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Chris Martenson

Image | Risk Increases – The Flood Continues
Risk Increases – The Flood Continues
 PREVIEW
Monday, November 9, 2009

I’ve long been cautioning that there are no historical parallels to the present that could guide us on whether inflation or deflation is going to dominate the next investment horizon.  I’ve recently spent some time arguing that deflationists may have overlooked the impact of allowing financial companies to ignore their losses and pretend that they did not exist.

Even further back, I warned that the signs we were seeing were most consistent with a liquidity flood, which I encourage you to re-read, as it can explain much about where we are headed.  I will build on this theme in this report.

Briefly, the signs of a liquidity flood are a rise in those asset classes most subject to the effects of freshly printed money (stocks, bonds, and commodities), a continued expansion of an already bloated Fed balance sheet, and a return of a risk appetite to the investing world. These things all predictably accompany a flood of freshly printed money pouring out of the Federal Reserve.

Risk Increases – The Flood Continues
 PREVIEW
Monday, November 9, 2009

I’ve long been cautioning that there are no historical parallels to the present that could guide us on whether inflation or deflation is going to dominate the next investment horizon.  I’ve recently spent some time arguing that deflationists may have overlooked the impact of allowing financial companies to ignore their losses and pretend that they did not exist.

Even further back, I warned that the signs we were seeing were most consistent with a liquidity flood, which I encourage you to re-read, as it can explain much about where we are headed.  I will build on this theme in this report.

Briefly, the signs of a liquidity flood are a rise in those asset classes most subject to the effects of freshly printed money (stocks, bonds, and commodities), a continued expansion of an already bloated Fed balance sheet, and a return of a risk appetite to the investing world. These things all predictably accompany a flood of freshly printed money pouring out of the Federal Reserve.

Image | Accepting the Obvious
Accepting the Obvious
 PREVIEW

What if we were to just accept the fact that the government and the Federal Reserve are interfering in the stock market to engineer higher prices?

While I have long maintained that this is indeed the simplest explanation for the market behavior we’ve been seeing, it remains speculation because we have no audit of the Fed to either confirm or refute the idea.

But what if we could just accept that it was true.  How would that change anything in our lives?  Would we invest differently?  Would we have a darker or brighter view of the future?  Would we calculate that risk had been improved or worsened?
Accepting the Obvious
 PREVIEW

What if we were to just accept the fact that the government and the Federal Reserve are interfering in the stock market to engineer higher prices?

While I have long maintained that this is indeed the simplest explanation for the market behavior we’ve been seeing, it remains speculation because we have no audit of the Fed to either confirm or refute the idea.

But what if we could just accept that it was true.  How would that change anything in our lives?  Would we invest differently?  Would we have a darker or brighter view of the future?  Would we calculate that risk had been improved or worsened?
Image | Market Recap – Ridiculous Productivity
Market Recap – Ridiculous Productivity
 PREVIEW

After digging around and sifting through the things both said and not said, I have come to the conclusion that what we are seeing are the likely effects of a rescue operation.

By this I mean a large injection of stabilizing cash to one or more parties, possibly related to the recent large bankruptcies.  Two of my friends, who have been actively trading for more than 20 years between them, threw in the towel this week, as their patterns and methods are no longer working.

Their conclusion is the same as mine; this market is not trading like it used to.  It is trading chaotically, counterintuitively, and as if there’s some sort of distorting influence involved.

First, we might just wonder if this isn’t the impact of a rogue firm with entirely too much power moving the market for its own benefit.
Market Recap – Ridiculous Productivity
 PREVIEW

After digging around and sifting through the things both said and not said, I have come to the conclusion that what we are seeing are the likely effects of a rescue operation.

By this I mean a large injection of stabilizing cash to one or more parties, possibly related to the recent large bankruptcies.  Two of my friends, who have been actively trading for more than 20 years between them, threw in the towel this week, as their patterns and methods are no longer working.

Their conclusion is the same as mine; this market is not trading like it used to.  It is trading chaotically, counterintuitively, and as if there’s some sort of distorting influence involved.

First, we might just wonder if this isn’t the impact of a rogue firm with entirely too much power moving the market for its own benefit.
Image | Decoding the Fed (Again)
Decoding the Fed (Again)

Once again, the Federal Reserve Open Market Committee (waggishly referred to as the Open Mouth Committee during the Greenspan era, for its tendency to try and talk up a good response in the markets) has delivered a widely anticipated “non-event” from its most recent meeting.

That is, interest rates were left untouched at a level indistinguishable from zero.

