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10 Key Events That Preceded The Last Financial Crisis That Are Happening Again RIGHT NOW

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10 Key Events That Preceded The Last Financial CrisisIf you do not believe that we are heading directly toward another major financial crisis, you need to read this article.  So many of the exact same patterns that preceded the great financial collapse of 2008 are happening again right before our very eyes.  History literally appears to be repeating, but most Americans seem absolutely oblivious to what is going on.  The mainstream media and our politicians are promising them that everything is going to be okay somehow, and that seems to be good enough for most people.  But the signs that another massive financial crisis is on the horizon are everywhere.  All you have to do is open up your eyes and look at them.

Bill Gross, considered by many to be the number one authority on government bonds on the entire planet, made headlines all over the world on Tuesday when he released his January Investment Outlook.  I don’t know if we have ever seen Gross be more negative about a new year than he is about 2015.  For example, just consider this statement

“When the year is done, there will be minus signs in front of returns for many asset classes. The good times are over.”

And this is how he ended the letter

And so that is why – at some future date – at some future Ides of March or May or November 2015, asset returns in many categories may turn negative. What to consider in such a strange new world? High-quality assets with stable cash flows. Those would include Treasury and high-quality corporate bonds, as well as equities of lightly levered corporations with attractive dividends and diversified revenues both operationally and geographically. With moments of liquidity having already been experienced in recent months, 2015 may see a continuing round of musical chairs as riskier asset categories become less and less desirable.

Debt supercycles in the process of reversal are not favorable events for future investment returns. Father Time in 2015 is not the babe with a top hat in our opening cartoon. He is the grumpy old codger looking forward to his almost inevitable “Ides” sometime during the next 12 months. Be cautious and content with low positive returns in 2015. The time for risk taking has passed.

So why are Gross and so many other financial experts being so “negative” right now?

It is because they can see what is happening.

They can see the same patterns that we saw in early 2008 unfolding again right in front of us.  I wanted to put these patterns in a single article so that they will be easy to share with people.  The following are 10 key events that preceded the last financial crisis that are happening again right now…

#1 A really bad start to the year for the stock market.  During the first three trading days of 2015, the S&P 500 was down a total of 2.73 percent.  There are only two times in history when it has declined by more than three percent during the first three trading days of a year.  Those years were 2000 and 2008, and in both years we witnessed enormous stock market declines.

#2 Very choppy financial market behavior.  This is something that I discussed yesterday.  In general, calm markets tend to go up.  When markets get choppy, they tend to go down.  For example, the chart that I have posted below shows how the Dow Jones Industrial Average behaved from the beginning of 2006 to the end of 2008.  As you can see, the Dow was very calm as it rose throughout 2006 and most of 2007, but it got very choppy as 2008 played out…

The Dow 2006 to 2008

As I also mentioned yesterday, it is important not to get fooled if stocks soar on a particular day.  The three largest single day stock market gains in history were right in the middle of the financial crisis of 2008.  When you start to see big ups and big downs in the market, that is a sign of big trouble ahead.  That is why it is so alarming that global financial markets have begun to become quite choppy in recent weeks.

#3 A substantial decline for 10 year bond yields.  When investors get scared, there tends to be a “flight to safety” as investors move their money to safer investments.  We saw this happen in 2008, and that is happening again right now.

In fact, according to Bloomberg, global 10 year bond yields have already dropped to low levels that are absolutely unprecedented…

Taken together, the average 10-year bond yield of the U.S., Japan and Germany has dropped below 1 percent for the first time ever, according to Steven Englander, global head of G-10 foreign-exchange strategy at Citigroup Inc.

That’s not good news. The rock-bottom rates, which fall below zero when inflation is taken into account, show “that investors think we are going nowhere for a long time,” Englander wrote in a report yesterday.

#4 The price of oil crashes.  As I write this, the price of U.S. oil has dipped below $48 a barrel.  But back in June, it was sitting at $106 at one point.  As the chart below demonstrates, there is only one other time in history when the price of oil has declined by more than $50 in less than a year…

Price Of Oil 2015

The only other time there has been an oil price collapse of this magnitude we experienced the greatest financial crisis since the Great Depression shortly thereafter.  Are we about to see history repeat?  For much more on this, please see my previous article entitled “Guess What Happened The Last Time The Price Of Oil Crashed Like This?

#5 A dramatic drop in the number of oil and gas rigs in operation.  Right now, oil and gas rigs are going out of operation at a frightening pace.  During the fourth quarter of 2014, 93 oil and gas rigs were idled, and it is being projected that another 200 will shut down this quarter.  As this Business Insider article demonstrates, this is also something that happened during the financial crisis of 2008 and it continued well into 2009.

#6 The price of gasoline takes a huge tumble.  Millions of Americans are celebrating that the price of gasoline has plummeted in recent weeks.  But they were also celebrating when it happened back in 2008 as well.  But of course it turned out that there was really nothing to celebrate in 2008.  In short order, millions of Americans lost their jobs and their homes.  So the chart that I have posted below is definitely not “good news”…

Gas Price 2015

#7 A broad range of industrial commodities begin to decline in price.  When industrial commodities go down in price, that is a sign that economic activity is slowing down.  And just like in 2008, that is what we are watching unfold on the global stage right now.  The following is an excerpt from a recent CNBC article

From nickel to soybean oil, plywood to sugar, global commodity prices have been on a steady decline as the world’s economy has lost momentum.

