Perfect Storm

This Wasn’t Supposed To Happen…

November 12, 2018November 12, 2018 by Michael

We have definitely deviated from the script. According to virtually all of the “experts”, the stock market was not supposed to keep plummeting in November. This was supposed to be the month when the market calmed down and things returned to normal. But instead, November is starting to look a whole lot like October, and many investors are really starting to freak out. U.S. stocks declined for a third day in a row on Monday, and all post-election gains have now been completely wiped out. The Dow Jones Industrial Average lost another 602 points, and all of these large daily losses are really starting to add up. It may still be a bit too early to call this a “major financial crisis”, but if stock prices keep plunging like this it won’t be too long before all hell starts breaking loose on Wall Street.

Goldman Sachs, GE and California utility stocks were some of the biggest losers on Monday, but it was Apple that made the biggest news…

Investors grew concerned after Wells Fargo analysts identified Apple as the unnamed customer that optical communications company Lumentum Holdings said was significantly reducing orders. The news sent Apple’s stock down 5 percent for the day. Lumentum shares plunged almost 33 percent.

Shares in other major tech stocks fell. Advanced Micro Devices gave up 9.51 percent, while Nvidia fell 7.84 percent. Micron Technology lost 4.27 percent. Banks and consumer-focused companies, and media and communications stocks also took heavy losses.

All along, tech stocks had been leading the bull market on the way up, but now things have completely shifted.

In recent weeks tech stocks have been absolutely cratering, and several of the biggest names are now officially in bear market territory. The following summary comes from Wolf Richter…

Facebook [FB] dropped 2.4% today, to $141.55 and is down 35% from its peak in July.
Amazon [AMZN] dropped 4.4% to $1,636.85 a share and is down nearly 20%, from the peak on September 5, when shares nearly kissed for the briefest moment $1 trillion.
Alphabet [GOOG] dropped 2.6%. At $1,038.63, shares are down 18% from the peak in July.
NVIDIA [NVDA] plunged 7.8% today to $189.54 and is down 34.5% over the past six weeks and down 11% from a year ago.
Netflix [NFLX] dropped 3.1% today to $294.07 and has plunged 30% from its high in early July.
Microsoft [MSFT] fell 2.4% today to $106.87 and is down 7.5% from its peak at the beginning of October.

The environment on Wall Street is radically different than it was even six months ago. Today, there are concerns about what a divided Congress will mean for the next two years. Certainly there will be no more tax cuts, and many investors are bummed about that. There are also concerns that the trade war between the United States and China will continue to escalate. In addition, interest rates continue to rise, housing numbers continue to get worse, and we continue to get more evidence that the global economy is really starting to slow down.

And one thing that is really spooking investors right now is the surging U.S. dollar…

Stocks investors are spooked about a lot of things, and the strong dollar biting into earnings growth is now one of them.

The dollar index, which measures the greenback versus a basket of other currencies, jumped 0.7 percent on Monday to 97.58, a 17-month high. As the dollar rose, the Dow Jones Industrial Average lost 602 points to 25,387, and the S&P 500 was down nearly 2 percent to 2,726.

You may be tempted to think that a strong dollar would be a good thing, but in this financial climate it is definitely not. As I have discussed previously, many emerging market countries binged on debt during the boom years, and much of that debt was denominated in U.S. dollars. Now that the dollar is surging, that is making it much, much more difficult to service and pay back those loans.

Meanwhile, the price of oil continues to fall precipitously. At this point, oil has now fallen for 11 days in a row…

Crude has now lost ground for 11 consecutive days, the longest slide since oil futures trading was introduced on the NYMEX in March 1983. The historic slump knocked oil into a bear market — barely a month after it hit four-year highs. Selling accelerated in extended trading, with crude breaking below $59 a barrel.

Monday’s drop signals skepticism from investors that Saudi Arabia will be able to quickly mop up a glut of supply that has suddenly emerged.

If you will remember, the price of oil also spiked dramatically and then fell like a rock just prior to the financial crisis of 2008.

Could it be possible that a similar scenario is playing out again?

In “Get Prepared Now”, I talked about what the coming financial crisis would mean for all of us, and I noted that many prepare for such a crisis by investing in precious metals. So it is quite interesting to note that global central banks were voraciously buying gold during the third quarter of this year…

Gold is particularly attractive to central banks looking for safe, liquid assets. Central bank purchases of gold increased by 22% during the third quarter. That’s the fastest pace since the fourth quarter of 2015, according to Natalie Dempster, managing director for central banks and public policy at the World Gold Council.

Could this be a sign that the central bankers believe that a new crisis is looming?

Of course there are many of us that are stunned that things have already deteriorated so rapidly. I expected that October would be bad, but I didn’t think that it would be that bad.

And many of us had anticipated that things would calm down a bit in November, and so a 602 point decline on Monday definitely came as a surprise.

Ultimately, it is just a matter of time before we witness a stock market crash far greater than we saw in 2008, but we can certainly hope that it will be put off for as long as possible.

However, the truth is that nobody can outrun the relentless march of time indefinitely, and time is most certainly running out for Wall Street.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The Last Days Warrior Summit is the premier online event of 2018 for Christians, Conservatives and Patriots. It is a premium members-only international event that will empower and equip you with the knowledge and tools that you need as global events begin to escalate dramatically. The speaker list includes Michael Snyder, Mike Adams, Dave Daubenmire, Ray Gano, Dr. Daniel Daves, Gary Kah, Justus Knight, Doug Krieger, Lyn Leahz, Laura Maxwell and many more. Full summit access will begin on October 25th, and if you would like to register for this unprecedented event you can do so right here.

