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Chris Martenson

Image | The Wrong Diagnosis
The Wrong Diagnosis

I post my thoughts and insights about breaking news items and other findings every day of the week, and often on weekends too, in a forum area for enrolled members.  Below is my first post of the day, which I thought would provide a good example of what’s happening over on that part of the site.

Mr Practical, who posts his keen insights at minyanville.com, has this nice summary and diagnosis of the current situation (which I happen to share 100%):

If you add up all the government bailouts, explicit and implicit, along with actual government purchases of assets (debt from banks) it comes out to a surreal $30 trillion. Markets are cheering that things have “stabilized” and “things are getting less bad”. I ask you seriously when the government throws $30 trillion at the “crisis” (one which bankers are now claiming is over), can you call that stable? That is like declaring a patient being kept alive on a heart-lung machine healthy.

Of course we have stabilized. The government has bankrupted our future to do it. The government(s) control the LIBOR market, the swaps market, the bond markets with all the “money” they are printing. They are feeding “money” to banks under the table at an alarming rate.

Those declaring the economy is now recovering do not understand (still) the problem: we are stuck with too much debt. The government’s solutions are to create more debt, as their next to be announced PPIP does. But an economy grows from production, not lending at the wrong price. This is a long term problem; the government has only addressed the short run symptoms.

The key issues are best examined at the most macro level these days.  If they do not make sense in total, then they do not make sense individually.

The Wrong Diagnosis

I post my thoughts and insights about breaking news items and other findings every day of the week, and often on weekends too, in a forum area for enrolled members.  Below is my first post of the day, which I thought would provide a good example of what’s happening over on that part of the site.

Mr Practical, who posts his keen insights at minyanville.com, has this nice summary and diagnosis of the current situation (which I happen to share 100%):

If you add up all the government bailouts, explicit and implicit, along with actual government purchases of assets (debt from banks) it comes out to a surreal $30 trillion. Markets are cheering that things have “stabilized” and “things are getting less bad”. I ask you seriously when the government throws $30 trillion at the “crisis” (one which bankers are now claiming is over), can you call that stable? That is like declaring a patient being kept alive on a heart-lung machine healthy.

Of course we have stabilized. The government has bankrupted our future to do it. The government(s) control the LIBOR market, the swaps market, the bond markets with all the “money” they are printing. They are feeding “money” to banks under the table at an alarming rate.

Those declaring the economy is now recovering do not understand (still) the problem: we are stuck with too much debt. The government’s solutions are to create more debt, as their next to be announced PPIP does. But an economy grows from production, not lending at the wrong price. This is a long term problem; the government has only addressed the short run symptoms.

The key issues are best examined at the most macro level these days.  If they do not make sense in total, then they do not make sense individually.

Image | Confirmed – Social Security Deluged with Early Retirement Requests
Confirmed – Social Security Deluged with Early Retirement Requests

On April 1st, in the context of writing about a newly appreciated shortfall in Social Security funding by the CBO, I wrote this (with the part I wish to discuss in bold):

Here’s a prediction – [the sharply reduced Social Security surplus] will be revised to the worse in about 6 months. I base this prediction on my belief that more people will opt for retirement than are currently projected and that entitlement program tax receipts will be below current projections. Also, nearly every prediction by the CBO has been revised to the worse over the past year, so I am “riding the trend” with this prediction.

At the time, several people commented that they thought this prediction faulty and saw the possibility of the exact opposite as being more likely.

I based my prediction on two concepts:

  1. With jobs hard to find and credit tightening, many folks would simply opt for early retirement as a means of securing any sort of cash flow at all.
  2. Many folks would (rightly) conclude that sooner or later the government would change the rules – perhaps moving the retirement date out a few years or reducing benefits or both – and opt to retire early as a means of grandfathering in their own position.

I can’t say for sure which of these reasons is most responsible here, but it looks like #1 is the winner for now:

Confirmed – Social Security Deluged with Early Retirement Requests

On April 1st, in the context of writing about a newly appreciated shortfall in Social Security funding by the CBO, I wrote this (with the part I wish to discuss in bold):

Here’s a prediction – [the sharply reduced Social Security surplus] will be revised to the worse in about 6 months. I base this prediction on my belief that more people will opt for retirement than are currently projected and that entitlement program tax receipts will be below current projections. Also, nearly every prediction by the CBO has been revised to the worse over the past year, so I am “riding the trend” with this prediction.

At the time, several people commented that they thought this prediction faulty and saw the possibility of the exact opposite as being more likely.

I based my prediction on two concepts:

  1. With jobs hard to find and credit tightening, many folks would simply opt for early retirement as a means of securing any sort of cash flow at all.
  2. Many folks would (rightly) conclude that sooner or later the government would change the rules – perhaps moving the retirement date out a few years or reducing benefits or both – and opt to retire early as a means of grandfathering in their own position.