For an extended discussion on this, please see my recent article entitled “Not Just Oil: Guess What Happened The Last Time Commodity Prices Crashed Like This?

#8 A junk bond crash.  Just like in 2008, we are witnessing the beginnings of a junk bond collapse.  High yield debt related to the energy industry is on the bleeding edge of this crash, but in recent weeks we have seen investors start to bail out of a broad range of junk bonds.  Check out this chart and this chart in addition to the chart that I have posted below…

High Yield Debt 2015

#9 Global inflation slows down significantly.  When economic activity slows down, so does inflation.  This is something that we witnessed in 2008, this is also something that is happening once again.  In fact, it is being projected that global inflation is about to fall to the lowest level that we have seen since World War II

Increases in the prices of goods and services in the world’s largest economies are slowing dramatically. Analysts are predicting that inflation will fall below 2pc in all of the countries that make up the G7 group of advanced nations this year – the first time that has happened since before the Second World War.

Indeed, Japan was the only G7 country whose inflation rate was above 2pc last year. And economists believe that was because its government increased sales tax which had the effect of artificially boosting prices.

#10 A crisis in investor confidence.  Just prior to the last financial crisis, the confidence that investors had that we would be able to avoid a stock market collapse in the next six months began to decline significantly.  And guess what?  That is something else that is happening once again…

Investor confidence that the US will avoid a stock-market crash in the next six months has dropped dramatically since last spring.

The Yale School of Management publishes a monthly Crash Confidence Index. The index shows the proportion of investors who believe we will avoid a stock-market crash in the next six months.

Yale points out that “crash confidence reached its all-time low, both for individual and institutional investors, in early 2009, just months after the Lehman crisis, reflecting the turmoil in the credit markets and the strong depression fears generated by that event, and is plausibly related to the very low stock market valuations then.”

Are you starting to get the picture?

And of course I am not the only one warning about these things.  As I wrote about earlier in the week, there are a whole host of prominent voices that are now warning of imminent financial danger.

Today, I would like to add one more name to the list.  He is respected author James Howard Kunstler, and what he predicts is coming in 2015 is absolutely chilling

*****

Here are my financial forecast particulars for 2015:

  • Early in 2015 the ECB proposes a lame QE program and is laughed out of the room. European markets tank.
  • Greek elections in January produce a government that stands up to the EU and ECB and causes a fatal slippage of faith in the ability of that project to continue.
  • Second half of 2015, the rest of the world gangs up and counter-attacks the US dollar.
  • Bond markets in Europe implode in first half and the contagion spreads to the US as fear and distrust rises about viability of US safe haven status.
  • Derivatives associated with currencies, interest rates, and junk bonds trigger a bloodbath in credit default swaps (CDS) and the appearance of countless black holes through which debt and “wealth” disappear forever.
  • US stock markets continue to bid upward in the first half of 2015, crater in Q3 as faith in paper and pixels erodes. DJA and S & P fall 30 to 40 percent in the initial crash, then further into 2016.
  • Gold and silver slide in the first half, then take off as debt and equity markets craters, faith in abstract instruments evaporates, faith in central bank omnipotence dissolves, and citizens all over the world desperately seek safety from currency war.
  • Goldman Sachs, Citicorp, Morgan Stanley, Bank of America, DeutscheBank, SocGen, all succumb to insolvency. American government and Federal Reserve officials don’t dare attempt to rescue them again.
  • By the end of 2015, central banks everywhere stand in general discredit. In the US, the Federal Reserve’s mandate is publically debated and revised back to its original mission as lender of last resort. It is forbidden to engage in further interventions and a new less-secretive mechanism is drawn up for regulating basic interest rates.
  • Oil prices creep back into the $65 – $70 range by May 2015. It is not enough to halt the destruction in the shale, tar sand, and deepwater sectors. As contraction in the failing global economy accelerates, oil sinks back to the $40 range in October…
  • …unless mischief in the Middle East (in particular, the Islamic State messing with Saudi Arabia) leads to gross and perhaps fatally permanent disruption in world oil markets — and then all bets are off for both the continuity of advanced economies and for peace between nations.

*****

Personally, I don’t agree with Kunstler on all of the particulars and the timing of certain events, but overall I think that we are going to look back when the year is done and say that he was a lot more right than he was wrong.

We are moving into a time of extreme danger for the global economy.  There has never been a time when I have been more concerned about a new year since I began The Economic Collapse Blog back in 2009.

Over the past couple of years, we have been very blessed to be able to enjoy a bubble of relative stability.  But this period of stability also fooled many people into thinking that our economic problems had been fixed, when in reality they have only gotten worse.

We consume far more wealth than we produce, our debt levels are at record highs and we are at the tail end of the largest Wall Street financial bubble in all of history.

