Bankrupting America - When leverage fails
Rarely, if ever, have I seen this level of INSANITY UNFOLDING in over 30 years
watching and analyzing GLOBAL macroeconomics, politics and markets. To say
it is frightening is to understate the combustible nature of the world economy
and its ability to generate future growth and prosperity.
It can't and won't grow without massive reform of governments and their policies,
which contrary to public opinion are deepening this MAN-MADE disaster. Conversely,
times of great danger and risk offer the most outstanding investment opportunities
if you can SEE IT and prepare yourself properly.
"There are two requirements for success in Wall Street. One, you have
to think correctly; and secondly, you have to think independently." ~ Ben
Graham
The battle lines are clear; on one side of the BATTLE are the most powerful
people and elites in the world, led by the Federal Reserve (Bernanke, Yellen
and Co.), Bank of England (Mark Carney), and ECB (Mario Draghi). Combined with
their partners in the public sectors in the capitals of the developed world:
Washington DC (Barack Obama and congress), London (David Cameron and the city),
Brussells (European commission) and let's not leave out Beijing, Tokyo and
Germany. On the other side of the fight are Mother Nature and Darwin: the apostles
of history.
In the long run, Mama Nature and Darwin have never lost this war ever, but
in the short run men can appear to be IN CHARGE. In charge of the titanic that
is. It is quite clear that the powers that be think they can EXTRACT any amount
of blood, treasure and toil and the world will continue to grow. Nothing could
be further from the truth and we await the societal & economic collapse
for which they are laying the foundations.
Foundations which will be extremely hard to remove and undo as they are embedded
in law and the people who must undo them are the same people that CREATED them.
Only a crushing blow will roll back the insanity and the future that is coming
at us like a freight train.
The socialists in disguise in the developed world's capitals have put their
constituents on a modern version of the RACK and are turning the wheels VIGOROUSLY.
These elites are Blind ideologues and will INFLICT any AMOUNT of MISERY on
their constituents at the point of their regulatory and tax guns to achieve
their ambitions of control over others.
A lot of ink has been spilled on the Healthcare.gov failures but the impact
that is unfolding is far DEEPER for the future of the world's greatest economy
and its private sector. The affordable care act (ACA) is the antithesis of
its title: it is wholesale destruction of the healthcare industry and the lives
of those who rely upon it. It is everything that socialism is: misery spread
widely and less HEALTH care for (crony capitalism) much more money, it is very
large doses of poison into people's lives and futures.
You must understand that control of people's lives through control of their
healthcare has been a progressive goal (both from the left and the right) for
many, many decades. Our system of checks and balances between the various branches
of governments and congress has prohibited this dream from being realized.
UNTIL the 2008 election that is, when in a stroke of coincidence gave veto
proof majority's and progressives captured complete and total power of the
US government. The acceleration of central planned economies and theft of
private property through printing press and RUNAWAY regulation was multiplied
EXPONENTIALLY, now those balls which began rolling then are hitting the economy
like a tip of an iceberg.
"A crisis is a terrible thing to waste" ~ Rahm Emanuel
They didn't let it go to waste as they justified their legislative and executive
branch actions as necessary to SAVE you. Unfortunately for us, all they inserted
political solutions which served their lust for power over others, the money
and themselves rather than practical solutions which serve all the public at
large.
The moral and fiscal INSOLVENCY of the financial system was on plain display
at that time. Now we are seeing the moral and fiscal insolvency of the system
that allowed it to unfold.
As thinly disguised Socialists and Marxists ascended to unbridled power, the
total remaking of our institutions was PUT in PLACE. Illinois is one of the
epicenters of democratic/socialist corruption and it is on plain display to
its residents and onlookers from around the nation, and they rose to power
on a national scale 2008. That political corruption took the driver's seat
of the national government at that time.
In Illinois, laws are routinely ignored and political foes are destroyed from
the misuse of government power. Crony capitalists are generally the only groups
which are allowed to thrive and POLITICIANS GUIDE IT ALL as divided government
has gone the way of the DO DO bird (extinct), thus corruption is unrestrained.
