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The $23 Trillion Credit Bubble In China Is Starting To Collapse – Global Financial Crisis Next?

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Bubble - Photo by Jeff KubinaDid you know that financial institutions all over the world are warning that we could see a “mega default” on a very prominent high-yield investment product in China on January 31st?  We are being told that this could lead to a cascading collapse of the shadow banking system in China which could potentially result in “sky-high interest rates” and “a precipitous plunge in credit“.  In other words, it could be a “Lehman Brothers moment” for Asia.  And since the global financial system is more interconnected today than ever before, that would be very bad news for the United States as well.  Since Lehman Brothers collapsed in 2008, the level of private domestic credit in China has risen from $9 trillion to an astounding $23 trillion.  That is an increase of $14 trillion in just a little bit more than 5 years.  Much of that “hot money” has flowed into stocks, bonds and real estate in the United States.  So what do you think is going to happen when that bubble collapses?

The bubble of private debt that we have seen inflate in China since the Lehman crisis is unlike anything that the world has ever seen.  Never before has so much private debt been accumulated in such a short period of time.  All of this debt has helped fuel tremendous economic growth in China, but now a whole bunch of Chinese companies are realizing that they have gotten in way, way over their heads.  In fact, it is being projected that Chinese companies will pay out the equivalent of approximately a trillion dollars in interest payments this year alone.  That is more than twice the amount that the U.S. government will pay in interest in 2014.

Over the past several years, the U.S. Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England have all been criticized for creating too much money.  But the truth is that what has been happening in China surpasses all of their efforts combined.  You can see an incredible chart which graphically illustrates this point right here.  As the Telegraph pointed out a while back, the Chinese have essentially “replicated the entire U.S. commercial banking system” in just five years…

Overall credit has jumped from $9 trillion to $23 trillion since the Lehman crisis. “They have replicated the entire U.S. commercial banking system in five years,” she said.

The ratio of credit to GDP has jumped by 75 percentage points to 200pc of GDP, compared to roughly 40 points in the US over five years leading up to the subprime bubble, or in Japan before the Nikkei bubble burst in 1990. “This is beyond anything we have ever seen before in a large economy. We don’t know how this will play out. The next six months will be crucial,” she said.

As with all other things in the financial world, what goes up must eventually come down.

And right now January 31st is shaping up to be a particularly important day for the Chinese financial system.  The following is from a Reuters article

The trust firm responsible for a troubled high-yield investment product sold through China’s largest banks has warned investors they may not be repaid when the 3 billion-yuan ($496 million)product matures on Jan. 31, state media reported on Friday.

Investors are closely watching the case to see if it will shatter assumptions that the government and state-owned banks will always protect investors from losses on risky off-balance-sheet investment products sold through a murky shadow banking system.

If there is a major default on January 31st, the effects could ripple throughout the entire Chinese financial system very rapidly.  A recent Forbes article explained why this is the case…

A WMP default, whether relating to Liansheng or Zhenfu, could devastate the Chinese banking system and the larger economy as well.  In short, China’s growth since the end of 2008 has been dependent on ultra-loose credit first channeled through state banks, like ICBC and Construction Bank, and then through the WMPs, which permitted the state banks to avoid credit risk.  Any disruption in the flow of cash from investors to dodgy borrowers through WMPs would rock China with sky-high interest rates or a precipitous plunge in credit, probably both.  The result?  The best outcome would be decades of misery, what we saw in Japan after its bubble burst in the early 1990s.

The big underlying problem is the fact that private debt and the money supply have both been growing far too rapidly in China.  According to Forbes, M2 in China increased by 13.6 percent last year…

And at the same time China’s money supply and credit are still expanding.  Last year, the closely watched M2 increased by only 13.6%, down from 2012’s 13.8% growth.  Optimists say China is getting its credit addiction under control, but that’s not correct.  In fact, credit expanded by at least 20% last year as money poured into new channels not measured by traditional statistics.

Overall, M2 in China is up by about 1000 percent since 1999.  That is absolutely insane.

And of course China is not the only place in the world where financial trouble signs are erupting.  Things in Europe just keep getting worse, and we have just learned that the largest bank in Germany just suffered ” a surprise fourth-quarter loss”

Deutsche Bank shares tumbled on Monday following a surprise fourth-quarter loss due to a steep drop in debt trading revenues and heavy litigation and restructuring costs that prompted the bank to warn of a challenging 2014.

Germany’s biggest bank said revenue at its important debt-trading division, fell 31 percent in the quarter, a much bigger drop than at U.S. rivals, which have also suffered from sluggish fixed-income trading.

If current trends continue, many other big banks will soon be experiencing a “bond headache” as well.  At this point, Treasury Bond sentiment is about the lowest that it has been in about 20 years.  Investors overwhelmingly believe that yields are heading higher.

If that does indeed turn out to be the case, interest rates throughout our economy are going to be rising, economic activity will start slowing down significantly and it could set up the “nightmare scenario” that I keep talking about.

But I am not the only one talking about it.

In fact, the World Economic Forum is warning about the exact same thing…

Fiscal crises triggered by ballooning debt levels in advanced economies pose the biggest threat to the global economy in 2014, a report by the World Economic Forum has warned.

Ahead of next week’s WEF annual meeting in Davos, Switzerland, the forum’s annual assessment of global dangers said high levels of debt in advanced economies, including Japan and America, could lead to an investor backlash.

