It’s Bad – You Know It.

Look.  It’s bad. You know it.

Stop listening to the airheads on CNBC and NPR.

Either they don’t know what they’re talking about, or they do and they’re trying to stop everybody in the theater from running for the exit at the same time.

CONFIDENCE IS GONE

That’s all you need to know.

These markets are completely divorced from fundamentals.  They levitate on confidence – and cheap Fed money.

Once the confidence goes, Fed money isn’t enough. Ponzi schemes like this come down.

These are dead cat bounces.

If you doubt that then PLEASE go and watch this video on the Crash of 1929

Crashes don’t happen overnight, and there are plenty of false rallies along the way.

Get your money out of the casino while you can. Put some into physical gold and silver. At current prices, it’s hard to go wrong.

 

Are We All Mistuning Our Instruments, and Can We Blame the Nazis?

And now, this!
Continuing with the music theme from the last post, and drawing out the conspiracy theme that is gaining ground in thinking about banking brings us…

Are We All Mistuning Our Instruments, and Can We Blame the Nazis?

Musicians don’t agree on much, but they tend to concur that the note A in the middle of the treble staff should be tuned to 440 Hz. The International Standards Organization even issued guidelines to this effect back in the ’50s. But the conspiracy theorists will tell you that this pernicious tuning was promoted by the Nazis—Joseph Goebbels, chief propagandist for the Third Reich, imposed the 440 Hz tuning as part of a heinous plan to warp the consciousness of the masses.

Works synergistically with the fluoride in the water, the theory goes.
OK, I made that last part up.
 This is the sort of question that can only be settled empirically.
Head on over to this site and listen to the Nazi tuning and the older, gentler, calmer, greener, organic tuning and see which one you like better.

Depopulation – More Really Scary Post China Talk

I really don’t like the pompous tone of the duet of doomsters over at the Automatic Earth.

DPC Heart of Chinatown, San Francisco, after earthquake and fire 1906

I like their propounding of the peak oil myth even less and I wonder why they do this (they are smart enough to know better), but if you want to hear some scary stories about where we’re headed the Automatic Earth blog is the place to go.

David Stockman reposted their recent comments on the Chinese devaluation and the inevitable deflation that will follow.

Some of this stuff will really give you the willies:

China is the end of the line…

The yuan devaluation shatters that hope once and for all…

Central banks are not “beginning” to lose control, they lost control a long time ago…

Debt deleveraging leads to … debt deflation…. It will now accelerate to wash over our societies like a biblical plague.

Deflation will obliterate our economies as we know them. Imagine an economy for instance where next to no-one sells cars, or houses, or college educations, simply because next to no-one can afford any of it….

Where everything that today is bought on credit will no longer be bought, because the credit will be gone. Where homes are not worth more than the cardboard they’re made of, and still don’t sell…

Where ships won’t sail because letters of credit won’t be issued, where stores won’t open in the morning because they can’t afford their inventory even if it arrives in a nearby port…

If you’re feeling a little too perky and want to slow yourself down you should head over to the Automatic Earth and read some more.

They head up most of their entries with mostly depressing photographs from the early part of the 20th century – many of them depression era shots – like the one that illustrates this post.

This isn’t really a world you can prepare for.

Now you know why all the rich guys are headed for New Zealand.

THE BIG FINANCIAL BANG JUST WENT OFF

It happened.

The BIG FINANCIAL BANG just went off.

The original Big Bang started the universe.

This Big Bang ends the financial and economic part of it.

China started devaluing their currency this week.

Bubba don’t claim to be no genius, but he does have him a degree in economics.

That makes him just smart enough to be able to figure out which of these guys yammerin about the economy knows what he’s talking about.

Andy Hoffman has been getting it right for a long time and he called this devaluation months ago.

How smart does that make him?

Consider this from John Rubino, another guy who is not too shabby an analyst himself:

China’s surprise currency devaluation has sent the global markets into a tailspin, but rather than spiking on the sudden drop in a major trading partner currency, the US dollar is plunging against the euro and most other currencies. Why? Because a global currency crisis is just about the last situation in which the world’s major central bank would be expected to tighten.

Suddenly, traders are concluding that maybe rates won’t rise after all.

It wasn’t a surprise to Hoffman.

He said devaluation was imminent the weekend before it happened.

The end game is here in the currency wars and it’s all downhill fast from here.

There’s nobody who explains this better than Hoffman.

For more of his analysis listen to this;

Andrew Hoffman – China Big Bang Bust

We don’t really know what happens next because we don’t know how the government will react as this plays out over time.  But we do know that things start changing significantly soon.

And in the end, we’re all likely a lot poorer.

Livin’ Large Long as They Charge

You keep hearing about this great economic recovery. Well hell yeah.

Long as people can keep running up debt with plastic everything is great

There’s your big recovery right there.

Look how spectacular things are going in my state, Florida.

Now you know how they be buying the bling and flashing the cash in South Florida.

This is the final effort in the debt-fueled “recovery” of the US economy. Companies have gorged on debt. The federal government has piled on the most debt at the fastest rate ever. State and local governments, despite any balanced budget requirements, and even public pension funds have loaded up on debt. And consumers have been binging on debt to buy cars and get an education and buy homes at a feverish pace. Outstanding auto loans now amount to over $1 trillion. Payments are routinely extended over 72 months. Loan-to-value ratios have jumped. And automakers have become outright ecstatic.

What had been missing? Consumers charging up their credit cards. Now finally, the US economy has jumped over that hurdle too. Equifax explained in its eloquent manner, “These trends suggest that American consumers are getting on with their lives.”

The lives as debt slaves. Because they can’t maintain their standards of living with their stagnating household incomes. This too was part of the movie we’ve seen before.

 

The labor force participation rate is at an all time low – so the unemployment numbers are really meaningless.  Debt is approaching highs again.

The global economy is imploding.  There’s over a quadrillion in derivatives out there ready to ignite the minute interest rates budge, or some other credit event like a sovereign default occurs.

But it’s all good.

What’d you say? Greece? Puerto Rico?

Who cares? Let the good times roll.