Podcast
How This Will All End
Wednesday, January 12, 2011
Executive Summary
- The inevitable market correction will be triggered by a forcing event, and which one is most likely
- The US has too much debt
- State bailouts signaled by Fed’s denials?
- “Not enough oil to repay the debt”
- Why the cost of debt service will drown us, even if interest rates remain low
- Bond market will lead the way
- The key signs to watch for that will signal the endgame is playing out
- Recommended investment classes for preserving wealth
Part I
If you have not yet read Part I of this report, please click here to read it first.
Part II – How This Will All End
In Part I of this report, I laid out my reasoning for why the game has managed to continue on as long as it has. Where a massive financial dislocation should have happened by now, in practice the impacts have been relatively minor compared to what many people had expected to happen.
But we cannot escape the fact that entirely too many debts and liabilities exist to pay off in current dollars. Either those debts will have to be defaulted upon, or they will have to be inflated away.
Even more important than the question of which one it will be is the question of when. That’s what we will explore here.
How This Will All End
PREVIEW by Chris MartensonHow This Will All End
Wednesday, January 12, 2011
Executive Summary
- The inevitable market correction will be triggered by a forcing event, and which one is most likely
- The US has too much debt
- State bailouts signaled by Fed’s denials?
- “Not enough oil to repay the debt”
- Why the cost of debt service will drown us, even if interest rates remain low
- Bond market will lead the way
- The key signs to watch for that will signal the endgame is playing out
- Recommended investment classes for preserving wealth
Part I
If you have not yet read Part I of this report, please click here to read it first.
Part II – How This Will All End
In Part I of this report, I laid out my reasoning for why the game has managed to continue on as long as it has. Where a massive financial dislocation should have happened by now, in practice the impacts have been relatively minor compared to what many people had expected to happen.
But we cannot escape the fact that entirely too many debts and liabilities exist to pay off in current dollars. Either those debts will have to be defaulted upon, or they will have to be inflated away.
Even more important than the question of which one it will be is the question of when. That’s what we will explore here.
Dan Ariely needs lab rats.
Our new friend, the renowned behavioral economics researcher, is conducting an experiment to better understand people’s perceptions around wealth inequality. A timely subject, as the wealth gap between rich and poor in many developed countries is now reaching all-time highs.
Following Chris’ recent interview with him, Dan has put together a survey for the CM.com audience to fill out on this topic. Perhaps we’ll become one of the colorful studies Dan is famous for citing in his talks!
If you’re game for it, take 10 minutes to fill out Dan’s survey. And remember, this is for posterity, so please be honest. (Can anyone cite that film reference?)
Here’s a bit more background in Dan’s own words:
Your Chance to Advance Science
by Adam Taggart
Dan Ariely needs lab rats.
Our new friend, the renowned behavioral economics researcher, is conducting an experiment to better understand people’s perceptions around wealth inequality. A timely subject, as the wealth gap between rich and poor in many developed countries is now reaching all-time highs.
Following Chris’ recent interview with him, Dan has put together a survey for the CM.com audience to fill out on this topic. Perhaps we’ll become one of the colorful studies Dan is famous for citing in his talks!
If you’re game for it, take 10 minutes to fill out Dan’s survey. And remember, this is for posterity, so please be honest. (Can anyone cite that film reference?)
Here’s a bit more background in Dan’s own words:
Improvise, Adapt, Overcome is an unofficial slogan among Marines made popular by Clint Eastwood’s movie, Heartbreak Ridge. No matter what your plans for the uncertain future, the ability to improvise, adapt, and overcome problems will be necessary regardless of how well stocked, tooled, provisioned, or conditioned you currently are.
Situational Problem Solving: Increasing Your Odds of Success When Facing Challenge
by mooselick7Improvise, Adapt, Overcome is an unofficial slogan among Marines made popular by Clint Eastwood’s movie, Heartbreak Ridge. No matter what your plans for the uncertain future, the ability to improvise, adapt, and overcome problems will be necessary regardless of how well stocked, tooled, provisioned, or conditioned you currently are.
In justifying the massive money printing operations of the Fed, Bernanke used inflation data to bolster his case that the Fed’s actions are both prudent and worth continuing.
Here’s what he said:
Recent data show consumer price inflation continuing to trend downward. For the 12 months ending in November, prices for personal consumption expenditures rose 1.0 percent, and inflation excluding the relatively volatile food and energy components–which tends to be a better gauge of underlying inflation trends–was only 0.8 percent, down from 1.7 percent a year earlier and from about 2-1/2 percent in 2007, the year before the recession began.
(Source)
Why I Don’t Trust the Official Inflation Numbers (and Neither Should You)
PREVIEW by Chris MartensonIn justifying the massive money printing operations of the Fed, Bernanke used inflation data to bolster his case that the Fed’s actions are both prudent and worth continuing.
Here’s what he said:
Recent data show consumer price inflation continuing to trend downward. For the 12 months ending in November, prices for personal consumption expenditures rose 1.0 percent, and inflation excluding the relatively volatile food and energy components–which tends to be a better gauge of underlying inflation trends–was only 0.8 percent, down from 1.7 percent a year earlier and from about 2-1/2 percent in 2007, the year before the recession began.
(Source)
Justification
