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Chris Martenson

Image | Egypt’s Warning: Are You Listening?
Egypt’s Warning: Are You Listening?

One day, a fruit and vegetable seller was arrested in Tunisia, sparking social unrest, and a few weeks later the government of Egypt was set to topple. 

Such is the nature of complex, chaotic, and unpredictable systems. The stresses build for years and years, and nothing really seems to be happening, but then everything suddenly changes. Egypt is therefore emblematic of what we might expect in any complex system in which pressures are building, such as the US Treasury market.  

Can events in complex systems ever be predicted? No…and yes. No, because the precise timing and details can never be predicted. Yes, because we can be certain that anything that is unsustainable will someday cease to continue and things that are horribly imbalanced will someday topple. We can also be certain that the change, when it comes, will be rather sudden and abrupt, rather than gentle and linear.

That is, we can easily predict that a complex system will shift, and that it will probably do so rapidly, but not exactly when or by how much.

Egypt’s Warning: Are You Listening?

One day, a fruit and vegetable seller was arrested in Tunisia, sparking social unrest, and a few weeks later the government of Egypt was set to topple. 

Such is the nature of complex, chaotic, and unpredictable systems. The stresses build for years and years, and nothing really seems to be happening, but then everything suddenly changes. Egypt is therefore emblematic of what we might expect in any complex system in which pressures are building, such as the US Treasury market.  

Can events in complex systems ever be predicted? No…and yes. No, because the precise timing and details can never be predicted. Yes, because we can be certain that anything that is unsustainable will someday cease to continue and things that are horribly imbalanced will someday topple. We can also be certain that the change, when it comes, will be rather sudden and abrupt, rather than gentle and linear.

That is, we can easily predict that a complex system will shift, and that it will probably do so rapidly, but not exactly when or by how much.

Image | Guide to Navigating the Coming Crisis
Guide to Navigating the Coming Crisis
 PREVIEW

Guide to Navigating the Coming Crisis

Wednesday, February 9, 2011

Executive Summary

  • Here we provide a detailed summary of the complete analytical framework that has delivered double digit investment gains (2004-2010)
  • Why this ‘recovery’ is false
  • Why the Fed is stuck between a rock and hard place
  • Why the US Treasury market is vulnerable
  • Asia is the most likely trigger

Part I

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II – Guide to Navigating the Coming Crisis

Illuminating the future is our job, and we take it seriously.

The unfolding Egyptian situation provides a perfect analogy for what I see coming to the developed world. During times of massive change, it is most important to have a clear-eyed view, few limiting beliefs, and a reliable framework to help you decode rapidly emerging events.

What we do here at Martenson Central is deliver both up-to-the-minute information-scouting services and a framework through which those events and information can be interpreted. 

Knowing what is likely to happen and having a solid framework for understanding those events provides emotional relief, removes uncertainty, and allows for crisper and more effective decisionmaking that can make you safer and even wealthier. These benefits are not speculation on our part; they are directly drawn from comments and feedback we’ve received from our members over the past several years.

The Crash Course is the foundation of that framework, which illuminates the main predicament as an inherent conflict between the currently evolved types of economic and monetary systems and looming resource scarcity, especially of oil.

Guide to Navigating the Coming Crisis
 PREVIEW

Guide to Navigating the Coming Crisis

Wednesday, February 9, 2011

Executive Summary

  • Here we provide a detailed summary of the complete analytical framework that has delivered double digit investment gains (2004-2010)
  • Why this ‘recovery’ is false
  • Why the Fed is stuck between a rock and hard place
  • Why the US Treasury market is vulnerable
  • Asia is the most likely trigger

Part I

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II – Guide to Navigating the Coming Crisis

Illuminating the future is our job, and we take it seriously.

The unfolding Egyptian situation provides a perfect analogy for what I see coming to the developed world. During times of massive change, it is most important to have a clear-eyed view, few limiting beliefs, and a reliable framework to help you decode rapidly emerging events.

