2013 - The Permanent Financial Crisis
Stock-Markets / Credit Crisis 2013 Jan 22, 2013 - 07:11 PM GMTBy: Ty_Andros
As the Global financial crisis rises to intense levels MAIN STREAM investors and the public at large sit on the buffet table for the predator classes known as Bankers, Crony Capitalists, special interest elites and leviathan government. The depression continues to unfold in REAL terms; nominally it APPEARS we are recovering. If you DISCOUNT OFFICIAL government ministry of truth statistical lies and Keynesian illusions created by unsound money. Developed world economies and living standards WILL continue to TUMBLE into the abyss. There is no avoiding this OUTCOME.
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." - Ludwig Von Mises
The POWERS THAT BE HAVE CHOSEN THE LATTER ROUTE as they have throughout history. As my regular readers know the developed world is in an unfolding currency and financial system EXTINCTION event. Nothing has changed in 2012 as we are just FARTHER down the road to that OUTCOME. The insolvencies are DEEPER in all respects.
Unsound money also known as FIAT currency and credit systems set the developed world on this destination on August 15, 1971 when Richard Nixon closed the gold window of gold convertibility for the US dollar. Today's mayhem was sealed on that date. It is only set to EXPAND in 2013 until the ultimate denouement.
This unsound money has funded the buildup of Progressive socialism (welfare states), centrally planned economies, unlimited leviathan government, publicly controlled schools (creating dumbed down useful idiots) and Something for nothing societies (impoverished by unsound money as it substitutes for real wealth creation).
Unsound money has created the ALL the INGREDIENTS which have collapsed every empire in history and this time is no different. The world is sitting on a keg of dynamite just waiting for someone to LIGHT a MATCH. The question is not IF but WHEN this will happen and the global conflagration IGNITES and many are immolated in the FLAMES.
That is what I call the WITCHES BREW. It is the recipe for a societal and economic collapse which will DWARF any seen in the past and will be studied for centuries into the future. I will be covering those INGREDIENTS in the 2013 Outlook. This will be GLOBAL MACRO AUSTRIAN economic analysis at its FINEST. I will be doing this as a series over approximately the next 6 to 8 weeks so don't miss an issue (subscriptions are free at www.Traderview.com or www.tedbits.com). When the 2013 Outlook series is completed I will do a special edition on APPLIED Austrian investing for SUBSCRIBERS only.
This is not DOOM and GLOOM. It is the reality facing the world today. It is history repeating on an inconceivable scale due to globalization in all its forms: Trade, communications, logistics, financial systems, central banking, etc. It is MOTHER NATURE and Charles Darwin versus the POWERS that be (banksters, crony capitalists, special interest elites and leviathan government). Hint: in all of history the powers that be have NEVER prevailed over Mother Nature over the intermediate term.
IT IS ALSO in my opinion the GREATEST OPORTUNITY in history if you invest correctly using APPLIED Austrian economics and most likely your demise if you look to the past and continue to FALL for the Keynesian ILLUSIONS and Ponzi economies which are failing and will not be revived this time around.
(Author's note: In my opinion, this is NOT Doom and GLOOM, it is one of the greatest opportunities in HISTORY. Invest properly for this outcome and Prosper, invest looking in the REARVIEW mirror and your wealth will be irreparably DAMAGED. Volatility is opportunity for the prepared investor. As it is priced in and markets ZOOM higher or LOWER to price in collapsing economies and money printing huge opportunities are created. Is your portfolio structured to thrive? The greatest transfer of wealth from those that hold it in paper and financial assets to those that don't is UNDERWAY. Restoring fiat currencies to sound money and absolute return alternative investments with the potential to thrive in all market (up, down and sideways) conditions is what I do. If you have an interest in learning more and working with Ty: CLICK HERE
Most of the BABY BOOMERS WILL NOT escape with the wealth they have accumulated over their lifetimes.
The greatest transfer of wealth from those that hold it in paper to those that don't is underway. Fiat currency and credit systems die in waves of insolvency and this episode has been and will be no different.
A number of quotes from the past tell the story the first and foremost is from Mayer Amshel Rothschild:
"Let me issue and control a nation's money and I care not who writes the laws"
The banks and those who control them COMPLETELY control the developed world. It is they who pull the strings in ALL of the world's most powerful capitals. They have monopolies on the currency's which you use and store your wealth in. Governments long ago succumbed to the siren song of WEALTH printed out of thin air. Creating currency monopolies in exchange for unlimited funding of government and running the economies for the benefits of the banks, selling the futures of the people they claim to serve. NOW the developed world's citizens are DEBT and tax slaves yoked to pay tomorrows income for what their governments have consumed today.
