Did you know that the sixth largest bank in Spain failed in spectacular fashion just a few days ago? Many are comparing the sudden implosion of Banco Popular to the collapse of Lehman Brothers in 2008, and EU regulators hastily arranged a sale of the failed bank to Santander in order to avoid a full scale financial panic. Sadly, most Americans have no idea that a new financial crisis is starting to play out over in Europe, because most Americans only care about what is going on in America. But we should be paying attention, because the EU is the second largest economy on the entire planet, and the euro is the second most used currency on the entire planet. The U.S. financial system is already teetering on the brink of disaster, and this new financial crisis in Europe could turn out to be enough to push us over the edge.
If EU regulators had not arranged a “forced sale” of Banco Popular to Santander, we would probably be witnessing panic on a scale that we haven’t seen since 2008 in Europe right about now. The following comes from the Telegraph…
Spanish banking giant Santander has stepped in to the rescue ailing rival Banco Popular by taking over the failing lender for €1 in a watershed deal masterminded by EU regulators to avoid a damaging collapse.
Santander will tap its shareholders for €7bn in a rights issue to raise the capital needed to shore-up Popular’s finances in a dramatic private sector rescue of Spain’s sixth-largest lender.
It will inflict losses of approximately €3.3bn on bond investors and shareholders but crucially will avoid a taxpayer bailout.
But now that a “too big to fail” bank like Banco Popular has failed, investors are immediately trying to figure out which major Spanish banks may be the next to collapse. According to Wolf Richter, many have identified Liberbank as an institution that is highly vulnerable…
After its most tumultuous week since the bailout days of 2012, Spain’s banking system is gripped by a climate of fear, uncertainty and distrust. Rather than allaying investor nerves, the shotgun bail-in and sale of Banco Popular to Santander on Tuesday has merely intensified them. For the first time since the Global Financial Crisis, shareholders and subordinate bondholders of a failing Spanish bank were not bailed out by taxpayers; they took risks in order to make a buck, and they bore the consequences. That’s how it should be. But bank investors don’t like not getting bailed out.
Now they’re worrying it could happen again. As Popular’s final days showed, once confidence and trust in a bank vanishes, it’s almost impossible to restore them. The fear has now spread to Spain’s eighth largest lender, Liberbank, a mini-Bankia that was spawned in 2011 from the forced marriage of three failed cajas (savings banks), Cajastur, Caja de Extremadura and Caja Cantabria.
On Thursday, shares of Liberbank dropped by an astounding 20 percent, and that was followed up by another 19 percent decline on Friday.
But we haven’t seen this kind of chaos in European financial markets in a very long time.
Meanwhile, Nick Giambruno is sounding the alarm about a much bigger bubble. At this moment, more than a trillion dollars worth of Italian government bonds have negative yields…
Over $1 trillion worth of Italian bonds actually have negative yields.
It’s a bizarre and perverse situation.
Lending money to the bankrupt Italian government carries huge risks. So the yields on Italian government bonds should be near record highs, not record lows.
Negative yields could not exist in a free market. They’re only possible in the current “Alice in Wonderland” economy created by central bankers.
You see, the European Central Bank (ECB) has been printing money to buy Italian government bonds hand over fist. Since 2008, the ECB and Italian banks have bought over 88% of Italian government debt, according to a recent study.
The moment that the ECB stops wildly buying Italian bonds, the party will be over and the Italian financial system will crash. Unfortunately for Italy, the Germans are pressuring the ECB to quit printing so much money, and the Germans usually get their way in these things.
But if the Germans get their way this time, we could be facing a complete and utter nightmare very quickly. Here is more from Nick Giambruno…
Once the ECB—the only large buyer—steps away, Italian government bonds will crash and rates will soar.
Soon it will be impossible for the Italian government to finance itself.
Italian banks—which are already insolvent—will be decimated. They hold an estimated €235 billion worth of Italian government bonds. So the coming bond crash will pummel their balance sheets.
It’s shaping up to be a lovely train wreck.
And all of this is happening in the context of a global economy that appears to be headed for a major downturn.
From peak to trough the deceleration in global credit growth is now approaching that during the global financial crisis (-6% of global GDP), even if the dispersion of the decline is much narrower. Currently 55% of the countries in our sample have experienced a -0.3 standard deviation deterioration in their credit impulse (median over 12 months) compared to 77% of countries in Dec ’09 when the median decline was -1.4 stdev.”
Of course the last time global credit growth decelerated this dramatically, global central banks intervened on a scale that was unlike anything that we had ever seen before.
More importantly, back in 2009, not only China, but the Fed and other central banks unleashed the biggest injection of credit, i.e. liquidity, the world has ever seen resulting in the biggest asset bubble the world has ever seen. And, this time around, the Fed is set to hike for the third time in the past year, even as the ECB and BOJ are forced to soon taper as they run out of eligible bonds to monetize. All this comes at a time when US loan growth is weeks away from turning negative.
As such, what “kickstarts” the next spike in the credit impulse is unclear. What is clear is that if the traditional 3-6 month lag between credit inflection points, i.e. impulse, and economic growth is maintained, the global economy is set for a dramatic collapse some time in the second half.
There are so many experts that are warning about big economic trouble in our immediate future. I would like to say that all of the experts that are freaking out are wrong, but I can’t do that.
I have not seen an atmosphere like this since 2008 and 2009, and everything points to an acceleration of the crisis as we enter the second half of this year.
S&P 500 tech stocks have now fallen for 9 days in a row. The last time tech stocks declined for so many days in a row was in 2012, and that was the only other time in history when we have seen such a long losing streak. As I have stated before, the post-election “Trump rally” is officially done, and the market is starting to roll over as investors begin to realize that all of the buying momentum has completely evaporated. Tech stocks tend to be particularly volatile, and so the fact that they are starting to lead the way down should definitely be alarming to many in the investing community.
