Thursday, January 7, 2016



The modern debt money system has a limited life span and it cannot stand still, it requires more debt to survive. The problem is that with every iteration of the boom-bust cycle, more real wealth is destroyed and more obstacles to the creation of real wealth are erected.

Hapless governments desperately try to squeeze blood out of a turnip by taxing and regulating the private sector to death, while central banks keep promoting monetary inflation. At some point the limit to this game will be reached – and the longer it takes to get to that point, the more devastating the eventual denouement will be.

A number of systemic, structural forces are intersecting in 2016. 

One is the hollowing out of democracy globally. Democracy is now a travesty, a mockery,a sham, a hollow shell of PR and propaganda designed to confuse and distract the citizenry--the citizenry that is being crushed beneath the authoritarian rule that has expanded to fill the hollow shell of formal democracy.

We are currently in a transitional phase of geo-political-monetary power struggles, capital flow decisions, and fundamental economic choices. This remains a period of artisanal (central bank fabricated) money, high volatility, low growth, excessive wealth inequality, extreme speculation, and policies that preserve the appearance of big bank liquidity and concentration at the expense of long-term stability. 

The potential for chaotic fluctuations in any element of the capital markets is greater than it has ever been. !!!!!!

The butterfly effect - the flutter of a wing in one part of the planet altering the course of seemingly unrelated events in another part - is on center stage.

What The Fed did was front-load an enormous market rally in order to create a wealth effect... and a very uncomfortable if not disasterous period is likely to follow. Simply put there can't be much more accomodation, The Fed is a giant weapon that has no ammunition left.

Manipulations by the Fed could not bring the economy onto a path of stability and prosperity but on the contrary, set in motion the menace of the boom-bust cycle, and this very likely will trigger a severe economic slump in the near to medium term.

Taking away from the government its power of compelling the citizenry to accept money that it monopolistically controls and abuses may serve as an important legal and economic change to force the government and those who live at its spending trough to face the reality of the welfare state's ideological and fiscal bankruptcy before it is too late to avert a complete collapse of our society.

Several noted economists and distinguished investors are warning of a coming stock market crash.

Billionaire Carl Icahn, for example, recently raised a red flag on a national broadcast when he declared, "The public is walking into a trap again as they did in 2007."

And economist Andrew Smithers warns, "U.S. stocks are now about 80% overvalued."

Smithers backs up his prediction using a ratio which proves that the only time in history stocks were this risky was 1929 and 1999. And we all know what happened next. Stocks fell by 89% and 50%, respectively.

Former congressman Ron Paul didn't mince words either. He warns that the stock market's "day of reckoning" is fast-approaching. When that day comes, he doesn't think it's just going to be a correction; it will be "stock market chaos."

When the next crisis strikes, do not believe any of the promises uttered by government or central bank officials. You will be lied to in the critical moments, and you could lose a lot if you believe the lies.

A return to an unhampered free market system is the only way out, painful as that may initially prove to be. Modern-day governments will simply not go down this path, as it would involve a vast loss of power for them.

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