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You STILL Don’t Believe the Economy Will Collapse? Think Again!

Saturday, April 4, 2015 21:03
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(Before It's News)

By: Voice of Reason

FOR MORE NEWS BY VOICE OF REASON CLICK HERE!

YOU HAVE A CHANCE NOW TO TAKE STEPS WHILE YOU STILL CAN!

I must have said in at least 3-4 separate posts over the last week that you don’t need to be a rocket scientist to figure SOME of this stuff out. With virtually ANYTHING that Obama says, the second it leaves his lying lips, everyone who hears him should have their own personal BULLSH** SIRENS going off in their heads. I’ll admit, there are times when I don’t “KNOW” Obama is lying (COUGH, IRAN, COUGH), however, often times even without a shred of concrete evidence to disprove him, whatever Obama is peddling doesn’t even pass the smell test. For example, I don’t need to have all the facts, or an intimate familiarity with astrophysics to know that if I hear an astronaut say he or she traveled at the speed of light, then they are lying. 

In MANY ways the talking points and the sound bites that get drilled into our heads on a daily basis about the economy DO NOT actually require the likes of Paul Krugman’s liberal Ivy League college education to masterfully decipher, as if Krugman is the only one on earth with a magic decoder ring or something. If a person demonstrates even just a lick of common sense, and then uses that common sense in conjunction with very basic elementary school arithmetic, the utter NONSENSE spewed out by our mainstream media is PATENTLY OFFENSIVE to anyone with an IQ over 6.

Other than listening to Peter Schiff’s podcast when time permits, and reading a few of his books, I have no formal training of any kind in economics.  Keeping that in mind, somehow I managed to accurately predict the 2008 crash almost to the day as far in advance as 2004, long before I’d ever heard of Peter Schiff, or before he predicted it. The Economic Collapse Blog’s Michael Snyder echoes the thoughts I’ve already said in countless financial posts listed at the end of this article on the DEVASTATION these low gas prices will wreak in the end. 

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The low gas prices we have experienced for some time now will not only turn out to be a FAR CRY from the gift they were presented to us as, but they will become the silent assassin that finally TAKES DOWN the mighty U.S. economy while issues like the STOCK MARKET BUBBLE CREATED BY OBAMA’S $7 TRILLION U.S. DOLLARS PRINTED OUT OF THIN AIR, THE BOND MARKET BUBBLE, the STUDENT LOAN BUBBLE, and yes another HOUSING BUBBLE have kept the U.S. against the ropes the last few years without a chance to even breathe, regardless of what you’ve heard. 

Obama sure did LOVE bragging about his ONE quarter at Reaganesk growth levels when the U.S. economy hit 5% growth, as if it had a damn thing to do with Obama’s policies. Give me a break. Obama’s ONE fluke quarter was 100% the result of the American people having several THOUSAND DOLLARS of additional discretionary income in their pockets while gas has been so low. Leave it to liberals to always be OBSESSED with the short game for political reasons. Recall what I have said in at least FIVE previous posts dating back as far as January:

So the damage that we are witnessing right now is just the very beginning UNLESS the price of oil goes back up substantially.

ANYONE WHO FOLLOWS THE LAST GREAT STAND KNOWS I THINK THIS IS THE FINAL DEATH BLOW COMING FROM SAUDI ARABIA. THEY KNOW AMERICANS ARE ALL ABOUT INSTANT GRATIFICATION. WE NEVER PLAY THE LONG GAME. LOW GAS IS GREAT NOW, BUT IT WILL BE THE FINAL BLOW TO DESTROY THE AMERICAN EMPIRE. WE’LL GO DOWN IN FLAMES WITH AMERICANS THINKING THE SAUDI’S WERE TRYING TO HELP US. GOD, IT’S PATHETIC HOW UNEDUCATED PEOPLE ARE TODAY!

IN THE LONG TERM, THESE GAS PRICES ARE THE DEATH BLOW!

The United States was FINALLY on the verge of energy independence, and no thanks to Barack Obama who has cut permits for drilling down to just about zero. No, instead the U.S. has had TREMENDOUS SUCCESS on private lands in places like North Dakota. It’s all the fracking that has helped us almost achieve independence… FOR NOW!  

Here is the problem with $2.25 gas, OR LOWER: All those fracking companies financed their operations and the building of their infrastructure with $ TRILLIONS in bonds, but they did so assuming oil prices would be at least $100 a barrel and very steadily moving north. I haven’t looked, but where is oil today? $60 a barrel? OH OH!

Saudi Arabia’s oil infrastructure has been around for decades, so they can get oil up, and out of the ground for maybe 1/4 the price of the American fracking companies with all their brand new equipment. At these prices, it won’t be long until NONE of the fracking operations can pay their investors and they all go belly up. THEN, gas will shoot back up, AND probably go WAY higher without any of the former fracking companies still in business. The U.S. will be even further from energy independence, with HIGHER gas, and that 5% growth Obama is touting will be NEGATIVE as we begin our nosedive into what is going to make the Great Depression look like good times. 