Of course it isn’t just tech stocks that are falling. The Dow was down another 59 points on Wednesday, and the S&P 500 has closed beneath its 50 day moving average for the very first time since the election. For those that have been waiting for a key technical signal before getting out of the market, there is one for you.
The price of gold was up again, and that is definitely not surprising in this geopolitical environment. The closer we get to war the higher gold and silver prices will go, and if we actually get into a major conflict we will see them blast into the stratosphere.
Another key indicator that I am watching very closely is the VIX. On Wednesday it shot up above 16 for the very first time since the day after Trump’s election victory, and many believe that it could soon go much higher. The following is an excerpt from a CNBC report…
The VIX measures the size of the S&P 500’s expected moves over the next 30 days, and consequently tends to run just a bit hotter than volatility over the past 30 days. Yet one-month realized volatility is just 6.7, meaning the VIX is at a roughly 9-point premium, which Chintawongvanich calls “highly unusual.”
That said, he notes that implied volatility was also at a large premium preceding the U.K. referendum to leave the EU and the U.S. presidential election. The obvious conclusion is that the market is now similarly preparing itself for the French presidential election, which is set to be held on April 23. Some fear that a populist candidate could prevail, which may cause more problems for the European Union and thus for economic stability.
As noted in that excerpt, the upcoming French election is absolutely huge. If the election goes “the wrong way” according to the globalists, it could literally mean the end of the European Union as it is configured today.
And of course of even greater concern is the global march toward war. It is being reported that North Korea is on the verge of a major nuclear weapons test, and such an act of defiance could be enough to push Donald Trump into conducting a major military strike.
But if Trump does hit North Korea, it is quite likely that North Korea will hit back. The North Koreans are promising to use nuclear weapons in any conflict with the United States, and if Trump bungles this thing we could easily be looking at a scenario in which millions of people end up dead.
Things also continue to get more tense in the Middle East. The Russians and the Iranians are promising to respond to any additional U.S. strikes “with force”, and on Wednesday Trump declared that our relationship with Russia “may be at an all-time low”.
Secretary of State Rex Tillerson and Russian President Vladimir Putin held more than two hours of “very frank” talks Wednesday in the Kremlin amid tensions over a U.S. airstrike against a Syria air base blamed for last week’s deadly chemical attack.
In remarks to reporters after the meeting, Tillerson said he told the Russian leader that current relations between the two countries are at a “low point.”
If the Trump administration conducts any more strikes on Syria, it is quite likely that the Russians and Iranians will make good on their threats and will start firing back.
And once U.S. aircraft or U.S. naval vessels come under fire, the calls for war in Washington will become absolutely deafening.
Unfortunately, Trump is not likely to back down any time soon because the recent missile strike in Syria has dramatically boosted his popularity. According to every recent survey, the American people overwhelmingly approve of what Trump did…
A Morning Consult/Politico poll released Wednesday found that 57% of Americans supported airstrikes in Syria, 58% supported establishing a no-fly zone over parts of Syria including strikes against Syria’s air-defense systems, and 63% of Americans thought the US should do more to end the Syrian conflict. Even more, 66% of respondents said they supported the Trump administration’s strike last week specifically.
Sadly, this is a time when the majority is dead wrong. Many of those that are supporting military action against Syria now were vehemently against it when Barack Obama was considering it.
Even Donald Trump spoke out very strongly against military intervention in Syria in 2013, and he was quite right to do so, and so what has suddenly changed that now makes it okay?
There is nothing to be gained in Syria, but we could very easily end up in a direct military conflict with Russia, Iran and Hezbollah which could ultimately prove to be the spark that sets off World War III.
And of course a military strike on North Korea could also potentially spark a global war. The first Korean War resulted in a direct military conflict between the United States and China, and the second Korean War could easily result in the exact same thing happening again.
Do the American people really want war with both Russia and China at the same time?
It has been said that you should be careful what you wish for, because you just might get it.
Donald Trump could have the election legally stolen from him on either December 19th when the Electoral College casts their votes or on January 6th when a joint session of Congress gathers to count those votes. The establishment is in full-blown panic mode at this point, and they seem to have settled on “Russian interference in the election” as the angle that they plan to use to try to deny Trump the presidency. As you will see below, there is an all-out effort to try to persuade members of the Electoral College that are supposed to be committed to Donald Trump to cast their votes for someone else instead. And if that doesn’t work, the groundwork is being laid for the Electoral College votes to potentially be invalidated when a joint session of Congress meets to count those votes on January 6th. I will explain how that would work later on in this article, but first let’s take a look at 14 signs that indicate that there is a plot to use Russia as an excuse to steal the presidency from Donald Trump…
#1 A group of 10 presidential electors has sent a letter to National Intelligence Director James Clapper asking to be briefed on Russian efforts to interfere in the election in November. This group is being led by Nancy Pelosi’s daughter Christine.
#2 The Clinton campaign is publicly supporting the effort to arrange for the members of the Electoral College to be given an “intelligence briefing” on Russian interference in the election before they cast their votes.
#4 Senate Majority Leader Mitch McConnell has announced that he supports an investigation into “Russian election interference”.
#5 On Sunday, U.S. Senators Chuck Schumer, Jack Reed, John McCain and Lindsey Graham announced that they very much desire to see an investigation into Russian interference in the election.
#6 U.S. Representative David Cicilline is urging electors to consider the “extent that foreign interference in the United States presidential elections may have influenced the final result” before they cast their votes.
#8 Time Magazine is openly lobbying for members of the Electoral College to vote for someone other than Donald Trump on December 19th.
#9 The former acting director of the CIA has boldly proclaimed that Russian attempts to alter the outcome of the election in November were “the political equivalent of 9/11”.
#10 Former CIA agent Bob Baer recently went on CNN and publicly called for a new election if it can be shown that the first election was not legitimate due to Russian interference.
#11 Former CIA operative and erstwhile presidential candidate Evan McMullin says that Donald Trump is “not a loyal American” because his views are not anti-Russian enough.
