Category Archives: Financial markets

The Real Reasons Why The Media Is Suddenly Admitting To The Recession Threat, by Brandon Smith

The media is admitting to the recession threat because we’re heading into a recession. From Brandon Smith at alternative-media.com:

One thing that is important to understand about the mainstream media is that they do tell the truth on occasion. However, the truths they admit to are almost always wrapped in lies or told to the public far too late to make the information useful.   Dissecting mainstream media information and sifting out the truth from the propaganda is really the bulk of what the alternative media does (or should be doing).  In the past couple of weeks I have received a rush of emails asking about the sudden flood of recession and economic crash talk in the media.  Does this abrupt 180 degree turn by the MSM (and global banks) on the economy warrant concern?  Yes, it does.

The first inclination of a portion of the liberty movement will be to assume that mainstream reports of imminent economic crisis are merely an attempt to tarnish the image of the Trump Administration, and that the talk of recession is “overblown”.  This is partially true; Trump is meant to act as scapegoat, but this is not the big picture.  The fact is, the pattern the media is following today matches almost exactly with the pattern they followed leading up to the credit crash of 2008.  Make no mistake, a financial crash is indeed happening RIGHT NOW, just as it did after media warnings in 2007/2008, and the reasons why the MSM is admitting to it today are calculated.

Before we get to that, we should examine how the media reacted during the lead up to the crash of 2008.

Multiple mainstream outlets ignored all the crash signals in 2005 and 2006 despite ample warnings from alternative economists. In fact, they mostly laughed at the prospect of the biggest bull market in the history of stocks and housing (at that time) actually collapsing. Then abruptly the media and the globalist institutions that dictate how the news is disseminated shifted position and started talking about “recession” and “crash potential”. From the New York Times to The Telegraph to Reuters and others, as well as the IMF, BIS and Federal Reserve officials – Everyone suddenly started agreeing with alternative economists without actually deferring to them or giving them any credit for making the correct financial calls.

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All along the watchtower: The follies of history, by Pepe Escobar

The US wants to bring China to heel; there’s no way China is going to allow that to happen. From Pepe Escobar at asiatimes.com:

All along the watchtower: The follies of history

Bayon temple, Angkor World Heritage site in Siem Reap, northern Cambodia. File pic by Bruno Morandi, Robert Harding Heritage / AFP
The ultimate American imperial dream is to engineer a Chinese vassal state

There must be some kind of way outta here
Said the joker to the thief
There’s too much confusion
I can’t get no relief

Business men, they drink my wine
Plowmen dig my earth
None were level on the mind
Nobody up at his word

-Bob Dylan, All Along the Watchtower (immortalized by Jimi Hendrix)

Nothing beats the beguiling, stony smiles at the Bayon temple near Angkor Wat in Cambodia’s Siem Reap to plunge us back into history’s vortex, re-imagining how empires, in their endless pursuit of power, rise and fall, usually because they eventually get the very war they had sought to avoid.

The Bayon was built as a state temple at the end of the 12th century by the undisputed superstar of Khmer empires, Jayavarman VII. Its magical narrative reliefs convey a mix of history and mythology while depicting daily life in Khmer society.

We still don’t know today the identity of the faces shown on the temple’s giant stone carvings. They could be a representation of Brahma, or of Jayavarman himself – a practicing Buddhist. What we do know is that the glorious Khmer empire – incomparable in art and architecture, and even benign in the sense that the mandate for power was based on the king’s relationship with the gods, started to fade after the 15th century, dismembered by war against the Thai and later the Vietnamese.

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House of Cards, by the Zman

All we’ve done since the financial crisis of 2008-2009 is build an even larger skyscraper of cards. From the Zman at theburningplatform.com:

One of the things that was revealed in the 2008 mortgage crisis was the fragility of the global financial system. The system that was born of the Louvre Accords was supposed to be robust and resilient, unlike the previous arrangements. The masters of finance would be able to keep a steady hand on the tiller, guiding the world economy through each storm, rather than have a free-for-all ever time there was a little turmoil. Up until 2008, everyone knew something like the mortgage crisis was impossible.

A credit based financial system was supposed to get around the problem of currency devaluation to solve political problems. That’s been a problem since the advent of coinage. When the state gets in trouble, the easiest ways to solve it is to spend money on the public. Whether it was debasing the coinage or printing paper money, the solution to spending money that did not exist was the create it. That always created new and bigger problems for the society down the line.

One way of looking at the mortgage crisis is as a form of currency devaluation. The global financial system is based in credit. That’s the base unit of value. Government debt and to a slightly lesser degree, corporate debt, is the foundation of the global financial system. Government issues debt, which increases the supply of money in the system, as that debt is used as collateral in the system. Central banks can buy and sell debt to control the supply of money in the system.