Global Stocks Plunge Again And A Former Reagan Administration Official Is Warning Of A “40% Crash”

November 4, 2018 by Michael

Stocks are falling again, and many believe that this new crisis is only just beginning. After a disappointing end to last week, a lot of investors were hoping for a bounce to start this week, but so far that has not materialized. As I write this article, all the big markets in Asia are down, and it looks like it is going be be a rough morning for Wall Street. Of course we probably won’t see too much movement as global markets wait to see what happens on Tuesday, and those results could potentially move things up or down substantially. Ultimately, I have a feeling that Wall Street will not be too happy if control of Congress is divided, because that would almost certainly mean that very little will get accomplished in Washington for the next two years. Instead, we will likely see even more bickering and fighting than we are seeing now.

But no matter what happens in the short-term, a lot of experts are convinced that the big market crash that everyone has been waiting for is finally here.

One of those experts is David Stockman.

Stockman is a former member of Congress, and he was the Director of the Office of Management and Budget under President Ronald Reagan. These days he is a frequent contributor on CNBC, and he recently told the network that there will be “a 40 percent stock market plunge”…

David Stockman warns a 40 percent stock market plunge is closing in on Wall Street.

Stockman, who served as President Reagan’s Office of Management and Budget director, has long warned of a deep downturn that would shake Wall Street’s most bullish investors. He believes the early rumblings of that epic downturn is finally here.

Because our financial system is even more leveraged today than it was in 2008, a plunge of that magnitude would be absolutely disastrous. Virtually everyone would need a “bailout” at that point, and economic activity would decline dramatically as the flow of credit dried up almost completely.

Needless to say, we would find ourselves in a very harsh recession very rapidly, and that is another thing that Stockman is anticipating…

“We’re going to be in a recession, and we’re going to have another market correction which will be pretty brutal,” Stockman said.

Of course Stockman is far from alone. Another economic expert that is warning of an imminent crisis is Mish Shedlock…

In the last 10 years not a single fundamental economic flaw has been fixed in the US, Europe, Japan, or China. The Fed was behind the curve for years contributing to the bubble. Massive rounds of QE in the US, EU, and Japan created extreme equity and junk bond bubbles. Trump’s tariffs are ill-founded as is Congressional spending wasted on war.

Potential Catalysts

Junk Bond Bubble Bursting

Equity Bubble Bursting

Italy

Tariffs

Brexit

Pensions

Housing

China

Many will blame the Fed. The Fed is surely to blame, but it is prior bubble-blowing policy, not rate hikes now that are the problem.

Shedlock has correctly identified a number of factors that could act as “catalysts” for this crisis. The truth is that signs of trouble are all around us, and it is only going to take a very small nudge to push us off of a very steep cliff.

Instead of fixing our long-term problems in 2008, our leaders patched up the current system and started reinflating the bubble.

Now we have created the largest financial bubble in all of human history, and the only way to keep it from imploding is to inflate it even more.

On some level, just about everyone knows that this story is going to end badly, and that a horrifying economic downturn is ahead of us.

Just look at what General Motors is doing. Even though the U.S. economy has supposedly been “doing well”, they just offered a buyout to 18,000 of their employees because they want “to act ahead of the next economic downturn”…

And yet, despite its strong position, Automotive News reports that GM plans to offer about 18,000 employees a voluntary buyout. The offer will only be extended to salaried employees who have worked at the company for at least 12 years, and eligible employees have until November 19 to decide whether to accept or not.

But why would GM reduce its workforce when it’s doing so well? With sales in the U.S. and China slowing down, hybrid and electric vehicles growing increasingly popular, and automated driving technology finding its way to more vehicles, GM sees a lot of change on the horizon. It’s also worried about the potential for another recession, and it wants to act ahead of the next economic downturn.

Earlier today, I received an email from one of my readers that really made me think.

He expressed his belief that a great economic crisis is rapidly approaching, and he wanted to know how he could help warn people about what is coming.

I wasn’t sure what to tell him.

At this point, the elite know what is coming and they are feverishly preparing for it. The “smart money” is pulling out of stocks at an unprecedented pace, and the ingredients for a “perfect storm” are definitely coming together.

But most ordinary Americans have bought into the false narrative that everything is going to be okay somehow.

Sadly, everything is not going to be okay, and a lot of people are going to be completely overwhelmed by the very painful times that are coming.

“Red October”: We Just Witnessed The Worst Month For The S&P 500 In 7 Years

October 31, 2018 by Michael

This was an October that many of us will never forget. The month of October is typically the most volatile month of the year for stocks, and that was definitely the case in 2018. It was the worst month for the S&P 500 in 7 years, and it was the worst month for the Nasdaq in almost 10 years. But the damage could have been much worse if we had not seen a bounce the last two trading days of the month. On Wednesday, the Dow Jones Industrial Average was up 241 points, and investors are hoping that this is a sign that things are starting to settle down a bit. And hopefully things will be calmer in November, because things were so chaotic in October that the month has already been branded “Red October” by the mainstream media…

Wall Street finally bid good riddance to what one professional stock investor dubbed “Red October.”