#12 The Huffington Post is touting a 1995 federal court ruling as a precedent that could be used to take the presidency from Donald Trump and hand it to Hillary Clinton if a court finds that Russian interference altered the outcome of the election.
#13 Hillary Clinton’s Communications Director Jennifer Palmieri is now claiming that a “foreign state” tried to hack her Gmail account just days before the election.
#14 Barack Obama has ordered the intelligence community to gather all of the evidence that it can find of Russian interference in the election and to deliver that evidence to him before he leaves office.
Most Trump supporters do not realize how very serious this is. The establishment absolutely hates Trump and wants to find a way to keep him from taking office. Now that they have gained traction with this “Russian hacking” angle, they plan to push this as hard as they can. An article that was just posted by Time Magazine explained why this issue could potentially cause some members of the Electoral College to change their votes…
And still further, we now learn that the Russians played a significant role in manipulating information available to the American people in a concerted effort to bring about the election of Trump. Even if this was not Trump’s doing, is it not the duty of the members of the Electoral College to consider whether the 2016 presidential election was undermined by a foreign power? And mustn’t it matter that the foreign power did so in order to bring about the election of a particular candidate? As Alexander Hamilton made clear, this was, one of the chief concerns of the Framers. As Hamilton explained in The Federalist Papers, a primary reason for the Electoral College was the need to protect our nation against “the desire of foreign powers to gain an improper ascendant in our councils . . . by raising a creature of their own to the chief magistracy of the Union.”
Of course this is completely and utterly ridiculous, but this is the kind of mental gymnastics that they are going through right now. They want to feel justified in denying Donald Trump the presidency, and so they are going to make this “Russian interference in the election” into the biggest issue that they possibly can.
Which is ironic, because as Paul Joseph Watson has pointed out, foreigners have been influencing our elections and we have been influencing foreign elections for many, many years…
Isn’t it funny how all you democrats who cry over foreign influence had no objection whatsoever to Saudi Arabia bankrolling Hillary’s campaign. You had no problem taking all that George Soros money, did you? You had no problem with the Obama State Department overthrowing the government of Ukraine. You had no problem with Obama interfering in the U.K.’s referendum on leaving the EU.
But ultimately this is not about Russian interference in our election.
Rather, this is all about the elite doing whatever is necessary to stop Donald Trump. The elite are going to fight against him every step of the way, and they are never, ever going to give up. This is a point that I made during an interview with Alex Jones on Monday…
The next key date that we need to be watching for is December 19th.
On Monday, members of the Electoral College will gather in Washington D.C. and in all 50 state capitols to cast their votes. We know that at least one Republican elector that is supposed to be pledged to Trump will not be voting for him, and that elector claims that there are others that also will not be voting for Trump.
If 37 Republican electors can be persuaded to cast their votes for someone other than Trump, that would throw the election into the House of Representatives, and it is unclear what the House would do in that scenario.
If Trump is not stopped at the Electoral College, there is also the possibility that he could be derailed when a joint session of Congress gathers to count the Electoral votes on January 6th.
As I discussed yesterday, all it takes to force a vote on the validity of Electoral College votes is an objection in writing that is signed by at least one member of the House and one member of the Senate. As the official House.gov website explains, if both the House and the Senate vote to approve the objection, the votes covered by the objection are not counted…
Since 1887, 3 U.S.C. 15 sets the method for objections to electoral votes. During the Joint Session, Members of Congress may object to individual electoral votes or to state returns as a whole. An objection must be declared in writing and signed by at least one Representative and one Senator. In the case of an objection, the Joint Session recesses and each chamber considers the objection separately in a session which cannot last more than two hours with each Member speaking for no more than five minutes. After each house votes on whether or not to accept the objection, the Joint Session reconvenes and both chambers disclose their decisions. If they agree to the objection, the votes in question are not counted. If either chamber does not agree with the objection, the votes are counted.
In both the Senate and the House, there are anti-Trump Republicans that would absolutely cherish the opportunity to deny him the presidency.
I don’t know if it will happen, but this Russian interference issue is the kind of thing that could be used to justify taking this kind of action.
Of course if the election was stolen from Donald Trump that would likely throw the entire nation into a state of chaos, but I think that at this point the elite would be willing to risk just about anything to keep Donald Trump out of the White House.
What would happen if some sort of major national emergency caused a massive transportation disruption that stopped trucks from running? The next time you talk to a trucker, please thank them for their service, because without their hard work none of our lives would be possible. In America today, very few of us live a truly independent lifestyle, and that means that we rely on the system to provide what we need. Most of us take for granted that there will always be plenty of goods at Wal-Mart and at the grocery store whenever we need more “stuff”, and most of us never give a second thought to how all of that “stuff” gets there. Well, the truth is that most of it is brought in by trucks, and if the trucks stopped running for some reason the entire country would devolve into chaos very rapidly.
Earlier today, I came across a quote from Alice Friedemann that detailed what we would be facing during a major national transportation disruption very nicely…
Within a week, in roughly this order, grocery stores would be out of dairy and other items that are delivered many times a day. And by the week, the shelves would be empty.
Hospitals, pharmacies, factories, and many other businesses also get several deliveries a day, and they’d be running out of stuff the first day.
And the second day, there’s be panic and hoarding. And restaurants, pharmacies would close. ATM’s would be out of money. Construction would stop. There’d be increasing layoffs. Increasing enormous amounts of trash not getting picked up, 685,000 tons a day. Service stations would be closed. Very few people would be working. And the livestock would start to be hungry from lack of feed deliveries.
Then within two weeks, clean water supplies would run out. Within four weeks to eight weeks, there wouldn’t be coal delivered to power plants and electricity would start shutting down. And when that happened, about a quarter of our pipelines use electricity, and so natural gas plants wouldn’t be fed natural gas and they’d start shutting down.