It is inevitable that we are heading for a tragic conclusion to all of this.  It is just a matter of time.

 

  • Erik Bergum

    When Americans think our economy is better, they are actually being fooled!!!!!

  • rat28

    Within 3 month, there will be QE4 and everything will be ok

    • Mike Smithy

      Do you have any theories as to what the specific stated purpose QE4 will be targeted at?

      • Bill

        To create inflation & prop up the stock market.

        • Mike Smithy

          I was looking for more specificity. I.E. To bail out the junk bond market, student debt bubble etc.

        • Bill

          Not the real Bill registered @Disqus.

    • jox

      One possibility is a QE from the FED added to a QE from the ECB. This way they can buy another 1/2 years.

      • Mike Smithy

        You might be onto something there. Certainly Mario Draghi isn’t getting his way pursuant to QE via ECB. Perhaps Old Yeller will come to his rescue and initiate a stealth QE program on Draghis’s behalf.

      • T.

        It’s a given for more QE from the Fed – It will come. However, the implosion in the Debt markets is already in progress because of the crashing Oil price and the rising (temporarily) Dollar. These two will wreak havoc among all Debt instruments (Bonds; Derivatives) denominated in $’s. The fuse has already been lit and Can Not be put out. The Collapse is underway. Over the next 8 months Destruction will spread throughout the Global Financial System and utterly destroy it. It CANNOT be stopped – But will Intensify with each passing month. The only thing ordinary people CAN do is PREPARE NOW.

        • jox

          I’m not so sure. I’m a long time follower of this blog, and I agree that eventually the system will collapse. But many times since 2008 we have underestimated the resilence of the system and the power of the central banks. Perhaps they can get another rabbit out of the hat.

          • T.

            My perspective is from a different angle than yours. Having studied the present Financial System for over a decade has brought me to conclude at least 5 years ago that – This present World Financial System is totally Controlled. At the Top of the all seeing eye on the pyramid on the back of our $ bill is Lucifer. However, he Controls this System primarily thru one entity – The Rothschild Global Banking (Evil) Cabal from the City of London. The present $ centric System has been operating since Bretton Woods 1944 and Their Plan is that this System has an Expiration Date. That date is September 2015. They will then have Their New Global Financial System READY to put in place – Which will give Lucifer even more Control of much more of All the people of the World. That is his Goal and he uses the System of Finance to attain it.

          • jox

            It sounds OK to me, but difficult to prove. And difficult to stop if true.

          • T.

            NO. He owns it and totally controls it. This is his evil plan for the end of the age. It will happen.

          • Jack Jackson

            Dear T:

            You are knocking yourself out for these people and they don’t get it because they don’t want to get it. Build your little group to endure what is to come. I am afraid that you are on the right track. Save what you love.

            Godspeed
            Jack

          • T.

            You are right. Here and there I keep trying to show any who will listen and perhaps read my feeble writings. America and the world are in for the most horrendous times since the days of Noah. That is what Jesus says in Mat. 24. Surprisingly and sadly, I believe there are as many Christians percentage wise as unbelievers who are just as blind to these truths.

          • Jack Jackson

            Dear T:
            Its OK. You are trying your best .Strangely enough like the prophet of old and the people won’t listen. Like you have said, we live in a world of lies, and the people quibble about the meaningless and obscure.. They choke on the ghat and swallow the camel? as the bible says.

            Jack

          • mgrandma

            Amen!

          • Jack Jackson

            Dear T:

            Yeah you’re right it seems. Like you I have bounced around this mess and have come to the same conclusion. Yeah, it satanic(some would say not in a bad way) Yeah, we are in love with our stuff. But now they take the stuff away and either we beg for more stuff or we say enough!, We chose eternal life! Praise God! T!

            Jack

  • Kent Harris

    I live in Georgia and raised hell about the debt that Congress keeps increasing each time around. My representative is Tom Price and I told his aide that Boehner needs to be replaced because he and the leadership are completely out of control. Unfortunately, him and the rest of the representatives from Georgia don’t give a flying f**k everyone of them voted for that SOB. We continue live way beyond our means and the fools in Congress don’t give a crap.

  • K

    Boehner being returned to the Speaker position, just shows you how little either party cares about the citizens. As long as the people who have been in charge, stay in charge. Nothing can change for the better. I do feel this year is the tipping point. All the pieces are in place.

    • XSANDIEGOCA

      Sad but true.

    • Cheri

      K.
      The reality is that they only care about the people who fund their campaigns.

      • huh ?

        … and considering most of them are anymore just sales pitchman for the establishment – all they’re doin is just reading the scripts and making excuses to keep people at bay, throwing the people bones if you will … job description : Sales and damage control.

        • Cheri

          I consider them traitors–all!

          • huh ?

            Ya know … I think most of them are either dense or oblivious (take your pick) to what they’re involved in and don’t realize that they’re on the powerbrokers liquidation list too when their usefulness runs out.

          • Cheri

            You are too kind. You don’t win elections without knowing how the game is played, and once the money starts flowing into their pockets, they’re total sellouts.

          • huh ?