The results are predictable: an economy in free fall with those in charge PREYING
upon those who aren't, at the point of a government gun. California and New
York are in the SAME BOAT.
These are the places which will be at the vanguard of economic failure in
the United States. It is why I recently left Chicago for Florida: to escape
the unfolding destruction of my families' future. Most every country in the
OECD is in secular decline as centrally planned socialist economies FAIL under
their redistributionist policies.
No matter where you look, socialist states are in various stages succumbing
to their moral and fiscal insolvency. Argentina, Brazil, Italy, Greece, Portugal,
France, Spain each have implemented the same policies, some are further down
the path to their demise/chaos and others a just a few steps behind in the
SAME process.
Some still have the ability to print money and other don't. It is why the
EURO is doomed as those countries which can't print must regain the ability
to do so or, quite simply, the elites will be destroyed. Above all else, the
euro is a device to transfer power from local governments to Brussels in exchange
for the printing press which they NEVER REACH. Sooner or later, the local socialists
will break away, recover seignoriege or experience an "off with their head" moment.
We all live in something for nothing societies where the majority of the people
think they can live at the expense of the PRODUCTIVE minority and they have
firm grips on our elected offices. The governments of the developed world are
good reflections of the MAJORITY of their constituents: lazy, thieving, dumbed
down, non-self-reliant, unproductive, unable to produce more than they consume,
unable to do critical thinking and ignorant of history. USEFUL idiots as Lenin
called them. But very dangerous as they are ripe for manipulation and can VOTE!
"A Nation of sheep breeds a government of wolves!" ~ Anonymous
"Any man who thinks he can be happy and prosperous by letting the
government take care of him had better take a closer look at the American
Indian." ~ Henry Ford
As government dependency caroms exponentially higher, the productive minority
is ground under the demands of the majority. They believe they are ENTITLED
to the fruits of others labor and VOTE to extract it under the point of a government
gun.
They normally NEVER feel the cost of their impossible beliefs that they can
live at the expense of others, but this time is DIFFERENT. The affordable care
act is hitting them right where it hurts: their incomes and well-being. It
now sets up the mother of all showdowns as the victim to victor ratio is enormous.
What is the victim to victor ratio you ask? There are probably ten people
who are badly damaged by the law compared to one person whose life is improved.
The victims are the very people the President got to vote for him to support
the ACA.
Quoting Peggy Noonan -
"They said if you liked your insurance you could keep your insurance
- but that's not true. It was never true! They said if you liked your
doctor you could keep your doctor - but that's not true. It was never
true! They said they would cover everyone who needed it, and instead
people who had coverage are losing it - millions of them! They said they
would make insurance less expensive - but it's more expensive! Premium
shock, deductible shock.
They said don't worry, your health information will be secure, but
instead the whole setup looks like a hacker's holiday. Bad guys are apparently
already going for your private information. And now there are reports
the insurance companies are taking advantage of the chaos of the program,
and its many dislocations, to hike premiums. Meaning the law was written
in such a way that insurance companies profit on it."
Now the president and progressives in congress are saying to everyone: who
do you believe? Me or you're lying eyes. He is going to have a hard time pulling
that over on the 4.6 million people who have received insurance pinks slips
with millions more to come. Do you really think it is a coincidence that millions
are being forced out and into the ACA? The very insurance companies who canceled
them await them inside the exchanges with huge premium increases and deductibles.
This is intentional folks...
It is clear that as we learn what was in the ACA the more monstrous and pernicious
it becomes. It is a regulatory and freedom destructive morass of Washington
progressive and special interest WEASEL words. It can be interpreted any way
the Washington bureaucrats wish. Regulations and sales of business to crony
capitalists who wait in line to buy them through K street lobbyists. Look at
the volume of goods sold:
The ACA - whose intent is nothing what it has been presented as. In something
for nothing societies, the true impact of policies can never DIRECTLY impact
the useful idiots who supported it or the truth becomes SELF apparent. They
can only touch them indirectly, so they cannot pin the tails of the donkeys
who are preying on them: their leaders.
Now let's cover recent history and put an impact statement for you to consider
concerning the national debt and paying for the something for nothing society
we inhabit.