This would create a “vicious cycle” of ballooning interest payments, rising debt piles and investor doubt that would force interest rates up further.

So will a default event in China on January 31st be the next “Lehman Brothers moment” or will it be something else?

In the end, it doesn’t really matter.  The truth is that what has been going on in the global financial system is completely and totally unsustainable, and it is inevitable that it is all going to come horribly crashing down at some point during the next few years.

It is just a matter of time.

  • JailBanksters

    a Mega Default
    I likes the sound of that
    so this could lead to cheaper silver and gold for about 10 seconds at 3am

  • Rufus T Firefly

    Unfounded hysteria

    • Rodster

      So was the collapse in 2008. Much to do about nothing and blown way out of proportion. 😉

  • Bill

    If this situation is not covered up it may be more than even the cabal can handle and lead to a huge world disaster.

  • Sack man

    Read the book. Rational optimism. Author is Matt Ridley. Great read. Puts things into perspective. You won’t be scared of everything. And may actually have a better outlook on things.

    • dienow

      If you were in my situation, I’d like to see how your outlook would be. Jackass

  • enditnow

    The elites think they are gods and have this all under control, but when this thing unwinds it’s going to be so catastrophic that it can’t even be influenced. The timing seems too perfect here and I believe this will be the trigger event. China is already prepared for war after it collapses.

    • Priszilla

      The difference of chinese and americans is that americans live in perpetual fear. fear of their government, the cops, the neighbour, the corporations, commies, aliens, etc.

  • chris

    China has been financially unstable for quite some time now. But I won’t be surprise if they somehow contain this mess for the time being. I believe the next collapse is going to be triggered be either China, Japan, or Canada. Some people might be surprise that I mentioned Canada, but its economy is in a mess. 164% household debt, overpriced real estate, which when the bubble bursts will take along with it a good chunk of the economy. And contrary to popular belief, Canada’s bank were bailed out during the 2008 meltdown.

  • Drud

    Everything in our society, everything, is predicated upon the idea of growth. Growth is praised and seen as the good way out of any and every economic downturn. Driving this notion and in turn being driven by it, is the inherent quality of debt-based fiat currency. If growth stops ever the currency collapses. This is not disputed by anyone anywhere. Obviously, there is a problem with this paradigm: no system can grow forever. Collapse is not only assured, it is necessary and it will happen given a long enough time scale. Now, that brings us to exponential curves, which is an accurate indisputable mathematical model of compounded growth: in this kind of curve things seem fine until an obvious turning point (inflection) at which things get very bad very quickly. We are on too many exponential curves to count and that inflection point is coming rapidly.

    • Priszilla

      Replace growth by improvement.

      And then go into circles.

      Right now, you could concentrate on food production. Use computers to calculate nutrient needs of the soil. Use agriculture machines that are driven by electric motors, and controlled by GPS and laser to sow precisely what is needed, and put in precisely the nutrients needed.

      Or use algae in tanks to produce methane for feeding into the gas grid.

      Search the patent databases for patents that have run out of their 20 years protection phase.

      Save money, then you won’t need so much debts.

      Would you be able to create a sustainable business that supplies to your neighbourhood what they need and can afford?
      Take in some seniors with experience and some apprentices to learn, and some middle aged to keep the business rolling.
      Provide secure storage for their bicycles.

    • Jahfre

      Yes, growth. Growth is good when it is driven by productivity and free markets.

      When growth becomes the subject of “cargo cults” which use tricks to simulate some of the aspects of productivity-driven growth without the actual productivity being the driver, then, the growth, at ANY cost, becomes the object of policy.

  • Rodster

    Well said Michael, awesome write up. Many have warned that if this global ponzu scheme unravels badly it has the potential to shutdown commerce everywhere around the world. Why? Because no one would trust paper money especially those who issue it.

    • MichaelfromTheEconomicCollapse

      And thank you for the tips that helped me with this article Rodster.


      • Rodster

        You are welcome. I feel too many keep their eyes on what the West is doing to the global economy and rightfully so but not attention is paid to what the East is doing.
        As Robert Fitzwilson said: “Much has been written about China’s desire to have the yuan be the world’s reserve currency. They certainly don’t act like it when massive amounts of currency and debt are being created. Even the Chinese have a stake in maintaining the approximate relative currency values.

      • Annette Smith

        I think the fella that wrote the Harbinger book states that the crash will happen in Sept 2015…and it makes perfect sense…the Jewish holiday, the blood moon, the sever year cycles…I wonder what will happen this April with the peace agreement between Israel and the Palestinians, Iran’s nuke agreement, the blood moon on April 15th, all happening at the same time.

  • James

    Agree with this article a few years left until global collapse 2016 is when I think it will hit.

    • Rene Girrard

      And Hillary will lead us out? Haha.

      • Priszilla

        If you don’t trust others you could do it yourself?

  • paul

    In order to heat my house, will use dollars as fire starting materials when it becomes worthless. Since 1913 the dollar has lost 95% of its value. Also, if you have the time watch the television documentary “How the Dollar became Worthless” It is quite good and informative.

    • Tim

      Why don’t you exchange those dollars now for things will still have value after the dollar dies? If (when?) there’s a run on the dollar, it may be too late for you to exchange them for other things because everyone else will be trying to do so.

    • Priszilla

      You could get $1 bills, shred them and insulate your house with the flakes. Or exchange those dollars into RMB and use the jiao notes? There are probably some other countries that have pretty useless money.

      Or just insulate your house with cellulose flakes you buy with your worthless dollars?

