The Beginning Of The End
The Beginning Of The End By Michael T. Snyder - Kindle Version

The Prepper's Blueprint

Don't Buy Survival Food Until You Read This - If you stockpile the wrong foods, you could be setting your family up to starve. It sounds harsh, but the truth is too many people with good intentions are making critical mistakes with their food stockpiles. Watch this video now >>
The End of Obama? Approaching Obama scandal could change the White House Administration and our country overnight... Click Here
Gold Buying Guide: Golden Eagle Coins

Archives

Warnings That A Massive Stock Market Crash Is Imminent

In the financial world, the month of October is synonymous with stock market crashes.  So will a massive stock market crash happen this year?  You never know. The truth is that our financial system is even more vulnerable than it was back in 2008, and financial experts such as Doug Short, Peter Schiff, Robert Wiedemer and Harry Dent are all warning that the next crash is rapidly approaching.  We are living in the greatest debt bubble in the history of the world and Wall Street has been transformed into a giant casino that is based on a massive web of debt, risk and leverage.  When that web breaks we are going to see a stock market crash that is going to make 2008 look like a Sunday picnic.  Yes, the Federal Reserve has tried to prevent any problems from erupting in the financial markets by initiating another round of quantitative easing, but 40 billion dollars a month will not be nearly enough to stop the massive collapse that is coming.  This will be explained in detail toward the end of the article.  Hopefully we will get through October (and the rest of this year) without seeing a stock market collapse, but without a doubt one is coming at some point.  Those on the wrong end of the coming crash are going to be absolutely wiped out.

A lot of people focus on the month of October because of the history of stock market crashes in this month.  This history was detailed in a recent USA Today article....

When it comes to wealth suddenly disappearing, October can be diabolically frightful. The stock market crash of 1929 that led to the Great Depression occurred in October. So did the 22.6% plunge suffered by the Dow Jones industrial average in 1987 on "Black Monday."

The scariest 19-day span during the 2008 financial crisis also went down in October, when the Dow plunged 2,675 points after investors fearing a financial collapse went on a panic-driven stock-selling spree that resulted in five of the 10 biggest daily point drops in the iconic Dow's 123-year history.

So what will we see this year?

Only time will tell.

If a stock market crash does not happen this month or by the end of this year, that does not mean that the experts that are predicting a stock market crash are wrong.

It just means that they were early.

As I have said so many times, there are thousands upon thousands of moving parts in the global financial system.  So that makes it nearly impossible to predict the timing of events with perfect precision.  Financial conditions are constantly shifting and changing.

But without a doubt another major financial collapse similar to what happened back in 2008 (or even worse) is on the way.  Let's take a look at some of the financial experts that are predicting really bad things for our financial markets in the months ahead....

Doug Short

According to Doug Short, the vice president of research at Advisor Perspectives, the stock market is somewhere between 33% and 51% overvalued at this point.  In a recent article he offered the following evidence to support his position....

● The Crestmont Research P/E Ratio (more)

● The cyclical P/E ratio using the trailing 10-year earnings as the divisor (more)

● The Q Ratio, which is the total price of the market divided by its replacement cost (more)

● The relationship of the S&P Composite price to a regression trendline (more)

Peter Schiff

Peter Schiff, the CEO of Euro Pacific Capital, has been one of the leading voices in the financial community warning people about the crisis that is coming.

During a recent interview with Fox Business, Schiff stated that the massive financial collapse that we witnessed back in 2008 "wasn't the real crash" and he boldly declared that the "real crash is coming".

So is Schiff right?

We shall see.

Robert Wiedemer

Economist Robert Wiedemer warned people what was coming before the crash of 2008, and now he is warning that what is coming next is going to be even worse....

"The data is clear, 50% unemployment, a 90% stock market drop, and 100% annual inflation . . . starting in 2012."

Harry Dent

Financial author Harry Dent believes that the stock market could fall by as much as 60 percent in the coming months.  He is convinced that stocks are hugely overvalued right now....

"We have the greatest debt bubble in history. We will see a worldwide downturn. And when you are in this type of recessionary environment stocks should be trading at five to seven times earnings."

So are these guys right?

We shall see.

But I do find it interesting that some of the biggest names in the financial world are currently making moves as if they also believe that a massive financial crisis is coming.