Read this article titled the Quiet Coup from Simon Johnson, former Chief Economist of the IMF, for a full explanation!
"Extremely powerful institutions, both financially and politically, undermine the long-term strength of our system and make us look like a financial oligarchy," - Former Federal Reserve regional president Thomas Hoenig
The banks and sovereign governments are terminally INSOLVENT and the unpayable and inextinguishable debt and FUTURE OBLIGATIONS begins at the heart of the Global monetary and financial systems, aka the reserve currency of the world and its government, (courtesy of www.zerohedge.com) behold the Jaws of death...er...debt:
The developed world's economies are in death...er...debt spirals from which there is NO ESCAPE. Trillion of dollars' worth of deficits with no plans to end them.
In fact they are planning on EXPANDING them. The only thing these predators are planning to cut is the private sector at the point of a GOVERNMENT gun to fund their EXPANSION.
We have entered the age of PERMANENT fiscal crisis.
EVERY developed world GOVERNMENT is in this position to one degree or another. To fund this deficit and that of other MAJOR economies we have most of the central banks in QE to infinity operations. There is NO WAY to EXIT once this has begun. The CENTRAL banks know this but in their minds it is PREFERABLE to systemic sovereign bond market and financial system FAILURE.
As Gresham's law (bad currency's push out good currencies) unfolds those Central banks that don't print money soon will or be destroyed as their economies and currency's ascend to the heavens as investors seek REFUGE from the printing press. Just as the Swiss national bank about this? Take a look at GRESHAM's law in ACTION:
Up 400% in 3 short years (see Chinese, UK and Japanese's central banks for similar balance sheet FINANCING of developed world BUDGET deficits). THAT is unsterilized money printing; the Swiss franc is NO LONGER the safe haven it once was except in the minds of idiots. They are using this money to BUY debt issuance of countries like Germany and Australia and calling them assets. It is check kiting pure and simple. On top of this the Swiss banking system is at least 600 to 700% the size of the Swiss economy and at least 10% of the assets are nearly worthless so the money printing has barely begun.
Currency WARS are in FULL BLOOM! And they serve two purposes: it devalues their currencies in relation to other countries and it FUNDS DEFICITS (worldwide) with MONEY printed out of thin air since real economic growth CANNOT DO SO!
The Federal Reserve's BASELINE monetization consists of three components: $45 Billion in treasury's a month, $40 Billion dollars' worth of mortgage backed securities and reinvestment of the toxic securities (they pretend to be paid) on its portfolio from the 2008-9 financial crisis equaling almost $90 to 100 billion per month (to put it in perspective it is 90,000 to 100,000 million per month which is an ABSURD NUMBER) or $1 trillion plus per year. THIS IS NOT MONEY THEY ARE CREATING, IT IS DEBT AND IOU'S MASQUERADING AS SOVERIEGN CURRENCIES. It can never be withdrawn without crashing the bond and stock markets and every financial institution in the nation. Why the crash you ask? BECAUSE EVERY FINANCIAL ASSET and many tangible ones are MISPRICED MALINVESTMENTS.
"All of us learn by doing. To learn how to ride a bicycle, we pedal. But money has been circulating for millennia, and there is a voluminous monetary record. It is there to be read. Did the chairman or his staff consult the wisdom of the ages before deciding to muscle around the yield curve, manipulate asset values, materialize dollars by the hundreds of billions and, in general, to short-circuit the price mechanism?" - Jim Grant
History is QUITE CLEAR how this ends (societal and financial collapse) and the POWERS THAT BE are IGNORING it. EVERYTHING everywhere is mispriced due to RUNAWAY destruction of the currencies they are denominated in and UNLIMITED CREDIT EXPANSION. When these ASSET markets WAKE UP and PRICE themselves accordingly (MARKETS CLEAR THE DISTORTIONS in asset prices) it will be quite an opportunity or a disaster depending on which side of the trade you are on.
The Bank of Japan with debt to GDP ratio of more than 200% and counting. Prime Minister Shinto Abe was just elected on the platform of unlimited MONEY printing to spur growth and INFLATION.
