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by Chris Martenson

Executive Summary

  • The inequality of the current system is becoming more and more visible, despite efforts to conceal it
  • History shows that control will break as those running the system are forced to compete more directly for a shrinking pie
  • The 3 essential indicators of instability to watch
  • The high price of a collapse of the status quo (and why developing resilience now is your best investment)

If you have not yet read Part I: Bankers Own the World, available free to all readers, please click here to read it first.

More Equal than Others

Like the pigs in Orwell's Animal Farm, those running the current system are quick to convince us they are doing it out of service, not self-interest (many remember the testimony of Goldman Sachs head Lloyd Blankfein that he sees the bank's efforts as "doing God's work"). The media (most of which is owned by the top 147 companies discussed in Part I) reinforces the perception that the status quo is all that stands between us and economic ruin. 

Of course, there's a much darker side to the story. It requires some digging by the curious mind, but the data is there to be found. As previous mentioned, such a parasitical system inevitably concentrates wealth over time into the hands of fewer and fewer of the most privileged and most powerful. Here's an excellent visualization of how that has already happened in the U.S.:

Note that the actual degree of wealth inequality is much worse than Americans perceive it to be. That's not surprising given the absence of light shined on this in the mass media…

The Indicators of Instability to Watch For
PREVIEW by Chris Martenson

Executive Summary

  • The inequality of the current system is becoming more and more visible, despite efforts to conceal it
  • History shows that control will break as those running the system are forced to compete more directly for a shrinking pie
  • The 3 essential indicators of instability to watch
  • The high price of a collapse of the status quo (and why developing resilience now is your best investment)

If you have not yet read Part I: Bankers Own the World, available free to all readers, please click here to read it first.

More Equal than Others

Like the pigs in Orwell's Animal Farm, those running the current system are quick to convince us they are doing it out of service, not self-interest (many remember the testimony of Goldman Sachs head Lloyd Blankfein that he sees the bank's efforts as "doing God's work"). The media (most of which is owned by the top 147 companies discussed in Part I) reinforces the perception that the status quo is all that stands between us and economic ruin. 

Of course, there's a much darker side to the story. It requires some digging by the curious mind, but the data is there to be found. As previous mentioned, such a parasitical system inevitably concentrates wealth over time into the hands of fewer and fewer of the most privileged and most powerful. Here's an excellent visualization of how that has already happened in the U.S.:

Note that the actual degree of wealth inequality is much worse than Americans perceive it to be. That's not surprising given the absence of light shined on this in the mass media…

by Chris Martenson

In the classic fantasy rom-com The Princess Bride, the beautiful maid Buttercup orders the farm boy Westley to perform numerous tasks to test his servitude. No matter the magnitude of the request, Westley simply answers "As you wish" and makes it so. Buttercup eventually comes to view Wesley with similar devotion, and true love is born.

Similarly, investors have fallen back in love with the capital markets, whose continual response their increasingly irrational hopes has been "As you wish."

Our “As You Wish” Markets Have Reached the Cliffs of Insanity
by Chris Martenson

In the classic fantasy rom-com The Princess Bride, the beautiful maid Buttercup orders the farm boy Westley to perform numerous tasks to test his servitude. No matter the magnitude of the request, Westley simply answers "As you wish" and makes it so. Buttercup eventually comes to view Wesley with similar devotion, and true love is born.

Similarly, investors have fallen back in love with the capital markets, whose continual response their increasingly irrational hopes has been "As you wish."

by charleshughsmith

Executive Summary

  • The commodity complex is already beginning to rise following oil's upside breakout
  • Natural gas is trending higher
  • Copper appears to have bottomed
  • Wheat and coffee's downtrends are ending
  • A secular rise in commodities can happen even in the face of slower economic growth and lower demand

If you have not yet read Part I: Get Ready for Rising Commodity Prices available free to all readers, please click here to read it first.