      If you do it properly, you won’t need to heat your house ever again with fuel brought in from the outside.

      Or, you use old bills, shred them, mix them with clay into bricks. When the bricks are burnt, the shredded money burns and creates small bubbles within the brick that improves the insulation property of the brick.

  • K

    I had heard about it.The question I ask. Is with all the sabre rattling going on in the area of China, Japan, Philippines and Taiwan, what might this kick off? Most people are ignoring this situation, because with the Chinese having nukes they figure nothing can happen. What makes you think out of that group, only the Chinese have access to nukes? If Pakistan has nukes. Then both Taiwan and Japan, who are far more technically advanced could easily make them. Have they? Well from what I hear not exactly. Some advanced Countries make the components for such weapons. But never assemble them. By the book they have no nukes. But they could have them quite quickly if needed. My advice, keep an eye on that area, and not for just economic reasons.

    • Alan

      Sabre rattling makes the defense cash registers ring. So I think its more about making money than actually a war. The real war now is being waged in Gold and printed money.

      • K

        Perhaps, but with both sides now having a carrier. A ship that is considered primarily an offensive weapon. It seems both sides are showing some aggressive tendencies. Also the sub launched harpoon missiles being delivered to Taiwan last week is interesting timing.

  • Gregge K Johnson

    Never underestimate the Bankers. They need a war to pull them out of their mess and it’s a brewing!

    • Priszilla

      All bankers are free to go into trenches.

  • LifeandLiberty

    I am as prepared as my family can be however, my fear is from the masses who wake up each day and have no clue at all. Nor do they even try to educate themselves to what may happen overnight but is already happening slowly. My fear is the Cloward and Piven strategy being implemented by the Obama administration. However, even IF their strategy comes to pass I believe enough of us have been awake for years now to restart our ability to live in Freedom in fact live in more Freedom than exists today. The reset is coming. My industry which was part of the first wave in 2008 to see the contraction is still only 1/3 rd of what it once was. You industry will soon see it to. The money printers are simply delaying the inevitable. Prepare yourself now before you become part of those who wake up and say “what the heck happened and where do I get tomorrow’s dinner.”

  • Always Tomorrow.

    2 years ago I started reading this website as well as a few others. I became an immediate believer. After about a year ago I realised every day was a different catastrophy. Every day a different end to the world. I only read for entertainment now.

    • happyfeet

      I agree that it seems like every article has to sound like a prophecy, but in all seriousness, thinking that there isn’t a globally systemic crisis growing larger and larger would be even more “entertaining”. No offense meant.:)

      • Mondobeyondo

        Oh, there’s a crisis all right. You won’t hear much about it in the news. That’s intentional.

        • bob just bob

          Indeed. There aren’t enough lifeboats, so why bother warning the steerage passengers that the iceberg is right ahead.

    • Alan

      That is true to some extent.
      There are many things that could trigger a tripping point. I think it will continue the way it has. Pretty much like cancer you don’t really notice it until its too late. I prep every year for hurricanes, so a little extra prepping is no big deal for me.

    • Joe Kleinkamp

      That is true to an extent. I’ve come to the same realization. Someday we will have to pay the piper but the 2013 stock market gain of 28% while gold dropped from $1700/ oz. to $1185 reminds us to diversify by planning for the best while preparing for the worst. Meanwhile someone is making a very good living selling advertising by sensationalizing negative news.

      • shogun_01

        the stock market growing didn’t have anything to do with the 80billion the feds were dumping in, did it?

        • Joe Kleinkamp

          Of course it did. In fact it was probably the main reason. But the point is it did grow and if you were diversified you would have gotten a share of it.

    • K

      I do not feel Michael posts much, about the end of the world, as you put it. I see him warning of difficult times, and how being prepared, will make these times more survivable. Example a couple of weeks ago, during the record cold, my well froze. For 4 days no running water, and all the streams and springs in the area frozen solid. If I had not had some stored water, this could have been a problem. Not all difficult times are the end of the world. Difficult times arise in everyones life. If you are prepared for them. They are less difficult.

    • jox

      In those 2 years, have you seen a single economic indicator with a positive trend? Ok, except stock market and gold, easily manipulated by the Fed. Business close, people lose their job, salaries get worse, government deficit higher, currency wars more intense, and so on. You are seeing the current economic system fall, but you don’t realize it because it’s developing in slow-motion.

    • Drud

      The point of this website, I believe, is to show the process of economic collapse. We always want to Hollywood-ize everything. In other words, collapse is something that happens instantly, in writing it’s called the inciting incident, the world is normal one moment and in the next everything is up-side-down. But that is not the way it happens in the real world. Systems have massive inertia. I use this metaphor: the same physics, the exact same equations, govern the collision of a bat and ball as govern the collisions of tectonic plates. One takes a couple of milliseconds the other takes years, decades or centuries. The only difference is scale. Our system, our whole way of life is collapsing, there can be no question. It simply take a long time. The decline and fall of the Roman empire took some 400 years, but only takes up a few paragraphs in most history books. Our system will not take that long, technology speeds up the process dramatically. I think we have been in decline for about 3 decades (perhaps more) and now we are accelerating towards the fall.

      • Annette Smith

        I think you are correct. “technology speeds up the process dramatically”.

        • Katy Henderson

          Especially when this “technology” –computers are doing all the trading with each other! They have created an algo monster about to blow its top!

