Post: #1

First, Jim Rogers.

Jim Rogers trades commodities and commodity-related securities. He was a partner with George Soros in the Quantum Fund. Seems to have a different personality than Mr. Soros. I tend to think that his warnings are well-intended and offered in good-will. Doesn't seem to have a hidden agenda. He's worth about $300 million; decide how you want to factor that into his credibility.

What’s Coming Is Going to Be a Mess

Quote:In 2015, when the market averages were flat, twice as many stocks were down on the New York stock exchange as were up. And in the last nine months, earnings are down in the United States. A recession is starting, it is already in place. But if you look at the averages and the bond market, they still go up.

That’s because all the central banks are running their printing presses as fast as they can, and Brexit means they’ll run them even faster. Except for the central banks printing a lot of money, the entire market would have tanked by now.

We had a problem in 2008 because of too much debt, domestically and worldwide. Now the debt levels are staggering compared to 2008. Some countries have up to five times as much debt as they had eight years ago. And the dangers now are even larger than 2008.

...

We’ve had two 50% market drops in the last 15 years. Why can’t we have a third? And if it can drop 50%, why can’t it drop 75%? It can and it will ultimately. But in the meantime, all that money printing could still drive stocks higher. And central banks might take even more desperate measures to keep the game going.

The Japanese central bank is already buying stocks. It’s already bought all the government bonds. The European Central Bank is running out of bonds and government bonds to buy. Now it’s starting to buy corporate bonds. Why can’t that happen in America? Why can’t the Federal Reserve buy these assets?

When Bernanke was head of the Fed he said, “If we have to, we’ll buy anything. We’ll buy shares of gold mines.” If the Central Banks all over the world buy stocks, there’s really no top.

In other words, the world's securities markets are not reflecting reality. Some day, they might!

I've been wanting to hear Mike Maloney talk about "deflation, then inflation" (the scenario I mentioned before being accused of not knowing what FIFO and LIFO mean), but the only previous youtube video I could find was boring and in the wrong context. Then this video came out a few days ago:





Here is an economic indicator worth mentioning in passing:



It's the delinquency rate on commercial loans. The grey bars indicate recessions. Notice what happened when the slope of the line turned positive (increasing delinquencies) in previous cycles. Notice what is happening at the end of the chart.

I seem to recall that something like this was mentioned in the video; the banks can't easily make more money, without making riskier loans than they're already making.

Post: #2

Some correct points. Bank spreads (difference between interest paid out and paid in) are at all time lows.

What he is massively ignoring is the effect of capital flows. Stock indexes are not just the result of Bank activity but of money fleeing places like Europe and countries where assets are less secure (like Russia). Remember the Cayman Islands leak? It revealed that the biggest global money shelter is Nevada.

Post: #3

No offence but I've been hearing this crap from "experts" for the better part of a decade. Point in fact, I picked up and moved to the sticks on the stern warning of guys like this that civilisation was going to implode in six months to a year.

They've been selling that same load of BS for the last 8 years now in 6 month intervals, complete with a thousand scary charts that make it all seem infallible.

Don't hold your breath.

The major players issue all the debt, and therefore it follows that they choose when to call the debt. There are factors that matter, to be sure, but if if there's one thing I've learned these last ten years is that the global economy will collapse at precisely the moment of their choosing ("Russian" false flag attack is my bet), and not a second before.

There are lots of good reasons to get your ass out of the hives and into the clean air, open spaces and freedom of country living. What I don't suggest is fucking yourself over by doing it in a ridiculously short time frame because these morons/charlatans have convinced you that the yuppies will be eating each other by this time next week.

Post: #4

Yea, people have been saying similar things for a decade, and they're right. Just because it hasn't happened yet doesn't mean it won't. Structural deficits and central bank intervention ensure that it's only a matter of time.

The reason SHTF hasn't happened yet is from the famous phrase:

"The markets can stay irrational longer than you can stay solvent."

Post: #5

This is definitely for real.

Anyone who is involved in the stock market on a daily basis can see a real life asset bubble being blown up right before your very eyes.

This isn't the paranoid ranting from some gold bugs or chicken littles. It's a real thing. The problem is noone knows when things will fall apart for sure. The central bank is in uncharted territory with these zero and negative interest rates as well as quantitative easing economic experiments.

There is global collusion between central banks to print money, buyback bonds, issue unsecured loans, and stuff what's left into equities.

We probably won't know for sure what the consequences will be until a big recession happens or a chain of debt ridden countries collapse from major defaults that can no longer be restructured by global creditors.