There is so much infrastructure that we take for granted that would suddenly become very vulnerable in this type of scenario. There are countless numbers of workers out there that never get any glory that do the hard work of maintaining our nuclear power plants, our natural gas pipelines, our electrical grid, etc. If they suddenly were not able to do their jobs, the consequences would be absolutely catastrophic. The following comes from Tess Pennington…
They rarely mention the dozens of nuclear power plants that litter the United States. If no one is there to operate them, how long before they melt down and bury millions of survivors under a radioactive cloud?
Then there are the 12,000 facilities around the country that store large quantities of toxic or flammable chemicals, and reside close to residential areas. 2,500 of these sites contain chemicals in quantities that, if a catastrophic accident were to occur, could affect 10,000 to 1 million people each. And let’s not forget the 2.5 million miles of oil and gas pipelines that can be found in every state. They suffer hundreds of leaks and ruptures every year, and are much more likely to explode when they aren’t maintained. That detail seems to be conveniently forgotten by post-apocalyptic films.
And finally, most post-apocalyptic movies will forget to mention what happens when there aren’t any functional fire departments. Aside from the obvious consequences, like whole neighborhoods routinely burning to the ground, who’s going to put out landfill fires that are occasionally radioactive?
For most Americans, a major national emergency of this magnitude may seem unimaginable right now. But the truth is that it isn’t difficult to see how this kind of scenario could happen. The Yellowstone supervolcano is becoming increasingly active, a single large asteroid could change all of our lives in a single moment, a crippling pandemic could bring normal life in America to a complete standstill, a terror attack involving weapons of mass destruction would spread panic and fear like wildfire, and a historic earthquake along the New Madrid fault, the Cascadia Subduction zone or any of the major faults in California could literally change the geography of our entire continent.
In addition, a massive EMP burst from a nuclear weapon or from the sun could fry our power grid and send us back into the stone age in a single moment. This is something that I have written about extensively, and those that want to minimize this threat simply don’t know what they are talking about.
And an electromagnetic pulse is not even required to cause very serious problems with our electrical grid. For instance, just consider what happened in Ukraine toward the end of last year…
On December 23rd, 2015, the Prykarpattyaoblenergo power distribution station in Ukraine was hit by a carefully coordinated cyber-attack that was months in the making. The technicians lost control of their cursors as they watched hackers open breakers and take circuit after circuit offline, plunging 230,000 residents into darkness.
The hackers took backup power of the stations offline, plunging the electrical workers into darkness too, and worse yet, they even rewrote the low-level firmware that controls the electrical transformers. The attack had come after months of careful infiltration and planning by a dedicated team of elite cyber-warfare specialists and the result was devastating.
Even months later, technicians struggled to regain full capacity in the electrical grid due to the overwriting of firmware. With Ukrainian moves to nationalize power companies, it is possible that the powerful and Putin-connected Russian oligarchs who own large parts of Ukraine’s infrastructure were sending a message: we can shut down the system anytime we want.
The truth is that we are far more vulnerable than most of us would like to admit.
So what would you do if “normal life” suddenly came to an end and you no longer had access to food, water or power?
How would you and your family respond?
Hopefully you would continue to act in a civilized manner, but history has shown that many people would not.
Before long, getting mugged or being a victim of some type of crime is as unpredictable and as common as a car accident. You’ll realize everyone in the neighborhood has now beefed up security on their homes. All your family, friends, and coworkers have experienced a mugging, carjacking, or worse.
You’ll have no choice but to accept this new way of life and count on basic safety measures (a form of passive denial) or further learn to defend yourself and remain in a constant state of alert (a very stressful state over time). It’s difficult emotionally, mentally, and physically to remain on high alert 24/7 for any length of time. Most people will revert to a form of passive denial until the next incident happens to them or a family member.
And even though things may seem relatively stable for the moment, concern about what is coming is one of the factors that has led an increasing number of Americans to arm themselves. According to a brand new study from the Pew Research Center, 44 percent of all American homes now have a gun. Just two years ago, a different study found that number was sitting at just 31 percent.
The way that we are living our lives right now will not last indefinitely.
At some point a major national emergency will strike, and when that day arrives we could suddenly be facing major power grid and transportation disruptions.
Are you prepared for that?
If not, you might want to do so while you still have time.
One day in the not too distant future, a major emergency will strike this nation, and that will set off a round of hoarding unlike anything we have ever seen before. Just think about what happens when a big winter storm or a hurricane is about to hit one of our major cities – inevitably store shelves are stripped bare of bread, milk, snow shovels, etc. Even though winter storms and hurricanes are just temporary hurdles to overcome, they still cause many people to go into panic mode. So what is going to happen when we have a real crisis on our hands?
We can get some clues about which items will disappear first during a major national emergency by taking a look at where such a scenario is already playing out. One recent survey found that over 80 percent of all basic foodstuffs are currently unavailable in Venezuela, and about half the country can no longer provide three meals a day for their families. Thankfully, some stores still have a few things that they are able to offer, but other key items are completely gone. The following comes from USA Today…
Oh, there are some things to buy. Besides salt, there are fresh vegetables and fruits, dairy products but no milk, some cereal, lots of snacks and a few canned goods.
The only meat is sausages; there are three kinds of cheese. The only problem: A kilogram of each costs more than a fourth of our monthly minimum wage of 15,050 bolivars.
But basic foodstuffs – the things most Venezuelans want to eat such as corn meal, wheat flour, pasta, rice, milk, eggs, sugar, coffee, chicken, mayonnaise, margarine, cooking oil and beef – are conspicuous by their absence. And there is no toilet paper, no sanitary napkins, no disposable baby diapers, no shampoo, no toothpaste, no hand soap and no deodorant.
Do you have plenty of the items in bold above stored up?
If not, you may want to stock up while you still can.
Someday similar things will happen in the United States and Europe too.
When that day arrives, will you be prepared?
One of the things that got my attention from the article quote above was the lack of milk. My wife is always telling me that we should store up more dried milk, and I believe that she is right.
Just imagine not having any milk and not being able to get any more.
What would you do?
Another thing that really stood out to me in the article was the fact that there is a severe shortage of personal hygiene items. Most people don’t really think of those as “prepper goods”, but the truth is that life will become very uncomfortable without them very rapidly.