I can’t say for sure which of these reasons is most responsible here, but it looks like #1 is the winner for now:

Image | Martenson Report Ready – Food Outlook 2009
Martenson Report Ready – Food Outlook 2009

Hello and Happy Memorial Day!

There’s a new Martenson Report ready for enrolled members.  It can be accessed by clicking the title below, or going to the Martenson Report page.  As always, it has already been sent as a newsletter so you should also find it in your inbox.

Here’s a snippet:

Food Outlook 2009 – Understanding the Risks

Executive Summary

  • Global grain stocks at lowest levels in over four decades
  • Shockingly low fertilizer sales suggest possibility of a disappointing yield
  • Food supply and demand are tightly balanced
  • Food distribution networks are cost-efficient but not terribly robust
  • Ways you can increase your food security

Introduction

Food is something that many of us take for granted, but it is important to recognize that this luxury is a recent development in human history. It is time to give more thought to this critical staple in our lives.

In March of 2008, food commodity prices hit an all-time high. This coincided with a world-wide food crisis, food riots, and even a few instances of national rice hoarding. Many believe that this was triggered by economic conditions (e.g. a flood of cheap money), not a fundamental or structural shortfall in food production. But I hold the view that both were at fault.

Food demand has grown steadily over the years, as has food supply. However, in recent years the excess margin of supply over demand has tightened and even gone negative several times. Reserve stocks are incredibly tight, resting at levels not seen since the early 1970’s. 

It is easily conceivable that food deliveries could be disrupted within any country, leading to rapid onset of local food shortages. This report will apprise you of several of the challenges that currently exist regarding world food supplies and the possibility that these challenges could lead to a structural shortfall in global food supplies in 2009 or 2010. It also contains specific actions that could greatly enhance your own food security.

Martenson Report Ready – Food Outlook 2009

Hello and Happy Memorial Day!

There’s a new Martenson Report ready for enrolled members.  It can be accessed by clicking the title below, or going to the Martenson Report page.  As always, it has already been sent as a newsletter so you should also find it in your inbox.

Here’s a snippet:

Food Outlook 2009 – Understanding the Risks

Executive Summary

  • Global grain stocks at lowest levels in over four decades
  • Shockingly low fertilizer sales suggest possibility of a disappointing yield
  • Food supply and demand are tightly balanced
  • Food distribution networks are cost-efficient but not terribly robust
  • Ways you can increase your food security

Introduction

Food is something that many of us take for granted, but it is important to recognize that this luxury is a recent development in human history. It is time to give more thought to this critical staple in our lives.

In March of 2008, food commodity prices hit an all-time high. This coincided with a world-wide food crisis, food riots, and even a few instances of national rice hoarding. Many believe that this was triggered by economic conditions (e.g. a flood of cheap money), not a fundamental or structural shortfall in food production. But I hold the view that both were at fault.

Food demand has grown steadily over the years, as has food supply. However, in recent years the excess margin of supply over demand has tightened and even gone negative several times. Reserve stocks are incredibly tight, resting at levels not seen since the early 1970’s. 

It is easily conceivable that food deliveries could be disrupted within any country, leading to rapid onset of local food shortages. This report will apprise you of several of the challenges that currently exist regarding world food supplies and the possibility that these challenges could lead to a structural shortfall in global food supplies in 2009 or 2010. It also contains specific actions that could greatly enhance your own food security.

Image | Food Outlook 2009 – Understanding the Risks
Food Outlook 2009 – Understanding the Risks
 PREVIEW
Sunday, May 24, 2009

Executive Summary

  • Global grain stocks at lowest levels in over four decades
  • Shockingly low fertilizer sales suggest possibility of a disappointing yield
  • Food supply and demand are tightly balanced
  • Food distribution networks are cost-efficient but not terribly robust
  • Ways you can increase your food security

Introduction

Food is something that many of us take for granted, but it is important to recognize that this luxury is a recent development in human history. It is time to give more thought to this critical staple in our lives.

In March of 2008, food commodity prices hit an all-time high. This coincided with a world-wide food crisis, food riots, and even a few instances of national rice hoarding. Many believe that this was triggered by economic conditions (e.g. a flood of cheap money), not a fundamental or structural shortfall in food production. But I hold the view that both were at fault.

Food demand has grown steadily over the years, as has food supply. However, in recent years the excess margin of supply over demand has tightened and even gone negative several times. Reserve stocks are incredibly tight, resting at levels not seen since the early 1970’s. 

