Missing you Dan!!! You made this board special.
The only thing that makes sense to me is "the powers that be" are doing two things to get us into a socialist NWO based on possibly a new form of socialism that sounds better than current socialism in China.
1. Making the business and social systems bad so most USA sheeple will welcome a change.
2. They are dumbing down our morals with planned unfairness, i.e. (January 6th BS), to get the Sheeple used to unfairness. In their planned system their will be a lot of unfairness.
Think about the Democrat supporters, such as government employees. Their perks will disappear after the NWO is set, i.e. China>>>
Now minorities supporting the socialists don't realise that socialism is just a nice sounding term for slavery.
So, IMO, the few supporting the socialism are being used and don't know it, and then the Deep State still has to cheat in elections to win and that is part of getting us used to unfairness. Oh and the other party is really part of the the Deep State, most of the "other side".
sumisu, get a hobby farm, lol, I know you do by your iHub photo, get some protection and supplies. Cash might not be worth much, stocks nothing.
Sad new year.
Wait till next year, USA will be dark blue on that map!
Global Food Crisis Worsens As Hunger Hotspots Identified
World Food Programme (WFP) and the Food and Agriculture Organization of the United Nations (FAO) are out with a new report outlining countries that "are either already starving or on the brink of disaster."
WFP and FAO found 19 hunger hotspots worldwide, with most countries in Africa, the Middle East, and even some in Central America. They call for urgent humanitarian action between October 2022 and January 2023 to avoid "huge loss of life."
Afghanistan, Ethiopia, South Sudan, Somalia, Nigeria, Yemen, and Haiti are labeled "hotspots of highest concern," facing catastrophic hunger levels.
Chiara Pallanch, the Senior Analyst in the Analysis and Early Warning Unit at WFP, said the "world is facing a food crisis of unprecedented proportions, the largest in modern history. Millions are at risk of worsening hunger unless action is taken now."
"We have a choice: act now in the face of these unprecedented needs, to save lives and invest in solutions that secure stability and peace for all. Otherwise, we will see people around the world face rising food insecurity – and even famines – driving migration, unrest and conflict."
"There is now a very real risk that food and nutrition needs across the globe may soon outstrip WFP's or any organization's ability to respond," Pallanch said.
Meanwhile, in a separate report, the heads of global humanitarian and financial institutions warned:
The war in Ukraine continues to exacerbate the global food security and nutrition crisis, with high and volatile energy, food and fertilizer prices, restrictive trade policies, and supply chain disruptions.
Despite the reprieve in global food prices and the resumption of grain exports from the Black Sea, food remains beyond reach for many due to high prices and weather shocks. The number of people facing acute food insecurity worldwide is expected to continue to rise.
Fertilizer markets remain volatile, especially in Europe, where tight natural gas supplies and high prices have caused many producers of urea and ammonia to stop operations. This may reduce fertilizer application rates for the next crop season, prolonging and deepening the impact of the crisis.
None of this should come as a surprise to readers. As we recently pointed out, David Beasley, executive director at the UN World Food Programme, recently indicated the world's food security conditions are "worse" than what was observed during Arab Spring over a decade ago.
FAO's world food index still holds above levels that triggered social unrest across the Middle East and toppled governments in 2011, known as the "Arab Spring."
It looks like a global food crisis could rear its ugly head in 2023. We've pointed out "The Stage Is Being Set For A Massive Global Rice Shortage" and asked: "Major Food Crisis Coming In 2023?"
What's important to know is that countries most susceptible to food shortages risk a flare-up in social unrest. It's probably best if you avoid those regions in 2023.
The U.S. Productive Sector Recession
Quantitative easing was designed as a tool to provide time for governments to implement structural reforms, boost growth and strengthen the economy. However, it has become a tool to increase the size of government and take increasingly riskier levels of debt.
The United States economy has not strengthened in the period of enormous fiscal and monetary stimuli, as the latest data shows. It needs increasing units of debt to generate a new unit of GDP, productivity is extremely poor and leading indicators are negative.