In a tumultuous month marked by big price swings, rising fear levels and emerging risks, the U.S. stock market suffered its biggest October decline since the 2008 financial crisis, prompting shaken investors to reassess the staying power of a bull run that began more than nine years ago.

When we go back and look at the month as a whole, the damage is breathtaking.

Here is a summary of the carnage that we witnessed…

-October was the worst month for the S&P 500 since September 2011.

-October was the worst month for the Nasdaq since November 2008.

–Nearly 2 trillion dollars in U.S. stock market wealth was wiped out.

-Overall, approximately 8 trillion dollars in global stock market wealth was wiped out.

-October was the worst month ever for the “FANG” stocks.

-Facebook was down 7.7 percent.

-Alphabet (the parent company of Google) was down 9.7 percent.

-Netflix was down 19.3 percent.

-Amazon was down 20.2 percent.

-Global systemically important bank stocks were down more than 10 percent.

To me, one of the most noteworthy things that happened in October was the huge movement that we saw in the junk bond market.

Usually junk bonds start to rapidly decline just before a major stock market crash happens, and October was the worst month for junk bonds since 2008.

That is a major league red flag, but not a lot of people are talking about it.

But without a doubt there is a lot of anxiety on Wall Street right now, and even many long-time bulls are turning into bears.

For example, just consider what Ralph Acampora is saying…

The so-called “Godfather” of market chart analysis said that the damage already done to the stock market is much worse than most people are talking about. Ralph Acampora, a prominent market technician, says the stock market is in bad shape and it’s worse than many Wall Street investors appreciate.

“From a technical perspective, the damage that has been done technically to the stock market is much, much worse than people are talking about,” he told MarketWatch in a phone interview on Tuesday. Acampora also said that the technical damage that has resulted in the Dow Jones Industrial Average and the S&P 500 index erasing all of their gains for 2018, and the Nasdaq Composite Index falling into correction territory (which is usually characterized as a decline of at least 10% from a recent peak) will take months to repair.

Acampora had been a bull for a very long time, and while many other analysts are calling this decline a “correction”, he believes that “this is something different”…

“I’ve been a bull for a long, long time and like everyone, I was waiting for a correction but this is something different,” said Acampora. “All the leadership is getting crushed,” he said. He added that he feels that the entire market will go into bear territory soon.

“Honestly, I don’t see the low being put in yet and I think we’re going to go into a bear market,” he said according to MarketWatch.

We’ll see what happens in November.

Stocks will definitely move next week after the election results come in. I would think that a divided result (Republicans keep the Senate but Democrats take the House) would be interpreted by investors as a negative sign because that will produce gridlock in Washington.

However, that will only move the needle for a day or two.

Ultimately, I still believe that some sort of “trigger event” will be necessary in order for a full-blown stock market crash to happen.

But the smart money is already behaving as if a stock market crash is a certainty. Just consider the following chart from Zero Hedge…

Meanwhile, the number of Americans that expect the stock market to decline over the next year is at the lowest level in over a decade.

That seems quite odd.

As you can see from the chart, the smart money has correctly anticipated the overall direction of the market all the way back to 1990.

Do you think that the smart money will be wrong this time?

We have never seen the smart money get out of stocks at such a rapid pace. Despite the bounce of the last couple of days, there is definitely an atmosphere of gloom on Wall Street.

The ingredients for a “perfect storm” are definitely coming together. It may not be today or tomorrow, but at some point a “trigger event” will happen, and then all hell will break loose in the financial markets.

The Stock Market Has Just Done Something That It Hasn’t Done Since 2009

October 29, 2018 by Michael

We continue to see extremely wild swings on Wall Street. On Monday, at one point the Dow Jones Industrial Average was up 352 points, and then later it was down 566 points. At the closing bell the Dow had officially lost 245 points, and all of this extreme volatility is making investors very nervous. Investors like markets that are predictable, because it is a whole lot easier to make money when things move in a predictable fashion. When things get crazy, a lot of investors pull their money out and wait until things settle down in the marketplace, and that definitely makes a lot of sense. Right now, there is a lot of uncertainty about where things are ultimately headed. Some experts believe that the bull market will resume after this “correction” is over, but others believe that a bear market has now begun. And as you will see below, the fact that the S&P 500 has now broken a major trendline that has not been broken since 2009 is strengthening the case of the latter group.

Many had anticipated that we may see a bounce on Monday, but instead we witnessed another very large decline. According to Zero Hedge, all of the major stock indexes are now officially in correction territory…

Dow -10.1%
S&P -10.8%
Nasdaq Composite -14.4%
Dow Transports -15.5%
Russell 2000 -15.5%

Tech stocks got hit harder than anything else on Monday, and at this point they are down 13.3 percent from the peak. Each one of the FANG stocks is now in bear market territory, and many on Wall Street are stunned that this has happened so quickly.

But as I have warned my readers many times, markets tend to go down a whole lot faster than they go up.

The main thing that rattled investors on Monday was news that the Trump administration might slap even more tariffs on Chinese imports…

President Donald Trump’s administration is prepared to announce tariffs on remaining Chinese imports if talks next month between Trump and Xi Jinping do not yield results, Bloomberg reported. Such a move is likely to prolong the standoff between the U.S. and China over trade and is expected to hurt the global economy.

