Insider
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
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
The most anticipated announcement of the year – perhaps too anticipated (sell the news?) – will answer the question, “How much new money will the Fed decide dump into the situation at their next meeting?”
Estimates range from a low of $500 billion to as high as $4 trillion. In the middle of the range is Bill Gross of PIMCO, who thinks the Fed needs to buy around $100 billion a month of US Treasuries (effectively monetizing the entire US deficit next year), while the high end is claimed by Jan Hatzius of Goldman Sachs, who makes the case that the Fed’s own “Taylor Rule” requires them to buy $4 trillion if they wish to close the apparent gap that exists between that rule and economic reality.
What began as a temporary rescue operation by the Fed and the feds to try and perform a normal Keynesian jump-start operation on the economy is now a permanent fixture without which the markets cannot operate.
More Liquidity on the Way
PREVIEW by Chris MartensonThe most anticipated announcement of the year – perhaps too anticipated (sell the news?) – will answer the question, “How much new money will the Fed decide dump into the situation at their next meeting?”
Estimates range from a low of $500 billion to as high as $4 trillion. In the middle of the range is Bill Gross of PIMCO, who thinks the Fed needs to buy around $100 billion a month of US Treasuries (effectively monetizing the entire US deficit next year), while the high end is claimed by Jan Hatzius of Goldman Sachs, who makes the case that the Fed’s own “Taylor Rule” requires them to buy $4 trillion if they wish to close the apparent gap that exists between that rule and economic reality.
What began as a temporary rescue operation by the Fed and the feds to try and perform a normal Keynesian jump-start operation on the economy is now a permanent fixture without which the markets cannot operate.
by
Chris Martenson
Wednesday, October 13, 2010
Executive Summary
- Perception will drive the market shift.
- Awareness of Peak Oil is still low but spreading rapidly.
- The military is mobilizing, but civilian government is AWOL.
- The Post-Peak transition will be more chaotic than it need be.
- We have time to prepare (but not much).
- Taking informed action now is critical.
Part I
If you have not yet read Part I of this report, please click here to read it first.
Part II
It’s All About Perception
On my plane ride back from DC, I happened to sit next to an insurance professional who was chatty. After hearing about his washed-out business trip to the Cayman Islands, I told him about my work and the ASPO conference I’d just been to. He’d never heard of Peak Oil before.
When I encounter someone who has not heard of Peak Oil, I experience the same sense of disorientation as if they said they had never heard of 9-11. The only difference between the two is that Peak Oil might have much larger and even more devastating effects.
The good news is that this reminds me that we are further away from the tipping point of awareness than I sometimes think, (hopefully) providing us with an extra year or two or preparation time. The bad news is that when the tipping point arrives, it will do so all at once, and probably with more disruption than if people had been allowed to more slowly internalize the implications and reality of vastly higher oil prices.
As we explored in the previous report, it’s not the fundamentals that will finally lead to the shift, it’s perception. Right now, on a fundamental basis, there is every indication that a liquid fuel crisis is imminent. Perhaps the data is wrong and will be corrected, or perhaps a massive discovery will change the game, but right now our best information is that depletion and demand are going to swamp supply in the near future.
Future Chaos: There Is No “Plan B”
PREVIEW by Chris MartensonWednesday, October 13, 2010
Executive Summary
- Perception will drive the market shift.
- Awareness of Peak Oil is still low but spreading rapidly.
- The military is mobilizing, but civilian government is AWOL.
- The Post-Peak transition will be more chaotic than it need be.
- We have time to prepare (but not much).
- Taking informed action now is critical.
Part I
If you have not yet read Part I of this report, please click here to read it first.
Part II
It’s All About Perception
On my plane ride back from DC, I happened to sit next to an insurance professional who was chatty. After hearing about his washed-out business trip to the Cayman Islands, I told him about my work and the ASPO conference I’d just been to. He’d never heard of Peak Oil before.
When I encounter someone who has not heard of Peak Oil, I experience the same sense of disorientation as if they said they had never heard of 9-11. The only difference between the two is that Peak Oil might have much larger and even more devastating effects.
The good news is that this reminds me that we are further away from the tipping point of awareness than I sometimes think, (hopefully) providing us with an extra year or two or preparation time. The bad news is that when the tipping point arrives, it will do so all at once, and probably with more disruption than if people had been allowed to more slowly internalize the implications and reality of vastly higher oil prices.
As we explored in the previous report, it’s not the fundamentals that will finally lead to the shift, it’s perception. Right now, on a fundamental basis, there is every indication that a liquid fuel crisis is imminent. Perhaps the data is wrong and will be corrected, or perhaps a massive discovery will change the game, but right now our best information is that depletion and demand are going to swamp supply in the near future.
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