As expected.

Once again I will try and provide translation services for the overly obtuse and meandering language preferred by the FOMC staff writers.
Decoding the Fed (Again)

Once again, the Federal Reserve Open Market Committee (waggishly referred to as the Open Mouth Committee during the Greenspan era, for its tendency to try and talk up a good response in the markets) has delivered a widely anticipated “non-event” from its most recent meeting.

That is, interest rates were left untouched at a level indistinguishable from zero.

As expected.

Once again I will try and provide translation services for the overly obtuse and meandering language preferred by the FOMC staff writers.
Image | Severe Market Dislocation
Severe Market Dislocation
 PREVIEW

This insider has been opened to allow for intra-day commentary on what is going on in the markets.  As I see it, there is something quite profound going on at the moment; I just don’t know what it is yet.

As I wrote in the last Martenson Report, the behavior of gold was quite noteworthy, as it ran counter to both the dollar and the stock market.

As of this writing, gold has suddenly vaulted to a new, all-time high, even as the dollar remains in positive territory and the stock market is negative.  Silver is following.

Here are the relevant charts.
Severe Market Dislocation
 PREVIEW

This insider has been opened to allow for intra-day commentary on what is going on in the markets.  As I see it, there is something quite profound going on at the moment; I just don’t know what it is yet.

As I wrote in the last Martenson Report, the behavior of gold was quite noteworthy, as it ran counter to both the dollar and the stock market.

As of this writing, gold has suddenly vaulted to a new, all-time high, even as the dollar remains in positive territory and the stock market is negative.  Silver is following.

Here are the relevant charts.
Image | Market Shift – Something Is Coming
Market Shift – Something Is Coming
 PREVIEW
Sunday, November 1, 2009

Executive Summary

  • A break in past relationships between the stock market, the dollar, and gold, along with a breakout in the VIX, could be signaling the beginning of an important turning point
  • Capmark declares bankruptcy (CIT is next).
  • A commercial real estate emergency is upon us.
  • Is gold signaling a continuation of the financial crisis, or something more?

As you know, I spend a great deal of time combing the available market information for clues about what is happening in the economy and where it may be leading us. This past week (October 24 – October 31, 2009) showed some amazing developments indicating that a major turning point is once again upon us.

This assessment is based on several key events, including the bankruptcy of Capmark Financial, which kicked off the week, the return of volatility to the stock market (reminiscent of past tops), and the bizarre strength in the price of gold on Friday, even as the Dow peeled off nearly 250 points.

Let’s take a look at these events one at a time…
Market Shift – Something Is Coming
 PREVIEW
Sunday, November 1, 2009

Executive Summary

  • A break in past relationships between the stock market, the dollar, and gold, along with a breakout in the VIX, could be signaling the beginning of an important turning point
  • Capmark declares bankruptcy (CIT is next).
  • A commercial real estate emergency is upon us.
  • Is gold signaling a continuation of the financial crisis, or something more?

As you know, I spend a great deal of time combing the available market information for clues about what is happening in the economy and where it may be leading us. This past week (October 24 – October 31, 2009) showed some amazing developments indicating that a major turning point is once again upon us.

This assessment is based on several key events, including the bankruptcy of Capmark Financial, which kicked off the week, the return of volatility to the stock market (reminiscent of past tops), and the bizarre strength in the price of gold on Friday, even as the Dow peeled off nearly 250 points.

Let’s take a look at these events one at a time…
Image | Going Broke Slowly, Then All at Once
Going Broke Slowly, Then All at Once
 PREVIEW

I want to highlight another excellent report put out by Sprott Asset Management.  In this one, they cast light, again, on the largest unspoken factor in the entire financial kingdom, namely that the US is insolvent, a theme I have been writing about for a few years.

The question emerges, if we all know this to be true, then the issue isn’t what the final result will be, but when the situation will change.

Here’s a snippet from the report:

Going Broke Slowly, Then All at Once
 PREVIEW

I want to highlight another excellent report put out by Sprott Asset Management.  In this one, they cast light, again, on the largest unspoken factor in the entire financial kingdom, namely that the US is insolvent, a theme I have been writing about for a few years.

The question emerges, if we all know this to be true, then the issue isn’t what the final result will be, but when the situation will change.

