A New Direction

Some have asked why there have been no new posts recently. Here is the answer.

Thundering Heard has reported on emerging trends in this time of transition, and offered some suggestions on how people might wish to prepare for the financial, political, energetic, and earth changes that continue to accelerate and that will have impacts over the next decade that are currently unimaginable.

While that work will continue, now it’s time to get into the details of how we take advantage of this confluence of end-of-cycle changes. The first installment is a draft of a chapter from an upcoming book on how we vanquish financial problems once and for all. The words vanquish financial problems once and for all are not chosen as some statement of vague hopefulness.  As you will see in this chapter, this is about the nitty-gritty of how things work now as a starting point for how to accomplish the goal.

The chapter is being labeled as a draft as a way of asking for your help. I sincerely seek your comments on this chapter, especially on anything questionable, unclear, or vague. If you were sending this post to friends, would they need more explanation, better explanation? More examples? Or is it too verbose? Is there a specific section, paragraph, sentence, or word that is unclear? Or should be deleted? Or perhaps the whole thing is fine as it is and should be left alone—but what are the odds of that?!

If this book is to truly help in accomplishing the goal, it needs to be excellent. I am asking for your help so that this chapter and upcoming chapters become as good as they can be.

Please post comments below or send them by email to my personal address or to the address on the Contact page.

In the upcoming book on vanquishing financial problems for all, this current chapter will be called Avoiding Structural Unfairness. On Thundering Heard, it will be posted in three parts. Here is the link to Part 1:

The Current System is PURPOSE-BUILT for Extreme Wealth Disparity, Draft Part 1

Thank you!

Some cycles due in 2015

So you can be prepared, if you wish, here are some cycles due in 2015. One of them is gigantically important to both the political and financial worlds, so I hope my exposition is clear.

The first cycle is very easy to understand: something economically important really hits the fan every seven years. Going in reverse from here, seven years at a time:

  • 2008, start of the Great Recession, first real estate debt bubble pop;
  • 2001, recession begins as part of 2000-2002 internet/tech stock bubble pop;
  • 1994, worst year for bond markets in modern history;
  • 1987, the famed stock market Crash of ’87;
  • 1980, inflation, the “Misery Index”, start of a major recession that doesn’t go away for three years;
  • 1973, Arab Oil embargo, start of a major recession;
  • […] you get the idea.

The article at this link talks more about this cycle, including the note that the years in this seven-year cycle that coincided with an Autumn solar eclipse (1931 and 1987) had particularly strong events; and 2015 does have two solar eclipses. Again, from the article at the link:

In 1931, a solar eclipse took place on Sept. 12…Eight days later, England abandoned the gold standard, setting off market crashes and bank failures around the world. It also ushered in the greatest monthlong stock market percentage crash in Wall Street history.

In 1987, a solar eclipse took place Sept. 23…Less than 30 days later came “Black Monday” the greatest percentage crash in Wall Street history.

Some great forecasters think that March is a strong candidate for significant financial turbulence in 2015, and there is a total solar eclipse on March 20. And there is a partial solar eclipse on September 13, a better calendar correspondence with the events referenced in the quote above. So maybe we’ll get two strong events this year.

For those of you who believe what you read in the US media, perhaps you are wondering how we could get major financial problems when things are allegedly so “awesome.” Well, sorry to tell you, but even Goldman “doing God’s work” Sachs just admitted that the world economy has gone into contraction:

     It’s Official: Global Economy Back In Contraction For First Time Since 2012 According To Goldman 

(As a side note, Al Jazeera did a great video on true nature of Goldman Sachs. The link is here, but, if you are in the USA, the censors won’t allow you to view the video in the “Land of the Free” US, it’s only playable outside the US. A lot of that type of thing is going on these days. It’s a small part of what has dropped the US down to 49th globally in press freedom; see World Press Freedom Index Plunges – USA Now Ranked #49 Globally.)