What would you do if there was no more toilet paper?
And if you have a little one, how are you going to manage without any diapers?
In general, it is wise to always have an extra supply of just about everything that you use on a daily basis stored away somewhere in your home. The generation that went through the Great Depression of the 1930s understood this concept very well, but most of us that are younger have had it so good for so long that we don’t even really grasp what a real crisis looks like.
Another thing that we are seeing happen right now in Venezuela is the rise of a barter economy…
Many of my urban friends are now planting vegetables in their outdoor spaces – if they have any – or in pots. Another friend, who is a hairdresser, is charging clients food to do their hair. For a shampoo and dry, she charges a kilo of corn meal, saying that she doesn’t have time to stand in line like some of her clients.
As you prepare for what is ahead, you may want to consider stocking up on some items that would specifically be used for bartering in a crisis situation.
For example, you may not drink coffee, but there are millions upon millions of people that do. In a crisis situation, there will be many that will be extremely desperate to get their hands on some coffee, and so any coffee that you store away now may become a very valuable asset.
We live in a world where one out of every eight people already goes to bed hungry each night, and where one out of every three children is underweight. As global weather patterns become more extreme, as natural disasters continue to become more frequent and more intense, and as terror and war continue to spread, it is inevitable that the stress on the global food system is going to continue to grow.
Today you can waltz into Wal-Mart and buy giant cartloads of very inexpensive food, but it will not always be that way.
Unfortunately, more than half the country is currently living paycheck to paycheck, and most Americans do not have any emergency food stored up at all.
In addition to food and personal hygiene supplies, here are some other items that are likely to disappear very rapidly during a major national emergency…
-Anything Related To Self-Defense
-First Aid Kits
So in addition to food and personal hygiene items, you may want to do an inventory of the items that I have listed above and see where you may have some holes in your preparation plans.
I understand that there will be some people that will read this article and think that all of us “preppers” are being just a tad ridiculous.
But when a major emergency strikes this nation and you haven’t done anything to prepare, you will dearly wish that you had bothered to take action while there was still time remaining to do so.
One thing that you have to appreciate about Donald Trump is that unlike most politicians, he actually says what is on his mind. On Tuesday, Trump told Fox Business that he had already gotten out of the stock market, and that he foresees “very scary scenarios” ahead for investors. And of course things have already started to get a bit ominous for those holding stocks over the last week and a half. The Dow Jones Industrial Average has now closed down for seven days in a row, and that is the longest losing streak that we have seen since the panic of last August. Over the past 12 months we have seen virtually every other major global stock market experience at least one major crash. Could the U.S. markets be next?
What Trump told Fox Business earlier today was actually right on the money. Our financial markets have been artificially inflated by the Federal Reserve, and all artificial bubbles of this nature eventually burst. The following comes from a Bloomberg article that was posted on Tuesday entitled “Trump Urges Exit From Market Boosted by ‘Artificially Low’ Rates“…
Donald Trump on Tuesday said interest rates set by the Federal Reserve are inflating the stock market and recommended 401(k)-holders to get out of equities, just like he did.
“I did invest and I got out, and it was actually very good timing,” the Republican presidential nominee said in a phone interview with Fox Business. “But I’ve never been a big investor in the stock market.”
“Interest rates are artificially low,” Trump said. “The only reason the stock market is where it is is because you get free money.”
Trump’s comments come at a time when we are getting a whole host of bad news about the U.S. economy. We just learned that U.S. GDP grew at a meager 1.2 percent annual rate during the second quarter, the rate of homeownership in the United States just hit an all-time record low, and corporate earnings have now been falling for five quarters in a row.
But perhaps most alarming of all is what is happening to the price of oil. As I discussed yesterday, the price of oil has plunged well over 20 percent since June 8th, and it was down again on Tuesday.
As I write this article, the price of U.S. oil is sitting at just $39.66. The psychologically-important 40 dollar barrier has been broken, but the price of oil doesn’t even have to go down another penny to do immense damage to the U.S. economy. If it just stays at this price, we are going to bleed more energy industry jobs, more energy companies are going to default on their debts, and more financial institutions that are exposed to the energy industry are going to get into serious trouble.
All the ingredients are there for a major financial crisis, and perhaps that explains why so many investors are flocking to precious metals such as gold and silver right now.
The price of gold has gone up for six trading days in a row, and silver is approaching 21 dollars an ounce.
If the goal of the EBA Stress Tests was to reassure investors and regain confidence that ‘all is well’ in Europe’s increasingly fragile and systemically interconnected banking system, then it has utterly failed. The broadest European bank stock index is now down 7% from the post-stress-test spike highs, Italian banks are at record lows and being halted (despite Renzi’s promises), Commerzbank is struggling with capital raise chatter, and Deutsche Bank and Credit Suisse are tumbling after being booted from the Stoxx 50.
It is funny – every time I write a major article about Deutsche Bank, their stock goes to a new record low.
Problems at Deutsche Bank and Credit Suisse are now becoming so obvious that even mainstream analysts are admitting that they are “causing some anxiety”…
“Deutsche Bank and Credit Suisse … are dropping to where they were after the Brexit vote,” said Bruce Bittles, chief investment strategist at Baird. “That’s causing some anxiety.”
Deutsche and Credit Suisse’s U.S.-listed shares closed down 3.75 percent and 4.67 percent, respectively.
In Europe nobody is waiting for financial stocks to crash, because they are already crashing.
A “too big to fail” crisis is rapidly unfolding across the entire continent, but most Americans are totally oblivious to what is going on over there. Instead, our major news outlets are feeding us an endless barrage of negative headlines about Donald Trump and a steady stream of positive headlines about Hillary Clinton.
I wonder who they want to win the election?
Of course I am being sarcastic. The days when the mainstream media at least pretended to be “independent” are long gone.
But as far as the stock market is concerned, I am quite confident that Donald Trump will be vindicated.