The main problem of loose monetary policy is that it massively increases the size of government on the way in, through debt and deficit spending monetization, but it also expands government on the way out as rate hikes and liquidity constraints impact households and small businesses but deficit spending and rising public debt remain. This “tightening” period is particularly negative in this crowding-out effect because the government is presenting every week new spending packages while the Fed tries to contain inflation curbing demand growth. The public sector is unaffected by the normalization of monetary policy, but the private productive sector suffers the crunch.
When the central bank tries to reduce inflation with rate hikes and monetary contraction but the government increases spending and keeps an astonishing pace of indebtedness what follows is wealth confiscation and stagnation.
The latest unemployment figures show the divergence between headline positive figures and the reality. Yes, the official unemployment rate is optically low, at 3.7%, but the labor participation rate remains at 62.4 percent or 1.0 percentage point below its February 2020 level. The employment to population ratio, at 60.1 percent in August, also remains 1.1 percentage points below its February 2020 value, according to the U.S. Bureau of Labor Statistics (BLS). Real wage growth is negative and consumer confidence remains extremely low. The Ipsos-Forbes Advisor U.S. Consumer Confidence Tracker fell back below the 50-point mark, which indicates contraction, in the first week of September. This is seven points lower than the January level. The Current and Investment sub-indices are both below the 40-point mark which indicates severe contraction for the sixth and fourth times this year, respectively.
The private sector is truly in a bad shape. The August S&P Global US Sector PMI shows all sectors in contraction. The report states that the Financials sector “continues to record the fastest fall in activity,” Healthcare “signals the sharpest decline in activity on record” while the Industrials and Technology output drops into contraction territory. And they say there is no recession risk?
The U.S. economy is projected to add just 8.3 million jobs from 2021 to 2031, also according to the BLS. Total employment is projected to grow 0.5 percent annually, which is half the 1.0 percent annual growth recorded over the 2011-21 decade. This, in a period in which we estimate that public debt will increase by another $10 trillion with an average annual deficit spending of one trillion.
Think of the trend for a second. The government adds trillions of so-called stimuli to the economy, the multiplier effect is inexistent even when all conditions remain positive, then the same government increase debt and deficits again due to an exogenous factor, and the result is even more debt.
In the past three decades the result is always the same. The United States economy exits a crisis with significantly more debt, lower employment growth, weaker real wage growth and slower GDP recoveries. Why? Government spending on everything and anything for any occasion is the equivalent of an athlete eating cake to face the challenging curves and expecting to run faster afterward.
Excessive monetary and fiscal intervention have left higher inflation and a weaker economy. Rate hikes may help reduce inflation, but permanent deficit spending will continue to erode the purchasing power of wages and deposits.
The United States seems to be on its way to a private sector contraction of unprecedented levels as it may affect all relevant industries at the same time. The divergence between the ISM indicator and the SP Global PMI indicator also shows another worrying trend: large businesses are doing fine in a high inflation-low growth economy but small and medium enterprises, which create around 65% of employment, are in deep contraction.
Some day we will understand that supply-side measures create less headlines but have a better impact on the economy than a constant increase in government size and spending followed by more debt, more taxes, and more inflation.
Author: Daniel Lacalle
About Daniel Lacalle: Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Author of bestsellers "Life In The Financial Markets" and "The Energy World Is Flat" as well as "Escape From the Central Bank Trap". Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Frequent collaborator with CNBC, Bloomberg, CNN, Hedgeye, Epoch Times, Mises Institute, BBN Times, Wall Street Journal, El Español, A3 Media and 13TV. Holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE.
A World on Fire
Every day, news reporters, traders, and workers of all sorts the world over wake to do their work as they always have. Part of that requires that everyone pretend that life is normal, fixable, and more or less stable. All of this is temporary. It will come and go and really not be that bad.
Strange, isn’t it? Human beings have a hard time adjusting to disaster, in their decision-making and even in their mindset. Reporters have to do their jobs as they are trained. Traders too. Everyone does. They please their bosses. They don’t sound alarms. They don’t scream and yell as they probably should.
But there is a moment in the day when the work is done and perhaps a cocktail comes out or the dishes are washed and the kids are in bed and the room falls silent. At this moment, millions and billions of people the world over know it. Disaster is all around us. We are just pretending otherwise, simply because this is what we have to do.