        • AngryWhiteMail

          Totally agree. It took a long time for Rome to rot. In this day and age the process is sped up.

      • cpgone

        Good post.
        “when giants fall” Panzner is a good read about this.
        ECB should interview him

      • watchmanonthetower

        Right you are, Drud! A very accurate portrayal of our ongoing predicament!

        As to the timeline:

        The ‘Push’ was in 1865;
        The ‘Shove’ was in 1913;
        And now, we are around just in
        time for ‘The Fall.’
        An engineered circle-cycle back to War.

        Prepare…or perish.

        • Katy Henderson

          Absolutely correct you are! This might explain why the gov–the “Feds” are preparing for war with the American people once they are pushed off the financial ripped-off cliff. All planned by those in secret.

          Please watch YT video

          THE ECONOMY IS GOING TO IMPLODE….watch it all, even if you do not agree totally with everythings…at least you will understand what these “Bankster Crooks” have done to the Financial Systems…a true eye opener!

      • Catalin Oancea

        The attitude of Always Tomorrow. is mostly to be blamed on sensationalist writing like the one on this website. I have thought about this and reached the conclusion that underneath the rhetoric of caring about people, most of you americans are just business people. Your economy has always been based on canibalizing the poor and helpless for your own benefit, exploiting their vulnerabilities (emotional, political, economic), sowing “goody-goody” feelings and messages of peace and democracy, while in reality destroying the lives of so many of the people that fell for your lies.
        These doomsday prepper scenarios are identical in nature, but opposite in practice; that is, you scare people into buying stuff, always leaving a “GET IT NOOOW! THE WORLD IS COLLAPSING, AAAAA!” feeling at the end of these articles, just like your political branch caresses people to buy into their inane speeches. I saw this on most websites that “care” for the people, they care so much that you have to buy their books, products, DVDs, audio tapes to see how much they really care; NOW, buy them NOW, it’s very urgent that you…whatever.
        Your american society has been based only on services and consumerism, you don’t actually produce anything other than this american dream and sell it to other gullible fools around the world who have bought into your enslavement machine. Now the fools are waking up and withdrawing their money and destroying the dollar in the process, along with your country. I don’t want to be mean, but you deserve it. It’s righteous judgement, China has been invaded over the course of these past centuries by almost all the imperial powers of the world; now it holds the production and most of the world economy in it’s hands. They are taking all their wealth back that England and the rest managed to “steal” through the Opium Wars and beyond. This subject alone will take a short book to discuss. China is exacting revenge on you for everything your country did to this world (not saying you are the great Satan, as the muslims call you, but you are a very important asset of his army).
        BUT, leaving aside the greed and uselessness of most of the american people, the economy really is collapsing. Although these money drones are into this “truth parade” for the profit, they hit the spot on many things that are very real. I am no fool, nor live in “Lala land”, I am aware that things are very, very bad.
        And I also believe that all this sensationalist charade is part of the judgement of God upon the church and the world. Jesus said:

        “…Nevertheless when the Son of man cometh, shall he find faith on the earth?” – Luke 18:8

        There are many in the church, so called christians, preppers, people that are awake that are beginning to lose faith in the signs of the time. The signs are clear, but the timing is not. Will you hold until the end and trust God to deliver you from what is to come upon the earth or will you just give up and see to your life and ignore everything because this doomsday (for unbelievers), Jesus Christ returning (for believers) is just a money making sham designed to scare you into emptying your wallet? Trust God, people, not foolish man and his predictions and scaremongering. Think on this, do you really believe all these people that are “helping” are allowed to go about their business when the internet was started as part of a DOD initiative? They control everything, most of these truthers are part of them and God is testing you to see if you put your faith in what He says or what some man says.

        “And saying, Where is the promise of his coming? for since the fathers fell asleep, all things continue as they were from the beginning of the creation.” – 2 Peter 3:4

        • It’s Coming

          James 5:9

          Do not grumble against one another, brethren, lest you be condemned.

          Behold, the Judge is standing at the door!

          (And His name is not Catalin Oancea)

          • Sargam01

            Only problem, the Christian apocalypse has been imminent for 2000 years.

      • Horiboyable .

        I give the USA about 15-20 years, unless you change the error of your ways. No socialism, Britain did exactly the same thing so if you want to see where your heading just look across the pond. You CAN NOT live a life style you have not earned for ever. This will play out until the USA crashes and burns, then maybe you will still have a democracy. You will begin to see separatist movements starting soon. I bet Texas will be the first to try and go it alone.

    • americalsgt

      I would image that most people who are struck by lightening heard rumbles of thunder beforehand. So I don’t see any harm in listening and learning before we are knocked to the ground..

    • Beanodle

      The reality is that a controlled reset should have been allowed to occur from 2008 onwards. Instead band aid after band aid has been applied to the world economy. Eventually the economic boils under the band aids will erupt. The consequences will be frightening. The P.T.B. know this, we know this, many of the aware population know this. The pollyannas of this world just turn a blind eye hoping the economic ills will go away. Phoney economic data are rainbows on the pollyanna horizon.
      The can kicking will run into a wall or more than likely a mild or hard black duck will be born.

      Much of those billions of Chinese money has been used to surreptitiously buy up foreign currency and bolt holes in foreign – i.e. western countries. In my city mainland Chinese awaiting the day of reckoning own thousands of apartments. Many, many of these apartments are empty – just waiting for the day of occupancy.

