RANTING ANDY – Despite the unabashed support of the PPT, August was one of the Dow’s WORST MONTHS EVER. “Summer doldrums” are typical during a period of “normal” economic activity, but DECIDEDLY NOT amidst an ALL-OUT COLLAPSE of the GLOBAL economy.
And please notice a VERY important change in my macro viewpoint; I am no longer forecasting collapse of the WESTERN economy, but the ENTIRE GLOBAL ECONOMY. Just as I reached a “Eureka Moment” last month when I decided that even hyperinflationary monetary policy cannot prevent a stock market CRASH, I have now concluded there is NO WAY that even the Chinese economy can be immune to a Western economic implosion.
Don’t believe me? Then take a look at the below charts of the ETFs holding the largest Chinese industrial companies and the largest American financials. Not only are they similar, but I needed to do a double-take to make sure I hadn’t copied the same chart twice!
These two ETFs represent some of the largest and most economically strategic companies in the world, and both look ready to COLLAPSE imminently, to at least the lows of late 2008 (amdist GLOBAL MELTDOWN I), and more likely still lower levels.
And if that doesn’t properly scare you, look at the below charts of some of Europe’s LARGEST BANKS, which had the EXACT same charts as the two shown above until swan diving in recent weeks. Yes, readers, these charts likely presage what NEARLY ALL financials are about to look like, such as MAJOR BANKS in….
…France (UGGHH, BELOW the 2008/2009 LOW!)….
…with white shoe snob outfit Lloyd’s of London also BELOW its 2008 LOWS!
…Italy (Unicredit about to break 2008 lows, with only $0.80 left until bankruptcy!)…
….and of course, GREECE, which may have officially DEFAULTED by the time you read this RANT…
In my August 26th RANT, “The Coming Fall to Remember”, I predicted that IMMEDIATELY after Labor Day, markets would implode on heightened economic fears. With GLOBAL economic activity in freefall, as well as stocks of the world’s largest international banks, it didn’t take rocket science to forecast that traders returning from August vacations would have trigger-happy selling fingers, and sure enough, the first week of September was an unmitigated disaster.
On average, Asian stocks fell more than 2%, as did the HEAVILY PPT-SUPPORTED Dow, while in Europe, stocks fell a whopping 6% on fears of the imminent collapse of the Eurozone, which WILL happen VERY, VERY soon. Sovereign interest rates soared, as did credit default swaps on essentially every European sovereign, municipality, and bank, and gold rose through $1,900 three separate times (fought back each time by CARTEL “DEATH STAR” tactics), only to settle roughly unchanged as it prepares to ROCKET through $2,000 in the coming weeks. Moreover, the week couldn’t have ENDED worse, with global markets COLLAPSING the day after Obama’s pathetic speech proposing a $447 billion “jobs bill” while Congress simultaneously (almost to the MINUTE) raised the debt ceiling by another $500 billion, officially putting it above U.S. GDP for the first time ever.
Rumors of a Greek sovereign default permeated the internet all week, an event that WILL happen this fall, perhaps as soon as this weekend. In fact, it looks like austerity riots have re-commenced already, and frankly ANYONE that believes Greece has a PRAYER of economic survival needs to have their head examined. A Greek sovereign default will cause an IMMEDIATE CHAIN REACTION OF FINANCIAL IMPLOSION across Europe, triggering payouts on TENS OF BILLIONS OF TOXIC CREDIT DEFAULT SWAPS, cascading into write-offs of TENS OF BILLIONS OF WORTHLESS GREEK DEBT, and setting the stage for the COLLAPSE OF THE EURO as the last-ditch EFSF bailout fund crumbles into oblivion.
Such events would in turn yield a global, all encompassing financial tsunami that would waste all but the strongest banks in its wake, likely including ALL the major U.S. banks such as Goldman Sachs, JP Morgan, and Citigroup. By the way, take a look at their charts and compare them to those above. Yes, they are staring into the same abyss.
…and don’t forget Warren Buffet’s favorite stock, Bank of America!
Which brings me to the topic of this RANT, the existential concept of PRAYER.
Quantitative Easing has accelerated GLOBALLY for the past THREE YEARS, yet somehow we are led to believe an OFFICIAL commencement of QE3 in America will somehow matter. Two weeks ago, the Pollyana media espoused the market was ‘waiting with baited breath’ for Bernanke’s Jackson Hole speech, as if he could somehow reverse decades of decay by announcing QE3, but he disappointed by essentially saying he’ll announced it on September 21st, a whopping three weeks hence. Yesterday, we were told the G-7 would SAVE THE DAY by announcing “GLOBAL QUANTITATIVE EASING” at their tax-payer funded boondoggle in Marseilles this weekend, but all they wound up stating were these UNBACKED platitudes:
Central Banks stand ready to provide liquidity to banks as required. We will take all necessary actions to ensure the resilience of banking systems and financial markets.
We reaffirm our shared interest in a strong and stable international financial system, and our support for market- determined exchange rates.
Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability, and we will consult closely in regard to actions in exchange markets and cooperate as appropriate.
Ah, what a beaut! They agreed on absolutely NOTHING, other than to put out a CHEERLEADING STATEMENT! Moreover, if you want to see just how STUPID these “leading bankers” are, look at the blatant contradiction of the last two sentences, first stating the G7 supports market-determined exchange rates, and directly afterwards stating that market-determined exchange rates can be dangerous, and thus they will blatantly, in a coordinated manner, MANIPULATE them further. As if the Japanese and Swiss Central Bank devaluations of the past two weeks weren’t enough!
Even better, after reading this article about the G7 proceedings (http://english.irib.ir/news/political/item/79311-g7-meeting-held-in-marseilles), it appears it was nothing more than a giant arguing session. The ministers admitted the problems were much broader than 2008, that the individual nations’ had dramatically different aims, and that further meetings were required due to deep concerns regarding the economic viability of the Eurozone.
Furthermore, according to ZeroHedge, LATE FRIDAY NIGHT the IMF activated a $580 billion bailout fund (all PRINTED MONEY, by the way) which, via their own bylaws, is only to be activated to “forestall or cope with a threat to the international monetary system.”
So you tell me readers, what ammo is left to the bankers except PRAYER?
The answer, of course, is NOTHING, and that is exactly what the GLOBAL FINANCIAL MARKETS are about to realize, perhaps as early as this week. Regarding my aforementioned “Eureka moment”, I believe global markets will start to reflect, in VERY SHORT ORDER, the HOPELESSNESS of the Eurozone’s financial situation, particularly in its weakest link Greece, the invetible all-out collapse of the U.S. economy, the insolvent nature of essentially ALL the Western money-center banks, and the utter WORTHLESSNESS of the fiat currencies behind them.
Conversely, they will realize, perhaps simultaneously, what I and other “goldbugs” have been stating for the past decade, that ONLY GOLD AND SILVER ARE MONEY. When this happens, the parabolic stage will officially commence (to the chagrin of top callers everywhere), and don’t be surprised if gold and silver coins and bars go “no offer” a lot sooner than you think.
Please take proper measures to PROTECT YOURSELF AND YOUR FAMILY AND FRIENDS now, as once this Eureka moment goes VIRAL, it will become far more difficult to do so, and potentially impossible under the worst case scenario.