It was this way during lockdowns. They must know what they are doing otherwise why would we be forced to do this. If we all do our part, maybe this will end sooner rather than later. The experts surely know better than we do what is what. What can we do but trust?
Let us adjust and find a way to normalize all of this in our minds. We are powerless to change it in any case.
And thus the peoples of the world adjusted and will continue to do so as the fundamentals decay and rot, long past the end of lockdowns and most vaccine mandates, even as all the old rituals and signals of life as we once knew it fade further into memory.
Enough with the dreary existentialism. Let’s talk about life in a one-bedroom apartment in London. The price of energy for heat has nearly doubled, seemingly overnight. Truly, it took months but it has felt like one day to the next. The energy bills will be approaching a substantial portion of the rent itself. And the forecast — which one has to do because that’s how energy markets work on the consumer end — is showing a doubling and doubling again.
Here is what Goldman Sachs is seeing:
Small businesses cannot function under these conditions. “Tom Kerridge, the celebrity chef, revealed that the annual energy bill at his pub has soared from £60,000 to £420,000 and warned that ‘ludicrous’ price rises left the hospitality sector facing a ‘terrifying landscape’,” reports Telegraph.
This is all running wildly ahead of consumer prices generally. This is only through June. We are already approaching 100% inflation in energy:
Many will need to close up shop. The new Prime Minister Liz Truss, who calls herself a conservative, has capped price increases for consumers while pushing the largest spending bill to bail out energy companies ever. It truly seems like she had no choice. Yes, that’s what they all say, but in this case, it might be true simply because otherwise, the entire nation would totally fall apart.
It could happen anyway.
“The U.K. may be facing a wave of business bankruptcies exceeding anything witnessed during the post-2008 panic and recession,” reports Joseph Sternberg. “Some 100,000 firms could be forced into insolvency in coming months, bankruptcy consultancy Red Flag Alert warned this week. These are otherwise healthy firms with at least £1 million in annual revenue. Business failures on this scale would dwarf the roughly 65,000 firms of any size that went under from 2008-10.”
Everyone wants to know why. As always, there are a number of factors. The sanctions on Russia for its struggle over the borders of Ukraine were ill-advised. That has never stopped the deployment of such tactics: sanctions against Cuba still in force began 60 years ago, all in an effort to make some foreign state behave in a way that the US demands.
They have driven up the price of energy all over Europe and the UK. But even then, Russian sources only about 3% of the UK’s energy needs.
Another culprit is the fanatical attempt on the part of the government to convert a fossil-fuel economy to one powered by the wind and sun. For reasons of climate change, we know how good politicians are at controlling the global climate by taking away your consumer conveniences.
But really even these two factors would not be enough to cause this level of carnage. The real root of the problem is monetary, which in turn traces (again!) to lockdown policies: the wild currency debasement starting March 2020 and continuing through lockdowns has wrecked the place. How could they not see this coming? It’s ridiculous.
And it happened the world over. The chart below that I put together looks messy but it tells the whole story of how one generation of central bankers wrecked the world. The key on the left tells you monetary inflation rates and the key on the right tells you price inflation rates. One lags the other by 16-18 months. I’ve color-coded it so that you can see the relationships.
This covers the U.S. (green), the EU (red), and the UK (blue). You can see the massive oceans of paper being pumped out to cover up for the egregious evil of lockdowns. Do you remember those days when governments the world over imagined that they could somehow shut things down while keeping the data looking pretty with the printing press?
How Quickly Things Fall Apart
My friends in the UK are truly panicked. They want to come to the U.S. just to get away. But many of my friends are rebels and did not accept the vaccine because they are healthy and under the age of 80. They rejected the jab. Now they cannot come to the U.S. because the U.S. is still imposing rules that forbid travelers from foreign countries who are not vaccinated from getting across the borders.
These policies again trace to the lockdown era: March 12, 2020, in particular, when the office of the president decided on its own to do the unthinkable and shut travel from Europe, UK, Australia, and New Zealand. It caused family disruption, business loss, and tragedy all around. It is still not normalized, which makes the point: no one in Washington has any regrets.
