Another huge financial crisis is coming…
Say hello to the next financial crisis, brought to you courtesy of the dumbest new bill of the week: H.R. 5148: Access to Affordable Mortgages Act.
With HR 5148, Congress aims to exempt certain ‘higher-risk mortgages’ from property appraisal requirements, reversing several provisions in the 1968 ‘Truth in Lending Act’.
It’s idiocy on an epic scale… and it makes one wonder what team of monkeys is coming up with these ideas.
Congress is trying to engineer yet another financial crisis by encouraging banks and other lenders to exercise minimal due diligence on their mortgage portfolio.
In danger of dying from too much debt.
Today, the world economy is in uncharted territory.
Never before has the developed world carried this much debt.
Never before have the central banks of those same countries expanded their balance sheets so much.
Never before has so much sovereign debt been outright monetized. Never before have major financial institutions been officially designated as “too big to fail” and thereby been granted special license to assume gigantic risks.
Dr. Lacy Hunt, economist and current executive vice president of Hoisington Investment Management Company, expects the macroeconomic situation to get worse from here:
Cycle analysis indicates the US Market Cycle is presently completing a 33+ year Bull Market Cycle and once complete, a Deflationary Bear Market Cycle will grip the US Markets in the year 2015 that will DEVASTATE the World.
Before a Deflationary Cycle grips the US Market and the World, FIRST expect an Inflationary Gold spike to $2000 catching everyone off guard and leaving all but the resolute Gold and Silver Bulls behind!
Unlike the previous recession that followed the collapse of 2008, there is no way out of this one.
The time to finalize preparations for what’s coming is NOW.
It’s going to go from bad to worse to terrible and our World as we know it will change forever!
A $1300 Gold price is soon to be history as Gold Spikes into $2000 before year end as the third and final Gold cycle of 7-years in to 2020/21 and $10,000+ gets under way!
In this interview with Paul Sandhu, exotic derivatives expert Rob Kirby explains why a complete systemic financial collapse is CERTAIN, with full-fledged bank system holidays & martial law coming!
Rob Kirby’s full interview is below:
The terrible irony in the official strategy of “buying time so the financial system can heal itself” is the policies prohibit healing and guarantee the next financial crisis will be greater in magnitude than the last one.
There is only one way for any financial system to heal itself: enable the open market to discover the price of capital, credit, assets, collateral and risk.
What “buying time” has done is destroy the market’s ability to price capital, credit, assets, collateral and risk, stripping the system of the essential information participants need to make rational, informed decisions.
By crushing the market’s ability to generate accurate pricing information, central state and banking authorities have insured the system cannot possibly heal itself while maintaining perverse incentives that guarantee the next financial crisis will dwarf the previous one.
The five biggest banks in the United States in 2008, today those banks are bigger. They have a larger percentage of the assets of the banking system. They have much larger derivatives books and if you apply what I use which is complexity theory, to understand the risk in capital markets, you know that when you increase something in scale, the risk does not go up in a linear fashion. It goes up in an exponential fashion so the risk is – the size of the system is greater than ever before and the risk gets exponentially greater than ever before.
So we have a lousy economy. We have massive risk. We have the whole thing getting propped up like money printing by the Fed. This is naturally going to happen except this time, the next time, it will be worse than 2008 because it will be bigger than the Fed.
None of the problems that caused the last financial crisis have been fixed. In fact, they have all gotten worse. The total amount of debt in the world has grown by more than 40 percent since 2007, the too big to fail banks have gotten 37 percent larger, and the colossal derivatives bubble has spiraled so far out of control that the only thing left to do is to watch the spectacular crash landing that is inevitably coming.
Unfortunately, most people do not know the information that you are about to read. Most people just assume that the politicians and the central banks have fixed the issues that caused the last great financial crisis. But the truth is that we are in far worse shape than we were back then.
When this financial bubble finally bursts, the devastation that we will witness is likely to be absolutely catastrophic.
The speculative excesses and political power of Wall Street pose a strategic threat to the Deep State, and as a result a showdown between the Deep State and the surface machinery of governance that has been captured by Wall Street is looming.
The basic idea of the Deep State is that the visible machinery of governance–electoral politics and the Federal Reserve–doesn’t set strategic policy, it ratifies and implements decisions made behind closed doors.
It’s widely assumed that Wall Street rules the roost in both the mainstream financial media and in the alternative financial media. In my view, the speculative excesses and political power of Wall Street pose a strategic threat to the Deep State, and as a result a showdown between the Deep State and the surface machinery of governance that has been captured by Wall Street is looming.