    • Rocketman

      In the old Soviet Union it was known for decades that the collapse was going to happen. Things went on normally (for them) during all that time until one day the collapse “suddenly” happened.

    • David Hammond

      It’s not that Michael is posting end of the world stuff, but rather he’s posting trends. There’s a big difference.

    • Horiboyable .

      It will begin in the last quarter of this year and it is going to be Tsunami. I saw this coming back in 2012 and am prepared for it. I have no mortgage, no debt and a little cash in the bank. If you ever read history this always happens. Think Rome.

  • Alan

    I think a collapse in Red China will not go over too well here, I suspect a domino effect will occur. However Red China has been buying up gold for a couple years now. I would not be surprised they will simply have a gold backed currency ready in the back ground, which in a collapse everyone will run too for safety. I’m not a fan of Red China but I think they know how to play the game and us. The US is ready for a shooting war but not an economic war.
    Everyone be safe and do a little prepping each day

    • Malcolm Reynolds

      Not only gold, but natural resources.
      As much gold as they’ve bought, they’ve bought more resources.

      • Tom

        The Chinese also hold about 90% of the world’s Rare Earth Elements. All of our technology relies on these to operate.

        • Priszilla

          That is not true.

          They probably produce 90% currently, but the most resources are in the USA.

          And in Germany their scientists and engineers are working on replacing rare earth elements. And they are succeeding, making electric motors now without rare earth magnets.

          • Malcolm Reynolds

            oooh, that is exciting. 🙂

          • hero

            Japan already succeeded. Ask Toshiba who invented a motor without using rare earth elements.

            Talking about collapse, china & korea may fall like dominoes. Korea is alreay broke. IMF stress test was supposed to come out in Nov but delayed twice. Also, the IMF director of the Asia Pacific Region resigned. Seems a big mess is coming out.

            Remember a lot of chinese investment trusts will mature in Q2-2014. It will be a big test.

  • Rene Girrard

    I know this is off topic, but Vladimir Putin is on the right side of the gay issue, and Pres O and the rest of the government and media elites are on the wrong side defending the LGBT lifestyle? How did we ever let this government and media scum rule over us like this? I just saw Bill O’Reilly make fun of Putin on Fox News and defend the LGBT. Sorry, but I just can’t think of a word to substitute for “scum”. Help me think of one. Thanks.

    • Erik Jaeger

      In a thread about possible economic collapse in China, and possibly extending worldwide, your main concern is the gheys. Get a life dimwit. Oh, and I have a substitute for “scum.” “Rene Girrard”

      • Rene Girrard

        An economic collapse won’t send you to hell, but being gay and not repenting of your sin will. You seem to have your priorities all messed up.

        • Gay Veteran

          and you seem to have your head up your a**

          • Malcolm Reynolds

            LOL, don’t be too harsh, you have one up yours too.

          • Gay Veteran

            no, you can’t put your head up my a**

          • Malcolm Reynolds

            No thanks, sodomite. I don’t bat for your team in the first place and I wouldn’t wanna get hit by your boyfriend’s purse in the second.

          • Gay Veteran

            jeez, stereoptype much?

        • Jimbo

          If God created man, why did he create gay people if he hates them so much?

          • Billy

            There is no god, do not pander to someone’s delusions to make a point. Look where it’s gotten us as a culture. System slavery love by low iq dim wits who believe in talking snakes and rib women.

      • WVBORN56

        You might want to try and connect the dots…moral decay = economic decay. God will not be mocked.

        • Billy

          there is no god keep your ghost stories to yourself.

    • davidmpark

      Putin is right for some of his argument as Russia lost a lot of it’s population due to communism, but his claims that homosexuals are criminals and should be rounded up is way off. The only reason to go after someone in that fashion is when there’s proof of theft, assault, or murder – actual crimes. Being homosexual, participating in homosexual acts with both parties consensual, is not a civil crime nor a reason to round people up. If they want to pursue homosexual relationships without being belligerent and hostile about it to others without provocation, not committing rape or sexual assault, or committing sexual harassment or making statements that are heterophobic, or disturbing the peace; then that’s their business.

      • Gay Veteran

        Putin is using gays as a scapegoat, using Jews is no longer acceptable

        • davidmpark

          I have to agree with that.

        • Malcolm Reynolds

          Prolly the most sensible thing you’ve ever posted.
          I wouldn’t say it’s no longer acceptable tho.
          He’s just outsourced the Jew hatred to the arabs, who are pretty good at it already and are Russia’s staunch allies.

  • davidmpark

    I’m not surprised… not anymore. Saw this coming miles down the road; and I got so much taunting on here from guys backing the commies as being superior and stable. It’s all bull-plop with those guys; and I knew it.

    Well, now we just have to see what happens to the March forecasts of yet another financial crisis. Should be interesting.

    Hope everyone got ready, cause when that Thanksgiving pigeon is done cooking (downed with a tethered house cat, stuffed with dandelions and wild sparkling mushrooms, with a side of lawn clipping salad, and served with tainted water and cattail moonshine) then one might think preparation and greater skills would’ve been useful. 🙂

  • Mondobeyondo

    Uh-oh. February could be interesting, to say the least.

    As I’ve said several times – we’re all sitting on top of a (financial) bomb. It’s a time bomb. No one in Washington is even thinking about trying to defuse it. They’re too busy with their own agendas, trying to get re-elected, etc. Looks like the bomb may be close to exploding.

    Specific date(s)? Your guess is as good as mine. I just know it’s very, very close.