I'm of the opinion you can't create something out of nothing though. If there is no real economic growth or earnings happening which coincides with the growth of equities then things don't make a lot of sense.

Something is bound to break eventually.

Post: #6

Financial systems are inherently unstable and so there will be another crisis. However, a gold salesman is not a good source for accurate information.

Post: #7

(08-11-2016 04:04 AM)Easy_C Wrote:  Some correct points. Bank spreads (difference between interest paid out and paid in) are at all time lows.

What he is massively ignoring is the effect of capital flows. Stock indexes are not just the result of Bank activity but of money fleeing places like Europe and countries where assets are less secure (like Russia). Remember the Cayman Islands leak? It revealed that the biggest global money shelter is Nevada.

I've also heard that Delaware is the place where people make endless "incorporations of companies" due to the lower tax laws than the rest of the USA..What kind of millionaire would want his wealth be "re-distributed" by high taxation?

Low interest rates also fuelled the credit bubble and housing bubble in countries like Australia and Canada..If Interest rates and tax rates rise in those countries, they are gonna have a wild economic ride.

Post: #8

I know that in Canadian cities like Vancouver and Toronto have huge housing bubbles, while other cities like Calgary and Edmonton had a housing bubble, but due to the oil price collapse, the housing prices collapsed too.

Bubbles can only go so high till they deflate. The real estate bubble in the USA from 2005-2006 had people cheering on for higher house prices and wealth, only to find a few years later that the real estate market declined by over 30% in a given year, thus paving the way for a global recession from 2008-2009.

It appears that bubbles and false economic progress are indicators of current economic evaluations for future economic crises.

Post: #9

These guys correctly called 30 of the last 3 crises.

They cherry pick their evidence each time, and zoom in on discrete parts of the system (usually positive feedback loops - mechanisms by which things spiral out of control), and deliberately ignore any counterbalancing negative feedback loops (i.e. mechanisms by which large movements get dampened down).

They also conveniently forget about all the times in the past when they called it with equally convincing argument, and nothing happened.

That's not to say crises and recesssions won't happen. They will and do. But these fear-mongerers are nearly always selling something, or building their platform for interviews/speaking gigs/book release.

Post: #10

You can google stock market _____(insert year) and there will always be many arguments for a crash.


"...corporate debt owed by U.S. companies, with the exception of banks and other financial institutions, is at the highest level since 2006.
In fact, the average credit rating for companies that are issuing bonds has declined to below-investment-grade, or ‘junk' status. That is lower than the average rating seen during the 2008 global financial crisis."

"In another report published earlier this year, S&P described the borrowing activities of companies throughout the world as ‘unsustainable’. They noted that corporate borrowing was growing at a pace faster than economic growth.

The increase in corporate debt can be attributed, in large park, to ain increase in debt-financed mergers and acquisitions, share buy-back programs and dividend payouts to shareholders."

http://www.investopedia.com/news/us-corp...year-high/

They´re going into debt to pay dividends? How fucked up is that. It´s a ponzi.

Read more: U.S. Corporate Debt at 10-Year High | Investopedia http://www.investopedia.com/news/us-corp...z4HPgzJiin
Follow us: Investopedia on Facebook


"Since I have forty-four seconds to spare, I’m going to tell you a story. It’s about a guy named Sam.
And we go close on Gekko...
GORDON GEKKO (CONT’D)

Sam used to work a job, he made things and he grew things and he sold those things. Until one day Sam got a credit card and was amazed how easy it was to buy things with it. So Sam got another card and then another. Then he used the credit card money to make
it look like he had an income... and he used that “income” to secure a loan.
91.
(MORE)
And with that loan Sam bought a fancy BMW car and rented a fancy penthouse apartment.
(beat) Now, the credit cards hit their limit and the bank needed him to service that loan, so Sam went to his friends.
His Chinese friend... and his Japanese friend... and his British friend and so on. And his friends loaned Sam money.
(another beat) And that brings us to today... where Sam owes the credit cards and Sam owes the banks and Sam owes his friends and
eventually they’re going to take away Sam’s fancy BMW car and his fancy penthouse apartment.
And Jacob can now see... in Gordon Gekko’s eyes... he truly believes every word he’s saying.
GORDON GEKKO (CONT’D)

And Sam doesn’t make anything anymore and Sam doesn’t grow anything anymore so Sam doesn’t sell anything anymore.
As he stands...
GORDON GEKKO (CONT’D)
Our favorite Uncle Sam’s desperate, Jake... and he just found a printing press in his basement.
(beat) So you tell me -- where do we go from here?2

Post: #11

(08-11-2016 07:20 PM)RichieP Wrote:  These guys correctly called 30 of the last 3 crises.