            I agree they’re sellouts … but I think they think it’s superficial – I think they think it’s the corporations who are buying votes and favors for themselves and not realizing there’s a much bigger claw controlling them. Icke explained it best in the ‘Thrive’ documentary that it works like a pyramid the lower men on the totem pole don’t know what goes on at the next level and so on up, and thus, don’t know how far up it goes let alone who’s there. And I think they think the buck stops with the corporations and don’t even realize the NWO is actually real and that it’s the anti-Christ system and they’re contributing to it’s gradual build-up. In fact, the same applies to the people as well – people unwittingly don’t realize that participating in banking schemes like checks, credit/debit cards, direct deposit, etc., is also helping gradually install the anti-Chrsit system little by little.

          • Cheri

            Regardless of who is lining their pockets, the consequences of their sell out is there for all to see–including themselves.

    • T.

      What is going on in the Financial World as given in this Article – Is totally out of the Control of our elected representatives in Washington. Period. It does not matter one iota Who is Speaker of the House or Senate Majority leader or any thing else. Period.

      • K

        On this one, we will have to agree to disagree. If some of the bankers had gone to jail for their nonsense, that could have made a difference. As far as I am concerned the President has already done, more than enough to impeach him. Do not see that happening. The EPA could have been defunded. Stopping their attack on coal, and soon on wood heat. The legislature could have revoked permission to pursue terrorism, where ever it is suspected. Such a law should have never been passed. In short, I do believe they could do something. I just believe they are sellouts and cowards.

        • T.

          I agree with you completely on what the EPA Could have done; What the President Could have done; What the Legislature Could have done; What the Justice Department Could have done; etc., etc. However, They did None of those things They SHOULD have done to the CRIMINALS – Because the Criminals Control THEM ALL. The CRIMINALS just put into the Federal Budget that just passed in early December and our illustrious lawmakers passed into LAW to put You and Me and Every American on the hook for 303 Trillion $’s of Derivatives that the Banksters have on Their BOOKS. Our illustrious Federal Legislature passed into LAW last year the Banksters desire to have American citizens bank accounts BAILED IN when the next Banking Crisis hits (2015). This is enough, but do you not see – IT IS OVER. When the next Crisis hits – The LAWS are already on the Books to DESTROY the 99%. This WHY I wrote what I wrote above.

          • Ex

            At the recent G-20 summit, the globalist leaders have already concurred that during the next financial calamity they will institute bank bail-ins where the depositors not the banks will be on the hook. Not conspiracy theory, but fact. Canada has a referendum addressing this new tactic. Look it up. Cyprus was the testing grounds to see how the citizens would react. In Germany and a few other EUROPEAN countries they have instituted negative interest rates, in essence depositors are losing money by parking their money in certain accounts. There is a fantastic book called “Don’t bank on it”. It discusses how our deposited money in big banks is not as a safe as people seem to think. In reality the banks consider them as unique secured liabilities and the property of the bank should the need arise during a black swan event.

          • Bryan

            Many of us had grandparents that lived through the Great Depression, my grandmother was a young girl. She used to tell me stories about living in a tent city set up in what is now a state park. They lived there for years. I noticed that people that survived the depression were affected forever, my grandmother kept a ridiculous amount of food in her house. She always kept a stash of money out of the bank and told me more than once that people who put everything they have in banks are fools. I used to listen (I wish I had listened closer now) thinking these things could never happen again…back then small family farms were everywhere. Those farmers struggled but as long as they had their farm they were able to eat. It’s past scary to think very much about what is happening to us. Will we be so hungry that we won’t care about our liberties being stripped away ?

          • G_rant

            Sorry to tell ya, Canada doesn’t have any referendum planned. Mark Carney said he supported the idea of a referendum in Greece. Bail ins are part of Canada’s Economic Action Plan as well for “systemically important financial institutions” which, if you research that term, you find are Canada’s Big 6 banks. It gives them the ability to convert capital liabilities “Deposits” to cover non-liquidity of the bank. Remember that a deposit at a bank is more of an unsecured investment, it no longer becomes your money and you become an unsecured creditor and well down the list for payouts in the event of insolvency.

    • Max

      That’s because both parties are simply mid-level managers to the greater (i.e. Central banks, BIS). The sooner the citizens recognize this and stop bickering, the sooner they can take back their existence. No “doom, gloom, & boom” speak but rather hard facts and occurrences since 2008. Longer technically but most recent 2008/2009. I have seen first hand from within the strategic moves taken place since then and to see it all unfolding is beyond disturbing.

      Still, as a collective group the majority of us pluck our heads in the sand like a long neck bird that can’t fly; because in the sand are the comforts of reality TV, a rigged stock market, rigged sports (for those unaware, see the controversy with last weekends Cowboys/Lions game in which even potus responded to [which I also found disturbing], egocentric social media, and tv sitcoms.

      When “it” does come, its going to come like a rogue wave (which essentially cannot be predicted) and smash this “unsinkable” Titanic we are all on. Question to ask ourselves is: “Do I want to be getting on one of these few life boats available, or stay on deck listening to the violinists play while sipping on Brandy?”