And if you don’t want to believe Donald Trump, I would encourage you to consider what Jeffrey Gundlach, the chief executive of DoubleLine Capital, has been saying. He has been right about the markets in recent years over and over again, and just a few days ago he publicly stated that “stocks should be down massively” and that now is the time to “sell everything“.
Unfortunately, very few people are likely to change course at this stage. Most of those that could see the warning signs have already gotten out of the market, and those that prefer to have blind faith in the system are not likely to listen to warnings from men like Trump and Gundlach.
So now it is just a waiting game.
We shall see if Trump and Gundlach are right, and those that end up on the correct side of the equation are probably going to make a boatload of money during the months ahead.
More stock market wealth was lost on Friday than on any other day in world history. As you will see below, global investors lost two trillion dollars on the day following the Brexit vote. And remember, this is on top of the trillions that global investors have already lost over the past 12 months. It is important to understand that the Brexit vote was not the beginning of a new crisis – it has simply accelerated a global financial crisis that started last year and that was already in the process of unfolding. As I noted on Friday, we have been waiting for “the next Lehman Brothers moment” that would really unleash fear and panic globally, and now we have it. The next six months should be absolutely fascinating to watch.
According to CNBC, the total amount of money lost on global stock markets on Friday surpassed anything that we had ever seen before, and that includes the darkest days of the financial crisis of 2008…
Worldwide markets hemorrhaged more than $2 trillion in paper wealth on Friday, according to data from S&P Global, the worst on record. For context, that figure eclipsed the whipsaw trading sessions of the 2008 financial crisis, according to S&P analyst Howard Silverblatt.
The prior one day sell-off record was $1.9 trillion back in September of 2008, Silverblatt noted. According to S&P’s Broad Market Index, combined market capitalization is currently worth nearly $42 trillion.
And of course many of the wealthiest individuals on the planet got absolutely hammered. According to Bloomberg, the 400 richest people in the world lost a total of $127.4 billion dollars on Friday…
The world’s 400 richest people lost $127.4 billion Friday as global equity markets reeled from the news that British voters elected to leave the European Union. The billionaires lost 3.2 percent of their total net worth, bringing the combined sum to $3.9 trillion, according to the Bloomberg Billionaires Index. The biggest decline belonged to Europe’s richest person, Amancio Ortega, who lost more than $6 billion, while nine others dropped more than $1 billion, including Bill Gates, Jeff Bezos and Gerald Cavendish Grosvenor, the wealthiest person in the U.K.
Could you imagine losing a billion dollars on a single day?
I am sure that Bill Gates and Jeff Bezos are not shivering in their boots quite yet, but what if the markets keep on bleeding like they did in 2008?
On the other hand, globalist magnate George Soros made a ton of money on Friday because he had positioned himself for a Brexit ahead of time. The following comes from the London Independent…
The billionaire who predicted Brexit would bring about “Black Friday” and a crisis for the finances of ordinary people appears to have profited hugely from the UK’s surprise exit from the EU.
George Soros is widely known as the man who “broke” the Bank of England in 1992, when he bet against the pound and made a reported £1.5bn.
Although the exact amount Mr Soros has gained after Brexit is not known, public filings show he doubled his bets earlier this year that stocks would fall.
So what will happen on Monday when the markets reopen?
Personally, I don’t think that it will be as bad as Friday.
But I could be wrong.
In early trading, Dow futures, S&P 500 futures and Nasdaq futures are all down…
Dow futures fell by 90 points in early trading, while S&P 500 futures slipped 11 points, and NASDAQ futures dipped 24 points. Gold futures rose, in a reflection of sustained demand for safe-haven assets.
And at this moment, the British pound is getting absolutely crushed. It is down to 1.33, and I would expect to see it fall a lot lower in the weeks and months to come.
Well, the truth is that now that the British people have voted to leave the EU, the globalists have to make it as painful as possible on them in order to send a warning to other nations that may consider leaving. I think that a recent article by W. Ben Hunt explained this very well…
What’s next? From a game theory perspective, the EU and ECB need to crush the UK. It’s like the Greek debt negotiations … it was never about Greece, it was always about sending a signal that dissent and departure will not be tolerated to the countries that matter to the survival of the Eurozone (France, Italy, maybe Spain). Now they (and by “they” I mean the status quo politicians throughout the EU, not just Germany) are going to send that same signal to the same countries by hurting the UK any way they can, creating a Narrative that it’s economic death to leave the EU, much less the Eurozone. It’s not spite. It’s purely rational. It’s the smart move.
The elite need a crisis now in order to show everyone that globalism is the answer and not the problem. If the British people were allowed to thrive once they walked away, that would only encourage more countries to go down the exact same path. This is something that the elite are determined to avoid.
The Brexit vote has barely sunk in, and Bank of America and Goldman Sachs are already projecting a recession for the United Kingdom. Sadly, I believe that this is what we will see happen.
But it won’t just be the British that suffer.
On Friday, European banking stocks had their worst day ever. In particular, Deutsche Bank fell an astounding 17.49 percent to an all-time record closing low of 14.72. I have warned repeatedly about the implosion of Deutsche Bank, and this crisis could be the catalyst for it.
Last week, market tumult stemming from the U.K.’s vote to quit the European Union drove the British pound to its weakest levels in three decades.
Yet it also sent investors flocking to traditional safe haven assets like the U.S. dollar, gold and the yen, the latter surging against every major currency as the results of Brexit became clear: Dollar/yen spiked from a Thursday high near 107 to a two-year low near 99.
Just like in 2008, there will be days when global markets will be green. When that happens, it will not mean that the crisis is over.
If you follow my work closely, then you know that it is imperative to look at the bigger picture. Over the past 12 months, there have been some very nice market rallies around the world, but investors have still lost trillions of dollars overall.
What happens on any one particular day is not the story. Rather, the key is to focus on the long-term trends.