This is the essence of policy in America today. Truly people are being locked out of our country for being insufficiently loyal to Pfizer, which seems to be the real government here at home, at least as it pertains to public health.
The most striking feature of that which afflicts the UK today is the sheer speed of it all. One day life was normal and then suddenly the bills were through the roof. No one could explain why. It was some kind of mystery, and extremely disorienting.
Why energy, for example? Well, inflation strikes in strange ways. It gravitates to the thing most vulnerable to price hikes. This could be dictated by fashion or policy or both. But when it happens, no power can stop it.
The story of going from normal to double and triple prices, forecasting to go much higher, reminds me of books I’ve read about Weimar, how things were fine until suddenly they were not and life itself took a shocking turn.
Until recently, Americans have looked at the chaos abroad and thought oh that’s what these weird foreign people do, just strange stuff with unstable governments and unsound financial systems. And yet right now it is happening to our mirror country across the pond, a place that Americans think of as cousins with a Royal family.
The remarkable thing is that the UK’s monetary policy was not as bad as the U.S.’s own. The only difference is that there is a larger international market for dollars than for pounds. This allows the Fed a bit of breaking room to do more damage.
But can it happen here? Yes, certainly, and it could happen before year’s end. The policies of the last three years have created an incredible powder keg. No one knows when it will go off, and no one knows what to do when it happens.
There are so many other data points: missing workers, food shortages, political instability, and the breathtaking entrenchment of Xi-backed lockdowns in China.
The world is on fire. Most people are not willing to think about it or talk about it. Yet.
Author: Jeffrey A. Tucker
About the Author: Jeffrey A. Tucker, Founder and President of the Brownstone Institute, is an economist and author. He has written 10 books, including Liberty or Lockdown, and thousands of articles in the scholarly and popular press. He writes a daily column on economics at The Epoch Times, and speaks widely on topics of economics, technology, social philosophy, and culture.
A List Of 33 Things We Know About The Coming Food Shortages
Things are far worse than you are being told. Over the past few months, I have been carefully documenting facts that show that global food production is going to be way down in 2022. Unfortunately, most people out there don’t seem to understand that the food that isn’t being grown in 2022 won’t be on our store shelves in 2023. We are potentially facing an absolutely unprecedented worldwide food crisis next year, but the vast majority of the population doesn’t seem very alarmed about this. So I would encourage you to help me get this warning out by sharing this list with as many people as you possibly can. As you will see below, we now have so many data points that it is impossible to deny what is coming.
The following is a list of 33 things we know about the coming food shortages:
#1 The hard red winter wheat crop in the United States this year “was the smallest since 1963”. But in 1963, there were only 182 million people living in this nation. Today, our population has grown to 329 million.
#2 It is being projected that the rice harvest in California will be “half what it would be in a normal year”.
#3 The U.S. tomato harvest will come in at just 10.5 million tons in 2022. That is over a million tons lower than a normal year.
#4 This will be the worst U.S. corn harvest in at least a decade.
#5 Year-to-date shipments of carrots in the United States are down 45 percent.
#6 Year-to-date shipments of sweet corn in the United States are down 20 percent.
#7 Year-to-date shipments of sweet potatoes in the United States are down 13 percent.
#8 Year-to-date shipments of celery in the United States are down 11 percent.
#9 Total peach production in the U.S. is down 15 percent from last year.
#10 Almost three-fourths of all U.S. farmers say that this year’s drought is hurting their harvests.
#11 Thanks to the endless drought, the total number of cattle in Oregon is down 41 percent.
#12 Thanks to the endless drought, the total number of cattle in New Mexico is down 43 percent.
#13 Thanks to the endless drought, the total number of cattle in Texas is down 50 percent.
#14 One beef producer in Oklahoma is now predicting that ground beef “could eventually top $50 per pound”.
#15 At least 40 percent of the United States has been suffering from drought conditions for 101 consecutive weeks.
#16 Overall, this is the worst multi-year megadrought in the United States in 1,200 years.
#17 Europe is currently experiencing the worst drought that it has seen in 500 years. In some parts of central Europe, river levels have fallen so low that “hunger stones” are being revealed for the first time in centuries.
