Thursday, July 18, 2019

"Economic Market Snapshot AM 7/18/19"

Gregory Mannarino, "The Attack On Gold And Crypto Reaches A Fever Pitch!"
MarketWatch Market Summary
CNN Market Data:

CNN Fear And Greed Index:
Reposted from December 31, 2018:
"Forecast 2019: Ding Ding! Margin Call USA" (Excerpt)
by James Howard Kunstler

"Markets and Money: The jig is really up. The big bad bear market is already underway, even if it rallies in January. The debt bubble engineered by the Federal Reserve is blowing up and thundering through the system. The epic market instability of December 2018 on the heels of persistent Fed rate hikes points to major credit problems and especially an inability to roll over old debt into new loans at higher interest rates - in particular loans to zombie enterprises that need to borrow to keep paying interest on previous loans (a lot of that among the shale oil companies). The US government can’t take higher interest rates either. It’s already paying about as much in annual interest on US debt as we pay for our war machine. There are only two ways out, both of them nasty. Either suck up debt defaults, which will produce an impoverishing disappearance of money; or provoke high inflation, by injecting more Central Bank QE “money” into the system, which can destroy the value of money. Inflation is typically the choice of governments because it reduces the face value of debts while it allows government to pretend that it is taking action. In the end, you may have plenty of worthless money, which is no different from having not enough money that retains value. The latter was the main feature of the Great Depression.

So, inflation is the usual choice, but it also typically leads to incendiary resentment among the citizenry when they realize they’ve been played and it takes a wheelbarrow full of cash to buy a loaf of bread and a jar of peanut butter. I suppose that Fed chief Jerome Powell knows all too well he’s popped the Mother-of-All-Bubbles. He can blame it on Mr. Trump. Everybody else will, of course. Sometime in the second quarter of 2019, the Fed will resume the money-for-nothing gambit of “quantitative easing” in the hope of arresting the damage, but this time the dollar will lose value uncontrollably and catastrophically. Many people will be ruined, especially retirees at the mercy of insolvent pension funds.

Before 2019 is out, the US could find itself in a situation worse than the Great Depression. Supply lines are much longer now than they were then. If suppliers can’t get paid because trust has collapsed in the short-term corporate paper system, they won’t deliver supplies, which means you may not eat, or fill your gas tank, or heat your house, or get whatever else you need. Also, the USA in 1931 had not yet transformed itself into the fiasco-waiting-to-happen called suburban sprawl. How is Dallas going to work for people who spend a substantial chunk of their income on mandatory motoring (if there’s little or no income)?"

Civil Disorder: Be prepared for it in 2019. There are going to be a lot of pissed-off people around the country. They are liable to attack Federal property and their fellow citizens (and their property). The hungrier they are, the worse it will be. They will not understand the forces that are destroying the money system. There are a gazillion small arms out there and the government will not be able to control them or confiscate them. Any attempt to do that will only inflame the situation. A major principle of The Long Emergency is that government becomes increasingly impotent and ineffectual as it rolls out. We’re already seeing that in Washington, and it is not at all just because Mr. Trump has inspired such an impasse between the branches. The states, too, will be hard-pressed to do anything useful. Many of them, like Illinois, New Jersey, Connecticut, and California, are already technically insolvent. The federal government may have to pretend to rescue them financially, which will only make the national predicament worse."
Complete article here:

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