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Economy
by
Chris Martenson
Executive Summary
- The economic data is getting darker fast
- The over-indebtedness of the economy is the worst it's ever been
- Predicting the timing of the next major market correction
- As the risks mount, what should the concerned investor do?
If you have not yet read Part 1: Why The Markets Are Overdue For A Gigantic Bust available free to all readers, please click here to read it first.
The Data Says…Another Downturn Is Upon Us
Our view is that a massive market correction is coming, one that may well rip the financial markets apart, and cause very long-term and long lasting damage, possibly to the point of taking generations to repair in any meaningful sense.
In fact things may never actually recover to the current heights because recovery requires energy and there simply isn’t the net energy per capita that existed in the past.
For now, we see plenty of signs of fundamental economic weakness, and this is not surprising at this stage of the so-called economic expansion. The truth is this expansion has been phony to a large degree, and quite probably should have broken down many times in the past, most recently in early 2016.
But the central banks prevented that and we can all feel thankful at the extra time that has provided us to become more resilient under reasonably calm circumstances.
And yet, the one thing that central banks have never been able to do is…
Get Ready For The Coming Massive Correction
PREVIEW by Chris MartensonExecutive Summary
- The economic data is getting darker fast
- The over-indebtedness of the economy is the worst it's ever been
- Predicting the timing of the next major market correction
- As the risks mount, what should the concerned investor do?
If you have not yet read Part 1: Why The Markets Are Overdue For A Gigantic Bust available free to all readers, please click here to read it first.
The Data Says…Another Downturn Is Upon Us
Our view is that a massive market correction is coming, one that may well rip the financial markets apart, and cause very long-term and long lasting damage, possibly to the point of taking generations to repair in any meaningful sense.
In fact things may never actually recover to the current heights because recovery requires energy and there simply isn’t the net energy per capita that existed in the past.
For now, we see plenty of signs of fundamental economic weakness, and this is not surprising at this stage of the so-called economic expansion. The truth is this expansion has been phony to a large degree, and quite probably should have broken down many times in the past, most recently in early 2016.
But the central banks prevented that and we can all feel thankful at the extra time that has provided us to become more resilient under reasonably calm circumstances.
And yet, the one thing that central banks have never been able to do is…
by
Chris Martenson
Executive Summary
- Why the Fed’s rate hikes are not actual “hikes”
- The new debt issuance directly or indirectly enabled by the Fed is staggeringly large
- Why the Fed’s intervention in the financial markets is creating worrisome instability
- As the risks mount, what should the concerned investor do?
If you have not yet read Part 1: The Federal Reserve Is Destroying America available free to all readers, please click here to read it first.
When Is A Rate Hike Not A Rate Hike?
The Fed keeps talking about raising interest rates, but they really aren’t doing any such thing. In fact they are doing the opposite.
I know that’s a controversial statement, so let me explain. The point of a ‘rate hike’ is not to make the cost of money (interest rates) go up, but to drain excess money from the system. That’s why a rate hike cycle is called a ‘tightening’ cycle; because it is making the amount of money available for lending to shrink, or for conditions to become tighter. The same as if you don’t have quite enough money at the end of the month, things are tight.
This means that the interest rate is the derivative, and the amount of money is the main driver. You don’t set interest rates, you control the amount of money in the system, and the interest rates follow along. They are the result, not the cause.
Or at least that’s how it used to be. But not any longer.
In the past, when the Fed ‘hiked rates’ what it actually did was drain money from the system. Money out = interest rates up.
Now when the Fed hikes rates it removes zero money in the system, and this is why a rate hike is not actually a rate hike at all, but the opposite because it leaves 100% of the money in the system but raises the amount that banks and other financial institutions can charge you for new loans and outstanding credit.
How did we get to this ‘upside down world’ where a rate hike increases money?
To understand let’s be sure we are clear on…
Understanding The Fed’s Endgame Is Key To Protecting Your Wealth
PREVIEW by Chris MartensonExecutive Summary
- Why the Fed’s rate hikes are not actual “hikes”
- The new debt issuance directly or indirectly enabled by the Fed is staggeringly large
- Why the Fed’s intervention in the financial markets is creating worrisome instability
- As the risks mount, what should the concerned investor do?
If you have not yet read Part 1: The Federal Reserve Is Destroying America available free to all readers, please click here to read it first.
When Is A Rate Hike Not A Rate Hike?
The Fed keeps talking about raising interest rates, but they really aren’t doing any such thing. In fact they are doing the opposite.
I know that’s a controversial statement, so let me explain. The point of a ‘rate hike’ is not to make the cost of money (interest rates) go up, but to drain excess money from the system. That’s why a rate hike cycle is called a ‘tightening’ cycle; because it is making the amount of money available for lending to shrink, or for conditions to become tighter. The same as if you don’t have quite enough money at the end of the month, things are tight.
This means that the interest rate is the derivative, and the amount of money is the main driver. You don’t set interest rates, you control the amount of money in the system, and the interest rates follow along. They are the result, not the cause.
Or at least that’s how it used to be. But not any longer.
In the past, when the Fed ‘hiked rates’ what it actually did was drain money from the system. Money out = interest rates up.
Now when the Fed hikes rates it removes zero money in the system, and this is why a rate hike is not actually a rate hike at all, but the opposite because it leaves 100% of the money in the system but raises the amount that banks and other financial institutions can charge you for new loans and outstanding credit.
How did we get to this ‘upside down world’ where a rate hike increases money?
To understand let’s be sure we are clear on…
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