Fiat debt and central banking have created an artificial economy. The end result will be disastrous. From Gary D. Barnett at lewrockwell.com:
In the past, there was a belief in the logic of the market, but no science of reasoning concerning the stock market was ever fully legitimate, as logic requires a market free from outside interference. Fast forward to today, and the manipulation is so extreme that little if any honesty is evident, and only fraud remains.
This stark reality should alarm investors, but many if not most, continue to rely on black magic economics as espoused by the mainstream media, those like Paul Krugman and his ilk, and a cadre of other Keynesian followers. As a rule, Keynesian or not, when it comes to market conditions and predictions, economists are always wrong. This is so due to the manipulative and bogus aspects of the Federal Reserve driven market, but even those who have genuine knowledge and understanding of free market economics, best described as Catallactics, cannot forecast with certainty. In a corrupt and fabricated market system such as exists today, it is impossible to predict outcomes with any accuracy because no pure market economy actually exists.
Currently, most open discussions about economics are convoluted and rely on a mix of politics, managed and controlled trade, trade wars, Fed policies, and minute-by-minute tweets from a narcissistic president consumed by his false prowess as manipulator-in-chief. The entirety of the American financial system is simply asinine at this stage of the game.
Economically speaking, this country’s financials are an unmitigated disaster, and the charge toward insolvency is quickening. Debt at every level is staggering, prices are out of control, and a triple bubble is obvious. Stocks and real estate prices are extreme, and the bond market is literally insane, with yields heading into negative territory worldwide. Nothing of this magnitude has been seen before, and a bubble economy of this degree when it explodes will be devastating beyond the imagination of most.
Many have claimed that the next bear market in stocks will be extreme, but I believe that to be an understatement. The notion that this is just another stock market downturn, with expectations that all will go back to normal after the correction, is very shortsighted. It is not just the stock market that will fall this time around, but also the majority of all the financial markets. This will lead to a global meltdown of epoch proportions, and financial chaos not seen in the past.
Never lose sight of the fact that this is a dilemma created, stoked, and perpetuated by the United States Federal Reserve System, and central banks around the world. Of course there are other factors, but the brunt of the problem lies in the nefarious monetary policies of the central banking system. The Federal Reserve Board web home page still espouses the claim that “the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system.” Dishonest hubris at this level is a testament to the fact that those elites controlling the monetary system have total faith in the blatant ignorance of the common man.
The entirety of the U.S. financial system is based on debt. This did not happen overnight, but it did happen in plain sight. The Fed’s expansion of the money supply went into permanent mode beginning in November 2008. That was when the first Quantitative Easing (QE) began, and the debt machine has been in high gear since that time. Interest rates have been held close to zero for the past decade, and now the call is to again lower rates even more. Effectively, saving has virtually ceased during this period, and there are no indications that this dynamic will change anytime soon.
Debt is at the highest level ever in history, and it is universal. Massively inflated debt is evident in households, corporations, and in government. Debt is now all consuming, and interest rates continue to remain very low with no end in sight. Debt continues to mount, as the cost to service that debt continues to increase. With debt expansion forever on the rise, inflation much higher than reported, the risk of higher interest rates in the future, and debt service becoming much more expensive every day, a cataclysmic risk of default seems imminent.
With continued monetary expansion and debt growth at current and most likely increased levels, this financial system will implode. How it has survived this long is certainly a mystery to me, but more expansion has brought more corrupt manipulation. It is difficult to imagine that this insanity can sustain much longer.
I am not suggesting that any single event, or even a one-time combination of events will instantly bring on Armageddon. This is not as likely here as in some other parts of the world, unless the events unfolding are of such an extreme nature, that nothing can stop the onslaught of catastrophe.
But with any all-consuming global financial collapse under these unique and unprecedented conditions, the market drop may be the least of our problems. What will happen if a majority face economic ruin? What will happen if food shortages are the norm? What will happen if the dollar loses most of its value, medical care is lacking, and a modern day depression consumes the country? What will happen in the inner cities and high population areas if left without the necessities to survive?
The likelihood of this scenario is extreme, but even the thought of these possible circumstances conjures up illusions of Martial Law, of police state brutality, of a complete loss of freedom, and of a frightened and out of control population. I have never been a doomsday proponent, but mass desperation leads to desperate measures, and in the case of any financial collapse today, those measures have the potential to become deadly.