Home
Economy
Economy
by
Chris Martenson
There’s a new Martenson Report ready for enrolled members.
Link to: Inflation vs. Deflation – What Comes Next?
Here’s a snippet:
One of the key questions of our day, especially for those who have wealth to protect, is, “What’s going to happen to the dollar?” More specifically, do we foresee an increase in the value of money going forward (deflation), or a decrease in the value of money (inflation)? Should we reserve a small amount of concern for the possibility of hyperinflation, which means the rapid and often total destruction of a currency?
There happens to be a lot of discussion around this topic these days. Unfortunately, much of it is confusing and contradictory, because far too much misinformation is included in the mix. So let’s begin by getting ourselves on firm footing before we look at the data.
(…)
Inflation correlates poorly with growth in the monetary base, making that statistic relatively useless as a predictor of inflation. However, inflation correlates extremely well with growth in government spending, meaning that we’d do well to track that statistic closely.
The current economic crisis is being fought tooth and nail by a determined Federal Reserve (in the role of the "enabler") and an equally-determined US government (in the role of the heavy-lifter, assuming all the lion’s share of the long-term debt and risk). Together, these institutions have virtually consigned future generations to the enormous challenge of wrestling with bloated budgets in desperate need of trimming, further compounded by coinciding with periods of high inflation.
Martenson Report – Inflation vs. Deflation – What Comes Next?
by Chris MartensonThere’s a new Martenson Report ready for enrolled members.
Link to: Inflation vs. Deflation – What Comes Next?
Here’s a snippet:
One of the key questions of our day, especially for those who have wealth to protect, is, “What’s going to happen to the dollar?” More specifically, do we foresee an increase in the value of money going forward (deflation), or a decrease in the value of money (inflation)? Should we reserve a small amount of concern for the possibility of hyperinflation, which means the rapid and often total destruction of a currency?
There happens to be a lot of discussion around this topic these days. Unfortunately, much of it is confusing and contradictory, because far too much misinformation is included in the mix. So let’s begin by getting ourselves on firm footing before we look at the data.
(…)
Inflation correlates poorly with growth in the monetary base, making that statistic relatively useless as a predictor of inflation. However, inflation correlates extremely well with growth in government spending, meaning that we’d do well to track that statistic closely.
The current economic crisis is being fought tooth and nail by a determined Federal Reserve (in the role of the "enabler") and an equally-determined US government (in the role of the heavy-lifter, assuming all the lion’s share of the long-term debt and risk). Together, these institutions have virtually consigned future generations to the enormous challenge of wrestling with bloated budgets in desperate need of trimming, further compounded by coinciding with periods of high inflation.
by
Chris Martenson
There’s a new Martenson Report ready for enrolled members. This week I spell out the five high level elements that I regularly track to guide my understanding of where we are and where we are headed.
A snippet:
Executive Summary:
- What can we expect next, and how will we recognize it?
- A series of sharp, interrupted shocks is more likely than a major sudden collapse.
- Five game-changing events, what I call The Five Horsemen, will indicate that the rules have changed and a new reality is about to take over:
- The First Horseman: New credit growth falls below interest payments
- The Second Horseman: The Fed monetizes debt
- The Third Horseman: Government spending exceeds 10% of GDP
- The Fourth Horseman: The dollar goes down, while interest rates go up
- The Fifth (and final) Horseman: US debt becomes denominated in foreign currencies
Severe structural damage has already been inflicted on our economy. As I wrote two weeks ago in It Has Hit the Fan:
If you have been waiting for further confirmation about the direction of the economy, or waiting for a sign that it’s now time to get serious about preparing for a future filled with less, this report is written for you.
You are living in the midst of the collapse of western economies, which are moving from a more complicated state to a less complicated one. This is it. Keep a journal, because it’s happening right now.
After the Great Depression, many people remarked that it was only obvious in retrospect. While it was unfolding, things steadily eroded. But 75% of the workforce remained employed, while hopeful signs of progress were constantly trotted out by various politicians, private economists, and official-sounding government agencies. It is often quite difficult to appreciate the true magnitude of sweeping change while it is occurring.
The most pressing question now is this: What can we expect next, and when?
In this report, I will give you the precise combination of macro-events that will cause me to issue an alert and kick my thinking and actions into new orbits.
Best,
Chris Martenson
The Five Horsemen – Martenson Report Ready
by Chris MartensonThere’s a new Martenson Report ready for enrolled members. This week I spell out the five high level elements that I regularly track to guide my understanding of where we are and where we are headed.
A snippet:
Executive Summary:
- What can we expect next, and how will we recognize it?
- A series of sharp, interrupted shocks is more likely than a major sudden collapse.
