When the Third Bubble Collapses

The problem is in the Eccles building [home to the main office of the Fed] and in the 12 people sitting there and thinking that interest rates are some magic elixir that'll cause this very troubled and difficult economy to revive," Stockman said.

"It's not true," he said. "These people are dangerous and destructive, and they're creating this massive income inequality that, sooner or later, is going to cause a huge political reaction."

That said, because Stockman thinks that stocks are set to plunge, he believes that those who have their money in the market are set to lose a great deal of it.

"We've had two huge bubbles that collapsed already in this century," he said. "When this third bubble collapses—and surely it will—I believe that will be the day of reckoning. The credibility of all this central-bank-dominated, Wall-Street-coddling policy will be totally repudiated, and maybe then we can clean the slate and start over.  http://www.cnbc.com/id/102381666

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Martin Armstrong has consistently predicted a crash on October 1, 2015 or what he calls 2015.75.  The Shemitah, an ancient Jewish prophecy about 7 year cycles, supposedly is predicting a stock market crash on September 11, 2015.

There are numerous indicators showing that we are at the top of the roller coaster, maybe just over, and set to plunge.  But the plunge hasn't started yet.  Some of the indicators are: initial jobless claims, credit market debt, Manufacturers' New Orders and S&P 500.  The 2001 recession was clearly underway by about October 2000, and the 2008 recession was underway by about August 2008.  I think within a few months the recession will start.  I've been wrong numerous times before, so I am a little cautious.  But I think the Third Bubble Collapse will occur this fall.  We will see.

Alternate History: What if the US lost WWII?

http://www.businessinsider.com/the-man-in-the-high-castle-review-2015-1

Awkward

See http://www.dailymail.co.uk/news/article-2913072/US-Secretary-State-John-Kerry-visits-Paris-terror-attacks.html

Oh, and after all that, Kerry didn't mention the words "terrorist" or God-forbid "Islamic" once.  Here is the closest he came:  Kerry told Hollande: 'I wanted to tell you personally of the horror and revulsion that all Americans felt at these cowardly and despicable attacks against innocent victims and fundamental values.'  So Kerry feels revulsion.  What is he going to do about it?  Nothing, other than take a quick vacation to Paris on the taxpayers' dime.

Black Swan events

I think these recent events qualify as Black Swan events:

1) The Russian ruble collapse.  As recently as November, the ruble traded at about 45 to the dollar.  Today it is about 65.

2) Gold finally seems to have bottomed out at about $1178 on 12/23/14.  Today it is about $1260.

3) Oil prices peaked at about $115/barrel in June 2014 before beginning a slow decline until October and then declining more rapidly until today they are below $50/barrel.

4) The Swiss franc rose 30% yesterday against the euro in a matter of minutes, and today seems to be about equal to the euro, up from 0.833 yesterday, for a net increase of 20% overnight.

5) Copper prices have plunged from $2.90 to $2.60 in less than a month.

6) The euro is down against the dollar from $1.27 at the end of October to $1.16 today.

7) Initial jobless claims are starting to rise.

8) Interest rates on US Treasuries are dropping.  The yield on the 30-year bond is now at 2.4%, probably the lowest ever.

9) The stock market is plunging.  I kept trying to call a high on the Dow, but it finally looks like we have it on 12/26/14 when it closed at 18,054.

10) The ECB is about to unleash a massive bond buying spree.

11) Bitcoins have lost 50% of their value in the last 6 months and now are worth only about $200.

What does this all mean?  Well, a recession is probably beginning.  Initial jobless claims are the main indicator.  And the biggest increase in jobs the last few years was in the energy sector, where there will now be massive layoffs.  The almighty US dollar is increasing in value, which hurts anyone who borrowed in dollars.

I started this blog about 5 years ago, concerned that the whole financial structure would collapse.  I guess that will never happen.  But we can anticipate that when the recession finally starts to bite later this year that the deficit will start to increase again as tax revenues decrease, and the US debt will start to climb rapidly again.

There is a phrase, "the worm has turned", whatever that means.  Something weird happened in April 2013, when gold dropped almost overnight from $1600/oz to $1400/oz and then to $1200/oz over the next 2 months.  The situation has now reversed itself and is back to normal.  SNAFU means "situation normal, all fouled up".

I am still expecting some sort of financial crisis on September 11, 2015.

Translation

Mi Mayor Anhelo

The US promotes its version of Islam

When Mitt Romney was running for president, I had some fear that Mormonism might become the unofficial religion of the US.  Well, it is pretty clear that under Obama, Islam - at least Obama's version of it - is the unofficial religion.

In response to the targeted attack on western journalists in France on Tuesday, the White House once again proved that they are living in Bizarro World when it comes to radical Islamic terrorism. After the attack, which killed ten reporters and two police officers, White House press secretary Josh Earnest said that the Obama administration would “redouble” its efforts to explain “what the tenets of Islam actually are.

“We are working very closely with leaders in the Muslim community both at home and around the world to try to counter the violent extremist messaging that ISIL and other extremist organizations are using to try to radicalize individuals around the globe,” Earnest added. Right. Because it’s the messaging that’s the problem. Not, you know, the murders and stuff. “And we have enjoyed significant success in enlisting leaders in the Muslim community, like I said, both in the United States and around the world to condemn that kind of messaging, to condemn those efforts to radicalize individuals, and to be clear about what the tenets of Islam actually are,” Earnest said. “And we’re going to redouble those efforts in the days and weeks ahead.” Yes, let’s all get together and condemn the messaging. Don’t worry about the violence, the deaths, the threat to free speech and the exercise of the rights of a free press. It’s clearly the messaging that’s the important factor here.
http://conservativetribune.com/obama-america-islam/

Instead of condemning the murders, the White House is focused on promoting the tenets of Islam.

Public Debt exceeds $13 trillion

The total debt topped $18 trillion for the first time on 11/27/14, but this is probably a bigger milestone because it involves real cash and not just a bookkeeping entry.  The Public Debt exceeded $12 trillion on 10/17/2013.  It should top $14 trillion on about 4/1/2016, about a month after the total national debt exceeds $19 trillion.

The national debt will never be paid back.  Instead it is just part of the money supply.