Chris Martenson
On Thursday, August 4th, the stock and commodity markets took a turn for the worse, the dollar and US bonds went up, and gold held firm.
This pattern is exactly what we have been expecting around here since early March. It still has quite a ways to run, and I remain convinced that it will result in a third round of quantitative easing (QE III).
I laid out this general thesis for what is now occurring in my report, The Coming Rout:
The Rout Is On!
PREVIEWOn Thursday, August 4th, the stock and commodity markets took a turn for the worse, the dollar and US bonds went up, and gold held firm.
This pattern is exactly what we have been expecting around here since early March. It still has quite a ways to run, and I remain convinced that it will result in a third round of quantitative easing (QE III).
I laid out this general thesis for what is now occurring in my report, The Coming Rout:
This week's interview is one of the most important discussions we've had to date on energy, its supply/demand dynamics, and the tremendous impact it has on our economic and social identity. It is clear now that we are staring at a future of declining output at a time when the world is demanding an ever-increasing amount.
Nate Hagens, former editor of the respected energy blog, The Oil Drum, gives a fact-packed update on where we are on the Peak Oil timeline. But interestingly, he explains how he sees the core issue as less about the actual amount of energy available to the world and more about our assumptions about how much we really need:
"We’re not really facing a shortage of energy; we’re facing a longage of expectations. And the sooner that we as individuals or a nation recognize that the future is going to see much lower consumption than today and prepare for that, psychological resilience is going to be really important, because if no one is psychologically prepared, people are going to freak out when some of these freedoms start to go away.
Nate Hagens: We’re Not Facing a Shortage of Energy, But a Longage of Expectations
This week's interview is one of the most important discussions we've had to date on energy, its supply/demand dynamics, and the tremendous impact it has on our economic and social identity. It is clear now that we are staring at a future of declining output at a time when the world is demanding an ever-increasing amount.
Nate Hagens, former editor of the respected energy blog, The Oil Drum, gives a fact-packed update on where we are on the Peak Oil timeline. But interestingly, he explains how he sees the core issue as less about the actual amount of energy available to the world and more about our assumptions about how much we really need:
"We’re not really facing a shortage of energy; we’re facing a longage of expectations. And the sooner that we as individuals or a nation recognize that the future is going to see much lower consumption than today and prepare for that, psychological resilience is going to be really important, because if no one is psychologically prepared, people are going to freak out when some of these freedoms start to go away.
Thursday, July 28, 2011
Executive Summary
- How stocks, bonds, precious metals, commodities, the dollar and, real estate will most likely fare post-August 2nd
- Why August-October will be a period of particularly high stress for the Treasury market
- What the “big picture” endgame is beyond today’s debt ceiling histrionics and how it is now accelerating towards its inevitable conclusion
- Why it’s now time to hedge your bets
Part I – Debt Ceiling Dilemma: The Foul Choice Facing Investors
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II – What Should Happen and What Will Happen
As always, we can easily describe what should happen, but that’s not what will happen. Deflationists sometimes fall into the “what should happen” camp and find themselves mystified, if not disappointed, when those events fail to materialize. So do inflationists, just in the other direction.
My view is that what should happen almost always never does. There’s no such thing as a free market defined by willing, free-thinking participants. Instead, far too many market prices are managed, influenced, and/or manipulated, and this distorts both the timing and the severity of what actually happens.
For example, right now market participants should not be buying ten-year US Treasury bonds at 2.5%. Looking at the rates of inflation and the fiscal train wreck approaching the US government, a fair rate might be closer to 7.5% or higher. Where Treasury interest rates actually are and where they should be are very different propositions.
The thing that will most impact the world financial system will be if the US suffers a credit downgrade, which would be a near certainty if and/or when the US defaults on its obligations, even briefly.
What Should Happen and What Will Happen
PREVIEWThursday, July 28, 2011
Executive Summary
- How stocks, bonds, precious metals, commodities, the dollar and, real estate will most likely fare post-August 2nd
- Why August-October will be a period of particularly high stress for the Treasury market
- What the “big picture” endgame is beyond today’s debt ceiling histrionics and how it is now accelerating towards its inevitable conclusion
- Why it’s now time to hedge your bets
Part I – Debt Ceiling Dilemma: The Foul Choice Facing Investors
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II – What Should Happen and What Will Happen
As always, we can easily describe what should happen, but that’s not what will happen. Deflationists sometimes fall into the “what should happen” camp and find themselves mystified, if not disappointed, when those events fail to materialize. So do inflationists, just in the other direction.
My view is that what should happen almost always never does. There’s no such thing as a free market defined by willing, free-thinking participants. Instead, far too many market prices are managed, influenced, and/or manipulated, and this distorts both the timing and the severity of what actually happens.
For example, right now market participants should not be buying ten-year US Treasury bonds at 2.5%. Looking at the rates of inflation and the fiscal train wreck approaching the US government, a fair rate might be closer to 7.5% or higher. Where Treasury interest rates actually are and where they should be are very different propositions.
The thing that will most impact the world financial system will be if the US suffers a credit downgrade, which would be a near certainty if and/or when the US defaults on its obligations, even briefly.
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