- Five game-changing events, what I call The Five Horsemen, will indicate that the rules have changed and a new reality is about to take over:
- The First Horseman: New credit growth falls below interest payments
- The Second Horseman: The Fed monetizes debt
- The Third Horseman: Government spending exceeds 10% of GDP
- The Fourth Horseman: The dollar goes down, while interest rates go up
- The Fifth (and final) Horseman: US debt becomes denominated in foreign currencies
Severe structural damage has already been inflicted on our economy. As I wrote two weeks ago in It Has Hit the Fan:
If you have been waiting for further confirmation about the direction of the economy, or waiting for a sign that it’s now time to get serious about preparing for a future filled with less, this report is written for you.
You are living in the midst of the collapse of western economies, which are moving from a more complicated state to a less complicated one. This is it. Keep a journal, because it’s happening right now.
After the Great Depression, many people remarked that it was only obvious in retrospect. While it was unfolding, things steadily eroded. But 75% of the workforce remained employed, while hopeful signs of progress were constantly trotted out by various politicians, private economists, and official-sounding government agencies. It is often quite difficult to appreciate the true magnitude of sweeping change while it is occurring.
The most pressing question now is this: What can we expect next, and when?
In this report, I will give you the precise combination of macro-events that will cause me to issue an alert and kick my thinking and actions into new orbits.
Best,
Chris Martenson
by
Chris Martenson
On April 1st, in the context of writing about a newly appreciated shortfall in Social Security funding by the CBO, I wrote this (with the part I wish to discuss in bold):
Here’s a prediction – [the sharply reduced Social Security surplus] will be revised to the worse in about 6 months. I base this prediction on my belief that more people will opt for retirement than are currently projected and that entitlement program tax receipts will be below current projections. Also, nearly every prediction by the CBO has been revised to the worse over the past year, so I am “riding the trend” with this prediction.
At the time, several people commented that they thought this prediction faulty and saw the possibility of the exact opposite as being more likely.
I based my prediction on two concepts:
- With jobs hard to find and credit tightening, many folks would simply opt for early retirement as a means of securing any sort of cash flow at all.
- Many folks would (rightly) conclude that sooner or later the government would change the rules – perhaps moving the retirement date out a few years or reducing benefits or both – and opt to retire early as a means of grandfathering in their own position.
I can’t say for sure which of these reasons is most responsible here, but it looks like #1 is the winner for now:
Confirmed – Social Security Deluged with Early Retirement Requests
by Chris MartensonOn April 1st, in the context of writing about a newly appreciated shortfall in Social Security funding by the CBO, I wrote this (with the part I wish to discuss in bold):
Here’s a prediction – [the sharply reduced Social Security surplus] will be revised to the worse in about 6 months. I base this prediction on my belief that more people will opt for retirement than are currently projected and that entitlement program tax receipts will be below current projections. Also, nearly every prediction by the CBO has been revised to the worse over the past year, so I am “riding the trend” with this prediction.
At the time, several people commented that they thought this prediction faulty and saw the possibility of the exact opposite as being more likely.
I based my prediction on two concepts:
- With jobs hard to find and credit tightening, many folks would simply opt for early retirement as a means of securing any sort of cash flow at all.
- Many folks would (rightly) conclude that sooner or later the government would change the rules – perhaps moving the retirement date out a few years or reducing benefits or both – and opt to retire early as a means of grandfathering in their own position.
I can’t say for sure which of these reasons is most responsible here, but it looks like #1 is the winner for now:
by
Chris Martenson
Hello and Happy Memorial Day!
There’s a new Martenson Report ready for enrolled members. It can be accessed by clicking the title below, or going to the Martenson Report page. As always, it has already been sent as a newsletter so you should also find it in your inbox.
Here’s a snippet:
Food Outlook 2009 – Understanding the Risks
Executive Summary
- Global grain stocks at lowest levels in over four decades
- Shockingly low fertilizer sales suggest possibility of a disappointing yield
- Food supply and demand are tightly balanced
- Food distribution networks are cost-efficient but not terribly robust
- Ways you can increase your food security
Introduction
Food is something that many of us take for granted, but it is important to recognize that this luxury is a recent development in human history. It is time to give more thought to this critical staple in our lives.
In March of 2008, food commodity prices hit an all-time high. This coincided with a world-wide food crisis, food riots, and even a few instances of national rice hoarding. Many believe that this was triggered by economic conditions (e.g. a flood of cheap money), not a fundamental or structural shortfall in food production. But I hold the view that both were at fault.
Food demand has grown steadily over the years, as has food supply. However, in recent years the excess margin of supply over demand has tightened and even gone negative several times. Reserve stocks are incredibly tight, resting at levels not seen since the early 1970’s.
It is easily conceivable that food deliveries could be disrupted within any country, leading to rapid onset of local food shortages. This report will apprise you of several of the challenges that currently exist regarding world food supplies and the possibility that these challenges could lead to a structural shortfall in global food supplies in 2009 or 2010. It also contains specific actions that could greatly enhance your own food security.
Martenson Report Ready – Food Outlook 2009
by Chris MartensonHello and Happy Memorial Day!