Analysts are also blaming the stock market’s weakness in October on a variety of factors, including worries that U.S. corporate earnings growth has peaked and fears of a U.S. monetary policy misstep by the Federal Reserve.

The Chinese do not respond well to threats and intimidation, and our relations with China are the worst that they have been in decades. This is going to have huge implications for all of us, and this is a major storyline that we will want to revisit again and again in the months ahead.

Getting back to the market, we are starting to see things happen that we have not witnessed since the last financial crisis.

Specifically, the S&P 500 just broke the bull market trendline that had not been violated since the market bottomed out in early 2009. The following comes from Graham Summers…

That’s bad news. But unfortunately it gets worse from here. Stocks have violated the monthly trendline running back to the 2009 for the first time in this bull market.

So when we talk about the bull market ending… we’re not just talking about the 2016-2018 run… we’re talking about THE ENTIRE bull market running back to the 2009 bottom.

You can see the chart that he is referring to right here. The fact that this trendline has now been broken is a huge sell signal, and it is yet another indication that a new financial crisis has begun.

And it isn’t just the U.S. that is in trouble. In fact, the U.S. is still in much better shape than the rest of the world.

Right now, approximately 58 percent of the 2,767 stocks listed on MSCI’s global index are officially in bear market territory.

Things have deteriorated so rapidly that even Jim Cramer of CNBC is starting to talk like a bear…

There have only been four times in Jim Cramer’s career when the stock guru and former hedge fund manager sold out of his entire portfolio. And, scary as it sounds, the market action of the past few weeks reminds him of those chaotic moments.

“As much as it pains me to say this, the current situation combines … some of the worst characteristics of those four past breakdowns,” Cramer told investors on Monday as much of the stock market slid into correction territory.

Hopefully we will see a bounce on Tuesday and things will settle down on Wall Street for the rest of this week.

But whether that happens or not, this crisis is far from over.

Stock prices should have never gotten this high. The only reason they reached such absurd heights was due to unprecedented intervention by the Federal Reserve. And now the Federal Reserve seems determined to burst the bubble that they originally created, and that is going to cause immense pain for investors.

In order for valuations to return to their long-term averages, stock prices would still need to decline another 40 percent from current levels, but because our system is so leveraged a decline of that magnitude would be absolutely crippling for our financial system and would create the greatest credit crunch that any of us have ever seen.

And a credit crunch of that magnitude would instantly plunge the U.S. into an economic depression.

This financial bubble has lasted for much longer than it should have, but we desperately need it to continue, because the alternative is an economic horror show of unprecedented magnitude.

Unfortunately it appears that this bubble is now bursting, and that is extremely bad news for all of us.

A Perfect Storm Is Brewing

October 28, 2018 by Michael

Will we someday look back on October 2018 as the turning point? As the month began, people were generally feeling pretty good about things, and the U.S. stock market quickly set a new all-time high. But from that point on, the wheels fell off for Wall Street. We just witnessed the worst October for U.S. stocks since the financial crisis of 2008, and at this point more than 8 trillion dollars of global wealth has been completely wiped out. But it isn’t just the stock market that is being shaken. The horrific violence in Pittsburgh is just the latest in a string of events that have rattled the entire nation. Sometimes I feel like I am literally watching the fabric of our society come apart right in front of my eyes. It is almost as if there is a tangible presence of evil in the air, and it seems to be getting stronger over time. For quite a while I have been warning that levels of anger and frustration are rising to unprecedented levels, and all of that anger and frustration is leading people to do things that are absolutely unthinkable. And if people are this crazed now, how bad are things going to get once the economy really starts unraveling?

Let there be no doubt – if U.S. stocks crash really hard, it will cause a massive credit crunch, and that would absolutely strangle economic activity.

Yes, October was bad, but we can recover from what happened in October.

But if November and December are equally as bad or worse, we could have a nightmarish crisis on our hands very rapidly. And many experts believe that this market is ultimately going to decline much, much further.

For example, just consider what Wolf Richter is saying…

So it boils down to this: Some stocks have gotten crushed, but the market overall has barely been dented – though the fundamentals are rotten, shares are still ludicrously overpriced, enthusiasm is still exuberant except on bad days, and blind faith in annually rising stock prices still reigns. And the fact that stocks like Tesla [TSLA] or Netflix continue to levitate beyond all reality shows that this downturn has a long way, and years, to go.

And Chris Martenson expressed similar sentiments in his most recent article…

The recent market weakness seen over the past two weeks is nothing compared to what’s in store. As we’ve been carefully chronicling, bubbles burst from ‘the outside in’, starting at the weaker places at the periphery before progressing to the center.

Emerging market equities are now down -26% from their January highs and -18% year-to-date. China’s stock market is down -32%, even with substantial intervention by the government to prop things up.

The periphery has been weakening all year, and the contagion has now spead worldwide.

But when I talk about a “perfect storm”, I am not just talking about money.

For years, I have been warning that the thin veneer of civilization that we all take for granted on a daily basis is rapidly disappearing, and the events of this past week made this exceedingly clear…

Wednesday, a white man with a history of violence shot and killed two African-Americans, seemingly at random, at a Kentucky Kroger store following a failed attempt to barge into a black church.