In Part I, we examined the conventional narratives used to explain the price of oil and found that they no longer account for oil’s breakout to a new uptrend.  I suggested that financialization and speculation could power oil much higher, despite sagging global demand for physical oil and a potentially deflationary global recession.

This thesis has been met with widespread skepticism when I’ve aired it privately, and I think this skepticism arises from the newness of this narrative. In the past, oil has responded to supply-demand and inflation/deflation. The notion that oil could rise in a finance-induced “scarcity amidst plenty” is neither simple nor intuitive.

If oil tracks higher, we can anticipate that the primary commodities (energy, agricultural, and construction) may well rise, even as end-user demand weakens, as oil underpins all production and transport. The 2.5% rise in producer prices over the past year suggests this is already occurring.

The secondary reason is that lower prices eventually push marginal producers out of business, tightening supply and giving the remaining producers pricing power.

As noted in Part I, regardless of what we see as key drivers or what we think oil “should do,” oil has broken out technically.

Is there any evidence to support the idea that the uptrend in oil will trigger higher prices in other commodities? Let’s start with the CRB (Commodity Research Bureau) index that reflects a basket of commodities…

Understanding the Secular Shift of Capital into Commodities
PREVIEW by charleshughsmith

Executive Summary

  • The commodity complex is already beginning to rise following oil's upside breakout
  • Natural gas is trending higher
  • Copper appears to have bottomed
  • Wheat and coffee's downtrends are ending
  • A secular rise in commodities can happen even in the face of slower economic growth and lower demand

If you have not yet read Part I: Get Ready for Rising Commodity Prices available free to all readers, please click here to read it first.

In Part I, we examined the conventional narratives used to explain the price of oil and found that they no longer account for oil’s breakout to a new uptrend.  I suggested that financialization and speculation could power oil much higher, despite sagging global demand for physical oil and a potentially deflationary global recession.

This thesis has been met with widespread skepticism when I’ve aired it privately, and I think this skepticism arises from the newness of this narrative. In the past, oil has responded to supply-demand and inflation/deflation. The notion that oil could rise in a finance-induced “scarcity amidst plenty” is neither simple nor intuitive.

If oil tracks higher, we can anticipate that the primary commodities (energy, agricultural, and construction) may well rise, even as end-user demand weakens, as oil underpins all production and transport. The 2.5% rise in producer prices over the past year suggests this is already occurring.

The secondary reason is that lower prices eventually push marginal producers out of business, tightening supply and giving the remaining producers pricing power.

As noted in Part I, regardless of what we see as key drivers or what we think oil “should do,” oil has broken out technically.

Is there any evidence to support the idea that the uptrend in oil will trigger higher prices in other commodities? Let’s start with the CRB (Commodity Research Bureau) index that reflects a basket of commodities…

by Chris Martenson

We invited Bill Black to return to explain whether the level of systemic risk due to fraud in our financial markets has improved or worsened since the dire situation he painted for us in early 2012. Sadly, it looks like abuse by the big players has only flourished since then.

In the U.S., our regulators have publicly embraced a "too big to prosecute" doctrine. We are restraining, underfunding, and dismantling regulatory oversight in the interest of short-term stability for the status quo. Which, as a criminologist, Black knows with certainty creates an environment where bad actors will act in their self-interest with assumed (and likely real, at this point) impunity.

Bill Black: The Banks Have Blood on Their Hands
by Chris Martenson

We invited Bill Black to return to explain whether the level of systemic risk due to fraud in our financial markets has improved or worsened since the dire situation he painted for us in early 2012. Sadly, it looks like abuse by the big players has only flourished since then.

In the U.S., our regulators have publicly embraced a "too big to prosecute" doctrine. We are restraining, underfunding, and dismantling regulatory oversight in the interest of short-term stability for the status quo. Which, as a criminologist, Black knows with certainty creates an environment where bad actors will act in their self-interest with assumed (and likely real, at this point) impunity.

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