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FOR THOSE WHO EMAIL ME WITH SNARKY MESSAGES LIKE:

“ALL YOU DO IS WARN US AND NOTHING EVER HAPPENS…”

You’re right! There, I said it. Are you happy? Until now NOTHING has happened… YET… but EVERYTHING that I have said is coming is in route and there is NOTHING we can do about it now but pray. I’ve been SCREAMING FROM THE ROOFTOPS for 2+ years about the coming collapse…. SINGULAR… collapse, not a series of them… and I’ve said from the beginning it’s not going to be a recession or some “economic downturn” either. GLOBAL DEPRESSION! Got it? It’s going to be BIBLICAL it’s going to be so bad! You know when I first used that word on THIS site? 

FEBRUARY OF 2013 I PUT MY PREDICTIONS IN WRITING…

In that post I said the following:

Ask the folks at the Congressional Budget Office, who released  their annual “Long Term Budget Outlook” last month. According to the CBO, our national debt will be 101% of GDP in 2021. That’s right, the size of the national debt will be larger than the economy in 9 years AT CURRENT SPENDING. Anyone see Obama slowing down?

What happens if your family has 75k in bills every year, but only brings in 60k in revenue? I’d say you’re in DEEP sh**. Oh yeah, any ridiculous thoughts you had about the government bailing out the broke liberal states should have just gone out the window. There is NO money. Worse! We’re NEGATIVE!

What could possibly make all that happen MUCH sooner than 9 years from now? 

INFLATION!!!!!! YIPPEE! Bond yields are already rising, and the more money we print, the higher they will go, which means the price of bonds is dropping. What does bond yields rising mean? Translation: Interest Rates go up. We are printing 80 BILLION a month. At some point the Fed won’t be able to artificially keep rates low… then that 9 year figure before our interest payments are more than GDP could be more like 3-4 years, especially with Obama’s spending. In other words, we have another bubble.

SEE THAT LAST LINE? 3-4 YEARS… 

LOOKS LIKE OUR GOOSE IS GOING TO BE COOKED EARLY

I am not a licensed financial professional, so I won’t tell you what my financial advice is, but I will suggest you talk to a financial expert that is NOT the same financial expert who would be SELLING you whatever HE or SHE says will “FIX” the problem HE or SHE diagnoses. One idea might be to go see an independent fee based financial planner… but I’ll leave the rest of the due diligence to you.

DON’T DELAY: THE END IS NEAR!

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us-economic-collapse

When an economic crisis is coming, there are usually certain indicators that appear in advance.  For example, COMMODITY PRICES USUALLY START TO PLUNGE BEFORE A RECESSION BEGINS. And as you can see from the Bloomberg Commodity Index which you can find right here, this has already been happening.  In addition, I have previously written about how the U.S. DOLLAR WENT ON A GREAT RUN JUST BEFORE THE FINANCIAL COLLAPSE OF 2008. This is something that has also been happening over the past few months.  Some people would have you believe that nobody can anticipate the next great economic downturn and that to try to do so is just an exercise in “guesswork”.  But that is not the case at all.  WE CAN LOOK BACK OVER HISTORY AND SEE PATTERNS THAT KEEP REPEATING. And a lot of the exact same patterns that happened just before previous stock market crashes are happening again right now.

For example, LET’S TALK ABOUT THE PRICE OF OIL. There are only two times in history when the price of oil has fallen by more than 50 dollars in a six month time period.  One was just before the financial crisis in 2008, and the other has just happened…

1

As a result of crashing oil prices, we are witnessing oil rigs shut down in the United States at a blistering pace.  In fact, ALMOST HALF OF ALL OIL RIGS IN THE U.S. HAVE ALREADY SHUT DOWN. The following commentary and chart come from Wolf Richter

In the latest week, drillers idled another 41 oil rigs, according to Baker Hughes. Only 825 rigs were still active, down 48.7% from October. In the 23 weeks since, drillers have idled 784 oil rigs, the steepest, deepest cliff-dive in the history of the data:

2

WE ARE LOOKING AT A FULL-BLOWN FRACKING BUST, AND THIS BUST IS ALREADY HAVING A DRAMATIC IMPACT ON THE ECONOMIES OF STATES THAT ARE HEAVILY DEPENDENT ON THE ENERGY INDUSTRY.

For example, just check out the disturbing number that just came out of Texas

The crash in oil prices is hammering the Texas economy.

The latest manufacturing outlook index from the Dallas Fed plunged again in March, to -17.4 from -11.2 in February, indicating deteriorating business conditions in the state.

Ouch.