If this seven-year cycle repeats in 2015, then I think we can easily predict what the authorities will do since it seems to be the only thing they know how to do when there’s trouble: print more money by creating more debt! But as explained in The deflationary wave intensifies, this strategy has become counter-productive and is locking the world economy in a deadly stranglehold.

Some realize all this and some do not. But this brings us to our second cycle: Martin Armstrong’s Sovereign Debt Big Bang. Here is a slide of Armstrong’s forecasts from a conference in early 1998:

Armstrong1998-Forecast

(Source, from Martin Armstrong’s blog)

These major forecasts all came true. The only one left to go (2015.75 = September 30, 2015) is the Sovereign Debt Big Bang. What it says in that the tide will monumentally shift away from confidence in government bonds starting on September 30, 2015. Currently, confidence in government bonds is so high that people are buying them even with negative interest rates. The easiest way to understand interest rates is that they are the rental charge for lending someone money. So you rent someone $100 and you hope to get back maybe $103, the original $100 plus $3 of rent. But people are now buying government bonds even though they get back less money than what they lent to some government in the first place. They are paying governments to lend them money!

     16% Of Global Government Bonds Now Have A Negative Yield: Here Is Who’s Buying It

That was a few weeks back, at which point JP Morgan calculated that $3.6 Trillion worth of government bonds were paying negative interest rates. Some of the countries involved were Germany, Switzerland, Japan, Netherlands, Sweden, and Denmark. In Denmark, because interest rates went negative, some adjustable rate mortgages are now paying interest to the people who took out the mortgage!

     In Denmark You Are Now Paid To Take Out A Mortgage

Now you might say: Why would anyone buy a government bond with a negative interest rate?!?! When I first said we should expect negative interest rates in More shackles readied for deploymentI did get a few e-mails politely suggesting that I might want to get checked for dementia. Here’s what was said:

The policy is that savers will soon be hit with negative interest rates…So people would have to pay the bank interest on their own savings. So if the negative interest rate were -3%, if you had $100 in your account, you’d have to pay the bank $3 in interest.

This is crazy. Most people alive today think governments never default on their debt.  But that’s just plain wrong. Here is a chart showing country debt defaults going back to 1800. And this chart only shows those countries that have defaulted at least four times, the rest are not shown. Note that the list includes supposed stalwarts like Germany:

Sov20140731_default

(Chart sourcefrom The Economist.)

What Armstrong is saying–and he has been saying it since the 1990’s and has strong mathematical/historical models backing up his forecast–is that, near the end of this year, the world at large is finally going to wake up and understand the insanity of all this government borrowing. Not all at once, but relentlessly. They will see that most if not all countries are not going to pay back what they borrowed. They can’t. They don’t have the money. Greece is the first country to forthrightly admit it. One of the pompous Eurocrats threatened Greece last week, saying “If you don’t do what we say, Greece will go bankrupt.”  To which the Greek Finance Minister Yanis Varoufakis replied, “Greece is already bankrupt.”  (Straight truth! From a politician! Finally! Maybe that will become a trend!)

So what will this do to those who own all these government bonds? Who does own them anyway? For one, most of what is called capital at banks is government bonds. So there go the banks: no capital, insolvent. (Watch out for the upcoming bail-ins if you still keep money in banks.) Insurance companies and both government and private pension funds are huge holders of government bonds. So there goes insurance, and pensions. A well-placed German friend says that several European insurance companies are on the verge of bankruptcy. All of the assets of the US Social Security system, for example, are US government bonds: that’s all they own!

And somehow, the financial system has come to accept government bonds as collateral for other loans and bets. The $1 Quadrillion (that’s 1,000 Trillions) world derivatives casino market floats on a thin veneer of government bonds as “collateral” for these bets. Before the US defaulted on its debts in 1971 when Nixon said they were no longer payable in currency backed by gold, as previously promised, but now were backed by promises alone, collateral meant something real. For example, when you have a mortgage, your house is the collateral. A car is the collateral for an auto loan. But now in the financial world, someone’s promise to pay back a loan that they can never repay counts as collateral for even more loans. This is insane. Starting later in the year, a lot more people will start to understand that. That’s the nature of this Big Bang cycle. And there will be major repercussions. We talked about the demise of banks, pensions, and insurance. The derivatives collapse will take down all the brokerages and investment banks. So where will people get money?