Just think what Japanese, U.S., UK and European GDP's would look like if they did not call growth of DEBT as GDP! Printing to prosperity is now a GLOBAL phenomenon and a RUNAWAY FREIGHT TRAIN: UNSTOPPABLE until the TRAINWRECK.
The Bank of England's latest chief Mark Carney suggesting he will print till he grows GDP, you can count on it happening (it was why he was hired as well as his connections to Goldman Sachs and the BIS). Leaving only Mario "Outright monetary transaction" Draghli to KEEP HIS PROMISE" to save the Euro. Draghli is playing coy with the printing press as he has not gathered enough power from the respective miscreant countries in exchange for the money printed out of thin air.
Thus FIREHOSES OF NEW MONEY for as far as the eye can see is spraying into the global economies in GARGANTUAN sums. This money is NOT to stimulate their economies as they say, it is to fund the insolvencies of sovereigns and financial systems. The printing presses are rolling and firing on all cylinders to rescue the moral and fiscal insolvency of the fascist welfare states of the developed world!
When you look at these debts and deficits you must COUNT IT TWICE as it is debt that the private sector must pay off in future earnings, TAXES or debasement of that which they hold in the bank AND STORE THEIR WEALTH IN. And a second time because US dollars (Pounds, Euros, and all currency's fall into the category of IOU's) are IOU's backed by the private property of the respective countries citizens (US DOLLARS are REDEEMABLE in PRIVATE property). Sovereign bonds are IOU's denominated in IOU's throughout the WORLD. If one creditor doesn't get you the other one will!!! The question now becomes when will these worldwide dupes/victims of the Developed world central banks and sovereigns WAKE UP and demand payment in REAL terms?
The solutions to escape this outcome are absent. They are the policies of growth (producing more than you consume in REAL terms), capitalism and free markets (more of everything for less money from REAL competition) and private property rights are now dead as the proverbial DODO bird. The powers that be would be destroyed if this were allowed to unfold. In their place CENTRALLY Planned economies have been substituted with corruption as the central outgrowth as wealth creation fails and the money printed out of thin air was substituted.
"The best way to destroy the capitalist system is to debauch the currency. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." - John Maynard Keynes
We have entered an age of unlimited GOVERNMENT throughout the developed world as poorly disguised fascist welfare states have eradicated the free market economies that created the wealth in the first place and what they once were. This collapse is not a failure of capitalism, we don't have capitalism. This is a collapse of centrally planned socialism from the capitals of the developed world. The English language has become corrupted as George Orwell predicted, socialism is called capitalism, prudence and virtue is bad, irresponsibility is now virtuous, etc.
When half of the people get the idea that they do not have to work, because the other half is going to take care of them, and when the other half gets the idea that it does no good to work, because somebody else is going to get what they work for, that is the beginning of the end of any nation!
To understand the destination that is set in stone look no further than this 20 minute presentation by Thorsten Polleit (It is a must see video explaining the something for nothing societies the developed world has become, how they evolved and the ultimate destination:
Something for nothing societies and their Governments unrestrained by budget constraints because of BASELINE money creation, growing ferociously by the year with basically unlimited funds for government expansion and centrally controlled economies. The BASELINE money printing means there will be NO REFORM of poor ECONOMIC policies, regulations and oppressive taxation by public servants so the economic collapses will continue and accelerate.
"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt." - John Adams
"None are more hopelessly enslaved than those who falsely believe they are free." - Johann Wolfgang von Goethe
A Unholy Alliance has emerged: Banksters, Big Business, Trade Unionism, Main stream media and Government = Rampant entrenched FASCISM!
- Fiscal cliff bill nothing but a payoff of the groups above ($1 billion in campaign funding = $10's of billions in payoffs)
- Small and medium sized businesses taxed (the real private sector) and regulated OUT of BUSINESS and looted by central government.
- The spoils redistributed to crony capitalists and special interest supporters.
- Taxes and regulations rise for all but the above and the public at large (this is no victory for the middle class)
- Main stream media manipulates Useful idiots and the public at large
- 41 dollars of NEW revenues for every 1 dollar of spending cuts (progressive governments definition of balanced)
- We have entered the age of UNLIMITED GOVERNMENT!
- Centrally controlled economies and the unlimited corruption that goes with it...