And without a doubt, this Brexit vote could be “the tipping point” that greatly accelerates our ongoing woes…
“Brexit is the biggest global monetary shock since 2008,” said David Beckworth, a scholar at the Mercatus Center at George Mason University, in a blog post on Friday. “This could be the tipping point that turns the existing global slowdown of 2016 into a global recession.”
We were already dealing with a new global economic crisis without the Brexit vote. But what this does is it introduces an element of panic and fear that had been missing up until this current time.
And markets do not like panic and fear very much. In general, markets tend to go up when things are calm and predictable, and they tend to go down when chaos reigns.
Unfortunately, I believe that we are going to see quite a bit more chaos for the rest of 2016, and the trillions that were lost on Friday may turn out to be just the tip of the iceberg.
If you have been waiting for “the next Lehman Brothers moment” which will cause the global financial system to descend into a state of mass panic, you might want to keep a close eye on German banking giant Deutsche Bank. It is approximately three times larger than Lehman Brothers was, and if the most important bank in the strongest economy in Europe were to implode, it would instantly send shockwaves rippling across the entire planet. Those that follow my work regularly know that I started sounding the alarm about Deutsche Bank beginning last September. Since that time, the bad news from Deutsche Bank has not stopped pouring in. They announced a loss of 6.8 billion euros for 2015, Moody’s just downgraded their debt to two levels above junk status, and they have been plagued by scandal after scandal. In recent months they have gotten into trouble for trying to rig precious metal prices, for committing “equity trading fraud” and for their dealings in mortgage-backed securities. The following comes from Zero Hedge…
A month after admitting to rigging precious metals markets, Deutsche Bank has been hit with a double-whammy of more alleged fraudulent behavior today and the stock is sliding. First, Reuters reports that the bank took a charge of 450 million euros for “equity trading fraud,” and then Bloomberg reports that The SEC is looking into Deutsche’s post-crisis mortgage positions.
This is a bank that is steadily bleeding money, and so the last thing that it needs is for government agencies to be putting immense pressure on it. Unfortunately for Deutsche Bank, the SEC seems determined to kick it while it is down…
Troubled Wall Street giant Deutsche Bank is under another investigation, this time by the Securities and Exchange Commission regarding the pricing and reporting of certain mortgage-backed securities.
The SEC wants to know whether the Frankfurt, Germany-based bank artificially raised the value of mortgage-backed securities in 2013 and later hid those losses for an extended period of time, Bloomberg first reported, citing people familiar with the matter.
But even if there were no scandals and no government investigations, the truth is that Deutsche Bank would be a deeply troubled bank anyway.
At one point, it was estimated that Deutsche Bank had 64 trillion dollars worth of exposure to derivatives contracts. That is an amount of money that is approximately 16 times the size of the GDP of the entire nation of Germany.
So nobody wants to see Deutsche Bank fail. It would be a financial disaster unlike anything the world has ever experienced before.
But right now things are not looking good. As you can see from this chart, the steady decline of Deutsche Bank’s stock price is eerily similar to what happened to Lehman Brothers during the months leading up to the time when it finally completely collapsed…
Earlier this year, Deutsche Bank’s stock price set a new record low, and since that time it has been hovering just above that record low.
Clearly it is no secret that Deutsche Bank is having big problems, and the outlook for the immediate future is not good. I included the following quote from Berenberg analyst James Chappell in a previous article, but I think that it bears repeating…
Too many problems still: The biggest problem is that DBK has too much leverage. On our measures, we believe DBK is still over 40x levered. DBK can either reduce assets or increase capital to rectify this. On the first path, the markets do not exist in the size nor pricing to enable it to follow this route. Going down the second path also seems impossible at the moment, as the profitability of the core business is under pressure. Seeking outside capital is also likely to be difficult as management would likely find it hard to offer any type of return on new capital invested.
In the end, I believe that Deutsche Bank will ultimately implode, but it won’t be the only one.
Meanwhile, we just got some more very disturbing news out of Asia. According to Bloomberg, Japanese exports have now fallen for seven months in a row…
Japan’s exports fell for a seventh consecutive month in April as the yen strengthened, underscoring the growing challenges to Prime Minister Shinzo Abe’s efforts to revive economic growth.
Overseas shipments declined 10.1 percent in April from a year earlier, the Ministry of Finance said on Monday. The median estimate of economists surveyed by Bloomberg was for a 9.9 percent drop. Imports fell 23.3 percent, leaving a trade surplus of 823.5 billion yen ($7.5 billion), the highest since March 2010.
When your imports are 23 percent lower than they were a year earlier, that is a clear sign that consumer demand is way, way down and that your economy is in the process of imploding.
So I will repeat what I have said a number of times before…
Watch Germany and watch Japan.
I believe that they are going to be two of the biggest stories as this new global financial crisis begins to play out.
*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*
Mainstream news outlets are already starting to use the phrase “economic collapse” to describe what is going on in some areas of our world right now. For many Americans this may seem a bit strange, but the truth is that the worldwide economic slowdown that began during the second half of last year is starting to get a lot worse. In this article, we are going to examine evidence of this from South America, Europe, Asia and North America. Once we are done, it should be obvious that there is absolutely no reason to be optimistic about the direction of the global economy right now. The warnings of so many prominent experts are now becoming a reality, and what we have witnessed so far are just the early chapters of a crushing economic crisis that will affect every man, woman and child in the entire world.
Let’s start with Brazil. It has the 7th largest economy on the entire planet, and it is already enduring its worst recession in 25 years. In fact, at the end of last year Goldman Sachs said that what was going on down there was actually a “depression“.
But now the crisis in Brazil has escalated significantly.
I want to share with you an excerpt from a recent article entitled “Brazil: Economic collapse worse than feared“. I know, that title sounds like it comes directly from The Economic Collapse Blog, but I didn’t write it.
Amid political chaos, Brazil’s economic collapse is worse than its government once believed.
In the midst of rising calls to impeach President Dilma Rousseff, Brazil’s central bank announced Thursday that it now expects the country’s economy to shrink 3.5% this year.
