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Chris Martenson

Image | A Couple of Bad Ideas
A Couple of Bad Ideas
 PREVIEW
by Chris Martenson

This week a couple of very bad ideas were floated, one having to do with U.S. natural gas (NG) supply, and the other a proposal for how the U.S. president could avoid having to deal with the pesky debt ceiling.

Throughout the entire unfolding of the crisis, we have all been patiently waiting (if not agitating) for reality to gain a place at the table of ideas.  Instead, we still have the usual fare of the absurd and the ridiculous, indicating that we are not quite ready yet to entertain the serious business of negotiating the various predicaments that we face.
A Couple of Bad Ideas
 PREVIEW by Chris Martenson

This week a couple of very bad ideas were floated, one having to do with U.S. natural gas (NG) supply, and the other a proposal for how the U.S. president could avoid having to deal with the pesky debt ceiling.

Throughout the entire unfolding of the crisis, we have all been patiently waiting (if not agitating) for reality to gain a place at the table of ideas.  Instead, we still have the usual fare of the absurd and the ridiculous, indicating that we are not quite ready yet to entertain the serious business of negotiating the various predicaments that we face.
Image | Unrealistic Expectations
Unrealistic Expectations
 PREVIEW
by Chris Martenson

Mish and I were unable to connect this week, so here's what was on my mind for that podcast.

One of the fundamental aspects of life today is that so many people are unable or unwilling to understand the nature of the predicament, which leads to all sorts of understandable, but unproductive, outbursts.

Put simply, people don't want their stuff to go away.  This is perfectly normal and understandable; the only problem is that a lot of people's expectations are entirely unrealistic and were formed during a period of time when they were, individually or collectively as a nation, living well beyond their means.

Cutting back is hard, and necessary, and it seems that many people are unwilling to entertain either the prospect of having less or the inevitability of the coming decline in living standards…
Unrealistic Expectations
 PREVIEW by Chris Martenson

Mish and I were unable to connect this week, so here's what was on my mind for that podcast.

One of the fundamental aspects of life today is that so many people are unable or unwilling to understand the nature of the predicament, which leads to all sorts of understandable, but unproductive, outbursts.

Put simply, people don't want their stuff to go away.  This is perfectly normal and understandable; the only problem is that a lot of people's expectations are entirely unrealistic and were formed during a period of time when they were, individually or collectively as a nation, living well beyond their means.

Cutting back is hard, and necessary, and it seems that many people are unwilling to entertain either the prospect of having less or the inevitability of the coming decline in living standards…
Image | Why the Fed Will Fight to the End
Why the Fed Will Fight to the End
 PREVIEW
by Chris Martenson

Given the choice between accepting the risk of future inflation and dealing with the immediate and destructive consequences of deflation now, our fiscal and monetary authorities will always choose inflation.  At least if 800 years of history and the last four years are any guide.

If I had to boil the whole thing down to one trite statement suitable for an election campaign, it might be, It’s the assets, stupid.

Here’s why.
Why the Fed Will Fight to the End
 PREVIEW by Chris Martenson

Given the choice between accepting the risk of future inflation and dealing with the immediate and destructive consequences of deflation now, our fiscal and monetary authorities will always choose inflation.  At least if 800 years of history and the last four years are any guide.

If I had to boil the whole thing down to one trite statement suitable for an election campaign, it might be, It’s the assets, stupid.

Here’s why.
Image | If We’re Ever Going to Take Control of Our Destiny, the Time is Now
If We’re Ever Going to Take Control of Our Destiny, the Time is Now
 PREVIEW
by Chris Martenson

Executive Summary

  • Adapting our behavior is a must at this point. We really don't have the option not to.
  • The number of claims on real wealth is increasing. How much of the "real wealth" do you own?
  • Our economy is now truly a confidence-based system. What will be the fallout when that confidence falters?
  • What are the key knowns & unknowns we need to be addressing now?

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

What is completely unknown at this point is what will happen to our very complex and interwoven financial system when it finally comes to grips with the idea that old-style growth is never coming back.  One worrisome idea is that it will experience something akin to cardiac arrest and simply break down one day. 

