by
Farmer Brown
Podcast
by
Chris Martenson
Thursday, November 11, 2010
Executive Summary
- The US is one failed auction away from economic meltdown.
- OECD countries are not aligned on what battle they’re fighting.
- ‘Emergency’ measures governments are now taking will become permanent.
- Currency devaluation & higher prices are inevitable.
- Time to prepare is running out. Use the time you have wisely.
- Chris gives specifics of his personal preparations for use as a guide.
Part I
If you have not yet read Part I of this report, please click here to read it first.
Part II
To quickly review Part I, the US has embarked on a very dangerous strategy of trying to print its way to prosperity, and various countries have, in exceptionally strong terms, indicated severe displeasure with the move. Essentially, they’ve determined that the US is trying to export its difficulties to them, and this is not appreciated.
So what do we make of this, and what might happen next?
I’ll be honest with you here: I have been redoubling my efforts at personal preparation over the past few weeks (and they were already on set to “high” over the past six months). I now see a very high possibility that a fiscal and/or associated dollar crisis could happen in the next 12 months. How high? Right now it looks like 50/50 to me; it’s a coin flip (or Russian roulette with three in the cylinder, if you prefer).
All that would be required to set match to dry tinder would be a single failed Treasury auction. You may consider this unlikely due to the presence of the Fed backstopping all new government borrowing, and that’s certainly a valid consideration, but the wildcard here is that the Fed is merely backstopping all the new Treasury issuances. As I indicated in part one, above, while the US might be floating roughly $1.2 – $1.5 trillion in new Treasuries in 2011, there’s another $3 trillion or so of ‘rollovers’ that have to go off without a hitch as well.
Alert: QE II Has Lit The Fuse
PREVIEW by Chris MartensonThursday, November 11, 2010
Executive Summary
- The US is one failed auction away from economic meltdown.
- OECD countries are not aligned on what battle they’re fighting.
- ‘Emergency’ measures governments are now taking will become permanent.
- Currency devaluation & higher prices are inevitable.
- Time to prepare is running out. Use the time you have wisely.
- Chris gives specifics of his personal preparations for use as a guide.
Part I
If you have not yet read Part I of this report, please click here to read it first.
Part II
To quickly review Part I, the US has embarked on a very dangerous strategy of trying to print its way to prosperity, and various countries have, in exceptionally strong terms, indicated severe displeasure with the move. Essentially, they’ve determined that the US is trying to export its difficulties to them, and this is not appreciated.
So what do we make of this, and what might happen next?
I’ll be honest with you here: I have been redoubling my efforts at personal preparation over the past few weeks (and they were already on set to “high” over the past six months). I now see a very high possibility that a fiscal and/or associated dollar crisis could happen in the next 12 months. How high? Right now it looks like 50/50 to me; it’s a coin flip (or Russian roulette with three in the cylinder, if you prefer).
All that would be required to set match to dry tinder would be a single failed Treasury auction. You may consider this unlikely due to the presence of the Fed backstopping all new government borrowing, and that’s certainly a valid consideration, but the wildcard here is that the Fed is merely backstopping all the new Treasury issuances. As I indicated in part one, above, while the US might be floating roughly $1.2 – $1.5 trillion in new Treasuries in 2011, there’s another $3 trillion or so of ‘rollovers’ that have to go off without a hitch as well.
by
Adam Taggart
Today we’re introducing another new series on the site. One that will surface actionable, experience-based advice on how to prepare for the kind of future predicted by the Crash Course.
The pace of major developments happening around us is accelerating – think QE2, currency wars, runaway commodity prices, to name just a few. As a result, we’re hearing more urgent requests than ever before for guidance on how individuals should position themselves.
Hence this new series which, by the way, will be written by our readers for our readers. There are seasoned CM.com members who have been taking steps to put the ideas discussed on this site into practice – and they are graciously willing to share the valuable knowledge they have gained in doing so.
Preparing for An Uncertain Future: New Help For You
by Adam TaggartToday we’re introducing another new series on the site. One that will surface actionable, experience-based advice on how to prepare for the kind of future predicted by the Crash Course.
The pace of major developments happening around us is accelerating – think QE2, currency wars, runaway commodity prices, to name just a few. As a result, we’re hearing more urgent requests than ever before for guidance on how individuals should position themselves.
Hence this new series which, by the way, will be written by our readers for our readers. There are seasoned CM.com members who have been taking steps to put the ideas discussed on this site into practice – and they are graciously willing to share the valuable knowledge they have gained in doing so.
by
SagerXX
by
Chris Martenson
"Straight Talk" features thinking from notable minds 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.
This week's Straight Talk contributor is Steve Keen, Associate Professor of Economics & Finance at the University of Western Sydney and author of the popular book Debunking Economics and the website Steve Keen's Debtwatch. Steve's research focuses on the dynamics of debt and leads him to believe that debt-deflation is the key issue that will continue to dictate what happens in the global economy.
1. Much of your research is complex. Can you summarize some of the more important conclusions of your work in ‘layman's’ terms for us?
Steve: Sure. My work is complex in part because I reject conventional economic analysis, which has infected how ordinary people think about the world—just as the Ptolemaic view of astronomy infected people’s minds prior to the Copernican revolution. So to explain my work I have to start with where I differ from conventional “neoclassical” economists, who now are rather like Ptolemaic astronomers—who tried to understand what they see in the sky by inventing more and more “spheres” on which heavenly bodies were supposed to rotate, rather than accepting Copernicus’ far simpler model of a solar system centered on the Sun.