For example, as I have written about previously, George Soros has dumped all of his holdings in banking giants JP Morgan, Citigroup and Goldman Sachs.

Infamous billionaire hedge fund manager John Paulson, the man who made somewhere around 20 billion dollars betting against the U.S. housing market during the last financial crisis, is making massive bets against the euro right now.

So where are these financial titans putting their money?

According to the Telegraph, both of these men are pouring enormous amounts of money into gold....

There was also news last week in an SEC filing that both George Soros and John Paulson had increased their investment in SPDR Gold Trust, the world’s largest publicly traded physical gold exchange traded fund (ETF).

Mr Soros upped his stake in the ETF to 884,400 shares from 319,550 and Mr Paulson bought 4.53m shares, bringing his stake to 21.3m.

At the current price of about $156 a share, these are new investments of about $88m of Mr Soros’ cash and more than $700m from Mr Paulson’s funds. These are significant positions.

So why would they do this?

Why would they pour millions upon millions of dollars into gold?

Well, it would make perfect sense to put so much money into gold if a massive financial crisis was coming.

So is the next financial crisis imminent?

We will see.

Most "financial analysts" that appear in the mainstream media would laugh at the notion that a stock market crash is imminent.

Most of them would insist that everything is going to be perfectly fine for the foreseeable future.

In fact, most of them are convinced that quantitative easing is going to cause stocks to go even higher.

After all, isn't quantitative easing supposed to be good for stocks?

Didn't I write an article just last month that detailed how quantitative easing drives up stock prices?

Yes I did.

So how can I be writing now about the possibility of a stock market crash?

Aren't I contradicting myself?

Not at all.

Let me explain.

The first two rounds of quantitative easing did indeed drive up stock prices.  The same thing will happen under QE3, unless the effects of QE3 are overwhelmed by a major crisis.

For example, if we were to see a total collapse of the derivatives market it would render QE3 totally meaningless.

Estimates of the notional value of the worldwide derivatives market range from 600 trillion dollars all the way up to 1.5 quadrillion dollars.  Nobody knows for sure how large the market for derivatives is, but everyone agrees that it is absolutely massive.

When we are talking about amounts that large, the $40 billion being pumped into the financial system each month by the Federal Reserve during QE3 would essentially be the equivalent of spitting into Niagara Falls.  It would make no difference at all.

Most Americans do not understand what "derivatives" are, so they kind of tune out when people start talking about them.

But they are very important to understand.

Essentially, derivatives are "side bets".  When you buy a derivative, you are not investing in anything.  You are just gambling that something will or will not happen.

I explained this more completely in a previous article entitled "The Coming Derivatives Crisis That Could Destroy The Entire Global Financial System"....

A derivative has no underlying value of its own.  A derivative is essentially a side bet.  Usually these side bets are highly leveraged.

At this point, making side bets has totally gotten out of control in the financial world.  Side bets are being made on just about anything you can possibly imagine, and the major Wall Street banks are making a ton of money from it.  This system is almost entirely unregulated and it is totally dominated by the big international banks.

Over the past couple of decades, the derivatives market has multiplied in size.  Everything is going to be fine as long as the system stays in balance.  But once it gets out of balance we could witness a string of financial crashes that no government on earth will be able to fix.

Five very large U.S. banks (including Goldman Sachs, JP Morgan and Bank of America) have combined exposure to derivatives in excess of 250 trillion dollars.

Keep in mind that U.S. GDP for 2011 was only about 15 trillion dollars.

So we are talking about an amount of money that is almost inconceivable.

That is why I cannot talk about derivatives enough.  In fact, I apologize to my readers for not writing about them more.

If you want to understand the coming financial collapse, one of the keys is to understand derivatives.  Our entire financial system has been transformed into a giant casino, and at some point all of this gambling is going to cause a horrible crash.

Do you remember the billions of dollars that JP Morgan announced that they lost a while back?  Well, that was caused by derivatives trades gone bad.  In fact, they are still not totally out of those trades and they are going to end up losing a whole lot more money than they originally anticipated.

Sadly, that was just the tip of the iceberg.  Much, much worse is coming.  When you hear of a major "derivatives crisis" in the news, you better run for cover because it is likely that the entire house of cards is about to start falling.