What we do here at Martenson Central is deliver both up-to-the-minute information-scouting services and a framework through which those events and information can be interpreted. 

Knowing what is likely to happen and having a solid framework for understanding those events provides emotional relief, removes uncertainty, and allows for crisper and more effective decisionmaking that can make you safer and even wealthier. These benefits are not speculation on our part; they are directly drawn from comments and feedback we’ve received from our members over the past several years.

The Crash Course is the foundation of that framework, which illuminates the main predicament as an inherent conflict between the currently evolved types of economic and monetary systems and looming resource scarcity, especially of oil.

Image | Wikileaks: US Officials Concerned Saudi Arabia Has Less Oil Than Claimed
Wikileaks: US Officials Concerned Saudi Arabia Has Less Oil Than Claimed
 PREVIEW

There has been another Wikileaks release, exposing the US diplomatic channels as being aware of the possibility of Saudi overstatement of reserves and the possibility that future Saudi ‘swing production’ may be far more limited than believed.

Here’s how the Guardian UK put it:

The US fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

(Source) 

Wikileaks: US Officials Concerned Saudi Arabia Has Less Oil Than Claimed
 PREVIEW

There has been another Wikileaks release, exposing the US diplomatic channels as being aware of the possibility of Saudi overstatement of reserves and the possibility that future Saudi ‘swing production’ may be far more limited than believed.

Here’s how the Guardian UK put it:

The US fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

(Source) 

Image | Joe Saluzzi on High-Frequency Trading: The Equity Market Is Now Controlled by the Machines
Joe Saluzzi on High-Frequency Trading: The Equity Market Is Now Controlled by the Machines

Joe Saluzzi, co-founder of Themis Trading LLC and outspoken exchange expert, is concerned with how high-frequency trading has brought the capital markets into uncharted – and dangerous – territory.

"Things have changed," he cautions. With 50-70% of all trades being conducted by algorithms at micro-second time intervals, real human traders are increasingly challenged to understand how our markets actually work. "No longer do the technical patterns – that have lasted for years and years, and are written about all over – work anymore."

In the following interview, Joe and Chris plunge into "dark pools" and other poorly-understood elements of our now-machine-dominated financial exchanges. The current system is fraught with risks of further "flash crash"-like disruptions, and at a fundmental level, feels a lot like sanctioned theft by the deep-pocketed institutions who can outspend on technology and speed. This is an important interview for anyone involved in trading (professionally or personally), as well as investors who want to know how today's markets truly operate.
Joe Saluzzi on High-Frequency Trading: The Equity Market Is Now Controlled by the Machines

Joe Saluzzi, co-founder of Themis Trading LLC and outspoken exchange expert, is concerned with how high-frequency trading has brought the capital markets into uncharted – and dangerous – territory.

"Things have changed," he cautions. With 50-70% of all trades being conducted by algorithms at micro-second time intervals, real human traders are increasingly challenged to understand how our markets actually work. "No longer do the technical patterns – that have lasted for years and years, and are written about all over – work anymore."

In the following interview, Joe and Chris plunge into "dark pools" and other poorly-understood elements of our now-machine-dominated financial exchanges. The current system is fraught with risks of further "flash crash"-like disruptions, and at a fundmental level, feels a lot like sanctioned theft by the deep-pocketed institutions who can outspend on technology and speed. This is an important interview for anyone involved in trading (professionally or personally), as well as investors who want to know how today's markets truly operate.
Image | Playing With Fire
Playing With Fire
 PREVIEW

There were rolling blackouts and natural gas delivery failures in the southwest, long bonds broke to new multi-month lows (that is, yields are rising), and Bernanke claimed that the Fed’s policies have nothing to do with global commodity price increases.

