents, share brokers and financial planners are not going to tell you anything other than ‘she’ll be right’. Why?
For two reasons.
Firstly, I think the majority have absolutely no idea how we have arrived at this point of no return.
They think going deeper and deeper into debt is normal. After all this is the way it has been for all their adult lives. They point to the world’s recovery since 2008 and genuinely think central bankers have figured out how to save the world with printed dollars. Why worry? The Fed has our backs. In simple terms, they are clueless.
Secondly, and I think far more immoral, are the minority that realise the system is a giant Ponzi scheme but have no intention of revealing the economic fraud and endangering their capacity to milk this sham for all its worth. The insiders have their parachute strategy in place and will have taken the necessary precautions to protect their wealth while the masses (as usual) suffer the horrific financial consequences.
The Australia of my childhood is a world away from the Australia I see today. We have embraced the great Australian dream of property ownership (plus a few more rental prop¬erties thrown in for good measure) irrespective of the level of indebtedness this ‘dream’ requires. More credit is used to furnish the ‘dream’ with the latest mod cons, pool and land¬scaped yard. Gone are the backyard ‘test matches’ and rugby league ‘grand finals’.
The bank managers of yesteryear were prudent and not afraid to say ‘no’ to those they considered less than credit worthy.
Since the 1980s the banking industry has prospered more than any other sector of the economy. The simple formula for the banks’ success has been fractional banking — the ability to charge interest on money that does not exist.
The more money central banks conjure up out of thin air,
the more profit banks make…
The proliferation of ‘funny money’ has been a game changer for the banking industry. That’s why the big four banks occupy the top five places in the All Ordinaries Index. The once honourable profession of banking has been reduced to an industry of ‘product floggers’.
The bank managers of old who failed to adapt to this new aggressive approach of meeting sales targets, were shown the door. This new age banking model may be highly profitable, but it has also made the financial system highly vulnerable.
When the next crisis hits and banks buckle, questions are going to be asked as to how we let this sector become so dominant. Sorry, but this will be too little, too late. The bank execs who oversaw this flawed business model have taken their bonuses and run.
With three adult children of my own, I often reflect on the differ¬ence in my starting position at their age. Housing was far more affordable based on a multiple of household income, there was an abundance of employment opportunities, and we didn’t have student loans. By comparison, life seemed a little easier.
Ironically I feel the coming collapse will, in the fullness of time, be seen as a positive for the younger generation…the ones who are not overly indebted with loans for overpriced houses.
Hitting the reset button on the global economy may, in the longer run, produce a couple of obvious positives.
Property becomes more affordable. And a culture of prudence and respect for money is restored to society (much like my parents had from their experiences during The Great Depression and the Second World War).
The continued accumulation of debt over many decades has influenced government entitlement policy, financial markets, economic growth and our attitude toward money. Nearly every aspect of our lives has in some way been directly or indirectly impacted by a multi-decade long credit-fuelled consumption binge.
For example, would we have so many factories in China pouring out tonnes of pollutants if we in the western world had acted with restraint in our purchasing habits? Probably not. Indirectly, climate change is a result of our love affair with debt.
To combat climate change, governments are all now thinking of implementing various (costly) carbon reduction schemes. Perhaps when the next crisis hits, these schemes won’t be neces¬sary, as a good number of the factories will cease to operate.
The views I have expressed in this book have been ones I have held for a number years.
The risk with publicly stating your views well in advance of a potential crisis is you invite calls of the boy who cried wolf.
The more time that passes and nothing happens, the louder the calls become.
The one thing I have learnt over the years is that you cannot time markets. Vested interests, powerful media messages and momentum can delay the inevitable outcome for much longer than you might think possible. This is when patience is required.
Sir Isaac Newton, to his great cost, learnt this lesson in 1720. Newton invested in the South Sea Company in early 1720 and sold out several months later for a handsome profit. Rather than take his profit and wait for the South Sea bubble to burst, he could not resist the lure of a market that continued to rise. Impatience got the better of him. A few months later he bought back in — at three times his original buy-in price — and the rest as the say ‘is history’. The bubble burst and Newton lost his life savings of 20,000 pounds (about $3 million in today’s dollars).
With plenty of time to think about his losses, Newton mused, ‘I can calculate the movement of the stars, but not the madness of men.’
The GFC was warning us of the madness of continued debt accumulation. The central bankers drowned out this message with printed dollars and suppressed interest rates.
The madness continued…the world is US$60 trillion
further in debt than it was in 2008
Once again the market will call time on this madness. Next time the message will be so loud and so clear central bankers will be rendered impotent to stop the market from doing what it should have done in 2008.
Yes, I have been early on my forecasts. So be it. The Fed has paid an extremely high price to buy seven years of ‘calm’. I did not anticipate this level of intervention…it has been, like a lot of things since 2008, without precedent.
Investing in cash is the equivalent of Noah’s Ark. When the markets wash away all in front of them, your Ark of cash will float above the flood that rages below. But you must build your ark before it rains. They mocked Noah, but he had the last laugh. Take the time now to get your house in order. Follow some simple rules.
If you have debt, make a determined effort to pay it down more quickly than you otherwise would have.
Do your budget, and learn to live within your income.
If you have investments and/or superannuation, move at least some, if not all, into cash. Take profits voluntarily now rather than be forced to realise losses later.
Above all, be patient. These things can and do take a long time to play out. Above all, be patient. These things can and do take a long time to play out.
Finally, I hope this book has been of assistance to you in formulating your strategy to not only survive but eventually prosper from The End of Australia.
As dire as the current situation is, I believe the end will pave the way for a new beginning. An Australia that’s not addicted to debt. A nation where our children and grandchildren no longer have to bear the burden of our over indulgences.

VERN, YOU NEED TO UNDERSTAND, THAT UNLESS THIS NATION REPENTS AND RECOGNIZES GOD’S SOVEREIGNTY, JUDGEMENT WILL COME.