Though everyone who is convinced the U.S. dollar will go to zero is confident that Wall Street will emerge victorious from the next financial crisis, I am convinced of the opposite: the Deep State will do whatever it takes to eliminate strategic threats to the integrity of the Deep State and the nation it depends on for its power and survival. In a financial crisis that threatens the dollar and the Deep State, the phantom claims of Wall Street’s financier skimmers, scammers and swindlers will be tossed under the bus with few qualms. The triage might even be performed with a certain relish.
Put another way: we’ve reached Peak Wall Street and it’s all downhill from here.
Doug Casey joins the Prepper Recon to talk about the other side of the financial hurricane. He compares our present situation to being in the eye of the hurricane which is notorious for a false sense of calm.
Casey explains how the excessive amount of US dollars will cause the side of the hurricane to be much more destructive than what we saw in 2008.
In Doug Casey’s words: “The worst is yet to come!“
The central bank driver world macro structure is in full can-kicking mode. The fuels that have built up are almost too numerous to mention, though some issues continue to be recycled as if they were needed to explain the latest potential spark.
Argentina has defaulted once again on its sovereign obligations, devalued its currency, and caused a painful split between the official and street value of its currency.
For precious metals investors, the lesson from the Argentinian currency discrepancy foreshadows the likely future of precious metals valuation as the physical or street value divorces from the official paper price.
Here’s the global financial crisis in a nutshell: access to easy credit can solve a temporary liquidity problem, but it can’t increase the value of collateral or generate income.
Once the liquidity typhoon dies down, the insolvent pigs will plummet back to earth. That’s what we’re seeing in the periphery economies and shadow banking systems around the world.
Gold expert Jim Sinclair emerged from a lengthy hiatus from public commentary Tuesday to warn readers that the major US markets will completely implode should Janet Yellen follow through on the Bernanke Fed’s threats to fully taper QE.
Sinclair states that should Yellen taper seriously now, the emerging markets will implode. Should the emerging markets implode, the US major markets will also implode. The dollar would lead on the downside.
Sinclair’s full MUST READ warning is below:
Financial crisis fears are spiking this afternoon as one of Russia’s largest 200 banks by assets, ‘My Bank’ has reportedly halted all cash withdrawals for one week.
Officials of My Bank have refused to comment after news of the bank halting all withdrawals was leaked early Monday by a call center employee.
In this interview with Finance & Liberty’s Elijah Johnson, Greg Hunter discusses:
-Germany’s top financial regulator says that precious metals manipulation is worse than the LIBOR rigging scandal
– The Federal Reserve has NO GOLD
– Those in Washington Know We Are Headed Towards ECONOMIC Crisis
– China buying up economic power from the United States?
– Current crisis is threatening our personal liberties
– Financial collapse will occur within a year, “This is a mathematical calculation that we’re headed for another financial calamity“
Have you been paying attention to what has been happening in Argentina, Venezuela, Brazil, Ukraine, Turkey and China? If you are like most Americans, you have not been. Most Americans don’t seem to really care too much about what is happening in the rest of the world, but they should. In major cities all over the globe right now, there is looting, violence, shortages of basic supplies, and runs on the banks. We are not at a “global crisis” stage yet, but things are getting worse with each passing day. For a while, I have felt that 2014 would turn out to be a major “turning point” for the global economy, and so far that is exactly what it is turning out to be.
The following are 20 early warning signs that we are rapidly approaching a global economic meltdown…
On the latest SD Weekly Metals & Markets Wrap we cover:
- China’s credit crunch and contagion fears- is the Chinese version of the Lehman Brothers collapse imminent?
- US 30 day T-bills auction at zero interest – Raw fear!
- Gold demonstrating classic safety trade Friday
- Doc’s retail market report
- SD Lead Bullion™ flies off the shelf
The SD Weekly Metals & Markets With The Doc & Eric Dubin is below:
Drastic restructuring of the current monetary system seems inevitable, whether or not it is imminent.
Before the system resets it seems likely that governments around the world will scramble to locate and nationalize assets in order to maintain their power for a while longer. Capital controls and financial repression via artificially lowered interest rates are already in place. Pension plans, savings accounts, and IRA and 401(k) plans seem vulnerable to partial confiscation, bail-ins, or mandatory investment in government bonds. Such confiscations and bail-ins have already occurred in other parts of the world and could easily happen in the United States.
Gold and silver have protected purchasing power and assets for 5,000 years. In this twilight period of the current debt based monetary system it seems likely gold and silver will increasingly be necessary for protection of purchasing power and assets.
Are you prepared?
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.
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.
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.