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Writing on the Wall, by MN Gordon

There’s a real economy out there that’s a lot different, and worse off, than the one suggested by Washington’s statistics. From MN Gordon at economicprism.com:

One of the more disagreeable discrepancies of American life in the 21st century is the world according to Washington’s economic bureaus and the world as it actually is.  In short, things don’t add up.  What’s more, the propaganda’s so far off the mark it’s downright insulting.

The Bureau of Labor Statistics (BLS) reports an unemployment rate of just 3.7 percent.  The BLS also reports price inflation, as measured by the consumer price index (CPI), of 1.8 percent.  Yet big city streets are lined with tents and panhandlers grumble “that’s all” when you spare them a dollar.

In addition, good people, of sound mind and honest intentions, are racking up debt like never before.  Mortgage debt recently topped $9.4 trillion.  If you didn’t know, this eclipses the 2008 high of $9.3 trillion that was notched at the precise moment the credit market melted down.

Total American household debt, which includes mortgages and student loans, is about $14 trillion – roughly $1 trillion higher than in 2008.  Credit card debt, which is over $1 trillion, is also above the 2008 peak.  To be clear, these debt levels are not signs of economic strength; rather, they’re signs of impending disaster.  Moreover, they’re signs that American workers have been given a raw deal.

How is it that the economy’s been growing for a full decade straight, but the average worker’s seen no meaningful increase in their income?  Have workers really been sprinting in place this entire time?  How did they end up in this ridiculous situation?

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Reality Dawning, by Sven Henrich

There are all sorts of indications that a recession is coming. From Sven Henrich at northmantrader.com:

Yesterday’s announcement by the Trump administration to delay some of the new tariffs on China it just announced a few weeks ago was initially greeted with relief by equity markets across the globe. This proved to be mistake as reality is dawning and global stock markets are selling off hard just a day later on ever weakening economic data in Europe and Asia and further yield curve inversions.

Call it a major hangover as the reversal in tariffs was not coming from a position of strength, it was coming as a result of global economic reality sinking in, a reality that is making its way rapidly to US shores as well. The collapse in global yields has been a theme since October of 2018 with the US 10 year dropping to 1.6% from its October 2018 high of 3.25%, but only now that the 2 year/10 year yield curve has inverted are the official recession alarm bells ringing. Why? Because every single recession in the past 45 years has seen a 2 year/10year yield curve inversion preceding it.

To believe no recession is coming is to argue that this inversion is defying history. And indeed let’s look at history, because it is now used to argue that this yield curve inversion leaves room for further market rallies to new highs. Does it?

If history is a guide, then the answer is yes but market relevant timing can vary quite a bit and depending on how the data is framed up you can get different conclusions.

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Can Salvini Beat the Italian Troika? by Tom Luongo

What happens in Italy is important because the country has a lot of debt and a tottering banking system. From Tom Luongo at strategic-culture.org:

Italian leader Matteo Salvini is in the headlines again, now openly threatening divorce with his coalition partner, Five Star Movement (M5S).

Salvini unleashed another round of rhetorical bombs at M5S to get on them board with his part of the agenda. But that seems to have failed and he is now prepared to go to Parliament and withdraw his party, Lega, from the coalition government which will lead to new elections.

He had put off any kind of talk of new elections in the past because the opinion polling wasn’t strong enough to grant Lega the kind of majority it needed to govern without strings.

The coalition is dead but it may not matter.

The biggest problem Salvini faced, however, wasn’t M5S’s internal strife and contradictions. His biggest obstacle lies in the Troika of Technocrats that hold all the real power in Italy as it pertains to the European Union.

That Troika is President Sergei Mattarella, Prime Minister Giuseppe Conte and Finance Minister Giovanni Tria and they are the problem, as I wrote back in June.

Prime Minister Giuseppe Conti and Economy Minister Giovanni Tria are in open revolt against the coalition leaders over the upcoming budget fight with the EU.

Reuters is reporting this morning that these two are working together to undermine the internal reforms Salvini is proposing to spur economic growth from the ground up by instituting a flat tax and spending a whopping $3 billion more than Brussels wants them to on rebuilding crumbling Italian infrastructure.

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Big Signals from Gold and Silver, by Tom Luongo

Do the recent rises in the prices of gold and silver signal impending global chaos? From Tom Luongo at tomluongo.me:

After nearly eight years of torment, gold and silver are back.  The global political picture is spinning out of control quickly.  And the precious metals are here to tell us just how quickly.

Before I get to the charts, however, I think it’s important we review everything that happened this week just to get some context.

Last weekend two gruesome murder sprees were committed in El Paso, Texas and Dayton, Ohio.  Both shooters apparently radicalized by the current political climate. The usual suspects used these events to call for gun control, pre-crime prevention straight out of a Philip K. Dick novel while blaming them on the tyranny of white people and Donald Trump’s racism.

Then on Monday morning to the news India revoked Article 370 of their constitution, reorganizing Kashmir & Jammu and putting the entire area on a lockdown so complete many there don’t know what happened.

Protests in Hong Kong continued into their third week as the U.S. is caught openly working with protest organizers and castigates by China.

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