Governments love to hide the truth about their historical defaults on their debt. Thus everyone is taught that the “cause of the Great Depression” of the 1930’s was the 1929 stock market crash. Total BS. The stock market crash wiped out stock speculators. That wasn’t a truly big deal. What took down thousands of banks were defaults on government bonds they and their customers were holding. Let’s look at that government bond default chart again. This time there is a red box around the worldwide wave of country debt defaults in the early 1930’s that wiped out thousands of banks and millions of savers:

Sov20140731_defaultBox

Get it? That’s what’s coming up again, only this time it will be worse. Way worse. There’s been far more borrowing, far more leverage, and all of it is floating on paper and electronic currencies and promises. The link to reality–gold–was removed in 1971.

World-Debts

Now some people say all this unpayable debt can be wiped off the books in a debt jubilee, like they used to do in Old Testament times. Well that’s true. It can. The problem is that anyone who put money in a bank account needs to realize that they have loaned that money to the bank. It’s a debt of the bank, they owe you money. And your deposit is backed by government debt, not by actual cash. So, if there were a debt jubilee, no one would have any money in their bank account anymore. Same for businesses, so no business would be able to write a paycheck to anyone. ATM’s would not be able to dispense any cash. Credit cards would no longer work. All of the money in the world is someone’s debt to someone else. So a debt jubilee would mean there was no money.

So now, do you want a debt jubilee? Of course not. But we are going to get one anyway. Not on purpose. By accident. Starting in a big way later this year.

Why can anyone be confident that this is true? Well first, go back and look at the rest of the predictions on Armstrong’s slide from 1998. Second, it’s already starting to happen. Greece, Argentina, Puerto Rico–the dominoes are starting to fall. Japan is a financial basket case, there is no way they can repay their debts, and they have the second largest pile of government debt on the planet. The whole world has gone wild for debt!

Which brings us to a third “cycle of interest’ for 2015. What else floats on a sea of debt? Real estate prices! This cycle was described before here:

As examples, due to his real estate cycle work for the US, he was telling clients–in the 1990’s to give them ample time to act–to be out of all US real estate investments by February, 2007; that real estate prices would then fall from 2007 into 2012, then rise into 2015 in a snapback rally that would sucker a lot of people back into real estate, and then fall again through 2033.

Well here we are in the snapback real estate rally into 2015. So many have forgotten the 9 million US foreclosures and the 7 million US households that are still “under water” on their mortgages. All the signs of a bubble are back, though now some are already starting to dissipate as real estate prices in some of the bubbliest areas roll over:

     Southern California home sale volume for January slowest since 2008: The stalemate accelerates with Orange County seeing a monthly median price drop of $28,500.

The bubble is stronger than ever in countries like Canada, Australia, and the UK. Unless people request it by sending me e-mails saying they want it, I’m not going to do a detailed post on real estate. I doubt it will change anyone’s mind, so it probably isn’t worth it. But when the biggest debt bubble the world–and perhaps the galaxy–has ever known pops, and governments are falling left and right, real estate prices will be hammered. And those falling governments will be desperately raising property taxes to try to stay afloat.

And anyone who agrees with people who say that “debt doesn’t matter,” like Dick Cheney from the right or Paul Krugman from the left, is going to get quite an education over the next few years. Actually, we all will. Which is good, in my view. Humanity badly needs to understand which actions have real value and which do not.

An evolutionary event

It isn’t often that one realizes, at the time of an event, that it will have a definite evolutionary impact. But I think this one will.

For those interested, the Sanctus Germanus Foundation has posted a simple yet powerful chant designed to intentionally develop or enhance clairaudience, to make this ability commonplace.  This has the potential to change people’s experience of what life is.