That’s worse than the central bank’s previous estimate for a 1.9% contraction. The darker forecast matches what the International Monetary Fund projected for Brazil — Latin America’s largest country — and what many independent economists have suspected.
It is one thing for Michael Snyder to tell you that Brazil is in the midst of “economic collapse”, but it is another thing entirely for CNN to say it.
Meanwhile, things are actually much worse in Venezuela than they are in Brazil. Food and basic supplies are in short supply, the inflation rate has hit 720 percent, and crime is completely out of control.
The only question now is whether Venezuela’s government or economy will completely collapse first.
The key word there is “completely.” Both are well into their death throes. Indeed, Venezuela’s ruling party just lost congressional elections that gave the opposition a veto-proof majority, and it’s hard to see that getting any better for them any time soon — or ever.
Incumbents, after all, don’t tend to do too well when, according to the International Monetary Fund, their economy shrinks 10 percent one year, an additional 6 percent the next, and inflation explodes to 720 percent. It’s no wonder, then, that markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt.
Once again we see a very respected mainstream publication using the phrase “economic collapse” to describe what is happening in South America.
You can find some stunning video of the “economic Armageddon” that is taking place in Venezuela right here. I would encourage you to watch that video, because what is happening down there will eventually be happening here.
Finance minister Pier Carlo Padoan has called a meeting in Rome on Monday with executives from Italy’s largest financial institutions to agree final details of a “last resort” bailout plan.
Yet on the eve of that gathering, concerns remain as to whether the plan will be sufficient to ringfence the weakest of Italy’s large banks, Monte dei Paschi di Siena, from contagion, according to people involved in the talks.
Italian bank shares have lost almost half their value so far this year amid investor worries over a €360bn pile of non-performing loans — equivalent to about a fifth of GDP. Lenders’ profitability has been hit by a crippling three-year recession.
As Italy descends into financial chaos, the rest of the continent better be paying attention.
Do you remember how hard it was for the rest of Europe to rescue Greece?
Well, Greece has the 44th largest economy on the planet.
Italy has the 8th.
It would be hard to overstate the seriousness of what is going on over in Europe, and it is not just Italy we are talking about. All over the continent major banks are in deep trouble, and the chairman of France’s second largest retail bank recently told reporters that “I am much more worried than I was in 2009“.
And there is very good reason for concern. On Sunday, we learned that a major “bail-in” had just been announced for one of Austria’s most prominent banks. The following comes from Zero Hedge…
And then today, following a decision by the Austrian Banking Regulator, the Finanzmarktaufsicht or Financial Market Authority, Austria officially became the first European country to use a new law under the framework imposed by Bank the European Recovery and Resolution Directive to share losses of a failed bank with senior creditors as it slashed the value of debt owed by Heta Asset Resolution AG.
Today, the Austrian Financial Market Authority (FMA) in its function as the resolution authority pursuant to the Bank Recovery and Resolution Act (BaSAG – Bundesgesetz über die Sanierung und Abwicklung von Banken) has issued the key features for the further steps for the resolution of HETA ASSET RESOLUTION AG. The most significant measures are:
a 100% bail-in for all subordinated liabilities,
a 53.98% bail-in, resulting in a 46.02% quota, for all eligible preferential liabilities,
the cancellation of all interest payments from 01.03.2015, when HETA was placed into resolution pursuant to BaSAG,
as well as a harmonisation of the maturities of all eligible liabilities to 31.12.2023.
According to the current resolution plan for HETA, the wind-down process should be concluded by 2020, although the repayment of all claims as well as the legally binding conclusion of all currently outstanding legal disputes will realistically only be concluded by the end of 2023. Only at that point will it be possible to finally distribute the assets and to liquidate the company.
The dominoes are starting to fall in Europe, and I would expect even bigger announcements in the weeks and months to come.
Over in Asia, economic chaos is beginning to prevail as well.
In China, the stock market is already down more than 40 percent from the peak, Chinese exports were down 25.4 percent on a year over year basis in February, and Chinese economic numbers overall have not been this poor since the depths of the last global recession.
Here in the United States, we haven’t been hit quite as hard as the rest of the world just yet, but there are lots of very disturbing warning signs all around us.
At the end of last week, we learned that it is being projected that U.S. GDP will have grown by just 0.1 or 0.2 percent during the first quarter of 2016. And on Monday corporate earnings reporting season begins, and it is expected to be a very, very bad one. The following comes from Business Insider…
We are about to get confirmation that earnings growth for America’s biggest companies was negative in the first quarter, compared to the same period a year ago.
When aluminum giant Alcoa releases its results on Monday, it will mark the unofficial start of the heaviest reporting season for S&P 500 companies.
The final scoreboard is expected to show a 9.1% earnings drop for the quarter, according to FactSet senior earnings analyst John Butters.
If these projections turn out to be accurate, it will be the fourth quarter in a row of earnings declines. This is something that we never see outside of a recession.
Of course I am just another voice in the crowd when it comes to predicting that the U.S. economy is headed for rough times. For example, just check out what Societe Generale economist Albert Edwards is saying…
A tidal wave is coming to the US economy, according to Albert Edwards, and when it crashes it’s going to throw the economy into recession.
…the profit recession facing American corporations is going to lead to a collapse in corporate credit.
“Despite risk assets enjoying a few weeks in the sun our fail-safe recession indicator has stopped flashing amber and turned to red”
Whole economy profits never normally fall this deeply without a recession unfolding. And with the US corporate sector up to its eyes in debt, the one asset class to be avoided — even more so than the ridiculously overvalued equity market — is US corporate debt. The economy will surely be swept away by a tidal wave of corporate default.
As you can see, it isn’t just one nation or one region of the world that we need to be concerned about.
Economic chaos is erupting literally all over the planet, and global leaders are starting to panic.
Unfortunately, they have had seven years to try to fix things since the last global recession, and they didn’t get the job done. Anyone that believes that by some miracle they will be able to pull us out of the fire this time and that everything will somehow be okay is simply engaged in wishful thinking.
*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*