      • K

        You are correct. I mention it mostly because all my republican friends, were so sure it would be different this time. Boehner could not possibly get back in. So let me say to the die hard republicans on this board. Do you still think the republicans are riding to the rescue? If at last you have seen the truth, then prepare accordingly. I truly believe time is short.

        • krinks

          I recall Trent Lott once upon a time when he was in the minority was one of the most outspoken Christians in Washington. After he became in the majority nada. Boehner is more of the same.

        • Max

          It sure is, I second that. Especially with the stock market “surging” today as the Fed speaks psychologically directed verbiage to the masses who swallow and accept the farce.

    • mgrandma

      I’d like to give you 100 thumbs up, K.

    • TBonePickens

      You’re right, I’d just like to point out the alternative to Boehner was Louie Gohmert.

  • T.

    #4 The price of oil crashes and #6 The price of gas tumbles – This is like all the people at the beach watching as the water recedes out into the ocean. Ignorant of what is about to take place very soon – This year a Financial Tsunami orders of magnitude larger than the one that hit Indonesia – Will devastate the Financial World as we now know it. People must get ready today.

    • Tom

      That’s a great analogy!

  • tacoma

    Survey the the global oil situation of the past 5 years and ask yourself ‘What has changed?”

    The answer: “Only one thing has changed substantially. U.S. shale oil production has increased from 4.5 mb/d to 11 mb/d = 6.5 mb/d.” The rest of the world’s oil producers put together has increased production by only 2 mb/d.

    U.S. alone produced almost 3 times more oil than the rest. While consumption increased by only 2 mb/d. Even a freshman economic student knows this will crash oil prices.

    Why do the U.S. shale oil producers pump so much more oil, so fast? What’s the hurry, is there some kind of global emergency, running out of oil? Of course not. In fact, there has been already a slight glut of oil the past few years. So there is no consumer call for more oil.

    U.S. shale oil producers pump so much more shale oil so fast because of 3 basic reasons:
    1) They want to recover their heavy cost of shale oil investment fast. They are worried about that due to technology and uncertainty.

    2) They, being mostly smaller companies and financed by heavy junk debt, need to repay their loans fast, with higher interests, in addition to wanting to make all the profit they can the fastest. See, shale oil is a big gamble and those who play it are gamblers. Do you see Shell, Exxon playing shale?
    3) They know a ‘secret’. They know, sooner or later but not when, shale fracking will crack enough fractures and mantle, produce earthquakes, with unintended consequences. The public will be scared and will call for a halt. Just like what happened to nuclear power plants. So make the money, NOW.

    So with these driving forces, U.S. shale oil producers are going all-out, damn the world oil situation. They are in it wholly for themselves.

    The U.S. government is not in control of these producers. The states, hedge funds, and other venture capitalists are. But the U.S. government sees a way to also play the shale oil – using its production to crash world price and hit its enemies hard. The government of course don’t care about being ‘crashed’ because it alone can print the petro-dollar to any amount at no cost.

    So this is the game. A short-term game by U.S. shale producers to make money fast, by the government to hit Russia, Iran, OPEC. There will be collateral damage of course, such as Canada, Mexico, Venezuela. But Obama wants to hit Canada anyway. What does the government gets out of it? It gets to show the world the U.S. government is powerful, runs the world. That it is still Number One. It is using North Dakota to play its game of Hegemon.

    How long will this last? It will last until 4-6 mb/d of glut is removed from the world market. Somebody will die for this to happen. Who? Your guess is as good as mine.

    Yup, this oil play is a play to the death.

  • gfmucci

    Kunstler was off on these points:

    He contradicted himself or was careless in expressing the timing of low and high oil prices.

    He was Christianaphobic concerning the alleged negative influence of social conservatives on the Tea Party demonstrating his progressive/atheistic predisposition.

    He persists in dissing the growth patterns of our suburbs and wishes for car-free, bike/pedestrian-rich towns linked by tax-sucking rapid transit.

    He ignorantly sides with the man-caused global warming – now the “man-caused violent weather” – crowd.

    These are just a hand full of the several dozen points he made, most of which sound quite plausible.

  • VegasBob

    Anybody who believes that any of the financial problems that caused the crisis in 2008-2009 has been fixed has been swallowing too many blue pills (If you don’t know about blue pills, watch the movie ‘The Matrix’).

    NOT ONE SERIOUS FINANCIAL PROBLEM THAT BROUGHT ABOUT THE 2008-2009 FINANCIAL CRISIS HAS BEEN FIXED. The problems have merely been papered over by zero interest rates and trillions of dollars of counterfeit electronic money-printing.

    Eventually, the sorry state of the world economy will overwhelm the ability of the Banksters to continue the charade of economic ‘normalcy.’

    I’m a retired Corporate Finance executive who worked at a Fortune 500 company for many years. I recently posted the following commentary on another blog.

    First, think about the old adage that “It ain’t over until the fat lady sings.”

    Here is the commentary:

    The fat lady started singing in 2008-2009, but she was quickly washed out to sea by “Benocchio” Bernanke’s wave of counterfeit
    electronic money-printing.