Clearly, from the amount of channeled information in books and on the web, clairaudience is already more commonplace than in prior time periods. Some of this channeled info is extraordinarily helpful, some is misleading. Thus, precautionary comments are in order: Success will reveal that not all beings from “the other side” are beneficent saints. Nor are they omniscient. Some communicate to advance their own selfish interests, not the interests of the seeker of truth. And just as misunderstandings happen in standard verbal communications, so can the same easily happen with clairaudient communications. The best protection is to take the Mystery School course that is the source of the chant; this provides the wider context and the opportunity to work directly with the Master Serapis Bey.

For those who wish to go it alone: first, if you get into trouble, let’s just say with an entity that doesn’t want to go away, you can request a telepathic healing for that here; second, you might want to read the section under the heading “Tricky Discarnate Souls” at this link.

These cautions are not given to discourage anyone from developing a skill that is the right of all humans, but to highly recommend that discernment and reason be an integral part of the process.

The chant is explained here in a transcript excerpt from the course audio; and you can hear the chant at the link which is the title of that page.

For those who wish to do so, this can help people expand the portion of the energetic spectrum in which they are conscious participants.

Earth Changes Update, End of 2014 – Part 1

When I tell the truth, it is not for the sake of convincing those who do not know it, but for the sake of defending those that do.
–William Blake

NOAA, NASA, the Japanese, and the World Meteorological Org. all say 2014 is the hottest year in the modern record.

From NOAA Global Analysis – Annual 2014 :

The year 2014 was the warmest year across global land and ocean surfaces since records began in 1880….To date, including 2014, 9 of the 10 warmest years on record have occurred during the 21st century. 1998 currently ranks as the fourth warmest year on record.

NOAAtrend-since-1998

Six individual months ranked as the warmest for that month in the modern record:

Six months of 2014 (May, June, August, September, October, and December) were record warm, while April was second warmest, January, March, and July were fourth warmest for their respective months, and November was seventh warmest.

Bloomberg did an interesting, brief (20 seconds) animated display of the temperature record since 1880, at this link:

     2014 Was the Hottest Year on Record

And from Japan:

     2014 was the hottest year on record, Japanese scientists say

Japan_an_wld.0

The global cooling people (they may have one good point, mentioned below) have a couple of things they’ll trot out. One is that 2014 was not the hottest year in the satellite temperature measurement data sets. The headline from the folks who keep the satellite data says this:

     2014 was third warmest, but barely

The article at the link, which only sometimes works, explains that they take measurements at different altitudes. In one data set, 2014 was the third warmest year; in another, 2014 was the sixth warmest year.

The other point is in this chart from NOAA:

NOAAland-ocean-combined

This shows the separate trends for temperatures taken on land, ocean, and the two combined. 2014 is the hottest year in the combined data (the black line) and in the ocean data (the blue line). It is the fourth warmest in the land-only data (the gold line). Some global cooling people impugn the ocean temperature data, claiming that the thousands of ocean temperature buoys provide suspect data. Even if they turned out right about that, which seems very unlikely, the long-term trends are exceedingly clear on all of these charts.

Where the global cooling people may have a point is not about the warming trend being a fallacy, clearly they seem wrong about that, but about the cause of the warming. While I think humans do play a part in the warming, I think that part is small compared with natural cycles, especially those driven by the Sun, which people underestimate across the board: the Sun not only keeps our physical bodies alive, but also lights our inner life via its connection with each of us at the point of the pineal gland, in the center of the head. So the Sun has a very wide spectrum of influence. People have been amazed in recent years by repeated largest-storm-ever-recorded events, but these aren’t happening only on Earth, they’ve been noted on other planets as well. Check this from UC Berkeley:

     Amateur, professional astronomers alike thrilled by extreme storms on Uranus

uranusIR

“This type of activity would have been expected in 2007, when Uranus’s once-every-42-year equinox occurred and the sun shined directly on the equator,” noted co-investigator Heidi Hammel of the Association of Universities for Research in Astronomy. “But we predicted that such activity would have died down by now. Why we see these incredible storms now is beyond anybody’s guess.”