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But this pain is going to be felt far beyond Texas.  In recent years, Wall Street banks have made a massive amount of money packaging up energy industry loans, bonds, etc. and selling them off to investors.

IF THAT SOUNDS SIMILAR TO THE KIND OF BEHAVIOR THAT PRECEDED THE SUBPRIME MORTGAGE MELTDOWN, THAT IS BECAUSE IT IS.

NOW THOSE LOANS, BONDS, ETC. ARE GOING BAD AS THE FRACKING BUST INTENSIFIES, and whoever is left holding all of this worthless paper at the end of the day is going to lose an extraordinary amount of money.  Here is more from Wolf Richter

It suited Wall Street just fine: according to Dealogic, banks extracted $31 billion in fees from the US oil and gas industry and its investors over the past five years by handling IPOs, spin-offs, “leveraged-loan” transactions, the sale of bonds and junk bonds, and M&A.

That’s $6 billion in fees per year! Over the last four years, these banks made over $4 billion in fees on just “leveraged loans.” These loans to over-indebted, junk-rated companies soared from about $40 billion in 2009 to $210 billion in 2014 before it came to a screeching halt.

For Wall Street it doesn’t matter what happens to these junk bonds and leveraged loans after they’ve been moved on to mutual funds where they can decompose sight-unseen. And it doesn’t matter to Wall Street what happens to leverage loans after they’ve been repackaged into highly rated Collateralized Loan Obligations that are then sold to others.

At the same time, WE ARE ALSO WITNESSING A SLOWDOWN IN GLOBAL TRADE.  This usually happens when economic conditions are about to turn sour, and that is why it is so alarming that the total volume of global trade in January was down 1.4 percent from December.  According to Tyler Durden of Zero Hedge, that was the largest drop since 2011…

Presenting the latest data from the CPB Netherlands Bureau for Economic Policy Analysis, according to which in January world trade by volume dropped by a whopping 1.4% from December: the biggest drop since 2011!

3

We are seeing some troubling signs in the U.S. as well.

I shared the following chart in a previous article, but it bears repeating.  It comes from Charles Hugh Smith, and it shows that new orders for consumer goods are falling at a rate not seen since the last recession…

4

Well, what about the stock market?  It was up more than 200 points on Monday.  Isn’t that good news?

Yes, but the euphoria on Wall Street will not last for long.

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WHEN CORPORATE EARNINGS PER SHARE EITHER START FLATTENING OUT OR START TO DECLINE, THAT IS A HUGE RED FLAG. We saw this just prior to the stock market crash of 2008, and it is happening again right now.  The following commentary and chart come from Phoenix Capital Research

Take a look at the below chart showing current stock levels and changes in forward Earnings Per Share (EPS). Note, in particular how divergences between EPS and stocks tend to play out (hint look at 2007-2008).

5

According to CNBC, a lot of the “smart money” is pulling their money out of the stock market right now while the getting is good…

Recent market volatility has sent stock market investors rushing for the exits and into cash.

Outflows from equity-based funds in 2015 have reached their highest level since 2009, thanks to a seesaw market that has come under pressure from weak economic data, a stronger dollar and the the prospect of monetary tightening.

Funds that invest in stocks have seen $44 billion in outflows, or redemptions, year to date, according to Bank of America Merrill Lynch. Equity funds have seen outflows in five of the last six weeks, including $6.1 billion in just the last week.

IT DOESN’T MATTER IF YOU’RE A MILLIONAIRE “ON PAPER” TODAY…

WHAT MATTERS IS IF THE MONEY IS GOING TO BE THERE WHEN YOU REALLY NEED IT.

At the moment, a whole lot of people have been lulled into a false sense of complacency by the soaring stock market and by the bubble of false economic stability that we have been enjoying.

But under the surface, there is a whole lot of turmoil going on.

THOSE THAT ARE LOOKING FOR THE SIGNS ARE GOING TO SEE THE NEXT CRISIS APPROACHING WELL IN ADVANCE.

THOSE THAT ARE NOT GOING TO GET ABSOLUTELY BLINDSIDED BY WHAT IS COMING.

DON’T LET THAT HAPPEN TO YOU!

By: Voice of Reason

FOR MORE NEWS BY VOICE OF REASON CLICK HERE!

Read the article at the Economic Collapse Blog here:

 

THE VOICE OF REASON

Economic-Collapse-header

FOR LINKS TO UNDERSTAND THE ECONOMY & THE COMING ECONOMIC COLLAPSE:

Martial Law

FOR MORE LINKS ON MARTIAL LAW:

FEMA

FOR MORE ON FEMA CAMPS:

 

BE SURE TO CHECK OUT THE GIFT SHOP!

 

 

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Total 8 comments
  • The Watcher

    NOTHING IS GOING TO HAPPEN!