    Most people have assumed she drowned. But I think that after 6 long years, the fat lady has finally swum back to shore, donned her blue bikini, and is now sunbathing on the beach, gorging on Hostess HoHos to build up her strength. My sense is that she’s getting ready to start singing again.

    This time though, I think the Central Banksters may have run out of tricks. They’re already at a zero interest rate. I doubt they could get away with negative interest rates for very long, while “moar” money-printing would run the risk of obliterating what’s left of the middle class, not to mention destroying whole sectors of the economy such as life insurance and annuities.

    This could get interesting very quickly. I think it might be time to stock up on popcorn and watch the show.

    • alan

      Thanks Vegas Bob, its nice to hear from someone that was
      in the upper workings of a big company and share your view.
      I think they still have tricks up their selves and will pull out every last one of them.
      401k’s to be looted, negative rates, major war distraction.

    • XSANDIEGOCA

      Do you think “they” will confiscate retirement accounts?

      • kfilly

        Yes, they even have a name for it. It is called MyRA. Obama mentioned it in his last State of the Union Speech. Yes, trade in your retirement accounts in exchange for worthless government IOU’s. How nice is that for the government to always be thinking of the little people.

        • Scared Economist

          Kfilly is right. The plan is to take IRAs and 401K account balances with the promise of 8% to 10% return (how realistic is that?). The hard sell to pacify the Sheeple will be that interest rates on safe investments like CDs and passbook savings are paying almost nothing anyway and instead of gambling on the risky Stock and Bond Markets, here is a guarranteed invstment backed by the US Government.
          Good luck with that plan…….

          • T.

            The Government will Confiscate 401’s and IRA’s by Edict – Just as They will Confiscate your Bank Account. They already have it written into LAW. Protect Thyself.

          • Douglas M. Green

            Yep. Of course, the IRA confiscation will be “temporary” as with Nixon’s suspension of dollar convertibility to gold, and bank depositholders will now be equityholders of the banks. What a deal!

      • GSOB

        Do you think the holocaust happened or not?

    • Bill

      Couldn’t agree more. Jack Apple goes well with the popcorn.

  • alan

    Plunge Protection Team standing by….
    Paper…check
    Ink….check
    That’s all you need to know.

    2015 will look like 2014 just a little worse.

    All I will predict is 2015 will be the year of the boogieman.

    • kfilly

      They don’t even need that. They are getting a new key installed on the computer keyboard that automatically enters billions. The trillion dollar key will be added shortly after.

  • digriff

    I still recommend my 3B plan: Beans, Bullets, and Bullion.

    • Ian Beattie

      Big stores of clean water should be added to that list. Before the Bullion and Bullets…

  • chilller

    It appears Kunstler left out the bail-ins the fed will use to share the pain of their follies….the fed should be rounded up and imprisoned…

    • Douglas M. Green

      True. This will buy some time, but can you imagine the impact on the economy and anger toward the fed and gubment? IMO, they cannot go too low on deposits that will be confiscated or there will be blood, and $ below FDIC insurance “coverage” will destroy confidence. BTW, if they do honor FDIC limits, they will have to print $trillions and that’s when we go Weimar.

  • Richard

    Michale, you do have this tiresome habit of quoting people who are/have been horrendously WRONG about things. Gross has been VIOLENTLY BEARISH on bonds for YEARS. In fact that’s why he was chased out of Pimco that he’d started and been with for FORTY YEARS… the clients were losing prodigious amounts of money.
    Frankly, at this point what he has to say is of NO INTEREST AT ALL. Do you not know these things???

    • David C

      Good one

  • JF

    Many years ago I was able to speak with someone who had retired from the Fed Bureau of Statistics. Her words were – ‘don’t believe any figures that come out of Washington DC’.

  • David C

    It’s just a matter of time till this ‘house of cards’ called the US economy collapses

  • grumpyhillbilly

    My fearless predilection – there will be an “event” that will lead to WWIII near the time of the bank collapses. Culling out the human herd, especially those with potential, is considered necessary by the ruling super rich.

    • Jack

      Follow the G”s guns, gold, a garden, good water, a generator, gasoline, generic medicine, and God for wisdom

    • T.

      The war you refer to will be all around you – When people get hungry – That is the real war – Coming to a street near you and me.

  • nekksys

    I’m nearly 50 and as I’ve said for the last 5yrs, there will be no retirement for me and those my age. Everything will tank: TPTB will make a huge cash grab to bail out their buddies; IRAs and 401ks will disappear along with savings and checking balances. The bottom will fall out of everything…

    But I will barely notice. I can hunt, farm and fish with the best of them. I am fully self-reliant and pliable enough to adapt to any changes in my way of life. In essence, I don’t need money.

  • A friend

    As a newbie to all this, I was wondering if you reccomend, Michael, that people move out of the major banks with their own personal deposits and go with credit union deposits. Or do you think the credit unions will go too? Yes, I know you’re going to say to put it all in bullion, but I need some money to access in a traditional bank account. Suggestions on what people can do?