Sea levels

While the warming trend brings changes, I think those changes will be quite welcome in the long run. Unless, of course, the place you live has a lot of its infrastructure near sea level. Coastal cities the world over are hiring Dutch water engineers to plan how to keep the rising water out. Cities like Miami don’t like to talk about it (they worry about real estate values!), but they are spending hundreds of millions on new sea walls, as shown in this seven-minute video (h/t KR):

     Is Miami Beach drowning?

Those new sea walls won’t help a bit with storm drains that, instead of draining water away from city streets, now bring sea water to those streets at high tide. Most of these people make their plans using the UN’s IPCC estimates for sea level rise, stated in millimeters per year. I think such numbers will come to be seen as vastly underestimating the trend. As the video of Prof. Bartlett’s famous course on exponential growth shows so well, people have a tough time seeing the implications (and sometimes dangers) of something that grows by a fixed percent each year. Chris Martenson tries to summarize the exponential concept in a six-minute video and does a pretty good job of it:

     Crash Course Chapter 3: Exponential Growth

Storms and Floods

And the storms–on Earth, that is–just keep on coming. The increase in precipitation is likely great proof of the Earth’s warming trend as more water evaporates and becomes available for storms.

     Increases in extreme rainfall

Dr Westra … said trends in rainfall extremes were examined over the period from 1900 to 2009 to determine whether they were becoming more intense or occurring more frequently.
“The results show that rainfall extremes were increasing over this period, and appear to be linked to the increase in global temperature of nearly a degree which also took place over this time.
“If extreme rainfall events continue to intensify, we can expect to see floods occurring more frequently around the world.” Dr Westra said.

Here is a map showing the observed increases in very heavy precipitation events in the USA by region from 1958 to 2012:

HeavyCS_very-heavy-precip_V8-1

(Map source.)

In last year’s Earth changes statistical update, a chart from the world’s largest re-insurance company, Munich Re, was used to show that the increase in storms and floods was not imagined by deranged bloggers but was being reported by the hard-nosed insurance industry. This year, they didn’t update the chart, but they did publish that the number of “loss events,” as the insurance world calls them, hit a new record of 980 events:

In total, 980 loss-related natural catastrophes were registered, a much higher number than the average of the last ten and 30 years (830 and 640).

If they had updated the chart, it would include a bar similar to the one I added in purple for 2014, with the 980 level shown by the purple arrow:

MunichReWeatherAndEarthChanges2014BarAdClearly, the trend of natural catastrophes, especially storms and floods, is still on the rise. Munich Re noted that there were fewer deaths than previous years and–while noting that the death toll was lowered by the lack of a mega-catastrophes like the Japan earthquake/tsunami of 2011–applauded countries for their use of improved early warning systems. It sounds like both nations and individuals are wisely beginning to gain respect for the power of these events. Let’s hope that this is a general trend that leads to more and more people moving away from areas prone to flooding, typhoons, earthquakes, and tsunamis. An appropriate regard for these accelerating trends can save individuals and humanity a great deal of anguish.

Unusual and massive flooding has become, well, usual, even epidemic. Here are some just from the last month, compiled by SOTT.NET:

     Catastrophic flooding continues in southern Africa, considered one of worst disasters in years

     Flooding hits Zimbabwe, Malawi and Mozambique

     South Australia prepares for flooding: 15 times their monthly rainfall

     Flooding, landslides and power outages hit Washington state

     Uruguay suffers severe flooding with much of Montevideo under water

     31 dead, 7 missing after Tropical Storm Jangmi triggers floods, landslides in Philippines

     Malaysian national park receives heaviest rainfall in more than 40 years

     Flash floods in Sri Lanka displace 46,000

     4 dead and 14,000 evacuated after flooding on the Thailand – Malaysia border

     Extreme flooding in Sao Paulo, Brazil

Earthquakes

With 156 magnitude 6.0 or greater earthquakes during 2014, the large-earthquake uptrend is more than intact. Here is my updated chart, using data from the USGS, with the arrow showing the clear trend:

QuakeTrend2014ShorterLabeledArrow

Maybe you think that’s an anomaly, not enough data is shown? Here’s the same chart with an additional nine years of data, back to 1973:

QuakeTrendThru2014Labeled

The science community is starting to admit the trend:

     A global surge of great earthquakes from 2004-2014 and implications for Cascadia

The last ten years have been a remarkable time for great earthquakes. Since December 2004 there have been no less than 18 quakes of Mw8.0 or greater – a rate of more than twice that seen from 1900 to mid-2004.

In 2014, there were no mega-quakes like the magnitude 9+ quakes that caused the deadly tsunamis of 2004 in the Indian Ocean and 2011 in Japan, so there were no major tsunamis.

It’s becoming commonly accepted that fracking and its associated wastewater injection activity causes earthquakes. So far, at least, these have been smaller-size quakes:

     Hydraulic fracturing linked to earthquakes in Ohio

     Oil Wells Linked to Oklahoma’s Stunning Increase In Earthquakes

     Second Greeley, Colorado earthquake halts injection site work

     Wastewater disposal may trigger quakes at a greater distance than previously thought

If you don’t live near a fracking site, here’s a great “meet your new neighbors” photo:

Fracking

Volcanoes

At the start of 2015, these were the numbers for currently-active volcanoes, with their colors as shown on the maps below (the interactive version of the map is here):

Erupting (red)   44
Warning/minor activity (orange)   32
Unrest (yellow)   75
      TOTAL 151

Ring of Fire map:

VolcanoesRingOfFire2015Start

Rest of the world:

VolcanoesAME2015Start

Some say that the extraordinary amount of volcanic activity is contributing to weather wildness and a slowing of the Earth’s warming trend. The latter point would not be surprising given this chart from the Berkeley Earth Surface Temperature project showing that truly major volcanic eruptions temporarily slow the rising temperature trend:

volcWeatherresults-plot-volcanoes

(Chart Source)

The article at this link has a short video of Iceland’s Bardarbunga volcano which has been producing 50 to 70 cubic meters of lava per second since August, 2014.

And these are just the land-based volcanoes. No one knows how many undersea volcanoes are active, though some are starting to think they are active enough to be warming the oceans. Previously-underwater volcanoes have been creating new islands, one in Tonga (which has been erupting every five minutes for a month) and two in Japan.

      Tongan Volcano Creates New Island

tonga_volcano-new-island

     Dramatic Video Shows Volcano Making New Island Off Japan 

Methane

Methane is being released not just from the ocean floor in the Arctic:

     Arctic Ocean releasing large volumes of methane

but also all along the Atlantic Coast of the USA:

     Hundreds of Methane Plumes Erupting Along East Coast

methane-bubbles

In an unexpected discovery, hundreds of gas plumes bubbling up from the seafloor were spotted during a sweeping survey of the U.S. Atlantic Coast….Between North Carolina’s Cape Hatteras and Massachusetts’ Georges Bank, 570 methane seeps cluster in about eight regions, according to sonar and video gathered by the National Oceanographic and Atmospheric Administration ship Okeanos Explorer between 2011 and 2013.

Sinkholes

Sinkholes continue to proliferate. SOTT.NET is the only service I have seen tracking these numerically. Yes, many sinkholes can be explained by broken water mains and the like, but others have no known explanation. SOTT.NET shows this as the emerging trend:

SinkholesSOTT2014

What’s causing these trends?

