July 4, 2020
AliExpress WW
The 'Can' To Be Kicked-Down-The-Road Is Just Too Damn Big

The ‘Can’ To Be Kicked-Down-The-Road Is Just Too Damn Big

AliExpress WW

Posted by Egon von Greyerz via GoldSwitzerland.com,

AliExpress WW

There are lies, damned lies and economists. Whether these economists work in the government or the bank, they spend all their time on the computer, extrapolating current trends with minor adjustments.

If you want to understand the future, do not waste your life preparing and constantly reviewing an Excel worksheet with lots of economic data. Collective human behavior is extremely predictable. But not by analyzing spreadsheets, but by studying history.

HISTORY BETTER FORECAST THAN ECONOMISTS

There simply is nothing new under the sun. So why does the whole world spend so much time and money to make economic forecasts that are no better than the random work of several chimpanzees?

Instead, give some lateral thinkers some history books and let them study the rise and fall of the major empires in history. This will tell them more about long-term economic forecasts than any spreadsheet.

After a 50-year recession in the US economy and the dollar, we still hear about the inevitable V-shaped recovery.

What planet do these people live on, who believe that a world on the verge of economic and social collapse will see a miraculous recovery out of the blue.

This is a system problem that is completely fake and depends on a constant stream of incentives, even if it has a zero value. Most people are fooled and believe that it really is.

ALL EMPIRE ENDS WITH A CURRENCY CURRENCY

We are now at the final stage of the final game. The end of the end may be a continuation of the affair, or they may be extremely quick. Most of the downturns of the main cycles are delayed, and this lasts half a century. During this time, the dollar fell by 50% against the German mark and by 78% against the Swiss franc. And since 1971, US debt has grown 65 times – from 400 to 26 thousand dollars. Currency collapse and rising debts – this is how all empires end.

But the end of the end was also stretched and began in 2006 with the Great Financial Crisis. The financial system was on the verge of collapse in 2008, but was miraculously saved with tens of trillions of dollars in print money and guarantees.

Since then, central banks have passionately supported the party, producing useless paper money. The music was supposed to stop in 2008, but the participants are still dancing on the grave of a system that is about to die.

The degree of impending collapse of the global economy will be known only to future historians. What is clear is that we see the end of the main cycle. Further, we will experience not only the fall of one nation, but also of most countries of the world, both developed and developing. Debt is a global problem from which almost all countries are seriously affected. When the financial system collapses, there will be world trade.

WHAT HAPPENS NEXT?

Bubbles of assets can end in only one of two ways: either they explode or explode

The main bubbles that we are talking about here are the financial system, stock markets, bond markets, and real estate. So, in principle, we are considering two options for ending this era.

The net result is always the same, although the Blast finale will be more violent and lead to a faster massacre than Implosion.

explosion

The risk of an explosive end is very high. Most likely, this will be due to acute problems in the banking system, which will lead to default of a large bank, Deutsche Bank says. This will spread throughout the banking system, such as wildfire, and will obviously also affect the 1.5 + quadrillion derivatives bubble. This will happen so fast that central banks cannot print money fast enough to stop it. In any case, the whole financial world would know at that moment that any recently printed money would have a zero value and, therefore, a zero effect.

The explosive outcome of this 100-year bubble era will undoubtedly be disastrous for the whole world. This would lead to a global deflationary depression of a scale that has never happened before. It would also return life to a level of desolation and deprivation that would be unimaginable today.

inward explosion

The only difference from the implosive outcome is that it will take longer and therefore require both hope and pain, as desperate central banks create trillions and quadrillion worthless dollars, euros, etc. In order to temporarily save air ball pumped up.

Even if this process is more lengthy, in the end it will also fail. First, a short period, perhaps a couple of years, of hyperinflation, will pass before it ends in deflationary collapse.

So these are two options. There is absolutely nothing to stop this. Well, we always have Deus ex Machina, of course. Yes, miracles can always happen, and the world will probably be needed this time. But, unfortunately, the odds are not in favor of such miracles.

WHAT WE KNOW

  • Coronavirus is a convenient excuse but not the cause of the current problems. CV was a catalyst, but the real crisis began in August-September 2019, when the Fed and the ECB panicked.
  • The real problem is excessive debt. at all levels of the economy, sovereign, corporate, financial and personal. Governments and the Central Bank have created debt and are now desperately trying to correct their mistake, doing most of all that created all this. As Einstein said:We cannot solve our problems with the same thinking that we used when we created them.“.
  • But The Central Bank has no other instruments, The rates are already equal to zero, and their negative value means that you will have to pay for loans by bankruptcy of the borrower. There are clearly more attractive investments, which I will discuss later.
  • Unemployment is now in hundreds of millions globallyMany people now earn more by not working, and they will be allergic to having to work for money in the future. In addition, a high percentage of job losses will not return in the world.