#18 Corn production for the entire EU could be down by as much as one-fifth in 2022.
#19 We are being warned that there will be crop losses in France of up to 35 percent.
#20 It is being projected that crop losses in some areas of the UK could be as high as 50 percent.
#21 It is being reported that there will be crop losses “of up to 50 percent” in some parts of Germany.
#22 Some farmers in Italy have already lost “up to 80% of their harvest”.
#23 Agricultural production in Somalia will be down about 80 percent this year.
#24 In eastern Africa, the endless drought has already resulted in the deaths of at least seven million animals.
#25 In China, they are facing the worst drought that they have ever experienced in recorded history.
#26 India normally accounts for 40 percent of the global rice trade, but we are being warned that production in that country will be way down in 2022 due to “considerable rainfall deficits in key rice producing states”.
#27 A third of the entire nation of Pakistan was under water after recent floods absolutely devastated that nation, and agricultural areas were hit particularly hard. As a result, the vast majority of the crops in the country have been “washed away”…
It has also been estimated that roughly 65 per cent of the country’s food basket — particularly crops like rice, cotton, wheat and onion — have been washed away.
Pakistan Foreign Minister Bilawal Bhutto-Zardari, in an interview to CGTN earlier this week, offered an even starker outlook by saying that “about 80 to 90 per cent” of the country’s crops have been damaged by the floods.
#28 The prices of some fertilizers have tripled since 2021, while the prices of some other fertilizers have actually quadrupled.
#29 One payment company is reporting that the number of Americans using their app to take out short-term loans for groceries has risen by 95 percent.
#30 Demand at U.S. food banks is now even worse than it was during the height of the COVID pandemic.
#31 The World Health Organization is telling us that millions of people in Africa are now potentially facing a very real possibility of starving to death.
#32 According to the World Food Program, 828 million people around the world go to bed hungry each night. Needless to say, that number will soon be much higher.
#33 UN Secretary General António Guterres has publicly stated that he believes that it is likely that there will be “multiple famines” in 2023.
As global food supplies get tighter and tighter, so will the risk of civil unrest.
In fact, this has already been happening…
The risk of civil unrest has surged this year in more than half of the world’s countries, signaling a coming period of heightened global instability fueled by inflation, war, and shortages of essentials, a new analysis says.
According to Verisk Maplecroft, a UK-based risk consulting and intelligence firm, 101 of the 198 countries tracked on its Civil Unrest Index saw an increase in their risk of civil unrest between the second and third quarters of this year.
In recent weeks, we have seen absolutely massive protests in cities all over the planet.
But conditions aren’t even that bad yet.
So what will things be like in 2023 when it finally becomes exceedingly clear that there simply will not be enough food for everyone?
Wealthy countries will have the resources to buy up much of what is available on the market, and that means that many poor countries will deeply suffer.
If everything that you have read in this article sounds familiar, that is because we have been warned for years that such conditions were coming.
In 2023, there will be famines and civil unrest all over the globe.
This is not a drill. An extremely serious global food crisis has already begun, and I would encourage you to get prepared for what is ahead while you still can.
' Dan ~ RIP' Is Dan really gone? Can you elaborate?
'he is already missed by many.' What does that mean? What's going on with Dan?
Thanks for posting and very sad to hear about "Dan The Man," which I called him in our private conversations.
Dan posted an amazing amount of information and he is already missed by many.
" Sad to hear, Dan ~ RIP " .. !
Target’s earnings take a huge hit as retailer sells off unwanted inventory
This is a developing news story. Please check back for updates:
Consumer prices rose 8.5% in July, less than expected as inflation pressures ease a bit
This is a developing news story. Please check back for updates:
Kunstler: A Glance Ahead
By James Howard Kunstler
August 5, 2022
What’s ahead — like a few months down the road? Hysteria and chaos, if the “Joe Biden” regime can help it… and they’re helping it all they can. Twice vaxxed, twice boosted, and twice recent Covid-19 patient Dr. Anthony Fauci warned this week that the unvaxxed would “get into trouble” as the seasons turn this year. The part he left out is: the unvaxxed will be in trouble trying to keep up with helping their sick and dying vaccinated relatives whose immune systems have been damaged by their multiple vaxxes.