  • Mondobeyondo

    We are rapidly approaching critical mass – that focal point where everything comes together – or falls apart.

  • chilller

    A loss in China of $500M just doesn’t seem that significant to me, nor does it seem to be enough to trigger a collapse of some sort.

    • MadMoto

      I agree.

    • jaxon64

      my first thought also–especially in a society where the line between corpro/govern is even less veiled than our own. The Chinese govt will easily finance this blip if needed. The timing is not yet for the fruition of their plans–there are more resources in S America, Africa and N America of which they aspire to gain —the vast Canadian oil reserves are only now beginning to flow into their Govt -controlled, industrialized, slave labor production.
      The world’s wealth and resources have literally been pouring into China through trade agreements, debt interests and shrewd purchasing from desperate nations…I think this one is a yawner…

  • Priszilla

    Here another one:

    According to the International Labour Organization (ILO) every minute the world gets 10 more unemployed persons.

    In another article I read that thr 85 richest persons on this earth own as much money as the 3.5 billion poorest combined.

    • MadMoto

      The wealth disparity is a little misleading. You have outliers with massive populations (China, India) that skew that statistic.

      • Priszilla

        No, forget “countries” for a while, just think “people”, no matter where they live.

        • MadMoto

          I understand your point but I still must disagree. Let me further explain, why would an American care about the wealth disparity in China? Does the average American have any economic interest or political influence there (or here for that matter)?

          Also, I still think it’s misleading with respect to the cost of living as well. The purchasing power parity, interest rate differential, and even the cost of financial assets will skew this number. For example, Bill Gates is supposedly the wealthiest person in the world, but, does he own a disproportionate amount of REAL assets in the same proportion? Certainly not. He doesn’t own 40B in land or factories. If we removed financial assets from the equation that band of wealth disparity will close by quite a bit. If we adjusted for the cost of living it would narrow a bit more. If we removed outliers like Gates, Buffet, or lets say the top ten, it would narrow considerably some more. What that report was really capturing was the value of equity these people hold. They own the theoretical future earnings of some entities and instruments but does that mean they actually have more stuff? I am not sure but a dollar tomorrow has to be discounted and I think that discount rate is grossly understated in such analyses.

          • Priszilla

            So, when Bill Gates donates 400 Million for Cancer Research, that isn’t real money? Just hot air?

            Why do Americans like to lie to each other?

          • MadMoto

            400M is a far cry from 40B in assets. Do you not know the difference between wealth and income? He doesn’t REALIZE the income until he exercises his options to sell the equity (hence the differing tax rates – well one of the supposed reasons used to argue for it; i personally would favor a consumption tax over income tax).

          • Mondobeyondo

            Do you know for certain, that the money Bill and Melinda Gates donate, is going to the causes they support?

            Not saying their money ISN’T, but…sometimes the media “washing machine” likes to hit the “spin” cycle – know what I mean?

          • Priszilla

            I don’t care. I switched to linux, and help my friends and family to switch, too.
            Using older computers you can be faster with linux than using new computers with new windows.

            there is a huge open source movement out there, that extends to hardware, 3d printing, etc. the idea being that everybody makes what he can, and downloads what he needs.

          • jaxon64

            “Why would any american care about the wealth disparity in China?”…or India’s poor and starving, or Africa’s or S America’s…..
            because they are fellow humans? Because they are our earthly brothers and sisters spinning through a violent and turbulent universe on our tiny blue planet–that their one and only life will be spent in abject poverty, misery, despair and often ill health—AND IT DOESN’t HAVE TO BE?…Why should any Americans care…..

          • MadMoto

            Oh geez. Spare me the phony altruism. When YOU start writing checks then you can ask others to join in… Didn’t think so. It’s always easier to spend someone else’s money, right?

      • Jimmy Smith

        Actually, India’s population growth rate is only 1.28%, its the African countries with the fastest growing populations.

        • MadMoto

          Who said anything about growth rates?

          • Jimmy Smith

            Wouldn’t the wealth disparities increase for African nations if there populations continue on growing?

          • MadMoto

            Possibly, I don’t think those are correlated however. More people translates to more consumption of resources, certainly, but I don’t think that in and of itself results in more disparity. I see where you’re going but in my opinion the scarcity of resources is mutually exclusive to the allocation of said resources in an economy.

      • Mondobeyondo

        Compare the life of an average Chinese peasant to that of an average sharecropper in Mississippi. Big difference.

        • MadMoto

          I still don’t see the relevance of the comparison and why it’s all Americans to have to solve this problem. Your fallacious altruism (like a previous post I replied to) is just a guise to steal from others.

  • MikeinOKC

    So we meaning the FED are printing digital money so we can buy up overpriced toxic assets. Our elite bankers smash down the price of physical gold and silver to profit in their paper gold.The Chinese have been printing money to buy thousands of tons of the worlds gold, probably including the missing gold from Germany. I wonder who the winners and loser’s will be when this all comes falling down? Don’t think its going to be US!

  • Rumplestitlskin

    After Hong Kong was returned to China, it didn’t take them long to realize that capitalism wasn’t as bad as they thought. Thus, they embraced it with enthusiasm, maybe not fully realizing that the Fractional Reserve Banking system it was based upon has major flaws. One being, that it is just a matter of time before that ponzi scheme comes crashing down around the heads.
    The United States and the EU have circumvented this inevitability for the time being by printing more and more money to keep the system afloat, and for the USA, by our currency being the world’s “Reserve Currency”
    Addiction is a tough one to stop, and when a nation is addicted to easy money, they actually don’t care what it will do to their body, they only care about what it is going to cost them today. The accumulative affects of the FRB system produces an ever increasing debt which can only survive if that debt is continually increased, thus the two biggest economies, China and the USA are about to go down because they cannot service that debt even if they stole all the labors from all of their citizens for an eternity !!!