This in a nutshell. Doom and gloomers need to just STFU. Peter Schiff has been predicting a USD and government bond crash since before 2008 -- where is it Petey? STFU until you've at least worked out the year it's going to happen in; then you can go nuts. Anything will happen if you wait long enough.

I predict another ice age!
When?
Don't know, but soon!

Say that long enough and the basic ebb and flow of the universe will make it so. Doesn't mean you've predicted anything.

Now tell me a guy who predicts the next boom, where and when, and I'll give respect.

Post: #12

The skepticism in this thread is completely well-founded. No one can truly predict a crash, and people constantly say that it will "definitely happen within 6 months" or some such BS.

That said, our current system is unsustainable, and has changed little since 2008. The motto of public companies seems to be 'growth at any cost', because growth is the main predictor of stock prices and therefore company valuation. Growth cannot continue forever unabated.

The lending market is extremely predatory these days. Not just houses and cars, but student loans that the 18-year-old liberal arts major will never be able to pay back, as prices continue to rise at a ridiculous rate compared to the decreasing value of a college degree, stagnant wages and the increasingly concentrated nature of wealth.

I'm not concerned with predicting or trying to prepare for an economic downturn. Of course a recession will happen at some point. They always do. There's no guarantee that we'll be able to just 'bounce back' from the next one like we did in 2008. Our technology and food distribution infrastructure will still be in place, so it's not the stone-age anarchal doom that preppers predict. It could be the spark that lights the fuse of the increasing societal divisions along a million different lines in America, and accelerate us down the path of destruction.

Post: #13

(08-11-2016 06:06 PM)RBerkley Wrote:  I've also heard that Delaware is the place where people make endless "incorporations of companies" due to the lower tax laws than the rest of the USA..What kind of millionaire would want his wealth be "re-distributed" by high taxation?

That is more or less correct. It was a major pain in one work project because an overwhelming majority of companies are incorporated in Delaware.....nevermind that their operations are elsewhere.

(08-15-2016 11:26 AM)Phoenix Wrote:  

(08-11-2016 07:20 PM)RichieP Wrote:  These guys correctly called 30 of the last 3 crises.

This in a nutshell. Doom and gloomers need to just STFU. Peter Schiff has been predicting a USD and government bond crash since before 2008 -- where is it Petey? STFU until you've at least worked out the year it's going to happen in; then you can go nuts. Anything will happen if you wait long enough.

Now tell me a guy who predicts the next boom, where and when, and I'll give respect.

Only one I can think of that has been halfway accurate is Armstrong. He has an excellent track record of predicting market movements although somewhat less so at political timelines.

Post: #14

Armstrong would bolster his cred if he stopped with the political predictions and stuck to what he does well.

He's been calling for 2017 to be rough politically. I'm curious to see if it turns out to be true.

Post: #15

I dont worry about a recession per se. Only investors should care so much about negative GDP growth. You can get negative GDP growth from everyone buying less crap and eating less sugar and saving more, but that would not be a crisis. In fact the opposite. Yet, the headlines would be "recession, unemployment!!" etc as shit companies that produced only poison/junk went bust. Something good in the long-term will be reported as a immediate "crisis" or "collapse".

Japan has had "lost decades" i.e. low or negative GDP growth that look awful in terms of ROI... yet, standards of living have slowly increased over that time.

Recession isn't bad per se but it's how it's absorbed by the economy and managed.

In an ideal world, recessions, disruptions and shocks would be healthy ways to "cut the crap" in an economy - let inefficient businesses die, spur new innovation, etc.

The problem is we aren't good at buffering for shocks or managing smooth transitions (i.e. temporary surges in unemployment). And we overspend, overborrow, and mal-invest in junk when the going is good. Which makes the dips far worse when they do come. Then we end up with cheap ferraris and yachts in a recession, while people lose their jobs and homes... sigh

Post: #16

Gold buggery aside--

I was clicking around some of the monetary analysis available on the St Louis Fed website yesterday. It's apparent that the monetary base (I.e. The supply of money in the system) is orders of magnitude greater than ever before, while the velocity of money has dropped to all time lows. I have to assume that while not necessarily indicative of any systemic risk factors, it's definite evidence of the fact that the fed's QE over the past ten years has brought us into new territory.

I'm not an economist, but from my layman's perspective the fact that the fed has almost no options left at its disposal (short of negative interest rates) in the event of some unforeseen systemic issue makes me nervous.

Post: #17

They do still have options, but they are unconventional. Some forward-thinking central banks are really doing great work here with systemic modelling, and coming up with new contingencies aimed at ensuring systemic robustness.