There’s a new Martenson Report ready for enrolled members. It can be accessed by clicking the title below, or going to the Martenson Report page. As always, it has already been sent as a newsletter so you should also find it in your inbox.
Here’s a snippet:
Food Outlook 2009 – Understanding the Risks
Executive Summary
- Global grain stocks at lowest levels in over four decades
- Shockingly low fertilizer sales suggest possibility of a disappointing yield
- Food supply and demand are tightly balanced
- Food distribution networks are cost-efficient but not terribly robust
- Ways you can increase your food security
Introduction
Food is something that many of us take for granted, but it is important to recognize that this luxury is a recent development in human history. It is time to give more thought to this critical staple in our lives.
In March of 2008, food commodity prices hit an all-time high. This coincided with a world-wide food crisis, food riots, and even a few instances of national rice hoarding. Many believe that this was triggered by economic conditions (e.g. a flood of cheap money), not a fundamental or structural shortfall in food production. But I hold the view that both were at fault.
Food demand has grown steadily over the years, as has food supply. However, in recent years the excess margin of supply over demand has tightened and even gone negative several times. Reserve stocks are incredibly tight, resting at levels not seen since the early 1970’s.
It is easily conceivable that food deliveries could be disrupted within any country, leading to rapid onset of local food shortages. This report will apprise you of several of the challenges that currently exist regarding world food supplies and the possibility that these challenges could lead to a structural shortfall in global food supplies in 2009 or 2010. It also contains specific actions that could greatly enhance your own food security.
by
JW
by
Chris Martenson
A new Martenson Report is ready for enrolled members. In this report, we stroll through the recent data and I make the case that there’s no need to wait for any clearer signs that “things have changed” than the ones we already have. If you are waiting for TSHTF (explained in the article) then you can stop waiting.
Link to It Has Hit The Fan
A snippet:
In times like these, I take a few steps back and try to look at the whole picture. The details are numerous; they are often contradictory and confusing. For clarity’s sake, it can be helpful to keep the macro view in focus, instead of the details. Here are the big-picture items that I keep firmly in mind each day:
- This is a crisis of too much debt, not too little spending.
- This is a global crisis. Clues for directionality are best found by viewing the entire world situation. That data still points downwards.
- The energy situation is getting worse, not better, due to a lack of critical and focused investment and the passage of wasted time.
- It’s not possible for an insolvent nation to borrow money from an insolvent financial system to bail out insolvent financial, real estate, and insurance companies.
New Martenson Report Ready – It’s Hit the Fan
by Chris MartensonA new Martenson Report is ready for enrolled members. In this report, we stroll through the recent data and I make the case that there’s no need to wait for any clearer signs that “things have changed” than the ones we already have. If you are waiting for TSHTF (explained in the article) then you can stop waiting.
Link to It Has Hit The Fan
A snippet:
In times like these, I take a few steps back and try to look at the whole picture. The details are numerous; they are often contradictory and confusing. For clarity’s sake, it can be helpful to keep the macro view in focus, instead of the details. Here are the big-picture items that I keep firmly in mind each day:
- This is a crisis of too much debt, not too little spending.
- This is a global crisis. Clues for directionality are best found by viewing the entire world situation. That data still points downwards.
- The energy situation is getting worse, not better, due to a lack of critical and focused investment and the passage of wasted time.
- It’s not possible for an insolvent nation to borrow money from an insolvent financial system to bail out insolvent financial, real estate, and insurance companies.
by
Chris Martenson
One of my favorite internet articles of all time, entitled "Pompous Prognosticators," placed quotes of various politicians and other authority figures across a chart of the Dow Jones, spanning the years 1925 to 1933. A portion of that article is located here.
Here’s an image from the original article to jog your memory, in case you can’t recall which article I am referring to:
I loved that article when it came out, and still love it today, because it reveals that nothing has changed through the decades and that believing the self-interested pronouncements of "green shoots" can be hazardous to your wealth.
So I decided to recreate that effort but update it for our modern times. Let’s continue to update this chart over time and see where it goes. The people at Lowesville will recognize the work below, because I presented it there, along with a lot of other new information, inlcuding the Crash Course Toolbox, which is a main feature of my in-person seminars.
In Their Own Words – Economic Quotes
by Chris MartensonOne of my favorite internet articles of all time, entitled "Pompous Prognosticators," placed quotes of various politicians and other authority figures across a chart of the Dow Jones, spanning the years 1925 to 1933. A portion of that article is located here.
Here’s an image from the original article to jog your memory, in case you can’t recall which article I am referring to:
I loved that article when it came out, and still love it today, because it reveals that nothing has changed through the decades and that believing the self-interested pronouncements of "green shoots" can be hazardous to your wealth.
So I decided to recreate that effort but update it for our modern times. Let’s continue to update this chart over time and see where it goes. The people at Lowesville will recognize the work below, because I presented it there, along with a lot of other new information, inlcuding the Crash Course Toolbox, which is a main feature of my in-person seminars.
Total 3568 items
by sand_puppy 