  • Vlad Lenin

    The Chinese government won’t allow this to happen. Besides preventing a potential disaster, the Chinese are all about saving face. They can’t appear to be suffering from those “western” problems. Besides, they have a plan… which will probably be very bad for the U.S. and Europe.

  • Richard O. Mann

    The interesting thing about all the reports here is that things are getting crazier and crazier, not just here in the US, but all over the world. If it was just some one standing on a street corner saying the end is near, I would tend to pass him by. But, when I read something here, and then it begins to be talked about all around the net and other sources, I would say that something is about to happen.

  • Kent Harris

    I believe in God’s timetable for the future. Israel is that time piece and it is about to hit the big 70. Whe that happens we could see the 3rd temple or as I believe war to the region and the world.

  • grumpyhillbilly

    Sounds like they are just about to attempt a control plunge. I’ll venture the Chinese Communist party will return to their strong armed roots in response to this. Even so China will still be sitting pretty compared to us. They have the manufacturing base now. The Communist government has invested in raw materials both at home and abroad. I doubt their education institutions are pushing nonsense like Common Core. It will likely be them that will rise from the global ashes.

  • Waiting-for-the-Godot

    Hello Michael,
    Have been following up this forum since about 2 years. I understood some part and believed you when I could not understand. I never doubted your sincerity and your knowledge depth.

    However, always, at the back of my mind, I had a feeling- like the things are getting exaggerated,

    Now, I have one question for you-

    Can I assume- Domino effect will start on 31st Jan ? Is this the date when everyone will officially acknowledge?

    Can you pin point some date, when governments and the media will officially acknowledge the mess?

    • Hillbilly

      Matthew 24:36

      “But on that day and hour no one knows, not even the angels of heaven, nor the son, but the father alone”

      Your asking him a question that has no answer!

    • Drud

      No one can pinpoint a day when collapse occurs for 2 reasons: 1) the system is so incredibly complex that no one can consider all the variables and 2) collapse does not happen in a day, there may be a single day that accelerates the rate of decline, but the collapse will play out over decades.

    • Jimbo

      If you read the UK Daily Mail, you would be forgiven for believing that the world economy is in a boom phase with the past firmly behind us and unprecedented growth coming up in the next few years. That is an extreme opposite view to what you read on this blog. You have to read everything and decide for yourself. Read the MSM and read this and make up your own mind.

      I have understood for 20 years that the world economic model can not work in the long term. Growth rates of 3% PA double the world economy every 26 or so years. Double the energy use, double the manufacturing output etc. etc.

      To predict exactly how it will end, what will be the trigger and when, would be practically impossible.

      What I would say, is that as each year passes, more triggers and more scenarios raise their heads and problems that we already have just get worse.
      It is like a person growing old. They don’t know when they will die, but die they will and as each day passes, the chances of dying increase.
      The world economy right now is like a dying old man who thinks he can improve his health by drinking more alcohol and smoking more cigarettes.

  • mike

    To put my ten pence worth in I believe after all research as most have done,that it is connected to the new order of the age . Obviously purposely bought about to gain more control of the sleeping people of this world robbing them of there consciousness via the ego or false self.I would also agree that the carrot of doom is dangled on many of these sites to try and get the awakened back into the system and trigger that ego . All that needs to be done is treat everything as a non reality until the day comes when it is and enjoy your experience here and quietly make preparation for your families as best you can .

  • A $500M default is nothing. Many countries default. The world didn’t end.

    • Mondobeyondo

      Yes – but not all countries are global superpowers with atomic weapons at their disposal

  • Mondobeyondo

    Just in case you were wondering – China basically owns us. Much of that $16 trillion U.S. is owed to them. If they wanted to, China could easily use that as leverage against, say, military action against Taiwan or Japan. The U.S. would be scared to death to use its military against any Chinese action. Why? The Chinese would simply “pull the plug” and dump the U.S. dollars it has on reserve, hyperinflation would ensue here in this country, and the dollar would be dead. It’s a dangerous game, indeed.

  • ItIsWell

    I agree that I too have read these sites for two years and its always pointing to different scenarios and nothing has happened yet. However, history ALWAYS repeats itself. I believe that in my lifetime some sort of collapse will happen and knowledge is the best tool to have. The economic mess we are in now has never happened before so we will probably be in a worse mess than ever before.

    • Jimbo

      That is the worrying thing. There are so many dominoes lined up and so many possible triggers, that collapse is inevitable.
      As for nothing happening yet, debt has continued to climb, inequality and unemployment have increased and global political stability has decreased.
      The train hasn’t hit the wall yet, but the wall is right in front of us and the train can’t be stopped.

  • Bill

    Could this recent headline be the “real” truth?

    “Wall Street adviser: Actual unemployment is 37.2%, ‘misery index’ worst in 40 years”

    • Mondobeyondo

      Wouldn’t doubt it for a New York minute.