After mail bombs were being sent to people who’d been criticized by the President, a suspect was arrested Friday — a man who had railed against Democrats and minorities with hate-filled messages online.

And Saturday morning, a man shouting anti-Semitic slurs opened fire at a Pittsburgh synagogue, killing 11 people attending Jewish services.

I will not ever be able to understand the kind of hate that we have been witnessing. I have always preached against racism, and I even included an entire chapter against racism in my latest book. There is absolutely no room for racism in America, but it just seems to keep growing.

We are facing overwhelming challenges as a society, and if we do not learn how to love one another there is no way that we are going to make it.

This is a time of great governmental shaking as well. On November 6th, some candidates will win and some candidates will lose, but the hatred being expressed on both sides will not go away. Sadly, the truth is that there are corrupt politicians all around us, and the American people have been rapidly losing faith in our system. If the corruption is not cleaned up and some way is found to restore faith in our system of government, it is only a matter of time before it collapses.

On top of everything else, we also live at a time of impending global conflict. A major regional war could erupt in the Middle East at any time, and Russia and China are openly warning that they are “preparing for war” with the United States. World War 3 is a lot closer than people realize, and the fact that our relationships with both Russia and China are rapidly going downhill is a major concern.

And of course the planet itself is increasingly becoming unstable. Earthquakes and volcanic eruptions appear to be growing in both size and intensity, and massive storms have been hammering communities all over the globe in recent months.

The giant rock that we all live on is rapidly changing, and many believe that the Earth changes that we are currently witnessing are going to escalate dramatically in the years ahead.

Many ordinary Americans seem unconcerned about everything that is going on, and perhaps that is because they are unaware of the bigger picture. But the elite are definitely freaking out. In fact, the New York Times just published an article about how demand for private security services is higher than ever…

At Pinkerton, a private security and detective agency founded in 1850, requests for executive security have increased 20 to 30 percent annually over the last five years, said its vice chairman, Tim Williams. And people are looking for safeguards in all areas of their lives that pose risks, experts say, including information technology and social media.

“People are scared right now,” Mr. Williams said.

And some among the elite even have plans to hop on private jets and leave the country completely when everything starts hitting the fan. For much more on this, please see my previous article entitled “Bankers And Tech Executives Know The Collapse Of Society Is Coming And Are Feverishly Prepping For It”.

We are entering a time that will cause many to have great fear, but now is not a time to be scared.

It is when times are the darkest that light is needed the most, and I believe that this coming “perfect storm” will be an absolutely thrilling time to be alive.

Yes, life is going to become a lot more uncomfortable for all of us, but it is during times of great challenge that we find out what is truly inside of us. This will be a time when some will show that they are great villains, but many will also emerge as great heroes.

We have reached a critical juncture in human history, and everything is about to change. I would encourage you to be a light in the darkness, because that is going to be greatly needed in the days ahead.

40 Volcanoes Are Erupting Right Now As The Crust Of The Earth Becomes Increasingly Unstable

May 22, 2016May 22, 2016 by Michael

Have you noticed that our planet has begun to shake, rattle and roll? Over the past few days we have seen major volcanic eruptions in Costa Rica and Indonesia, and according to Volcano Discovery 40 volcanoes around the planet are erupting right now as you read this article. Meanwhile, earthquakes continue to shake the globe with alarming regularity. Just last week, Ecuador was hit by a magnitude 6.7 earthquake and a magnitude 6.8 earthquake in rapid succession. Overall, there have been more than 3,000 earthquakes of magnitude 1.5 or greater within the past month globally. So yes, I write constantly about the rapidly accelerating deterioration of our financial system, but the coming “collapse” is not just about money. I am convinced that we are entering a “perfect storm” in which a confluence of factors will absolutely cripple society and bring about changes that most of us would not even dare to imagine right now.

Let’s talk about the volcanic eruptions that we have seen in recent days. The eruption down in Costa Rica took authorities completely by surprise, and a thick layer of dust and ash is coating vehicles and buildings 30 miles away in the capital city of San Jose…

A volcano has erupted in central Costa Rica, belching smoke and ash up to 3,000m (9,840ft) into the air.

Hundreds of people have gone to hospital, complaining of breathing difficulties and skin problems.

Some schools were shut and some flights into the country cancelled or diverted.

People in the capital San Jose, about 45km (30 miles) west of the Turrialba volcano, said layers of ash had coated buildings and cars and there was a fierce smell of sulphur.

Leading up to this eruption, there were “swarms of small earthquakes” in the vicinity of the volcano, but scientists assured the public that these earthquake swarms were “not signs of an imminent eruption.”

Keep that in mind, because later in the article I am going to show you something.

But first let us talk about the other major eruption that is happening right now. Down in Indonesia, Mount Sinabung has violently erupted, and this is causing all sorts of chaos…

The death toll from a volcanic eruption in western Indonesia has climbed to six, an official said Sunday, with fears more could have been trapped by the hot ash.

Three people also remain in a critical condition after Mount Sinabung, a highly-active volcano on Sumatra island, unleashed a series of fresh eruptions on Saturday afternoon, disaster agency spokesman Sutopo Purwo Nugroho said.

“Nine people were struck by the hot clouds. Six died, and three others remain critical with burns,” he said, adding the injured had been taken to hospital.

According to one report, “torrents of lava” are pouring out of the volcano, and this is just one example of how volcanoes that were once considered to be “inactive” are coming to life all over the world. In fact, prior to 2010 Mount Sinabung had been dormant for about 400 years.