There are several theories about the cause of these increasing Earth changes. In my view, the one that best encompasses the full array of changes is the one that says, summarized briefly: Earth and humanity are beginning their evolutionary passage from third dimension to fourth dimension reality and therefore everything, everything is becoming more permeable, from the Earth’s crust to the lies of our governments to the divisions between the planes of existence, enabling more people to increasingly access realms of life that have traditionally been hidden. In any case, it seems that two things are clear:

1. These trends are accelerating, not diminishing, and as such, they deserve people’s attention and respect. Prof. Bartlett is right, people don’t realize the power of exponential trends, even less so with accelerating trends. Living in places that these trends indicate as high risk areas reminds me of a phrase in the financial markets for remaining in trades to the very last minute where the chance of gain is small and the risk of loss is huge: “picking up nickels in front of a steamroller.”

2. Whatever the cause or causes, there is clearly a pervasive energetic component to this planetary event. One demonstration of this is the great upset and upheaval taking place in the animal kingdom, which will be covered in Part 2.

The deflationary wave intensifies

Little darling, I feel that ice is slowly melting
Little darling, it seems like years since it’s been clear
Here comes the sun, here comes the sun
And I say it’s all right
     –George Harrison, The Beatles, Here Comes the Sun

Most people have probably heard by now that world crude oil prices are in a dramatic plunge. In the futures market, the price is down 47% since June, from $107.68 per barrel to $57.49. The scuttlebut is that prices in the cash market are even lower as desperate countries and companies get what prices they can.

And it isn’t just crude oil prices that are crashing. Think stuff that China used for its “economic miracle,” like the price of iron ore (used in making steel), which has been cut in half since 2013.

But this current wave of deflation has taken on a new intensity. ZeroHedge summarized the most recent week quite well in Crude Carnage Contagion: Biggest Stock Bloodbath In 3 Years, Credit Crashes [my explanatory remarks in brackets]:

WTI’s [oil] 2nd worst week in over 3 years (down 10 of last 11 weeks)
Dow’s [stocks] worst worst week in 3 years
Financials [stocks] worst week in 2 months
Materials [stocks] worst week since Sept 2011
VIX’s Biggest week since Sept 2011 [VIX is a fear index, it rises when people are afraid]
Gold’s best week in 6 months [Gold is real money, solidified sunlight 🙂 ]
Silver’s last 2 weeks are best in 6 months [Silver is also real money!]
HY Credit’s worst 2 weeks since May 2012 [HY = High Yield (aka junk) bonds]
IG Credit’s worst week in 2 months [IG= Investment Grade bonds]
10Y Yield’s best week since June 2012 [10Y = US 10 year note]
US Oil Rig Count worst week in 2 years [Rigs are for drilling/fracking]
The USDollar’s worst week since July 2013
USDJPY’s worst week since June 2013 (USDJPY = US$ priced in Japanese Yen]
Portugal Bonds worst week since July 2011
Greek stocks worst week since 1987

So, why the intensifying deflation? Because, as has been explained here on several occasions, the world is groaning under an increasingly fierce debt load. The central banks have printed up $11 trillion in new money in the last 5 years to try to fend off deflation. Why? Because when debt loads get too large, some people and companies can’t pay back their loans, so they default, and the money they owe disappears. If they are companies, their employees lose their jobs. So their households spend less. Putting pressure on more businesses because of lost sales. Leading to more layoffs and more defaults. It’s a vicious cycle, an economy in reverse, and economy that is deflating. Remember, because all of the money in the system is debt, the economy must always grow to pay the interest on that debt. If the economy stops growing, the interest can’t be paid, defaults arise, and the deflationary cycle ensues. People tend to associate deflation with falling prices, but the falling prices are the result of deflation, not its cause.

So the central banks tried to ease the debt load by lowering interest rates to zero or lower. But one of the results was that all that cheap money financed all kinds of projects that would never have been created without this almost-free money because they weren’t very good ideas to begin with, such as the stories we’ve all heard about China having 3,000 companies all basically in the same business–how can they all make money? They can’t. Such overcapacity makes life tough for all of the companies, which all have to lower their prices, which start laying off employees, which can’t pay back their debts, etc. etc. as explained above. So this lowering of rates might seem to work for a short time, but when it’s carried on for years, it’s deflationary!