Less than 1 month ago (distant memory now) a debt ceiling showdown and government
shutdown (God forbid the something for nothings may have had to do something
to supplement themselves) was in full bloom and the world was on the brink
of disaster (those on the dole cut off from their benefactors within the beltway,
and the government unable to print money thru QE), which when resolved supposedly
everything was FINE. Quoting the commander in chief:
"Now, this debt ceiling -- I just want to remind people in case you
haven't been keeping up -- raising the debt ceiling, which has been done
over a hundred times, does not increase our debt; it does not somehow
promote profligacy. All it does is it says you got to pay the bills that
you've already racked up, Congress. It's a basic function of making sure
that the full faith and credit of the United States is preserved." ~ Barrack
Obama
Actually, the trouble was obscured from the public who is mostly dependents
of government through a variety of programs too numerous to mention. On the
day of the debt ceiling resolution, the US debt mushroomed by approximately
$329 billion dollars (329,000 million) or $1,061 dollars for every man woman
and child in the U.S. The administration has racked up $8 trillion dollars
of debt since his inauguration not counting UNFUNDED entitlements.
For your information that is $25,806 dollars for every man woman and child
in the U.S. That goes with the $25,000+ dollars borrowed before the current
administration in was elected and must be added to obligations which are off
balance sheet of 5 times more (approximately $300,000 for every man woman and
child in the country). Do the math.
Not one media source informed the public of this insidious fact. Do you think
90 days of big government is worth this price to the public? Why weren't they
informed? Main stream Media blackout of the facts? Say it ain't so...
Now on to the stock market where it's become a party like 1999. Insanity is
the norm as it was then. Tech companies with valuations in the tens of BILLIONS of
dollars on companies with NO EARNINGS. Nothing for sale but hot air, hype and
the HOPE of monetizing future growth.
The public and huge money managers are piling in with no fear, with record
inflows happening as we speak. Today's Twitter IPO is valuing the company at
roughly $30+ Billion dollars, more than the market value of over 337 S&P
500 companies, worth more than GM, John Deere and many more.
Stocks are floating higher with a direct correlation to the Federal Reserve's
EXPLODING balance sheet and the debasement of the currency the S&P is denominated
in. It doesn't take a genius to buy this chart until it doesn't work. Take
a look at the world's most ugly and widely known chart courtesy of the chart
store and Ron Griess;
Do you think today's stock markets are moving higher on fundamentals? The
ONLY fundamental driving this chart is $4.1 billion dollars and yen ($4,100
million) printed out of thin air on a daily basis and nothing else. And a mania
is in full swing (chart courtesy of www.cross-currents.net).
Too many dollars chasing too few destinations.
Margin use is at record highs which have preceded every market crash in the
past 15 years (courtesy www.cross-currents.net):
And bullish newsletter sentiment is at extremes seen at previous market tops:
And professional managers are holding extreme levels of long exposure:
People have short memories, and today's troubles obscure the recent past and
why REAL economic growth CANNOT RESUME under current government policies IMPLEMENTED
since the global financial crisis exploded at that time. And the public is
piling in, in a manner not seen since 2007:
And the retail investor cash levels are now at extreme lows so buying power
is now a Fed affair:
With hedge funds approaching record net longs in the tech sector:
Of course the main stream media tells the public "this time it's different".
HA HA... All I can say is someday soon it will be BOMBS away. For these maniacal
daredevils, the operative words at this point is "Don't FIGHT the FED" and
pray they keep it up. Make no mistake: there will never be a taper, just ask
Janet.
In conclusion, as I said several weeks ago: the smell of napalm is in the
air. The only thing preventing an explosion is FIREHOSES of NEW money being
poured on the fires of insolvency to keep them under control. The purpose of
this commentary is not doom and gloom, it is a fire alarm. So you can better
prepare yourself to avoid the fires and prepare yourself to benefit from them.
Authors 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? For a personal consultation with me CLICK
HERE!
The crises are now never ending and broad credit growth to the private sector
flat to down. But, as I said, this is Mother Nature and Darwin versus the most
powerful people on the planet. This is a battle royal to see who determines
the face of reality. The Keynesian illusionists or Mother Nature.
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