"You never want to let a serious crisis go to waste." - Rahm Emanuel, February 9, 2009
These groups gather power by a constant creation of Crisis after crisis in which they put political solutions in place (which benefit themselves) rather than practical solutions (which benefit their constituents). They prey upon your FEAR to take your freedom and install themselves as masters to SAVE you. Fleecing the public which are little more than USEFUL IDIOTS as outlined by Vladimir Lenin. Useful idiots are created by publicly controlled schools which teach that you can rely on government to meet your needs and manage the economy. Rather than self-reliance which create free society's.
"When you see that in order to produce, you need to obtain permission from men who produce nothing; when you see that money is flowing to those who deal not in goods, but in favors; when you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you...you may know that your society is doomed." - Ayn Rand - Atlas Shrugged
Doesn't this quote SUM up the DEVELOPED world governments and economies today?
In Closing: It isn't pretty out there but the opportunities are enormous. Austrian Economic analysis is extremely PREDICTIVE as it simply human behavior and HISTORY repeating on an inconceivable scale. The secular psychology of the something for nothing society is working to destroy empires as it always has in the past. The outcomes are UNAVOIDABLE but can be harnessed for personal gain.
You will be challenged as never before to preserve and build your wealth. Asset prices are all mispriced and those markets will reprice to reflect the reality of the situation regardless of the actions of the POWERS THAT BE that are outlined in this 2013 outlook. The next crisis is the debt ceiling you can expect it to result in less income for you and more for them, with absolutely NO reduction in runaway government spending.
The collapse of the monetary, financial and economic systems is not IMMINENT absent a black swan event of which there are many. They are pouring gargantuan sums of money via the printing presses. You are the proverbial frog in the boiling water. The world's largest economies can be compared to dinosaurs with governments pouring small caliber bullets into them. Death is slow in coming as millions of bullets (taxes, bad policies, fake money, destruction of private property and incentives to produce, etc.) increasingly TAKE their toll.
(Author's note: In my opinion, this is NOT Doom and GLOOM, it is one of the greatest opportunities in HISTORY. Invest properly for this outcome and Prosper, invest looking in the REARVIEW mirror and your wealth will be irreparably DAMAGED. Volatility is opportunity for the prepared investor. As it is priced in and markets ZOOM higher or LOWER to price in collapsing economies and money printing huge opportunities are created. Is your portfolio structured to thrive? The greatest transfer of wealth from those that hold it in paper and financial assets to those that don't is UNDERWAY. Restoring fiat currencies to sound money and absolute return alternative investments with the potential to thrive in all market (up, down and sideways) conditions is what I do. If you have an interest in learning more and working with Ty: CLICK HERE
In subsequent issues of the 2013 Outlook will running the gauntlet of issues unfolding globally and what to expect. Crack-up Booms, policies of insolvency, deleveraging, debasement, fingers of instability, currencies, central banks, something for nothing society's, Stocks and Bombs...er...bonds.
In the next issue will cover the Cloward Piven strategy and the planned COLLAPSE of the United States economy, bond and currency markets as these issues are at the epicenter of the UNFOLDING DEPRESSION in the next edition. Don't miss it. Subscriptions are free click here.
Thank you for reading TedBits, subscriptions are Free at www.Tedbits.com or www.TraderView.com, may God Bless you!
By Ty Andros
TraderView
Copyright © 2013 Ty Andros
Hi, my name is Ty Andros and I would like the chance to show you how to capture the opportunities discussed in this commentary. Click here and I will prepare a complimentary, no-obligation, custom-tailored set of portfolio recommendations designed to specifically meet your investment needs . Thank you. Ty can be reached at: tyandros@TraderView.com or at +1.312.338.7800
Tedbits is authored by Theodore "Ty" Andros , and is registered with TraderView, a registered CTA (Commodity Trading Advisor) and Global Asset Advisors (Introducing Broker). TraderView is a managed futures and alternative investment boutique. Mr. Andros began his commodity career in the early 1980's and became a managed futures specialist beginning in 1985. Mr. Andros duties include marketing, sales, and portfolio selection and monitoring, customer relations and all aspects required in building a successful managed futures and alternative investment brokerage service. Mr. Andros attended the University of San Di ego , and the University of Miami , majoring in Marketing, Economics and Business Administration. He began his career as a broker in 1983, and has worked his way to the creation of TraderView. Mr. Andros is active in Economic analysis and brings this information and analysis to his clients on a regular basis, creating investment portfolios designed to capture these unfolding opportunities as the emerge. Ty prides himself on his personal preparation for the markets as they unfold and his ability to take this information and build professionally managed portfolios. Developing a loyal clientele.
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