It is easily conceivable that food deliveries could be disrupted within any country, leading to rapid onset of local food shortages. This report will apprise you of several of the challenges that currently exist regarding world food supplies and the possibility that these challenges could lead to a structural shortfall in global food supplies in 2009 or 2010. It also contains specific actions that could greatly enhance your own food security.
Food Outlook 2009 – Understanding the Risks
 PREVIEW
Sunday, May 24, 2009

Executive Summary

  • Global grain stocks at lowest levels in over four decades
  • Shockingly low fertilizer sales suggest possibility of a disappointing yield
  • Food supply and demand are tightly balanced
  • Food distribution networks are cost-efficient but not terribly robust
  • Ways you can increase your food security

Introduction

Food is something that many of us take for granted, but it is important to recognize that this luxury is a recent development in human history. It is time to give more thought to this critical staple in our lives.

In March of 2008, food commodity prices hit an all-time high. This coincided with a world-wide food crisis, food riots, and even a few instances of national rice hoarding. Many believe that this was triggered by economic conditions (e.g. a flood of cheap money), not a fundamental or structural shortfall in food production. But I hold the view that both were at fault.

Food demand has grown steadily over the years, as has food supply. However, in recent years the excess margin of supply over demand has tightened and even gone negative several times. Reserve stocks are incredibly tight, resting at levels not seen since the early 1970’s. 

It is easily conceivable that food deliveries could be disrupted within any country, leading to rapid onset of local food shortages. This report will apprise you of several of the challenges that currently exist regarding world food supplies and the possibility that these challenges could lead to a structural shortfall in global food supplies in 2009 or 2010. It also contains specific actions that could greatly enhance your own food security.
Image | New Martenson Report Ready – It’s Hit the Fan
New Martenson Report Ready – It’s Hit the Fan

A new Martenson Report is ready for enrolled members.  In this report, we stroll through the recent data and I make the case that there’s no need to wait for any clearer signs that “things have changed” than the ones we already have.  If you are waiting for TSHTF (explained in the article) then you can stop waiting.

Link to It Has Hit The Fan

A snippet:

In times like these, I take a few steps back and try to look at the whole picture. The details are numerous; they are often contradictory and confusing. For clarity’s sake, it can be helpful to keep the macro view in focus, instead of the details. Here are the big-picture items that I keep firmly in mind each day:

  • This is a crisis of too much debt, not too little spending.
  • This is a global crisis. Clues for directionality are best found by viewing the entire world situation. That data still points downwards.
  • The energy situation is getting worse, not better, due to a lack of critical and focused investment and the passage of wasted time.
  • It’s not possible for an insolvent nation to borrow money from an insolvent financial system to bail out insolvent financial, real estate, and insurance companies.
New Martenson Report Ready – It’s Hit the Fan

A new Martenson Report is ready for enrolled members.  In this report, we stroll through the recent data and I make the case that there’s no need to wait for any clearer signs that “things have changed” than the ones we already have.  If you are waiting for TSHTF (explained in the article) then you can stop waiting.

Link to It Has Hit The Fan

A snippet:

In times like these, I take a few steps back and try to look at the whole picture. The details are numerous; they are often contradictory and confusing. For clarity’s sake, it can be helpful to keep the macro view in focus, instead of the details. Here are the big-picture items that I keep firmly in mind each day:

  • This is a crisis of too much debt, not too little spending.
  • This is a global crisis. Clues for directionality are best found by viewing the entire world situation. That data still points downwards.
  • The energy situation is getting worse, not better, due to a lack of critical and focused investment and the passage of wasted time.
  • It’s not possible for an insolvent nation to borrow money from an insolvent financial system to bail out insolvent financial, real estate, and insurance companies.
Image | It Has Hit The Fan!
It Has Hit The Fan!
 PREVIEW
Sunday, May 17, 2009

Executive Summary

  • Stop waiting for "it" to happen; it already has.
  • Keep the big picture in mind.
  • This is a crisis of too much debt, not too little spending.
  • This is a global crisis.
  • The energy situation is getting worse, not better.
  • It’s not possible for an insolvent nation to borrow money from an insolvent financial system to bail out insolvent financial, real estate, and insurance companies.
  • Change is necessary, and we must embrace it.

If you have been waiting for further confirmation about the direction of the economy, or waiting for a sign that it’s now time to get serious about preparing for a future filled with less, this report is written for you.

My job is to provide you with a big-picture view of where we are and where we are headed, with an emphasis on clarifying the ways in which the dominant spin-cycle news machinery attempts to lure us back into the false comfort of borrowing and spending more.

At PeakProsperity.com, people often wonder about what they’ll do "when things fall apart."  A frequently-used acronym-containing alternative to this phrase is "when TSHTF," where the "F" refers to a fan and the other letters to something else hitting the fan that I will be coy about, so as not to offend anybody’s sensibilities or trigger any spam filters.