And don't get too caught up in the exact timing of predictions.

If a stock market crash does not happen this month, don't think that the storm has passed.

A major financial crisis is coming.  It might not happen this week, this month or even this year, but without a doubt it is approaching.

And when it arrives it is going to be immensely painful and it is going to change all of our lives.

I hope you are ready for that.

Be Sociable, Share!
  • http://www.SternWealthAdvisors.com Billy Stern

    Michael, although I appreciate your articles warning people about “true” inflation rates and other articles pertaining to the U.S. dollar and bear markets, what I find lacking is a plan to protect yourself.

    I really hate to self-promote, but our firm (sternwealthadvisors.com) protects clients in down markets and we have a plan to profit from the next major decline. Many money managers don’t know what to do, but we are ready to act with a defined plan to protect and even profit from a meltdown.

  • Old Advisor

    We are in the midst of a slow motion economic crash, or series of adjustements, right now and have been for years. In the last four years the government has kicked the can down the road by going $5 trillion into debt so that the economy could grow by $1 trillion. This foolishness only goes on so long until the boom is lowered and the can gets kicked down the road shorter and shorter distances as the wall approaches. The wall is there around 2015 and the entire second half of the decade will be spent picking up the pieces and trying to go on. The end comes as global demand for oil exceeds global supply and we try to adjust to a new energy paradigm. Cracked natural gas will not fully save us. Prepare for an emergency that will last the rest of your life after that.

  • Mark

    The only hope that you have is not in money, but in the rosary. Pray the rosary daily (Blessed Mother at Fatima 1917).

    • 90404

      why, how often is Mary mentioned in the New Testament?

  • dla

    I really enjoy this site and while i do not agree with extreme prepping stuff, i do believe we are being offered an opportunity to get in at the ground floor of the stock market when it hits bottom. We all know that the JP morgans of this world control everything. Knowing this i do not understand why I never read on prepping blogs on how to set aside some funds for investing. In my mind the markets are gonna be on sale to say the least. I understand having food,guns,shelter and so on which to me is just common sense and i have always had an excess of those things before the economy tanked years ago. We can’t stop what is coming but i think setting aside a few thousands dollars to invest in the stock market is wise for anyone with basic knowledge of how much the market controls our lives and future. Eventually the markets will see liquidity and anyone who gets in at the bottom will profit in the future. We might not see the true inflation damage of the quantitative easing programs for years to come and buying stocks will be another way to protect yourself. The QE money that is flooding the markets is not in circulation. It is sitting on balance sheets waiting to be loaned out which might not happen for quite awhile. So the inflation that we see now is not the colossal inflation that is coming. For those of us that are struggling day in and day out. The coming crash might be the wealth transfer that changes ours families future. Silver and Gold on hand is nice but if history is repeating itself then those who have never invested might want to reconsider?

  • m

    Stock up on food and supplies when they have a good sale. How can it hurt?

  • Grillge

    I have created a post on International preppers showing that the stock market charts are saying there is going to be a crash like never before.
    I have tried to explain it the best I can so have a read, there are charts to help you understand what is going to happen. here’s the link.

    http://internationalpreppersnetwork.net/index.php?sid=772c731386d6f81f1f3447abaf01e5bb

  • jeffe potton

    Next March 13th, Allen’s Comet will trail the sky and end the financial cliffhanger we have all been living.

  • http://www.tradedmoney.com Anisley

    Loved it as you made it short and simple.Thanks for such a wonderful information Im looking forward to read your informative post.

  • beary4171

    I’ve been reading this garbage for years! Not sure if Keynes is an economic god but he sure seems to know more than than anyone in this post.

  • http://www.technicalanalysisofstocks.in/ Stock Tips

    Unexpectedly market has performed well after few months of your article. However if it falls below the support levels, crash will be unavoidable.

Emergency Essentials/BePrepared
Agora Financial
Thrive Life
FEMA Hates This

Austin Coins
Family Survival Plan - Check This Out!
The End Of America?
MHAdNew_125x125 copy(1)
End Game Economics
FINCA BAYANO
Survive After Collapse
cheaper to burn dollars than paper

Silver.com

Facebook Twitter More...