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Economy
Economy
by
Adam Taggart
by
charleshughsmith
Executive Summary
- The source of leverage being used to manipulate us
- The powers that be have a much weaker hand than we realize
- The increase use of force to control the system will ultimately undermine it
- What options are available to those who want to free themselves from this supression?
If you have not yet read Part 1: Upon The Next Crisis, The Rules Will Suddenly Change available free to all readers, please click here to read it first.
In Part 1 we surveyed the dynamics driving ever-expanding state control, the state’s priorities in crisis management (secure the state’s authority and the wealth/power of elites) and the authorities’ current preference for indirect control of the market.
Leverage and the Market as a Signifier
Markets are no longer markets—they are simulacra of markets, displaying the superficial appearance but not the dynamics and uncertainties of real markets, which have an unnerving tendency to veer away from the state-approved scripts of permanent, stable expansion.
Why have central banks and states (which includes blocs of nations such as the Eurozone with a centralized governing elite) chosen to cloak their control of markets?
The answer is has two parts: 1) central banks/states must leverage their intervention due to the monumental scale of global markets; owning assets worth hundreds of trillions of dollars is at best awkward in the current arrangement and at worst politically impossible.
While financial leverage is a relatively straightforward tool, 2) the real leverage is exerting psychological control over the market by transforming market price action into a signifier (i.e. signaling mechanism) that persuades participants to…
How To Defend Against An Unfair Re-Set Of The System
PREVIEW by charleshughsmithExecutive Summary
- The source of leverage being used to manipulate us
- The powers that be have a much weaker hand than we realize
- The increase use of force to control the system will ultimately undermine it
- What options are available to those who want to free themselves from this supression?
If you have not yet read Part 1: Upon The Next Crisis, The Rules Will Suddenly Change available free to all readers, please click here to read it first.
In Part 1 we surveyed the dynamics driving ever-expanding state control, the state’s priorities in crisis management (secure the state’s authority and the wealth/power of elites) and the authorities’ current preference for indirect control of the market.
Leverage and the Market as a Signifier
Markets are no longer markets—they are simulacra of markets, displaying the superficial appearance but not the dynamics and uncertainties of real markets, which have an unnerving tendency to veer away from the state-approved scripts of permanent, stable expansion.
Why have central banks and states (which includes blocs of nations such as the Eurozone with a centralized governing elite) chosen to cloak their control of markets?
The answer is has two parts: 1) central banks/states must leverage their intervention due to the monumental scale of global markets; owning assets worth hundreds of trillions of dollars is at best awkward in the current arrangement and at worst politically impossible.
While financial leverage is a relatively straightforward tool, 2) the real leverage is exerting psychological control over the market by transforming market price action into a signifier (i.e. signaling mechanism) that persuades participants to…
by
charleshughsmith
Executive Summary
- Is it better to hold cash in savings/checking accounts, or securities accounts?
- Where will the dollar likely from here?
- What will likely happen with retirement accounts?
- Ways to diversify your cash risk
If you have not yet read Part 1: The Cardinal Sin Of Investing: Permanent Impairment Of Capital available free to all readers, please click here to read it first.
The Role Of Cash In The Informal Economy
In stagnating formal economies burdened by over-regulation, high taxes and financialization, one of the few bright spots for employment and entrepreneurism is the informal or cash economy. The more stultified and elite-dominated the economy, the larger and more vibrant the informal economy. In some highly regulated, high-tax European nations, up to 30% of the economic activity is underground/cash.
The elimination of central bank currency will not eliminate the informal economy. Rather, the participants in this sector will adopt non-central bank issued forms of cash—precious metals, coins, other nations’ paper money, perhaps even digital currencies such as bitcoin or its gold-linked cousins (Bitgold, etc.)
Those with little income often do not have bank accounts, as the fees are costly. Eliminating cash will hit the poor who earn money in the informal economy especially hard. Though the poor are essentially powerless in our influence-is-auctioned-to-the-highest-bidder system, this could change once the working poor who benefit from the cash economy are pushed even deeper into poverty by the banning of cash.
