Peak Insiders

Understanding The Endgame

Wednesday, June 8, 2011

Executive Summary

• Greece as a case-study in sovereign debt collapse
• Why peak oil assures we will not be able to pay our debts
• Understanding the dynamics of a future of less/no growth
• Steps we as individuals need to be taking in preparation
• How to preserve purchasing power during the coming market rout

Part I – Death by Debt

There has never been an economic recovery without a rebound in housing. Of course, we don’t really have an economic recovery now; it’s more of a statistical mirage, thanks to trillions in thin-air money printing.  And we don’t have a recovery in housing.

I have written extensively on the housing topic over the years because a rebound in housing will be an important signpost that some sort of stable economic recovery is actually underway.  

The first-quarter economic results for Japan were grim, revealing an annualized rate of contraction of -3.7% over the first three months.  Note that the earthquake struck on March 11, so there really are only a couple of weeks of “earthquake impact” in that number.

The next quarter’s numbers will be even grimmer (that’s a prediction), and this will catapult the Japanese deficit and sovereign-debt readings into brand-new territory.

In response to the last piece, several of you asked me to clarify my views on gold and silver, especially regarding whether this is a good time to buy…or sell.  Here are my thoughts.

I’m going to preface the views that follow by saying that they utterly depend on QE II (quantitative easing) ending on schedule and as advertised. There are numerous ways that the Fed might short-circuit the proposed termination of QE, such as simply calling “additional money-printing” something else, asserting that it is being done for some other purpose, or other new sets of reasons. What we are looking for, very simply, is for the Fed’s balance sheet to stop expanding. Even here we have some difficulty. Although the Fed publishes the data at a high level, we cannot easily track whether or not it is playing games by revaluing the assets already on there, or even whether the Fed is being truthful. Without an audit, we’ll never really know.

Positioning For The Coming Rout

Thursday, May 12, 2011

Executive Summary

• What private and public debt levels are telling us
• Housing’s prospects for worsening the situation
• Why endless compound growth is impossible
• The crushing pain of a deflationary downdraft
• Predictions and conclusions for the future

Part I – Why Growth Is Dead

The rout is on.  More market weakness lies dead ahead – unless the Fed reverses course, and soon.

Eight weeks ago, on March 8, 2011, I wrote that there was a very high chance of a rout in all of the major markets – stocks, bonds, and commodities – due to the sudden disappearance of quantitative easing (QE) money at the end of June.

Since markets are supposed to be forward-looking, if the ‘rout’ thesis is correct, we’d expect the markets to begin selling off well before the last POMO. Perhaps even right about, oh, say this past week.