Maybe this will happen, maybe not.  I will note that the degree to which the central banks have set themselves up as the ultimate saviors of the system has both an upside and a downside, and it is the downside that worries me the most at this point.

While all the trillions of dollars of intervention have stabilized the system, which I consider to be a good thing, the downside is that the central banks have placed themselves in a position where they had better succeed.  If not?  Then we discover just how important confidence is to a monetary system built, owned, and operated on trust.  My guess is "very."

If We’re Ever Going to Take Control of Our Destiny, the Time is Now
 PREVIEW by Chris Martenson

Executive Summary

  • Adapting our behavior is a must at this point. We really don't have the option not to.
  • The number of claims on real wealth is increasing. How much of the "real wealth" do you own?
  • Our economy is now truly a confidence-based system. What will be the fallout when that confidence falters?
  • What are the key knowns & unknowns we need to be addressing now?

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

What is completely unknown at this point is what will happen to our very complex and interwoven financial system when it finally comes to grips with the idea that old-style growth is never coming back.  One worrisome idea is that it will experience something akin to cardiac arrest and simply break down one day. 

Maybe this will happen, maybe not.  I will note that the degree to which the central banks have set themselves up as the ultimate saviors of the system has both an upside and a downside, and it is the downside that worries me the most at this point.

While all the trillions of dollars of intervention have stabilized the system, which I consider to be a good thing, the downside is that the central banks have placed themselves in a position where they had better succeed.  If not?  Then we discover just how important confidence is to a monetary system built, owned, and operated on trust.  My guess is "very."

Image | Understanding the Implications of QE3
Understanding the Implications of QE3
 PREVIEW
by Chris Martenson

Executive Summary

  • We've now entered a new era of economic and fiscal descent; expect the next stage to be prolonged and bumpy
  • Why only two possible economic outcomes remain at this point (and one of them has a 90%+ chance of occurring)
  • How the recent liquidity measures announced by the world's largest central banks will impact:
    • stocks
    • bonds
    • gold & silver
    • other commodities
    • real estate
  • Why adopting a wealth preservation strategy is critical right now (and why so many will fail to do so)
  • Why this is not (yet) the moment to go "all in" in exchanging paper assets for hard ones (but do get started if you haven't already!)

If you have not yet read Part I: The Trouble with Printing Money, available free to all readers, please click here to read it first.

A Process, Not an Event

Okay, the ECB and the Fed are now in the game with unlimited, open-ended commitments to print as much money as necessary to get back to the same rates of GDP growth we had in prior decades. I should note that the ECB actions, at least, will be fully sterilized, meaning that they won't boost the money supply – at least that's the plan right now. Soon enough, Japan is going to have to join the fray simply because it cannot afford a stronger yen here; it will have to print because it is first, second, and last an export economy…

After that, it is anybody's guess as to how long China will put up with its massive $3.2 trillion in foreign exchange reserves being debased willy-nilly, but my vote is 'not long.'

These latest rounds of QE are certainly unnerving and may prompt many of you to want to accelerate your own private efforts at financial, emotional, and physical resilience. By all means, use these moments to focus your attention and efforts. But also be aware that we are experiencing what is certain to be a very long process rather than some dramatic event.

Understanding the Implications of QE3
 PREVIEW by Chris Martenson

Executive Summary

  • We've now entered a new era of economic and fiscal descent; expect the next stage to be prolonged and bumpy
  • Why only two possible economic outcomes remain at this point (and one of them has a 90%+ chance of occurring)
  • How the recent liquidity measures announced by the world's largest central banks will impact:
    • stocks
    • bonds
    • gold & silver
    • other commodities
    • real estate
  • Why adopting a wealth preservation strategy is critical right now (and why so many will fail to do so)
  • Why this is not (yet) the moment to go "all in" in exchanging paper assets for hard ones (but do get started if you haven't already!)

If you have not yet read Part I: The Trouble with Printing Money, available free to all readers, please click here to read it first.

