Downturns and Financial Crises – A Sequence

Miles Franklin sponsored this article by Gary Christenson, the Deviant Investor. The opinions are his.

■       Bond Market Turned Down & Interest Rates Up – Check! 

Two-Year yield bottomed September 2011

Five-Year yield bottomed July 2012

Ten-Year yield bottomed July 2016

The 30+ year bond bull market is done.

■       Housing Market Turned Down – Check!

Mortgage rates bottomed in July 2016.

Mortgage applications have fallen hard.

London, Vancouver B.C. and Australian prices are down.

New York, San Francisco, and Dallas prices are down.

Housing Bubble 2.0 is correcting.

■       Stock Markets Turned Down—Check!

Chinese Shanghai peaked January 2018

German DAX peaked January 2018

U.K. FTSI peaked May 2018

U.S. NASDAQ peaked August 2018

U.S. Transports peaked September 2018

U.S. DOW peaked October 2018

All indices are well off their highs. New lows lie ahead.

■       Debt Crisis In Progress—Check!

• S. “official” national debt is nearly $22 trillion
• Global debt is about $250 trillion
• Debt is growing exponentially and much faster than the economies which must support the debt. (Trouble ahead!)
• Debt can’t be repaid unless dollars/yen/euros/pounds are devalued.
• Default and/or hyper-inflation are visible on the horizon.
• The coming recession will devastate tax revenues and worsen the debt crisis.
• We can’t fix a debt problem with more debt.

□       Currencies Collapse—More Coming?

• Venezuela, Argentina, and Turkey printed currencies that have collapsed or fallen. Others will follow.
• The euro is vulnerable. Italian and Spanish debt is dodgy.
• Deutsche Bank and several Italian and French banks may fail.
• Trillions in U.S. “sub-prime” corporate debt may default.
• Many countries seek dollar alternatives, which will weaken the dollar further.
• The dollar is vulnerable as Washington politicians will need the 2019-2020 version of QE to continue their “out-of-control” spending.

□       Runaway Inflation—On the Horizon?

• The U.S. inflation of the 1970s may look like a walk in the park on a warm sunny day compared to hyper-inflation created by irresponsible spending, debt creation, Fed policies and monetization.
• Prices for food, energy, and services will explode if government fails to intelligently control spending. The prognosis is grim.
• Loss of purchasing power will devastate savings and retirements for everyone but the top few percent if “they” create runaway inflation.
• Will the coming reset occur in months or a few years?

□       Civil Disorder—Coming?

• Arab spring disruptions
• Riots in France and Europe today
• S.A.?
• Police and the military will use force to control outbursts.

□       Rise of Global Currency and Controls?

• Global controls, New World Order and a global currency are planned by the “globalists.”
• The IMF and BIS want more power over global economies.
• This is a dangerous scenario.

Speculations, Guesses and Worries!

• Recession and trauma during 2019-2020. Voter unrest.
• Stock markets, housing markets, auto sales, and retail sales fall further.
• Political polarization and “fake news” become worse.
• Several mid-west Republican states in 2016 will fall to the Democrats in the 2020 Presidential election.
• Florida may swing Democratic.
• Not much of “the swamp” will be drained.
• The House may impeach President Trump but the Senate should acquit. Chaos and depressing social mood ahead.
• A “hard left” Democrat will win the 2020 election, and will advocate Universal Basic Income, higher taxes, larger deficits, free tuition, infrastructure spending, Medicare for all, student loan forgiveness and more as Democrats expand their desired “free” list. More giveaways will be implemented, debt will rise and will further weaken the dollar.
• A Democratic President may “print” trillions to bail out insolvent public and private pension funds, expanding a costly precedent begun in 2009.
• Government and The Fed will attempt to solve another debt crisis with more debt. When will they learn?
• Watch gold and silver soar as the dollar collapses.

CONCLUSIONS:

• The bond market and housing market have turned downward.

• S. and global stock markets rolled over in 2018.

• A debt/credit crisis could arrive soon. There is little (as in no) political will to reduce spending, deficits, and debt.

• Some currencies have already collapsed. Others may follow. Fiat currencies are vulnerable.

• Currency collapses lead to runaway consumer price inflation!

• Breakdown of social structures, civil disorder and riots follow runaway inflation and the ensuing loss of confidence in government, currencies, and banks.

• The globalists will “never waste a crisis” and will use the unrest to increase their controls.

• A New World Order is a dangerous answer to the problems created by corrupt politicians, central bankers and globalists working to destroy nations.

• The sun will still shine. Many will be “sadder but wiser” by 2025.

Read: Chris Marcus: “Will the Next Silver Rally Exceed the 2011 Highs?”

Call Miles Franklin at 1-800-822-8080 to purchase silver and gold.

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The Deviant Investor