That might spark…
Smart Strategies For Building & Managing Your Cash Savings
PREVIEW by charleshughsmithExecutive Summary
- Is it better to hold cash in savings/checking accounts, or securities accounts?
- Where will the dollar likely from here?
- What will likely happen with retirement accounts?
- Ways to diversify your cash risk
If you have not yet read Part 1: The Cardinal Sin Of Investing: Permanent Impairment Of Capital available free to all readers, please click here to read it first.
The Role Of Cash In The Informal Economy
In stagnating formal economies burdened by over-regulation, high taxes and financialization, one of the few bright spots for employment and entrepreneurism is the informal or cash economy. The more stultified and elite-dominated the economy, the larger and more vibrant the informal economy. In some highly regulated, high-tax European nations, up to 30% of the economic activity is underground/cash.
The elimination of central bank currency will not eliminate the informal economy. Rather, the participants in this sector will adopt non-central bank issued forms of cash—precious metals, coins, other nations’ paper money, perhaps even digital currencies such as bitcoin or its gold-linked cousins (Bitgold, etc.)
Those with little income often do not have bank accounts, as the fees are costly. Eliminating cash will hit the poor who earn money in the informal economy especially hard. Though the poor are essentially powerless in our influence-is-auctioned-to-the-highest-bidder system, this could change once the working poor who benefit from the cash economy are pushed even deeper into poverty by the banning of cash.
That might spark…
by
Chris Martenson
IMPORTANT NEWS
The live version of this webinar took place on Sep 13, 2017. It was excellent.To purchase access to the replay video of the event for $25, click the blue button below:
or
Given that a month’s subscription to PeakProsperity.com is only $30, you may want to give serious consideration to enrolling instead. It’s only $5 more, and gives you access to the webinar PLUS all of the premium analysis, webinars, reports, podcasts, alerts and events that PeakProsperity.com has to offer. That’s a pretty screaming value for an additional five bucks.
In this webinar, featured experts Grant Williams and Lance Roberts dove deep into the structural fragility of today’s financial markets and the many reasons why economic growth will remain constrained for years to come.
The excessive build-up of debt in the system — and the absolute dependence on its continued expansion to keep the economy from imploding — is, of course, seen as the prime risk to future growth.
As Lance demonstrates here with several of his excellent charts, so much leverage has been taken on that its servicing is increasingly stealing capital that would otherwise go to savings, consumption and productive investment. Going forward, the demands of the debt service will simply result in less and less capital available left over to grow the economy:
As financial assets are (supposed to be) valued on future growth prospects, lower forecasted growth demands lower valuations. Grant calculates that, should the US see another decade of 2% average annual GDP growth (and it has averaged less than that over the past decade), stock prices should be roughly half of what they are today to be considered fairly valued:
And Lance builds further on this, explaining how this moribund growth, coupled with America’s aging demographic trend, will simply savage the nation’s (already troublesomely underfunded) pension and entitlement systems:
But there are a number of other destabilizing risks to fear beyond our terminal debt addiction. One that Grant believes is not getting enough attention right now is the de-dollarization trend becoming notably apparent across a number of America’s strategic trading partners:
To watch the full 1.5 hours of this excellent webinar, purchase it by clicking on the blue button above.
WATCH NOW: Dangerous Markets Webinar
PREVIEW by Chris MartensonIMPORTANT NEWS
The live version of this webinar took place on Sep 13, 2017. It was excellent.To purchase access to the replay video of the event for $25, click the blue button below:
or
Given that a month’s subscription to PeakProsperity.com is only $30, you may want to give serious consideration to enrolling instead. It’s only $5 more, and gives you access to the webinar PLUS all of the premium analysis, webinars, reports, podcasts, alerts and events that PeakProsperity.com has to offer. That’s a pretty screaming value for an additional five bucks.