A Process, Not an Event

Okay, the ECB and the Fed are now in the game with unlimited, open-ended commitments to print as much money as necessary to get back to the same rates of GDP growth we had in prior decades. I should note that the ECB actions, at least, will be fully sterilized, meaning that they won't boost the money supply – at least that's the plan right now. Soon enough, Japan is going to have to join the fray simply because it cannot afford a stronger yen here; it will have to print because it is first, second, and last an export economy…

After that, it is anybody's guess as to how long China will put up with its massive $3.2 trillion in foreign exchange reserves being debased willy-nilly, but my vote is 'not long.'

These latest rounds of QE are certainly unnerving and may prompt many of you to want to accelerate your own private efforts at financial, emotional, and physical resilience. By all means, use these moments to focus your attention and efforts. But also be aware that we are experiencing what is certain to be a very long process rather than some dramatic event.

Image | The Trouble with Printing Money
The Trouble with Printing Money
by Chris Martenson

For a while now, I have been expecting a coordinated, global central bank action that would seek to print more money out of thin air, or "QE" (quantitative easing), as it is now called.  Now we have two of the most important central banks, that of the U.S. and in Europe (ECB) having committed to open-ended, limitless QE.

In Part I of this report, we analyze the actions themselves, and then in Part II we discuss the implications to individuals and those with responsibilities to manage money.
The Trouble with Printing Money
 by Chris Martenson

For a while now, I have been expecting a coordinated, global central bank action that would seek to print more money out of thin air, or "QE" (quantitative easing), as it is now called.  Now we have two of the most important central banks, that of the U.S. and in Europe (ECB) having committed to open-ended, limitless QE.

In Part I of this report, we analyze the actions themselves, and then in Part II we discuss the implications to individuals and those with responsibilities to manage money.
Image | Happy 50th, Chris!
Happy 50th, Chris!
by Adam Taggart

On Saturday, Chris turns 50. The Fed would have to announce QE4-ever as Chris prepares to celebrate his half-century milestone….

While his family toasts (and roasts) him this weekend, there's no reason we shouldn't do the same.
Happy 50th, Chris!
 by Adam Taggart

On Saturday, Chris turns 50. The Fed would have to announce QE4-ever as Chris prepares to celebrate his half-century milestone….

While his family toasts (and roasts) him this weekend, there's no reason we shouldn't do the same.
Image | Never in Doubt
Never in Doubt
by Chris Martenson

What has never been in doubt in my mind is that thin-air money printing and the bailing out of banks and financial institutions would be tried and tried again.  The alternative is unthinkable to those in power, because it involves living within one's means and letting those who took the risks eat the losses. 

Here we are at the tail end of a forty year credit bubble in which everybody participated (although China and India were late to the event) and nobody wants that party to end.  It is simply so much easier to simply borrow, spend and kick the can down the road.

As noted here repeatedly, we have an exponential credit system which, by extension, gives us an exponential money system.  Until and unless the credit markets can be coerced back onto an exponential trajectory, nothing will work quite right to the point that systemic financial collapse is a distinct possibility.

Given that possibility, nobody in power has even the slightest wish to test out the odds and so they will opt to print, print, print.

Just yesterday the UK opted for another round of printing but look how they applied it:
Never in Doubt
 by Chris Martenson

What has never been in doubt in my mind is that thin-air money printing and the bailing out of banks and financial institutions would be tried and tried again.  The alternative is unthinkable to those in power, because it involves living within one's means and letting those who took the risks eat the losses. 

Here we are at the tail end of a forty year credit bubble in which everybody participated (although China and India were late to the event) and nobody wants that party to end.  It is simply so much easier to simply borrow, spend and kick the can down the road.

As noted here repeatedly, we have an exponential credit system which, by extension, gives us an exponential money system.  Until and unless the credit markets can be coerced back onto an exponential trajectory, nothing will work quite right to the point that systemic financial collapse is a distinct possibility.

Given that possibility, nobody in power has even the slightest wish to test out the odds and so they will opt to print, print, print.

Just yesterday the UK opted for another round of printing but look how they applied it:
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