    • EruditeOne

      PYHOOYA! The US Government is bankrupt and has been bankrupt for years. There are millions of people, myself included, who have not reached normal retirement age, have no income, and have no job prospects. Our Government actively distorts the real situation of this economy. The consumers in the USA have spent far beyond their neans for decades and now find themselves unable to freely spend like they have in past years. The US economy will only straighten itself out if the US Congress returns to the Constitutional Requirement to coin currency and regulate the value therof and immediately outlaws the private federal reserve bank and doesn’t allow any private banks to operate in the country.

  • Jdelec

    Gasoline prices are exactly were they should be. If you look at an inflation adjusted chart going back to 1918 you will see gasoline is now priced as it should be. The boom and bust cycle is common in any industry. People see opportunity to make money so they jump in with both feet. The well manged companies survive and the not so well perish. The companies that are financially sound will by the assets of those that are financially ruined. You will see a much stronger sector after this all plays out. The only problem companies are seeing right now are the lack of a skilled work force. People that are competent at their jobs. Companies want people that show up for work and are not drug addicts and alcoholics. This country use to have skilled tradesman and competent laborers now we have a populace enamored by cell phones, selfies and social networks. The downfall will come from the entitlement mentality not from make believe currency implosions.

    • LifeIs

      Jdelec, you said, “inflation-adjusted.”

      When incomes of wage earners don’t keep up with inflation, and they have not for decades,
      adjusting the price for inflation is an exercise in self-deception.

      Massive unemployment and massive under-employment, part time jobs, make it worse.

      Setting aside the fact that cartels produce the oil, setting aside the fact that US government policy dating back to 1973 has been to maintain high oil prices…

      …SEE explanation below, if you don’t get that…

      The INFLATION you are adjusting for is produced by banks “printing money.” EVERY dollar
      is someone’s loan PRINCIPAL.

      THUS there is never enough money to pay back loans PLUS INTEREST. To pay off our bonds,
      and our other loans, in the future, the banks will have to CREATE THE MONEY.

      …by making BIGGER LOANS.

      This is the system that is collapsing right now.

      WHY we have had high oil prices since the early 1970s:

      ….that’s called the “petrodollar,” the idea being that if people need to buy US dollars in order to buy oil, our banks can print as much money as they want without destroying the value of the dollar….

      …and the sub rosa agreements include a requirement that oil producers send their money to
      Wall Street instead of buying goods and services…the idea being that if they are invested
      in USD denominated assets, they won’t take action against the dollar….

      …that’s called “the dollar trap…”

      • Jdelec

        Massive underemployment is do to the fact that people do not have the skills or education to participate in the labor market. I find that most people want a pay check but they refuse to work for it. They want to play on their phones and spend their free time drinking and drugging. The country is in need of engineers of all sorts, Competent educated plumbers, electricians, Carpenters, Mechanics, Installers etc. These jobs will pay a competent journeyman with skills upwards of 100k a year. Notice the word competent. I have read this destructive nonsense for forty years and this country keeps chugging along. The planet needs more work done than all of the people in the world could give for 20 lifetimes. The opportunities are everywhere but most are not taking them. It seems people want spoon fed and taken care of. I here you scream its wall streets problem and its the bad loans blah blah blah. I never hear the down trodden say the real problem may be me.

  • Knave Dave

    Excellent points. This reads almost exactly like what I’ve been writing and posting for years (http://thegreatrecession.info). Albeit a bit more strident in tone (but not by much ; ), your points are sound. Like you, I don’t have a degree in economics, but like you, I predicted both the economic crisis of 2008 and the August market plunge of 2011 before others saw it coming.

    I haven’t predicted things that didn’t happen nor predicted them for years until they finally did. I’ve been very careful to predict when they would happen and have been right about that, though I recently predicted a stock market crash for the fall of 2014. We did have a huge market drop as soon as fall began, but it wasn’t a crash. So, I’m off a little in predicting the timing of the crash. HOWEVER, as I point out in recent articles on my blog, what happened in the fall of 2014 and now on into 2015 looks just like the rounded volatile top of a massive crash.

    When the market goes down big, it doesn’t happen overnight. If you look, for example at Black Tuesday in 1929, you will see that the stock market was in a volatile period and was turning down in into a bear market before it went over the cliff. It did the same thing in 2008, showing the start of troubles in late 2007.

    –Knave Dave

  • Grover

    The would not wait economy to collapse. It will be to late for them..

  • Amminadab

    Many declare that the United States will crumble and fall in economic collapse to be no more a superpower. But that is a direct denial of Christian prophecy. It will have economic problems like all others, yes. But it will never lose it’s global power. In fact, it will become THE power that helps the Antichrist enforce the mark of the beast all around the world. Below is a study in the Scriptures verifying this as fact.

    http://www.remnantofgod.org/usa-in-prophecy.htm

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