46 million Americans, nearly 30% of the US workforce, have applied for unemployment benefits since the start of the CV.

According to ILO (International Labor Organization) estimates, nearly 50% of the world’s workforce, especially in developing countries, can lose their jobs.

  • Business, large and small, is collapsing. Thousands of companies are declining in all sectors. Total losses will easily amount to trillions of dollars.

For example, the entire tourism industry is on the verge of collapse. Carnival’s cruise business just announced a loss of $ 4.4 billion and the sale of 6 major cruise liners. Airlines and hotels either fail or lose their fortune. Global tourism is a market worth 5 thousand dollars, and indirect support enterprises contribute 9.2 thousand dollars to world GDP. Imagine that there is an industry that accounts for 11% of global GDP, which is bleeding and, at least, will not recover in this decade.

Another example is the Swiss watch industry, which is important for the country. It lost 81% of exports in April and 68% in May compared with 2019. Another sector that will never be the same.

  • Bad loans are growing because companies and individuals cannot afford to pay interest or installments. It is estimated that in the United States no payments were made on more than 100 million loans.
  • Half of Americans consider selling their homes to survive financially. Most Americans have no savings to cover expenses exceeding two weeks.
  • Global presses work around the clock save the world from perdition. Since the start of the resume, The total fiscal and monetary stimulus today is $ 18 thousand.,
  • An incentive of 18 thousand dollars can easily double. But “just” 18 thousand dollars is a huge 22.5% of world GDP.

6 largest producers of money:

  1. 6.5 thousand US dollars,

  2. 3 US dollars

  3. Japan 2.1 t,

  4. China 1.2T,

  5. Italy $ 1.1 T

  6. France 0.8 t

The above list of problems is just an example of global pressure on states, companies and individuals who will either go bankrupt or go bankrupt under the weight of their own debt in the next few years.

WHAT EFFECTS WILL BE

  • As I discussed in this article, in a world that has collectively gone bankrupt, there is no solution to the global debt problem.
  • The just created incentive of 18 thousand dollars is not real money. This is monopoly money, which can be useful if you play the board game “Monopoly”, but in the real world they have no value. Thus, throwing out fake money in the amount of 18 thousand dollars. In global debt in the amount of 275 thousand dollars. (Which is also impossible to repay) may fool some people for several weeks. This, of course, deceives investors in the retail trade in shares, which are lured into the largest rally in history. They will soon have a shock for life.
  • Almost all asset markets will collapse, including stocks and real estate. But the greatest devastation will occur when bond and loan markets collapse. When this happens, the 2 quadrillion derivative market will also grow in smoke with devastating consequences for the world.
  • We end with an explosion or explosion does not matter much for the final result. At first, we may have a hyperinflationary explosion, which, I believe, is more likely. But it will soon end in depression and deflation. This will return the world to at least 50 years in terms of production and trade, and hence the standard of living. But before the recession ends, there will be enormous financial and human suffering in the world, including social unrest and, possibly, war.
  • Yesterday I was with one of my grandchildren who wanted to photograph a peregrine falcon’s nest. These majestic birds can dive at a speed of 390 km / h (240 mph) to hit their prey, such as a pigeon. The poor dove does not know what struck him when the fastest animal in the world dives from above at a speed of 390 km / h. If the economic bubble explodes, as I described above, the world will also not know that it hit. It will all happen so fast.

WHAT SHOULD WE DO

Unfortunately, most people cannot plan what is coming. They have no savings, and they may have problems living in their house or apartment.

For those who have small savings, even if it’s only a few hundred dollars, take them out of the bank and buy some silver or gold bars or coins. One gram of gold costs 60-70 dollars. One gram of silver costs 70 cents, and an ounce of silver costs $ 20. Many people can afford it, and what looks like a small investment today can save your life in a few years. Just ask the Venezuelans.

For larger investors, dispose of stocks, excluding stocks of gold and silver, and dispose of bonds and investment property. In your own home, pay off your mortgage if you can.

And, obviously, buy as much physical gold and silver as you can afford, and store it outside the banking system.

Gold and silver will effectively protect wealth from both inflation and deflation.

In times of crisis, your best asset and support system is your close circle of friends and family. This is what will support you physically, mentally and morally.

MARKETS

Stocks

The secular bull market ended in February 2020. Now we have entered the secular and destructive bear market. The first stage was completed in mid-March, and we just finished the sucker draw, which makes retail investors over-optimistic. The next foot down is inevitable. It will shock the world. There may be a vicious catalyst.

Gold Silver

The movement began until 1950 – 2100 dollars. We could see the acceleration starting soon. As soon as gold is cleared of $ 2,000, much higher values ​​come.

For most people who know and follow me, I hardly need to repeat that you should not focus on the price of gold or silver, measured in soon useless paper currencies. Just own physical precious metals for insurance and wealth preservation.

Measured in revalued paper money, gold and silver are ridiculously cheap.

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