Here’s a snippet from the report:

Image | Personal Preparation – Where To Begin
Personal Preparation – Where To Begin
 PREVIEW
Wednesday, October 28, 2009

Executive Summary

  • Why prepare?
  • Where to begin?
  • Action is liberating
  • Do what is necessary, knowing it is insufficient
  • Put on your own “oxygen mask” first
  • Seek personal and community resilience
  • Any measure of self-sufficiency is valuable
  • Start with small steps
  • Food, water, shelter, and warmth 

In a recent report entitled It’s Time to Prepare, I walked through the financial preparations that one might take to add greater resilience to one’s holdings and where they are located. 

But there is more to preparation that just financial savvy. I have been asked repeatedly to provide some guidance on personal preparation. In this report, I will begin the process of sharing my thoughts and experiences about this subject.

There are some basic things that would like to see every person considering for themselves and their family in order to minimize the impact of future disruptions. While I cannot be sure of when, or even if, these disruptions will happen, I am certain of two things:  you can prepare for these changes relatively cheaply, and you will feel better for having done so.

Personal Preparation – Where To Begin
 PREVIEW
Wednesday, October 28, 2009

Executive Summary

  • Why prepare?
  • Where to begin?
  • Action is liberating
  • Do what is necessary, knowing it is insufficient
  • Put on your own “oxygen mask” first
  • Seek personal and community resilience
  • Any measure of self-sufficiency is valuable
  • Start with small steps
  • Food, water, shelter, and warmth 

In a recent report entitled It’s Time to Prepare, I walked through the financial preparations that one might take to add greater resilience to one’s holdings and where they are located. 

But there is more to preparation that just financial savvy. I have been asked repeatedly to provide some guidance on personal preparation. In this report, I will begin the process of sharing my thoughts and experiences about this subject.

There are some basic things that would like to see every person considering for themselves and their family in order to minimize the impact of future disruptions. While I cannot be sure of when, or even if, these disruptions will happen, I am certain of two things:  you can prepare for these changes relatively cheaply, and you will feel better for having done so.

Image | New Martenson Report on Personal Preparation
New Martenson Report on Personal Preparation

A new Martenson Report is ready for enrolled members.

Link:  Personal Preparation – Where to Begin

I am continuing with my thoughts and advice on preparation for a very different future.  This time we focus on personal preparation.  In this report I discuss many of the changes and actions that we have personally undertaken in my household.

A snippet:

In a recent report entitled It’s Time to Prepare, I walked through the financial preparations that one might take to add greater resilience to one’s holdings and where they are located. 

But there is more to preparation that just financial savvy. I have been asked repeatedly to provide some guidance on personal preparation. In this report, I will begin the process of sharing my thoughts and experiences about this subject.

New Martenson Report on Personal Preparation

A new Martenson Report is ready for enrolled members.

Link:  Personal Preparation – Where to Begin

I am continuing with my thoughts and advice on preparation for a very different future.  This time we focus on personal preparation.  In this report I discuss many of the changes and actions that we have personally undertaken in my household.

A snippet:

In a recent report entitled It’s Time to Prepare, I walked through the financial preparations that one might take to add greater resilience to one’s holdings and where they are located. 

But there is more to preparation that just financial savvy. I have been asked repeatedly to provide some guidance on personal preparation. In this report, I will begin the process of sharing my thoughts and experiences about this subject.

Image | Getting Closer – The Day of Recognition
Getting Closer – The Day of Recognition
 PREVIEW

Even as the whole world seemingly is transfixed on economic recovery and what the stock indexes are up to, the 800 lb. gorilla in the room has grown to 1000 lbs.

There have been a recent spate of news articles and book reviews triangulating on the topic of Peak Oil, although none quite get to the heart of the problem, and I think it would be wise to keep the issue of oil and energy directly in view.

The first article I’d like to draw your attention to shows that, for a rapidly industrializing country, even the most destructive economic crisis in generations is not enough to halt consumption growth.
Getting Closer – The Day of Recognition
 PREVIEW

Even as the whole world seemingly is transfixed on economic recovery and what the stock indexes are up to, the 800 lb. gorilla in the room has grown to 1000 lbs.

There have been a recent spate of news articles and book reviews triangulating on the topic of Peak Oil, although none quite get to the heart of the problem, and I think it would be wise to keep the issue of oil and energy directly in view.

The first article I’d like to draw your attention to shows that, for a rapidly industrializing country, even the most destructive economic crisis in generations is not enough to halt consumption growth.
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I’ve been doing a lot of thinking about the needs and sustainability of our family. We have six young children, our oldest just turned 12 and our youngest just turned 3 months old. I love the considerations that the article had above and thought I would add a few things that I have considered for our situation. My...
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