The boldness of Dr. Fauci’s lying is really something to behold. Who in the entire HHS-NIH-CDC bureaucracy has failed to notice that the mRNA “vaccines” have no efficacy whatever against Covid-19? The vaccinated are by far those still getting sick and increasingly disabled from the disease and even more from the vaxxes themselves. The emperor’s new clothes hang in shreds. Rumor is that many upper-level employees in these public health agencies are increasingly freaked out by their now-obvious complicity in a momentous crime. They know they will have to answer for allowing the mRNA fiasco to get this far, for going along to get along, and they’re preparing to mutiny to save their own asses. Wait for it.
The regime’s back-up plan is the comical monkeypox, transmitted to date mainly via all-male orgies. HHS Secretary Xavier Becerra declared a national monkeypox emergency this week, saying he’d “explore every option on the table” (except an official advisory against homosexual orgies). There is, of course, reasonable suspicion that monkeypox is but one device for shutting down the November mid-term election, or, more deviously, closing polling places and allowing only mail-in ballots — the easiest way to rig elections.
That will lead naturally to several state’s attorneys general seeking relief in the Supreme Court against the federal government’s unconstitutional takeover of the states’ duty to conduct their elections. The “Joe Biden” regime will lose that one, but not before royally pissing off at least half the adults in the land, leading to even greater-than-anticipated election losses for the Party of Chaos.
Meanwhile, the Party of Chaos is about to unleash its “Inflation Reduction Act,” which proposes to spend three quarters of a trillion dollars created from thin air into an economy already hyperventilating on three years of multi-trillion-dollar injections derived from no productive activity. At the same time, the act will raise taxes especially for low-end wage earners and small businesses, completing the regime’s destruction of the middle-class. The cherry-on-top is the provision to double the size of the Internal Revenue Service by hiring 87,000 new employees to harass ordinary American taxpayers. Is that what you voted for in 2020? I thought not.
None of that is going to work as intended. More likely, passage of the act will trigger destruction of the dollar as the world’s reserve currency, and a stampede out of dollar-denominated investments, which is to say, a very severe financial crisis. Credit will freeze, the distribution and sales of goods will cease, interest will stop being paid on virtually all outstanding debt, the bond market will implode, few will have anything identifiable as money, and there will be little in the way of everyday goods like food and gasoline to buy anyway.
You realize, of course, that this is a description of economic collapse. If things roll that way, there will be absolutely no trust left in the US government. It will be either ignored or opposed. And in places like my own New York, under the tyrannical and titanically incompetent accidental Governor Kathy Hochul, there will be no trust in state government either. Meaning, we’re on our own, community-by-community. This will be a very interesting experiment in the dynamics of emergence — the self-organizing properties of systems in chaos. I doubt that it will resolve in the direction of the globalists’ dreams of transhuman technocracy. Every macro trend now runs against centralization.
But the process could conceivably invite an attempted Chinese takeover of the USA, if not militarily, then in a way similar to America’s asset-stripping operations in the collapsed Soviet Union of the 1990s, a looting spree — as seen many other times in history when empires founder. Or else, the rest of the world will just kick back and witness the spectacle of our struggle as the lights of Western Civ flicker out. (Europe will be right in it with us, by the way.) The other nations of the world are tired of us trying to push them around, with increasingly evil intentions. They will enjoy watching our tribulations. They will be convinced we deserve it.
This is what comes from a culture of immersive and pervasive dishonesty. Satan is the father of lies and we have become Satanic, being and doing evil, most especially to ourselves, whether you believe in a literal Satan or not. So, do you think now that being transgressive is… fun? You’ll be changing what’s left of your mind about that soon. Along with the threat of literal starvation will also arise a terrible hunger for truth: How did this happen? How did we come to do this? Who was behind it? It won’t be hard to find out, once we’re motivated to look.
Mike Savage - Illusions
By Mike Savage
August 4, 2022
While most people are busy earning a living and contemplating how they are going to keep up with rising prices and a crumbling society there are many things taking place that many are not paying attention to.