  • Gay Veteran


  • cpgone

    when giants fall” Panzner is a good read about this.
    ECB should interview him

  • Priszilla

    That’s a bit extreme.
    But there is always space for improvement.
    We grow herbs for cooking indoors as room plants. We also take any seed we get and try to grow something from it. Avocado, Mango, tomato, strawberry, citrus, etc. sometimes it works, sometimes not.
    Now we have thyme to make a tea for sore throats, and coughing. The basil goes well with the tomatoes, the greens from freshly grown onions are good for toast in the morning.
    The woollen jumpers keep us warm in Winter, reducing the need for heating.

    Even in the city there is a lot you can do to stretch your wealth. It usually comes down to knowledge, skills, ideas, experiments.

  • Clarice King

    The sky is falling,the sky is falling

  • Chocolatini

    I probably don’t understand the usual ‘smoke and mirrors’ of the financial economic magicians.
    But what I do know, is the globalists have china in their crosshairs. I believe they are building china up, only to bring it down. China was welcomed into the WTO in 2001, 2 months after the September 11th distraction, and was wined and dined like a young virginal hooker for the globalists to sink their teeth into.

    All this talk about China as a military threat blah blah won’t matter when their economy is imploded from the inside.

  • Katy Henderson

    A really good explanation as to what is going on in the financial background- playing out in secret shadowy financial markets- is presented and exposed by Ann Barnhardt, ex broker in:


    Watch the eight part video series on YT and be informed as to what the Banksters are “really” doing–and what is likely to be the result. Their goal is “Chaos” to create a New World Order/ One World Order global enslavement with every person Micro-Chipped, tracked, and marked.

  • I am Zelco

    This is why the Chinese love them some bitcoin

  • I am Zelco

    Time for plan B, B is for Bitcoin 🙂

  • DanJR

    Sorry to burst your bubble, but you are condemning all Americans in one broad stroke without first taking the plank out of your own eye.

    If you tell me what country you are from, I can do the same as you have just done to America and worse.

    You are making America out to be some metaphorical evil beast, yet you are not one to judge and “it’s coming” is right, you are not to do the judging that god alone is to do.

    You can deny the scripture verse he quoted all you want to feel like you are intellectually isolated or somehow untouchable, but you too are a mere human with finite understanding.

    Be careful in whom you call evil, because you might be looking at it in the mirror.

  • bluesky

    Has anyone heard of the deadly wound?

  • Catalin Oancea

    It’s useless with you people. Really, you are far gone.

    “Since you think China is being used as God’s great vessel…”

    You think I condone China. Do you have no knowledge of how God used the Babylonian empire to destroy Israel?

    “You failed to point out the flaws in Drud’s argument.”

    You think I tried to argue with Drud.

    “You condemn the mega churches, rightly so, but they are such a small percent of believers in America.”

    You think I believe the megachurches are almost all believers in America.

    “…the inaccuracies you stated about China…”

    You think China hasn’t been abused by almost every imperial power since the Opium Wars, more recently by the Japanese. And it’s just one inaccuracy, not multiple like you make it to be. And you actually try to excuse England by blaming China’s addiction…aren’t you a pathetic person. You are actually going to try to tell me drug dealers are blameless because there is demand…they just doin’ their business, maaan.

    “…as if you have been reading, listening, and buying DVDs to pastors and teachers…”

    You try to accuse me of the same thing I talked about. How does that work? “Hey, better use his argument and hope I am right.”

    “In fact, this article doesn’t even try to sell anything.”

    I wasn’t making reference to this article. I have changed “you” to “they” as to avoid this confusion. I was referring to the prepper movement in general. It seems other people understood that, but you needed some other reason to argue against me.

    “Sure there are advertisements on its site and if you were a prudent
    christian you could make out whether it is a waste of money or not…”

    Trying to defend the greed of your own people, pathetic. Are you some kind of fanboy? Do you know this author has two other websites similar to this one, in which he presents issues from a social perspective?

    “We live in an evil world and your country will not be spared either.
    Your leaders, your people are just as evil as anyone else in the world…”

    Did you miss this: “Because you are bigger, you are more evil than the rest of us for the
    simple fact that you have more distructive capability than the rest; the
    rest have the framework for commiting evil, it is sin, but given their
    limited size and power, are restrained by purely logistical means.”

    “…missy ignoramus.”

    Thinking that I am a girl because in your country Kaitlin is a girl’s name, while recognizing I am from a different country, seeing that my name is NOT written like that, and not even bothering to actually look the name up and see that it’s a man’s name.

    You prove my point, most of you Americans are stupid, ignorant, self-centered, self-righteous fools.

    And another thing: this author claims he’s a Christian, yet on the top of his page is his book and from the articles I’ve read (some of which I found useful and even recommended them to others) I haven’t seen even ONE Bible verse. That is because it will scare away the heathens and won’t have as many hits…do you actually comprehend what I am saying? That’s a rhetorical question, no need to answer, please don’t bother because I am done arguing with buffoons like yourself.

  • Horiboyable .

    Politicians selling the sheeple down the road again. When people feel the pain, then they will rise against the ruling elites. Europe first and then the USA. Politicians and nappies need to be changed regularly and for the same reason.

  • Horiboyable .

    It’s over, its just a matter of time before you feel the pain.
    It was a good gig while it lasted.

  • Nemesio E. Diamante

    Ever since, I believed that China’s success story is just a baloney. It’s economic growth was not anchored on sound economic fundamentals but just a manipulation to attract more credit to finance the whims of China’s ruling minority. Now they have they have to swallow the bitter pills.

Finca Bayano

Panama Relocation Tours



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