Those may sound like entirely unrelated events, but I see them as intimately connected. Here’s how:
Playing With Fire
 PREVIEW

There were rolling blackouts and natural gas delivery failures in the southwest, long bonds broke to new multi-month lows (that is, yields are rising), and Bernanke claimed that the Fed’s policies have nothing to do with global commodity price increases.

Those may sound like entirely unrelated events, but I see them as intimately connected. Here’s how:
Image | Bernanke: “Yes, We Have No Inflation”
Bernanke: “Yes, We Have No Inflation”
 PREVIEW

In the recent article on the party in stocks, this was one of my concluding paragraphs:

The bottom line is that by the time the Fed becomes institutionally aware that inflation is raging across the globe – and I often wonder when they’ll finally awake to the threat – it will be too late. Inflation will have the momentum, and it will take a vast overreaction on the part of the Fed to restrain it. They’ll have to drain enormous amounts of liquidity and tolerate vastly higher interest rates to be able to do that, and I doubt they have the courage for such bold action. I think they will hesitate, equivocate, and ultimately be late.

Perhaps sensitive to the growing awareness of inflation across the world and the Fed’s role in fostering it, Bernanke took the opportunity today, while at the National Press Club, to minimize any such concerns. This is really quite a disturbing mindset on display:

Bernanke: “Yes, We Have No Inflation”
 PREVIEW

In the recent article on the party in stocks, this was one of my concluding paragraphs:

The bottom line is that by the time the Fed becomes institutionally aware that inflation is raging across the globe – and I often wonder when they’ll finally awake to the threat – it will be too late. Inflation will have the momentum, and it will take a vast overreaction on the part of the Fed to restrain it. They’ll have to drain enormous amounts of liquidity and tolerate vastly higher interest rates to be able to do that, and I doubt they have the courage for such bold action. I think they will hesitate, equivocate, and ultimately be late.

Perhaps sensitive to the growing awareness of inflation across the world and the Fed’s role in fostering it, Bernanke took the opportunity today, while at the National Press Club, to minimize any such concerns. This is really quite a disturbing mindset on display:

Image | Information Scouting Report: Vol 1 (2-2-11)
Information Scouting Report: Vol 1 (2-2-11)
 PREVIEW

We received a lot of great feedback from the content survey, and one idea that popped back into our field of view was for me to provide additional commentary on the wide range of articles that I run across when I do my daily scouting.

Here are the most interesting articles I’ve run across the past few days and why they caught my eye:

Information Scouting Report: Vol 1 (2-2-11)
 PREVIEW

We received a lot of great feedback from the content survey, and one idea that popped back into our field of view was for me to provide additional commentary on the wide range of articles that I run across when I do my daily scouting.

Here are the most interesting articles I’ve run across the past few days and why they caught my eye:

Image | How long can the party in stocks last?
How long can the party in stocks last?

The headlines are screaming at the top of every financial media outlet tonight:  The Dow Closes Above 12,000 For the First Time in Two Years!

What’s going on here?  Is the recovery well and truly underway?   And, if it is, why is the Fed dropping hints again that “QE3 may get discussed” at future Fed meetings, as Kansas City Fed President Thomas Hoenig said on Feb 1st?

Given the raft of good economic news lately, one might be forgiven for wondering what the Fed has in mind here.  If everything is so economically rosy, why are they already dropping trial balloons about more Quantitative Easing?  What are they seeing that we are not seeing, that justifies more than $100 billion in thin air money each month, and why won’t they just tell us what it is? 

Here’s how PeakProsperity.com member dbworld put it earlier today:

How long can the party in stocks last?

The headlines are screaming at the top of every financial media outlet tonight:  The Dow Closes Above 12,000 For the First Time in Two Years!

What’s going on here?  Is the recovery well and truly underway?   And, if it is, why is the Fed dropping hints again that “QE3 may get discussed” at future Fed meetings, as Kansas City Fed President Thomas Hoenig said on Feb 1st?

