Tuesday, June 28, 2016
“The Epocalypse Is Here”
“The Epocalypse Is Here”
by David Haggith
“Brexit- the second major landslide in the Year of the Epocalypse- has bankers all over the world scrambling to pick up and prop up their crumbled facades this week. This is one more jolt in the developing global economic collapse that I predicted for 2016. The ground of an entire nation just dropped several feet. Aftershocks from a drop that size will be felt frequently throughout the summer and to some extent for years to come.
As I’ve said before, US politicians will find it increasingly difficult this year to keep shoring up the US economy until the end of the election cycle. This collapse just made things a lot worse for them. Brexits, Grexits and other exits, oil defaults, job decay, manufacturing malaise and a host of other planet-sized problems are piling up so fast that it will become almost impossible to hold off collapse much longer as global problems press in on the US and other nations.
“We have now entered a global period of bailouts heaping up against the back of earlier bailouts and attempted recovery coming on the back of already failed recovery. Why? Because it is all the same Great Recession, and as I’ve maintained since I began this blog several years ago the “recovery” is nothing but a prop under the Great Recession’s monstrous belly. That prop, I said would fail this year, and we would slide into the abyss of an economic apocalypse in a series of jolting plunges and rallies.
As I quoted David Stockman in an earlier article, “At long last the tyranny of the global financial elite has been slammed good and hard. You can count on them to attempt another central bank based shock and awe campaign to halt and reverse the current sell-off, but it won’t be credible, sustainable or maybe even possible. The central bankers and their compatriots have well and truly over-played their hand. They have created a tissue of financial lies; an affront to the very laws of markets, sound money and capitalist prosperity. So there will be payback, clawback and traumatic deflation of the bubbles. Plenty of it, as far as the eye can see.”
When I say “the Epocalypse is here” or “the end is here,” I don’t mean we are now on the final leg down or that there will be no leveling off or no rally- that it's finished. Heck, the central bankers aren’t going to give up the show that easily, and this is an election year in the US where they can expect totally subservient assistance from establishment politicians on both sides of congress. The majority of elected politicians clearly deplore the possibility that Donald Trump could not only be proven right about economic collapse but could be hoisted to a success big enough to give him a political mandate to tear the establishment apart in 2017!
What I mean when I claim “the end is here” is that this is one more enormous jolt like we saw in January that is a part of the end. We are, in other words, going through the end. I’ve consistently stated the Epocalypse will take, at least, a year and half to find its bottom; so it is far from over. This is just the beginning of the end.
Each of these jolts does huge damage to the global economy, weakens banks and central banks and other corporations in substantial ways, and takes us further into the Epocalypse. This one is massive to such a degree that its damage to the establishment will only be discovered over a period of weeks or more likely months. Along the way, we also have smaller jolts like we saw when I quoted Dennis Gartman as saying a month ago: "The Bulls and the Bears left scratching their heads and wondering aloud, “What the hell just happened?” Yesterday was our worst day of the year thus far, as that which we were long of fell and that which we were short of closed unchanged. Yesterday was a disaster which we wish to put behind us."
By “Epocalypse” I mean an economic collapse on the scale of things predicted in The Apocalypse (i.e. on the same scale as biblically prophesied disasters in the Book of Revelation). The “Epocalypse” is my name for our second and deeper plunge into the belly of the Great Recession- a drop so great it will make the first slump look like it was just a dress rehearsal for the real show.
I am sure many bulls who were long on Brexit are feeling the sizzle of the frying pan in the summer heat now as they try to recover from foolhardy long positions. Those were just the first ones who didn’t listen, and they just lost over two trillion dollars. The price of continuing to bet on the bull will grow worse each time something hits. You’re going to smell a lot more barbecued bull this summer… and beyond:
A few major banks that were already stressed will likely fail in the months ahead because Brexit added more stress than they can absorb. That will probably mean more bailouts, but the populace is not inclined to accept any more bailouts, so that will mean more civil unrest if bailouts happen.
National economies that were already crumbling like Greece, Brazil, Italy, Spain and France, will fall faster. As a result, other parts of the Eurozone will likely break off like icebergs in the summer heat. They may not announce their break from the EU this summer, but you’ll see major cracks form around their circumference.
Areas of marginal economic weakness will develop visible fault lines and experience serious tremors. In the US that would include jolts to jobs and wages, more falloff in GDP, increasing social unrest, increasing corporate collapse.
In the midst of that there will likely be periods of calm created by massive central bank infusions. You’ll see central banks invent new tricks that even they didn’t know they could come up with out of desperation to save their “recoveries.” Those eddies of calm that run as counter currents to the main flow of events may beguile some rosy-eyed optimists into thinking the earth has stabilized, but it hasn’t and it won’t, and those beguiled will be hurt just as many were massively hurt by this jolt. As soon as you think the earth is steady, the next nation will fall.
The calm between January and Brexit was longer than I expected between legs down, and the expected intervening rally went twice as high as I thought it would, but this is an election year. Regardless of the extended pause, global economic breakdown is continuing along the fault lines where I’ve indicated it would and in the year when I said things would all come apart, and the scale of Brexit is as huge as I said each leg of our journey into the Epocalypse will be.
The journey into our decline has now resumed. Each part that gives way makes all the other parts weaker and their own collapse more certain and more imminent. It’s going to be a summer filled with aftershocks.
You cannot stop this collapse, nor can you talk it into happening with negativity either. It is going to happen because it has to happen. It has inevitability all over it. Economic structures that should never have been created in the first place are giving way in what will become total structural failure. They are giving way because of their own flawed design:
• You cannot create mountains of enduring wealth by carving out caverns of debt beneath them.
• You cannot create stable economies by focusing all the benefits toward the rich industrialists and hoping they will trickle down to create demand later.
• You cannot deplete your nation’s treasure with endless wars around the world by putting the wars of budget and beguiling yourself to think that means there was no cost to your own greatness.
• You cannot cram people from divergent cultures together by the millions without creating huge social costs that become economic costs.
• You cannot bail out rich bankers without creating moral hazard that entices them to repeat their sins.
• You cannot centrally manage economies in a way that benefits the periphery.
The list could be bigger. The earthquake has happened. The aftershocks will come. And then there is autumn, the time called “fall” because many things will.”
"A wise person can want nothing better from life than
to pay back the wrong that has been done him."
- Jean Paul Sartre