    • Drud

      You should ever “put it all” in anything, and certainly not bullion. The way I look at it is this: collapse is a certainty, but there are a lot of ways down. For managing bills, I recommend keeping just the exact amount you need on a monthly basis in a major bank (personally I like Wells Fargo, they seem to be the cleanest shirt in that ugly hamper), this allows you to use the online tools and tech, and it is very convenient. Any extra income/wealth above this you should diversify, just not in the standard sense. First, get some food and water stored, but also means of getting more (seeds, water filters/purifiers), second, get energy supplies (propane bottles, gas cans (rotate often), solar panels, off-grid lighting (candles, lamps, rechargeable LED lights, etc.), third, get defense (guns & ammo if you are a gun guy, but at least some pepper spray, stun gun, other non-lethals), THEN, think about financial assets. Personally, I think it is every bit as likely that we see a bank run as hyperinflation, so I would keep some cash and some gold/silver. If you can get a decent interest rate from a credit union (I doubt it, but I haven’t checked) it may be useful to keep any additional fund there, but this would be last on my list. The way I see collapse is that we have transitioned away from tangible assets to financial assets over past 3 decades (at least). This has been a slow process, but the transition back to placing higher value on tangibles will be rapid.

      • Friend

        Thank you very much for taking the time to respond to me. I appreciate it. Those are good tips.

      • Gay Veteran

        get your money out of the Big Banks and put it into small banks and credit unions. the big banksters are the ones in the worst shape

  • JayC777

    All I can say is get some skills. I can build and repair automobiles( father retired from Ford Motor Company and worked as a mechanic when I was a teen ), I can repair and build small arms( certified gunsmith ), I can build and remodel homes ( I have worked as a residential and commercial electrician, my brother is a professional in drywall, and my dad’s best friend was a carpenter and I worked in those industries with all of them ). I can fish, hunt, and can provide for myself and others. For the record, I did all this while being in the IT industry. I’m a computer programmer that has worked in every level of the computer industry. Prepare yourselves.

    • Mike Smithy

      Ooh Rah, Devil Dog. Your ability to improvise, adapt and overcome will serve you well.

  • Looks like the Globalist, NWO, Illuminati, Banksters finally get there long awaited wish, NOW watch what they do with it.
    As THEY are about to unleash HELL ON EARTH
    http://www.iplantosurvive.info

  • goldminer

    The carnage is getting worse. I have posted in earlier threads about the closing of oil investment firms and hedge funds. Now it is spreading to the middle class. US Steel just announced the closing of at least 2 plants that make steel for the oil industry. This will affect thousands of middle class people who have good paying jobs. Not just the plant workers who get layed off. But all the people who provide services and materials to those plants will be affected.
    I work in the mining industry. One miner working supports 7 people outside the mine in full time jobs. I am sure the oil industry has similar numbers. The oil industry it laying people off in the thousands. Contracts are being terminated, exploration has come to a standstill. The ripple effect could result in millions of jobs lost.
    This is just the tip if the iceberg that we are running into with our Titanic economy. The only lifeboat we have is QE4! Full Steam Ahead!!! The dollar is drowning.
    Better get prepared.

  • confused

    The stock market is up right now over 160 pts. What’s the problem?

    • Mike Smithy

      The Plunge Protection Team just got back from vacation. Just another dead cat bounce orchestrated by the fed.

  • T.

    You’re right – Just about your normal life and stay away from blogs like this so they will not ruin your otherwise blissful life. Blessings

    • Mike Smithy

      The blissfully ignorant scoffed at Noah as well. Same as it ever was.

      • Gay Veteran

        find the ark yet?

        • GSOB

          Christ is the ark.

          • Gay Veteran

            in other words, no, you haven’t found the ark because it never existed

          • GSOB

            Are you sure?

  • GSOB

    For 2015, despite our worldly concerns, the Lord will continue to redeem sinners and make them Sons and, as His chosen people now, we will be one with Him forever.

    FYI.

    You’ll want to get in on that, but it will be race of endurance.

    There is no other or no higher calling.

    God calls out a people for Himself.

    Answer the call.

  • GSOB

    Hopefully there will be a cure for cancer found in 2015.

  • GSOB

    Revelation 5:9-10

    And they sang a new song, saying, “Worthy are You to take the book and to break its seals; for You were slain, and purchased for God with Your blood men from every tribe and tongue and people and nation.

    “You have made them to be a kingdom and priests to our God; and they will reign upon the earth.”

    2015 AMEN! Come Lord Jesus!

  • Mondobeyondo

    I agree with Bill Gross’s assessment. The good times are over.

    But people insist on “living it up”, and partying like it’s 2005.

    House flipping appears to be in vogue again, considering the number of radio commercials by investors giving seminars on “how you can make quick money by flipping properties”, etc…

    You do know what Albert Einstein’s definition of insanity was, right? Doing the same thing over and over and expecting a different result. Well, we’ve officially gone insane as a nation.

  • dees

    spam that I saw on ZeroHedge an hour ago. you disgrace.