Not sure what the state of this research is in the US though.

Post: #18

"Some forward-thinking central banks"? Which ones?

Post: #19

Interesting observation in this weeks Bill Bonner newsletter;

The German government is now advising its citizens to prepare for “emergencies.”

As reported in German newspaper the Frankfurter Allgemeine Zeitung, for the first time since the Cold War, Germans are being urged to stock food, medical supplies and, significantly, cash.

And Deutsche Welle, Germany’s equivalent of the BBC, elaborated:

A wad of cash is another important part of any household’s emergency supplies. There may not be time to rush to a bank, and ATMs won’t work if the power is out.

It’s part of a “civil defense” plan being debated in the German cabinet. The plan says people should prepare for an unspecified event that “could threaten our existence.”

Here at the Diary, we always hope for the best. But it’s not a bad idea to take precautions against the worst.

Note that a mystery hacker group known as the Shadow Brokers, breached the NSA’s elite hacking unit and stole some of the agency’s most powerful “cyber weapons.”

The hacker group is now holding a Bitcoin auction for them. Whoever is the highest bidder will receive a file with the crypto-booty.

If mercenary hackers can break into one of the most secure systems in the world, couldn’t they also breach the electronic money system and wipe out all bank account records?

Our advice: Follow the Germans’ lead. Stock some food and some cash.

Post: #20

Deepdiver dont you think those newsletters are largely fear-mongering? They are cherry-picking news and implying it supports whatever central thesis they're pushing.

If you read more around those events, IMO it becomes clear the way they're presented in the newsletter is very deliberately pushing people's fear buttons. It's like a tabloid newspaper.

Post: #21

^What part of the NSAs elite hacking units key tools being hacked and actioned off for bitcoin to the highest bidders by Shadow Brokers is fear mongering?

Or Germany debating new Civil Defense plans?

The reason I subscribe to Bonner is he only sells research... no stocks bonds or commodities like Peter Schiff et.al. so higher level of credibility frankly... Google Agora Publishing in Baltimore.. Bonner was a founder and is CEO. If their research was flawed they would be out of business.

Post: #22

(08-24-2016 07:56 PM)Deepdiver Wrote:  ^What part of the NSAs elite hacking units key tools being hacked and actioned off for bitcoin to the highest bidders by Shadow Brokers is fear mongering?

Or Germany debating new Civil Defense plans?

The reason I subscribe to Bonner is he only sells research... no stocks bonds or commodities like Peter Schiff et.al. so higher level of credibility frankly... Google Agora Publishing in Baltimore.. Bonner was a founder and is CEO. If their research was flawed they would be out of business.

Well if you read around those events, it becomes clear that how they're presented in the newsletter is a very cherry-picked, distorted version.

e.g. the hacking:

-Data/code may be so old as to be relatively useless now
-Still not clear whether a hack by this group even occurred, or whether this really is NSA code
-The auction is likely a diversion or publicity stunt

Of course he conveniently leaves that out though - it wouldnt help him push his reader's buttons.

Also, I dispute your last point:

"If their research were flawed, they'd be out of business"

People have very short memories, and have all sorts of biases that make this not true. Emotions still rule buying decisions. People backwards-rationalize after they've bought something, and confirmation bias is rampant in investing - they remember the times they were right, and forget the times they were wrong. Same dynamic applies to purchased information. It's very possible to build a business selling less than rigorous research.

Post: #23

(08-11-2016 04:04 AM)Easy_C Wrote:  Some correct points. Bank spreads (difference between interest paid out and paid in) are at all time lows.

What he is massively ignoring is the effect of capital flows. Stock indexes are not just the result of Bank activity but of money fleeing places like Europe and countries where assets are less secure (like Russia). Remember the Cayman Islands leak? It revealed that the biggest global money shelter is Nevada.

I can't imagine this from a person who traveled around the world twice with a motorcycle and a car.

He is obviously aware of global capital flows. He even says in the article that there is 'no place to hide', with which he suggests, I suppose, everywhere in the world.

@ about the fear mongering accusations to Jim Rogers by other members, research about him and you will find out why he is aware of those things.

Post: #24

The crisis is happening in 2019.

Post: #25

(08-11-2016 07:20 PM)RichieP Wrote:  These guys correctly called 30 of the last 3 crises.

Quote of the thread!!!!!


But you should have a spread of investments, not everything in the stocks anyay. Investment 101.

Real estate, cash, gold and stocks.

If you own your own home and have 6 months food and water in the basemment you are in a great position.