The key ways are that I see the economy as being credit-driven, and out of equilibrium all the time. The economy needs an expanding supply of money to grow, and in our credit-driven economy, most of that expansion is driven by rising debt.
Straight Talk with Steve Keen: It’s All About the Debt
by Chris Martenson"Straight Talk" features thinking from notable minds 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.
This week's Straight Talk contributor is Steve Keen, Associate Professor of Economics & Finance at the University of Western Sydney and author of the popular book Debunking Economics and the website Steve Keen's Debtwatch. Steve's research focuses on the dynamics of debt and leads him to believe that debt-deflation is the key issue that will continue to dictate what happens in the global economy.
1. Much of your research is complex. Can you summarize some of the more important conclusions of your work in ‘layman's’ terms for us?
Steve: Sure. My work is complex in part because I reject conventional economic analysis, which has infected how ordinary people think about the world—just as the Ptolemaic view of astronomy infected people’s minds prior to the Copernican revolution. So to explain my work I have to start with where I differ from conventional “neoclassical” economists, who now are rather like Ptolemaic astronomers—who tried to understand what they see in the sky by inventing more and more “spheres” on which heavenly bodies were supposed to rotate, rather than accepting Copernicus’ far simpler model of a solar system centered on the Sun.
The key ways are that I see the economy as being credit-driven, and out of equilibrium all the time. The economy needs an expanding supply of money to grow, and in our credit-driven economy, most of that expansion is driven by rising debt.
by
Chris Martenson
Earlier this week, Chris was invited to appear on Talk Radio Europe, the largest English-speaking radio station in continental Europe. A podcast of the interview has just been made available, which you can listen to by clicking here or on the image below:
The discussion focused heavily on the looming Peak Oil crisis, with a particular slant on implications for the European countries. The subject matter resonated with the host, Richie Allen, particularly because he’s now beginning to hear related sentiment echoed by a small but growing number of concerned European economists.
Chris on Talk Radio Europe: “Gigantic Mismatch” Between World Oil Consumption and Future Supply
by Chris MartensonEarlier this week, Chris was invited to appear on Talk Radio Europe, the largest English-speaking radio station in continental Europe. A podcast of the interview has just been made available, which you can listen to by clicking here or on the image below:
The discussion focused heavily on the looming Peak Oil crisis, with a particular slant on implications for the European countries. The subject matter resonated with the host, Richie Allen, particularly because he’s now beginning to hear related sentiment echoed by a small but growing number of concerned European economists.
by
Chris Martenson
QE II is now out of the bag, ready to alter the course of history.
There are several assessments that I’ve held over the years that have never wavered:
- Thin-air money printing. U.S. monetary and fiscal authorities (the Fed and Congress, respectively) will make every attempt to print and spend their way out of this financial predicament and will not take the path of austerity until forced to by external circumstances.
- Gold and silver are an excellent way to protect your wealth from the form of confiscation that thin-air money printing represents.
- Over the next 20 years, resource issues, especially in energy, specifically in petroleum, are going to fundamentally reshape the economic landscape. And maybe the political and social landscapes to boot.
More than two years ago now, reacting to an increase in the levels of government and Federal Reserve bailouts (The Day Everything Changed), I opined that a course had been set and that we were in all new territory that would lead to a dollar crisis someday.
This was my conclusion on September 19, 2008:
The Slippery Slope
PREVIEW by Chris MartensonQE II is now out of the bag, ready to alter the course of history.
There are several assessments that I’ve held over the years that have never wavered:
- Thin-air money printing. U.S. monetary and fiscal authorities (the Fed and Congress, respectively) will make every attempt to print and spend their way out of this financial predicament and will not take the path of austerity until forced to by external circumstances.
- Gold and silver are an excellent way to protect your wealth from the form of confiscation that thin-air money printing represents.
- Over the next 20 years, resource issues, especially in energy, specifically in petroleum, are going to fundamentally reshape the economic landscape. And maybe the political and social landscapes to boot.
More than two years ago now, reacting to an increase in the levels of government and Federal Reserve bailouts (The Day Everything Changed), I opined that a course had been set and that we were in all new territory that would lead to a dollar crisis someday.
This was my conclusion on September 19, 2008:
by
Chris Martenson
With today’s Fed announcement of $600 billion more in Quantitative Easing purchases, the United States has officially entered “Stage II” of the crisis.
This $600 billion is in addition to the purchases already underway using the proceeds from the maturation of their massive MBS portfolio.
Goodbye dollar; hello future.
Here’s the relevant wording from the statement:
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities.
The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings.
In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month.
The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.
(Source)
Fed Monetizes Government Debt: $600 Billion QE II Program Announced
by Chris MartensonWith today’s Fed announcement of $600 billion more in Quantitative Easing purchases, the United States has officially entered “Stage II” of the crisis.
This $600 billion is in addition to the purchases already underway using the proceeds from the maturation of their massive MBS portfolio.
Goodbye dollar; hello future.
Here’s the relevant wording from the statement:
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities.
The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings.
In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month.
The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.
(Source)
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