Given the raft of good economic news lately, one might be forgiven for wondering what the Fed has in mind here.  If everything is so economically rosy, why are they already dropping trial balloons about more Quantitative Easing?  What are they seeing that we are not seeing, that justifies more than $100 billion in thin air money each month, and why won’t they just tell us what it is? 

Here’s how PeakProsperity.com member dbworld put it earlier today:

Image | Why are the stock markets up?
Why are the stock markets up?
 PREVIEW

The headlines are screaming at the top of every financial media outlet tonight: The Dow Closes Above 12,000 For The First Time In Two Years!

What’s going on here? Is the recovery well and truly underway? And, if it is, why is the Fed dropping hints again that “QE3 may get discussed” in the future, as Kansas City Fed President Thomas Hoenig said today? 

Given the raft of good economic news lately, one might be forgiven for wondering what the Fed has in mind here. Why are they already dropping trial balloons?  What are they seeing that we are not seeing, and why won’t they just tell us? What, exactly, is it that justifies more than $100 billion in thin air money each month?

Here’s how member dbworld put it earlier today:

Why are the stock markets up?
 PREVIEW

The headlines are screaming at the top of every financial media outlet tonight: The Dow Closes Above 12,000 For The First Time In Two Years!

What’s going on here? Is the recovery well and truly underway? And, if it is, why is the Fed dropping hints again that “QE3 may get discussed” in the future, as Kansas City Fed President Thomas Hoenig said today? 

Given the raft of good economic news lately, one might be forgiven for wondering what the Fed has in mind here. Why are they already dropping trial balloons?  What are they seeing that we are not seeing, and why won’t they just tell us? What, exactly, is it that justifies more than $100 billion in thin air money each month?

Here’s how member dbworld put it earlier today:

Image | Straight Talk with Catherine Austin Fitts: We Are Victims of A Financial Coup D’Etat
Straight Talk with Catherine Austin Fitts: We Are Victims of A Financial Coup D’Etat

"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.

This week's Straight Talk contributor is Catherine Austin Fitts: investment advisor and entrepreneur. She is the founder of Solari Investment Advisory Services, where she offers subscribers guidance for navigating the risks of the global financial system and the political economy. (FYI: Chris will be the guest on her weekly podcast, The Solari Report, on Feb 3). Her perspective on Wall Street and Capitol Hill are shaped by her past roles as Assistant Secretary of Housing under George H. W. Bush, and before that, as Managing Director and board member for the investment bank Dillon, Read & Co. 

p.p1 {margin: 0.0px 0.0px 6.0px 0.0px; font: 13.0px Verdana}

1. Despite (or perhaps because of) your time as Assistant Secretary of Housing under Bush Sr., you are extremely critical of the government’s financial stewardship. What, if anything, changes with administrations and how much is institutionally baked into the cake?

The federal financial model is institutional, and its ultimate governance is outside of the government.

 

Straight Talk with Catherine Austin Fitts: We Are Victims of A Financial Coup D’Etat

"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.

This week's Straight Talk contributor is Catherine Austin Fitts: investment advisor and entrepreneur. She is the founder of Solari Investment Advisory Services, where she offers subscribers guidance for navigating the risks of the global financial system and the political economy. (FYI: Chris will be the guest on her weekly podcast, The Solari Report, on Feb 3). Her perspective on Wall Street and Capitol Hill are shaped by her past roles as Assistant Secretary of Housing under George H. W. Bush, and before that, as Managing Director and board member for the investment bank Dillon, Read & Co. 

p.p1 {margin: 0.0px 0.0px 6.0px 0.0px; font: 13.0px Verdana}

1. Despite (or perhaps because of) your time as Assistant Secretary of Housing under Bush Sr., you are extremely critical of the government’s financial stewardship. What, if anything, changes with administrations and how much is institutionally baked into the cake?

The federal financial model is institutional, and its ultimate governance is outside of the government.

 

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