I have news for everybody:  It has hit the fan.
It Has Hit The Fan!
 PREVIEW
Sunday, May 17, 2009

Executive Summary

  • Stop waiting for "it" to happen; it already has.
  • Keep the big picture in mind.
  • This is a crisis of too much debt, not too little spending.
  • This is a global crisis.
  • The energy situation is getting worse, not better.
  • It’s not possible for an insolvent nation to borrow money from an insolvent financial system to bail out insolvent financial, real estate, and insurance companies.
  • Change is necessary, and we must embrace it.

If you have been waiting for further confirmation about the direction of the economy, or waiting for a sign that it’s now time to get serious about preparing for a future filled with less, this report is written for you.

My job is to provide you with a big-picture view of where we are and where we are headed, with an emphasis on clarifying the ways in which the dominant spin-cycle news machinery attempts to lure us back into the false comfort of borrowing and spending more.

At PeakProsperity.com, people often wonder about what they’ll do "when things fall apart."  A frequently-used acronym-containing alternative to this phrase is "when TSHTF," where the "F" refers to a fan and the other letters to something else hitting the fan that I will be coy about, so as not to offend anybody’s sensibilities or trigger any spam filters.

I have news for everybody:  It has hit the fan.
Image | In Their Own Words – Economic Quotes
In Their Own Words – Economic Quotes

One of my favorite internet articles of all time, entitled "Pompous Prognosticators," placed quotes of various politicians and other authority figures across a chart of the Dow Jones, spanning the years 1925 to 1933. A portion of that article is located here.

Here’s an image from the original article to jog your memory, in case you can’t recall which article I am referring to:

src=

I loved that article when it came out, and still love it today, because it reveals that nothing has changed through the decades and that believing the self-interested pronouncements of "green shoots" can be hazardous to your wealth.

So I decided to recreate that effort but update it for our modern times. Let’s continue to update this chart over time and see where it goes.  The people at Lowesville will recognize the work below, because I presented it there, along with a lot of other new information, inlcuding the Crash Course Toolbox, which is a main feature of my in-person seminars.

In Their Own Words – Economic Quotes

One of my favorite internet articles of all time, entitled "Pompous Prognosticators," placed quotes of various politicians and other authority figures across a chart of the Dow Jones, spanning the years 1925 to 1933. A portion of that article is located here.

Here’s an image from the original article to jog your memory, in case you can’t recall which article I am referring to:

src=

I loved that article when it came out, and still love it today, because it reveals that nothing has changed through the decades and that believing the self-interested pronouncements of "green shoots" can be hazardous to your wealth.

So I decided to recreate that effort but update it for our modern times. Let’s continue to update this chart over time and see where it goes.  The people at Lowesville will recognize the work below, because I presented it there, along with a lot of other new information, inlcuding the Crash Course Toolbox, which is a main feature of my in-person seminars.

Image | Stress Test Results Announced
Stress Test Results Announced

As I wrote about in my last report the bank "stress tests" are a sham in part because the trajectory of even the worst case stress test scenario (called "more adverse" by the regulators) has already been exceeded to the downside by real-world economic results.
Stress Test Results Announced

As I wrote about in my last report the bank "stress tests" are a sham in part because the trajectory of even the worst case stress test scenario (called "more adverse" by the regulators) has already been exceeded to the downside by real-world economic results.
Image | Listen to Bernanke at Your Own Peril
Listen to Bernanke at Your Own Peril

Ben Bernanke spoke today (Tuesday May 5th, 2009) and said some very encouraging things that were widely interpreted throughout the US media machine as a claim that the "the bottom is in."

Astute observers of past Bernanke statements will quickly recall the numerous other times he made either overly-optimistic or horribly off-the-mark statements that seem, in retrospect, to have been crafted to be soothing, instead of wise or accurate.
Listen to Bernanke at Your Own Peril

Ben Bernanke spoke today (Tuesday May 5th, 2009) and said some very encouraging things that were widely interpreted throughout the US media machine as a claim that the "the bottom is in."

Astute observers of past Bernanke statements will quickly recall the numerous other times he made either overly-optimistic or horribly off-the-mark statements that seem, in retrospect, to have been crafted to be soothing, instead of wise or accurate.
Image | Pending Home Sales – Spin Cycle Set on “High”
Pending Home Sales – Spin Cycle Set on “High”

Once again we have been treated to a form of news spin that borders on propaganda.

This time the information comes from the National Association of Realtors, or NAR, a group which long ago fell out of my favor for their tendency to churn out poor quality sampled “data” that was invariably out of step with reality by being overly positive.  Errors happen, but when they are always in one direction, they cease to be random errors.
Pending Home Sales – Spin Cycle Set on “High”

Once again we have been treated to a form of news spin that borders on propaganda.

This time the information comes from the National Association of Realtors, or NAR, a group which long ago fell out of my favor for their tendency to churn out poor quality sampled “data” that was invariably out of step with reality by being overly positive.  Errors happen, but when they are always in one direction, they cease to be random errors.
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