Meanwhile, there is “unprecedented” activity at Iceland’s very dangerous Baroabunga volcano. This one is not erupting quite yet, but we definitely want to keep an eye on it, because a major eruption there would have serious implications for Europe.

To finish this article, I would like to provide an update to a piece that I posted last week on End of the American Dream. Just prior to the eruption of the Turrialba volcano in Costa Rica, there were significant earthquake swarms in the vicinity of the volcano. Well, the exact same thing is happening at three major volcanoes in the United States right now.

I would like to share three images with you that come from Google Earth via the Pacific Northwest Seismic Network. This first image shows the earthquake activity that has taken place in the area around Mt. St. Helens in recent days. Over the past month there have been 95 earthquakes in the region, and most of them have been centered right along the core of the volcano…

This next image shows what has been happening at Mt. Rainier. Those that follow my work closely already know that I consider it to be the most dangerous mountain in America and that I believe that a major eruption of the volcano is coming in the not too distant future. There have been 36 earthquakes at Mt. Rainier over the past month, and once again most of them have occurred right along the core of the volcano…

Mt. Hood is also a very dangerous volcano. There have been 126 earthquakes in the vicinity of Mt. Hood in recent days, and in this image you can see that the earthquakes have been centered very tightly on a spot on the south face of the mountain. This is alarming because it was also the south side of Mt. St. Helens that violently erupted back in 1980…

When there are major volcanic eruptions or major earthquakes in other parts of the globe, many Americans don’t seem to care too much because they don’t think that this rise in global seismic activity is any sort of a threat to them personally.

But the truth is that the entire west coast of the United States lies along the Ring of Fire, and virtually every other section of the Ring of Fire is roaring to life these days.

At some point, there will be historic earthquakes on the west coast.

At some point, there will be historic volcanic eruptions on the west coast.

Scientists assure us that these things are inevitable.

So let us certainly hope for the best, but putting our heads in the sand and pretending that these dangers do not exist is not going to help matters one bit.

Get prepared while you still can, because at some point time will run 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.*

Is America About To Reach A Breaking Point? Anger Grows As Unemployment Benefits Get Cut

December 30, 2013December 30, 2013 by Michael

In America today, there are close to 50 million people living in poverty and there are more than 100 million people that get money from the federal government every month. As the middle class disintegrates, poverty is climbing to unprecedented levels. Even though the stock market has been setting record high after record high, the amount of anger and frustration boiling just under the surface in our nation grows with each passing day. And now extended unemployment benefits have been cut off for 1.3 million unemployed Americans, and it is being projected that a total of 5 million unemployed Americans will lose their benefits by the end of 2014. In addition, as I have written about previously, 47 million Americans recently had their food stamp benefits reduced. The conditions for a “perfect storm” are certainly being created. So how much longer will it be until we see all of this anger and frustration boil over in the streets of our major cities? Is America about to reach a breaking point?

If you think that the title of this article is “alarmist”, you probably have not been paying attention to what has been happening over the past few weeks. For example, a 600 person brawl broke out at at movie theater in Jacksonville, Florida just the other day…

Five teenagers were arrested when a 600-person brawl broke out in a Florida movie theater’s parking lot on Christmas night.

Described by police as a “melee,” the fight occurred around 8:30 p.m. on Wednesday outside the Hollywood River City 14 movie theater in Jacksonville when a group tried to storm the theater’s doors without purchasing tickets, police said. Several had rushed an off-duty police officer working as a security guard.

The officer “administered pepper spray to disperse the group, locked the doors and called for backup, following protocol,” said Lauri-Ellen Smith, a spokeswoman for the Jacksonville Sheriff’s Office.

Soon after the pepper spray was used, “upward of 600 people moving throughout a parking lot about the size of a football field began fighting, disrupting and jumping on cars,” she said.

And a “flash mob” of “400 crazed teens” was so violent that it forced a mall in Brooklyn to shut down just a few days ago…

A wild flash mob stormed and trashed a Brooklyn mall, causing so much chaos that the shopping center was forced to close during post-Christmas sales, sources said Friday.

More than 400 crazed teens — who mistakenly thought the rapper Fabolous would perform — erupted into brawls all over Kings Plaza Shopping Center in Mill Basin on Thursday at 5 p.m., sources said.

The troublemakers looted and ransacked several stores as panicked shoppers ran for the exits and clerks scrambled to pull down metal gates.

In addition, the release of new Air Jordan sneakers caused mini-riots and brawls to break out all over the country just before Christmas.

So why is all of this happening?

Of course people will come up with all sorts of theories to explain these outbreaks of violence, but what pretty much everyone should be able to agree on is that we are seeing levels of anger and frustration rise to very dangerous levels in this country.

Right now, there are approximately 6 million Americans in the 16 to 24-year-old age group that are not in school and that are not working either. What that means is that we have an alarmingly high number of very frustrated young people that do not have anything better to do than to cause trouble.

In some of our largest cities this has become a massive problem. In fact, quite a few major U.S. cities actually have more than 100,000 “idle youth” living in them…

Just look at some of the nation’s largest cities. Chicago, Houston, Dallas, Miami, Philadelphia, New York, Los Angeles, Atlanta and Riverside, Calif., all have more than 100,000 idle youth, the Opportunity Nation report found.