  • WolfThom

    Powerful BRICS Nations Plan Competition for World Bank, IMF, Federal Reserve System

    AUGUST 08, 2014 AFP 2 COMMENTS

    By Bill White —

    – See more at: http://americanfreepress.net/?p=18478#sthash.MsMkRr2T.dpuf

    http://americanfreepress.net/?p=18478

    U.S. Sanctions Backfire as China, Russia Bypass New World Order

    JUNE 08, 2014 AFP 4 COMMENTS

    – See more at: http://americanfreepress.net/?p=17623#sthash.TChHSOaa.dpuf

    http://americanfreepress.net/?p=17623

    http://americanfreepres

    Argentina Snubs Bankers; Stabilizes Own Currency

    DECEMBER 21, 2014 AFP 2 COMMENTS

    By Bill White —

    – See more at: http://americanfreepress.net/?p=21582#sthash.WLgByreo.dpufs.net/?p=21582

  • WolfThom

    EIR NEWS

    http://www.larouchepac.com For a New Glass Steagall law!

    Peak Oil and 9.11.

    http://www.fromthewilderness.com

  • GSOB

    Now now now, Everything is gonna be alright.

  • history always repeats its self.

  • concerned

    So, could someone explain what to do with money in the bank? Would you pot it in IRA, pay off your house, buy a car…i mean is anywhere safe? I wish these stories could give some advise for the meager saver.

  • D’Anne Blume (with hold name

    There is a lot of good analysis in this discussion. What have you personally done to prepare? You are way ahead of most Americans. You understand much of what is happening.
    Now, stop commiserating and go buy the things you will need when your credit card doesn’t work ever again! What do you need? Food! Go get some! Medicine! Do what you have to do but get some! Water, that’s easy but you have to do it. protection – guns, ammo, steel doors, window guards.
    Learn something new – learn how to sprout, buy lots of seeds, nuts, grains so you will have food stored. When it is sprouted, it has more nutrition than the seed or the mature plant. Learn how to ferment veggies so they will last through the winter when you can’t grow them. Do it now!
    Clearly the people in this discussion have the brains to do these little things. What is stopping you?! You are right. It really is going to happen.
    Come back tomorrow and tell us what you did and what you have started doing. How are you going to get through this?

  • Eric Riley

    And when this doesn’t happen by the end of this year?

  • Next major crash won’t be until the real estate cycle peaks again and we get a repeat of the GFC in some form or other. That wont happen till around about 2026. We are due a correction so we might get that and probably a recession which tend to occur during the real estate mid cycle slowdown about 2019. The charts are not showing any overtly bearish behaviour in my opinion. Forget the news its there to mislead you.

  • Dani Gray

    I do hope that many people in these last days will have their eyes opened and begin to turn away from their lifestyle of sin and unbelief and turn to the Lord Jesus Christ. He is seeking to save all that will come to Him in simple childlike faith. Those who refuse to do this will face God’s judgement and wrath. No one will recover from this economic downfall for this is the end of the world as we know it. The bible calls these things the “beginning of sorrows” and tells us in the book of revelation of a “great tribulation” and that “nation shall fight against nation” just before the Lord Jesus returns. I fear for this world. I never thought I’d see it but the bible is true. The bible says that “all have sinned and come short of the glory of God” and that the wages of our sin (murder, covetousness, fornication, lying, stealing adultery, and a host of other sins) is death. Man always forgets God in his plans to make the most of this short, temporary life. But God does not forget us. He sees EVERYTHING we do and knows what is in our hearts. It is foolish for anyone to think that these sins will go unpunished. God is not mocked. America has forgotten that this country was built upon Christian precepts and that this and only this is what made her great. The religious protections in the constitution were made for a moral and free man…they were not made to protect the many false religons of today in which there is no liberty! They were meant to protect people who wanted to serve the Lord Jesus Christ and only Him based upon the dictates of their own conscience and not that of the popes of Rome. But somewhere along the line we sold ourselves.

    A friend once told me that America is a nation of whoremongers. How right she was. We selfishly murder our own babies while they are in the womb We pay strangers to rip their limbs apart with a vacuum and disdainfully call them a fetus so that we can assuage our guilty conscience. We believe every single lie that a man tells us instead of listening to God who loves us and warns us for our own good. We refuse to understand and obeying the Lord is shunned while we in our ignorance obey and worship the devil. What is happening in this world today is bible prophecy. Jesus is coming to judge the world and if you are not on His side you are on the devil’s side. We must flee to the arms of Jesus if we want to live. No sinners will be in heaven. Many say a good God would not put His childen in hell and I would have to agree. God’s children aren’t in hell the devil’s children are (while your father the devil just laughs and laughs because he was able to deceive you). People are screaming about immigration not realizing that the issue has nothing to do with race and everything to do with religion. Barack HUSSEIN Obama is a muslim and he let muslims infiltrate this country. Take a look at what muslims are doing in the UK…they are taking OVER that country…and the U.S. is next on the list. This was a long time in the making, it didn’t just happen overnight. Americans are too busy with their heads stuck in the sands of entertainment, television, sports and the many other distractions used to keep us focused on the future of our mortal bodies and never considering our immortal soul that will live one day in eternity…either in hell or in heaven with Jesus.

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