One great example is what is happening in Europe. This really ties into what I am talking about when I say that there is NO price discovery in almost any asset and that everything we are seeing is an illusion.
It can’t be argued that in Europe there are countries that can be considered “haves” like Germany and “have-nots” like Italy and Spain. Because of this, in a real market those “have not” countries would have to pay FAR more in interest because of the additional risks associated with funding their debts. The problem here would be that those countries would likely be insolvent in no time if they had to pay a true market price.
Since we have no real markets the central banks- in this case the ECB- can manipulate prices not only by buying bonds to keep rates low and bond prices high (this also allows governments to carry FAR more debt than they should be able to) but they can also manipulate the spreads (difference between rates of different countries). They are currently doing this by buying the bonds of the “have nots” and selling the bonds of the “haves”. This gives the Illusion that all is equal when it is certainly not.
If they were not doing this, it is likely that the Italian and other “have-not” bond yields would spiral higher and could propel the country into insolvency. This is a great example of how the central banks can help countries pretend they are solvent when it is readily apparent that without trillions of currency units created out of nowhere-they are not.
In the meantime, even though the central banks are intervening massively in the debt “markets” we are seeing unprecedented volatility in rates. This appears to me to be a case where even though there is massive intervention in the “markets”, since the debt is growing exponentially it appears that, at times, it is not enough.
The real problem here is that these actions take TRILLIONS of dollars, euros, Yen, etc. These actions don’t just happen out of nowhere. The cash has to be conjured up and assets have to be bought (or sold) to manipulate the price.
Keep in mind that I am focusing on bonds here but the very act of keeping rates low also keep stock and real estate “markets” elevated. Low rates allow for cheap borrowing and a lot of leverage. Rising rates reverses that flow.
As we look forward to fall, I am expecting a few things.
* Far higher prices for all the goods we need. I am particularly worried about energy and food. While we are paying far more already than we are used to paying, I believe prices will rise substantially for quite a long time. There are MANY reasons for this. At the top of the list would be the US dollar losing its lone reserve currency status and countries in the East looking inward and trading with each other making all natural resources more scarce in the West. I’m not even sure if a depression would give us any relief from this.
* Lower prices for homes and other goods that people may forego because of the rising cost of essential goods. With interest rates rising and the cost of daily living skyrocketing home affordability will likely take a massive hit.
* Large move up in the price of silver, gold and the companies that mine both. I saw an interview with Andy Schectman and he has stated that the banks have been amassing massive amounts of silver and that the banks have reduced their short positions (one of the mechanisms to keep the price artificially low) to record LOWS. It makes a lot of sense that an asset like silver which has been used as money in the past but also has MANY commercial uses- which means at some point there could be a physical shortage- should be FAR higher in price in my opinion. I believe that the banks see it coming and are getting ready for a massive U-turn. I believe that because of these actions we are getting close. When? I believe VERY soon- but who knows?
* Large move up in profitable companies that produce hard assets. I believe many of these companies who are producing things we need and are already making record profits have been beaten down recently because of the rising interest rates and also the fear of recession which, in the past, would have led to lower commodity prices. This time, however, we are in a situation where there are severe supply constraints and many countries are looking to keep their products at home to assure that their populations have adequate supplies. This could be a situation where demand could fall but prices (particularly for importing countries) could rise substantially. I have recently sat in on two meetings. One with Goldman Sachs and another with Invesco (people who run their commodity desks). After both meetings I came away with the feeling that my hypothesis is correct. There are SEVERE supply constraints that should lead to FAR higher prices.
While there is no guarantee that I am right at all here and it is Far less likely that I could time these things I am as sure as I could be that, at some point, all of the debt-based assets are going to implode together. At that time, I believe all that people will accept will be something real- whether it be gold, silver, oil, food, water, etc.
A good question for investors would be what assets will thrive in a situation like this and what assets could suffer in this scenario. Do you own assets that are at risk of rising or falling if the economic storm being predicted by almost all of the major banks along with the IMF and many governments comes ashore?
Is your portfolio positioned correctly?