But the Obama administration says that this should not be a problem. In fact, the Obama administration tells us that the unemployment rate has been steadily “declining” and that there are plenty of opportunities for everyone.

Of course that is a giant lie. Just before the last recession, about 63 percent of all working age Americans had a job. During the recession that number fell below 59 percent and it has stayed there ever since…

So the notion that we are experiencing an “employment recovery” is absolutely laughable.

But most of our politicians appear to believe this lie, and it is being used as justification to cut off extended unemployment benefits.

And the funny thing is that by cutting off these benefits, it is going to make it appear as though unemployment has gone down even more. Millions of unemployed workers that are being forced into the streets will now be counted as having “left the labor force”, and it is being projected that the unemployment rate could decline by as much as half a percentage point as a result.

What a joke.

A lot of the people that are having their benefits cut off are really hurting. For instance, consider the case of 63-year-old paralegal Laura Walker…

“Not all of us have savings and a lot of us have to take care of family because of what happened in the economy,” said Walker, of Santa Clarita, who said she has applied for at least three jobs a week and shares an apartment with her unemployed son, his wife and two children. “It’s going to put my family and me out on the streets.”

So what is she going to do?

Well, at this point she appears to be down to just one option…

“I just don’t know what to do, except pray.”

And of course the unemployed are not the only ones that have had their benefits cut. As I mentioned above, all 47 million Americans that are currently on food stamps recently had their benefits reduced. The following is an excerpt from a recent article by Mac Slavo…

Earlier this year government benefits for nutritional assistance were reduced after the expiration of emergency legislation that was enacted following the 2008 financial collapse. Nearly all of the 48 million people receiving food stamp distributions were affected. The move led to warnings from food pantries and recipients around the country who said that the $40 billion in cuts would leave many American families without the ability to put food on dinner tables across America. According to Feed America, the roughly $29 per family that would no longer appear on their EBT cards will amount to about 1.5 billion meals in 2014.

The fact that government dependence has soared to all-time highs even in the midst of this so-called “economic recovery” is just another sign that the middle class is dying. For years, middle class families have tried strategy after strategy in an attempt to survive, but now it has become apparent that the middle class is rapidly approaching a breaking point…

Rising income inequality is starting to hit home for many American households as they run short of places to reach for a few extra bucks.

As the gap between the rich and poor widened over the last three decades, families at the bottom found ways to deal with the squeeze on earnings. Housewives joined the workforce. Husbands took second jobs and labored longer hours. Homeowners tapped into the rising value of their properties to borrow money to spend.

Those strategies finally may have run their course as women’s participation in the labor force has peaked and the bursting of the house-price bubble has left many Americans underwater on their mortgages.

And even though the Obama administration and the mainstream media have tried to convince us over and over that the economy is “getting better”, most Americans are not buying it. In fact, according to a new CNN poll, 70 percent of all Americans believe that “the economy is generally in poor shape”.

As the economy continues to decline, not all Americans will respond to their desperate situations by getting violent. Many suffer quietly, hoping that things will eventually turn around for them. Unfortunately, the ranks of the suffering grow with each passing year. For example, a recent CNN article discussed the continued growth of “tent cities” all over America…

The total number of homeless people residing in tents and makeshift homes is unknown. Many of these communities are small and hidden from public view, while others claim hundreds of residents and are sprinkled through major urban areas.

Some, like those tucked under roadways, are temporary and relocate frequently. Their conditions are vile, unsanitary and fail to provide refuge from storms and winds. Then there are communities, such as Dignity Village in Portland, Oregon, that have a more sustained presence. The 13-year-old “ecovillage” set up by homeless people is hygienic and self-sufficient.

Preliminary findings by The National Law Center on Homelessness and Poverty show that tent cities have been documented in almost every state, and they’re growing.

So how do we solve these problems?

Are there any solutions that could get us out of this mess?

Of course there are. But don’t hold your breath waiting for any of them to be adopted. In fact, the American people continue to express great support for the very people that got us into this mess in the first place. For example, according to a Gallup survey that was just released, Barack Obama is the most admired man in America by a very wide margin and Hillary Clinton is the most admired woman in America by a very wide margin.

And the mainstream media will continue to tell all of us that “leaders” like Obama, Clinton, Reid, Boehner, McConnell and Pelosi can be trusted to get us out of this mess.

If you believe that, there is a bridge that I would like to sell you.

The American people need to stop having blind faith in the relentless propaganda that is being spewed at them through their televisions screens. The pretty faces that you see “reporting the news” do not care about you and they are not watching out for your best interests. The corporate-controlled news is highly scripted and it is pretty much the same whatever channel you turn to. If you have any doubt that “the news” is scripted, just check out this video…

“If The Yield Goes Significantly Higher The Market Is Going To Freak Out”

June 21, 2013 by Michael

If yields on U.S. Treasury bonds keep rising, things are going to get very messy. As I write this, the yield on 10 year U.S. Treasures has risen to 2.51 percent. If that keeps going up, it is going to be like a mile wide lawnmower blade devastating everything in its path. Ben Bernanke’s super low interest rate policies have systematically pushed investors into stocks and real estate over the past several years because there were few other places where they could get decent returns. As this trade unwinds (and it will likely not be in an orderly fashion), we are going to see unprecedented carnage. Stocks, ETFs, home prices and municipal bonds will all be devastated. And of course that will only be the beginning. What we are ultimately looking at is a sell off very similar to 2008, only this time we will have to deal with rising interest rates at the same time. The conditions for a “perfect storm” are rapidly developing, and if something is not done we could eventually have a credit crunch unlike anything that we have ever seen before in modern times.