In this webinar, featured experts Grant Williams and Lance Roberts dove deep into the structural fragility of today’s financial markets and the many reasons why economic growth will remain constrained for years to come.
The excessive build-up of debt in the system — and the absolute dependence on its continued expansion to keep the economy from imploding — is, of course, seen as the prime risk to future growth.
As Lance demonstrates here with several of his excellent charts, so much leverage has been taken on that its servicing is increasingly stealing capital that would otherwise go to savings, consumption and productive investment. Going forward, the demands of the debt service will simply result in less and less capital available left over to grow the economy:
As financial assets are (supposed to be) valued on future growth prospects, lower forecasted growth demands lower valuations. Grant calculates that, should the US see another decade of 2% average annual GDP growth (and it has averaged less than that over the past decade), stock prices should be roughly half of what they are today to be considered fairly valued:
And Lance builds further on this, explaining how this moribund growth, coupled with America’s aging demographic trend, will simply savage the nation’s (already troublesomely underfunded) pension and entitlement systems:
But there are a number of other destabilizing risks to fear beyond our terminal debt addiction. One that Grant believes is not getting enough attention right now is the de-dollarization trend becoming notably apparent across a number of America’s strategic trading partners:
To watch the full 1.5 hours of this excellent webinar, purchase it by clicking on the blue button above.
by
Chris Martenson
Executive Summary
- Controlled markets can't be controlled forever
- Confidence is beginning to fail, even at the top
- The leading indicators to monitor closely
- The reason to get excited about gold & silver again
If you have not yet read Part 1: Who’s Going To Eat The Losses? available free to all readers, please click here to read it first.
As we recently covered in this week's special webinar, the geopolitical tensions across the world, alone, should have created some sort of ‘risk off’ response in the equity markets. With China, Russia and North Korea all increasingly at odds with the US for a wide variety of reasons, it’s very hard to make a case that Everything is Awesome!
Instead, it’s very easy to make the case that the world is on the brink of a period of destructive trade wars, if not actual 'hot' wars.
Again, that alone should be introducing some uncertainty, some ‘risk off’ behaviors by which we mean some sort of a selloff in equities. But that’s just not the case.
In fact, the current stock ramp-up is the second longest without even a 3% sell-off in all of US equity history.
It's my firm belief that these calm markets do not represent the collective wisdom of millions of independent traders and investors. They are instead the result of both direct and indirect support of said markets by monetary authorities and their proxies. That is, the central banks and the big banks they actually represent and look out for.
But this lack of volatility will have a very painful cost some day. No different than in a political crisis where an oppressed people finally rise up, the suppression of market volatility will spill over and…
How To Deal With Our Dangerous Markets And Failing Future
PREVIEW by Chris MartensonExecutive Summary
- Controlled markets can't be controlled forever
- Confidence is beginning to fail, even at the top
- The leading indicators to monitor closely
- The reason to get excited about gold & silver again
If you have not yet read Part 1: Who’s Going To Eat The Losses? available free to all readers, please click here to read it first.
As we recently covered in this week's special webinar, the geopolitical tensions across the world, alone, should have created some sort of ‘risk off’ response in the equity markets. With China, Russia and North Korea all increasingly at odds with the US for a wide variety of reasons, it’s very hard to make a case that Everything is Awesome!
Instead, it’s very easy to make the case that the world is on the brink of a period of destructive trade wars, if not actual 'hot' wars.
Again, that alone should be introducing some uncertainty, some ‘risk off’ behaviors by which we mean some sort of a selloff in equities. But that’s just not the case.
In fact, the current stock ramp-up is the second longest without even a 3% sell-off in all of US equity history.
It's my firm belief that these calm markets do not represent the collective wisdom of millions of independent traders and investors. They are instead the result of both direct and indirect support of said markets by monetary authorities and their proxies. That is, the central banks and the big banks they actually represent and look out for.
But this lack of volatility will have a very painful cost some day. No different than in a political crisis where an oppressed people finally rise up, the suppression of market volatility will spill over and…
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