At the moment, perhaps the most important number in the financial world is the yield on 10 year U.S. Treasuries. A lot of investors are really concerned about how rapidly it has been rising. For example, Patrick Adams, a portfolio manager at PVG Asset Management, was quoted in USA Today as saying the following on Friday…

“I am watching the 10-year U.S. bond,” says Adams. “It has to stabilize. If the yield goes significantly higher the market is going to freak out.”

If interest rates keep rising, it is going to have a dramatic effect throughout the economy. In an article that he just posted, Charles Hugh Smith explained some of the things that we might soon see…

The wheels fall off the entire financialized debtocracy wagon once yields rise. There’s nothing mysterious about this:

1. As interest rates/yields rise, all the existing bonds paying next to nothing plummet in market value

2. As mortgage rates rise, there’s nobody left who can afford Housing Bubble 2.0 prices, so home prices fall off a cliff

3. Once you can get 5+% yield on cash again, few people are willing to risk capital in the equities markets in the hopes that they can earn more than 5% yield before the next crash wipes out 40% of their equity

4. As asset classes decline, lenders are wary of loaning money against these assets; if the collateral for the loan (real estate, bonds, stocks, etc.) are in a waterfall decline, no sane lender will risk capital on a bet that the collateral will be sufficient to cover losses should the borrower default.

In addition, rapidly rising interest rates would throw the municipal bond market into absolute chaos. In fact, according to Reuters, nearly 2 billion dollars worth of municipal bond sales were postponed on Thursday because of rising rates…

The possibility of rising interest rates rocked the U.S. municipal bond market on Thursday, with prices plunging in secondary trade, investors selling off the debt, money pouring out of mutual funds and issuers postponing nearly $2 billion in new sales.

“The market got crushed,” said Daniel Berger, an analyst at Municipal Market Data, a unit of Thomson Reuters, about the widespread sell-off.

We are rapidly moving into unprecedented territory. Nobody is quite sure what comes next. One financial professional says that municipal bond investors “are in for the shock of their lives”…

“Muni bond investors are in for the shock of their lives,” said financial advisor Ric Edelman. “For the past 30 years there hasn’t been interest rate risk.”

That risk can be extreme. A one-point rise in the interest rate could cut 10 percent of the value of a municipal bond with a longer duration, he said.

Many retail buyers, though, are not ready for the change and “when it starts, it will be too late for them to react,” he said, adding that he was encouraging investors to look at their portfolio allocation and make changes to protect themselves from interest rate risks now.

Rising interest rates are playing havoc with other financial instruments as well. For example, it appears that the ETF market may already be broken. Just check out the chaos that we witnessed on Thursday…

The selling also caused disruptions in the plumbing behind several ETFs. Citigroup stopped accepting orders to redeem underlying assets from ETF issuers, after one trading desk reached its allocated risk limits. One Citi trader emailed other market participants to say: “We are unable to take any more redemptions today . . . a very rare occurrence due to capital requirements we are maxed out on the amount of collateral we have out.”

State Street said it would stop accepting cash redemption orders for municipal bond products from dealers. Tim Coyne, global head of ETF capital markets at State Street, said his company had contacted participants “to say we were not going to do any cash redemptions today”. But he added that redemptions “in kind” were still taking place.

These are the kinds of things that you would expect to see at the beginning of a financial panic.

And when there is fear in the marketplace, credit can dry up really quickly.

So are we headed for a major liquidity crisis? Well, that is what Chris Martenson believes is happening…

The early stage of any liquidity crisis is a mad dash for cash, especially by all of the leveraged speculators. Anything that can be sold is sold. As I scan the various markets, all I can find is selling. Stocks, commodities, and equities are all being shed at a rapid pace, and that’s the first clue that we are not experiencing sector rotation or other artful portfolio-dodging designed to move out of one asset class into another (say, from equities into bonds).

The bursting of the bond bubble has the potential to plunge our financial system into a crisis that would be even worse than we experienced back in 2008. Unfortunately, as Ambrose Evans-Pritchard recently noted, the bond market is dominated by just a few major players…

The Fed, the ECB, the Bank of England, the Bank of Japan, et al, own $10 trillion in bonds. China, the petro-powers, et al, own another $10 trillion. Between them they have locked up $20 trillion, equal to roughly 25pc of global GDP. They are the market. That is why Fed taper talk has become so neuralgic, and why we all watch Chinese regulators for every clue on policy.

This is one of the reasons why I write about China so much. China has a tremendous amount of leverage over the global financial system. If China starts selling bonds at about the same time that the Fed stops buying bonds we could see a shift of unprecedented proportions.

Sadly, most Americans have absolutely no idea how vulnerable the financial system is.

Most Americans have absolutely no idea that our system of finance is a house of cards built on a foundation of risk, debt and leverage.

Most Americans have complete and total faith that our leaders know what they are doing and are fully capable of keeping our financial system from collapsing.

In the end, most Americans are going to be bitterly, bitterly disappointed.

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