The second thing the central banks did was create this new $11 trillion to buy more debt! So they are trying to fight a problem of too much debt by creating more debt! Historians will marvel at the lack of logic by an entire academic profession. The reason for this pervasive illogic is that academic economists have for years purged from their ranks anyone who brought up the topic of gold as real money, ridiculing and marginalizing them. So they banished logic from their own ranks.

But let’s get back to the big deal of the last several weeks, the crash in oil prices. Cool, you might say, I’ll be able to pay less when I fill up my car with gas. True. But it might be wise to consider why oil prices are crashing:

     World Oil Demand Outlook Cut Again; Sub-$60 Price Seen Holding

Any hope that global demand would provide a floor for oil’s freefall was dashed as the leading energy forecaster cut its outlook for the fourth time in five months and crude extended its tumble.

Frankly, I don’t think I’ve ever heard of one of these international organizations like the International Energy Agency cutting their forecast four times in five months. So what’s happening is collapsing demand for oil.

Several recent financial statistics that measure changes in the economy are reporting levels of decline “last seen in 2009.” Recall that in 2009, a lot of people thought the world economy was not just staring into the abyss, but was about to fall in.

     PPI Slides, Misses Estimates, After Finished Goods Prices Tumble Most Since July 2009

     Short-Term Inflation Expectations Have Crashed To 5 Year Lows (In The US)

Now how does this relate to yet another “miracle” discovered by the pom-pom and short-skirt-bedecked economic and political cheerleaders, the “US shale miracle”? This is the miracle by which the US will allegedly frack its way to energy independence.

For the last three years, the US shale drillers have been borrowing $1.50 for every $1.00 in oil and gas that they pull from the ground. And that was with oil prices above $100 per barrel. The industry as a whole expected to get to breakeven–instead of losing money hand over fist, which is what they have been doing with oil just above $100–with oil above $120 per barrel. But now the price is under $60, which is less than half of the price needed for them to break even. (Chris Martenson’s group has done a great, clear video on this if you want the details.)

All told since early 2010, these energy producers have borrowed at least $550 billion. Remember that the size of the sub-prime mortgage problem was around $1.1 trillion, and the collapse of that sub-prime mortgage market nearly took down the whole system. These oil frackers have borrowed over a half trillion just since 2010 and now it looks like a lot of that borrowing will not get repaid, that is, they will default.

Now that $550 billion was a lot of spending for purchasing equipment and creating jobs to use that gear. It turns out that 1/3 of business capital spending in the US in recent years has been for energy exploration and production. And some estimate that 90% of new jobs created in the US in the last five years are related to energy production.

But now suddenly, no one wants to lend the frackers cheap money to create more overcapacity in the shale patch (because the lenders know there is a good chance they will never get paid back.) So now there will be a huge drop in equipment purchases and lots of job layoffs, leading to, you guessed it, more deflation!

If you don’t think this will happen, check this headline:

     Exclusive: New U.S. oil and gas well November permits tumble nearly 40 percent

Plunging oil prices sparked a drop of almost 40 percent in new well permits issued across the United States in November, in a sudden pause in the growth of the U.S. shale oil and gas boom that started around 2007.

Data provided exclusively to Reuters on Tuesday by industry data firm Drilling Info Inc showed 4,520 new well permits were approved last month, down from 7,227 in October.

So, the “US shale miracle” will be proven to be another fable, along with the US energy independence it was supposed to engender. It was fueled by a supply of ultra-cheap money that has now dried up. One aspect of fracked wells is that they lose 70% of their production capacity in two years, and 80% to 90% in three years. So to keep more oil flowing, these fracking companies have had to borrow more and more money to drill more and more wells. As described above, it wasn’t a very good business model and would not have existed were it not for the cheap money being provided to Wall St by the central banks.

So while you may be able to buy cheaper gas for your car, the US economy is likley to take a serious hit relating to jobs and business spending from the oil collapse.

And the US is supposed to be the bright spot in the world economy. Japan is in recession yet again. The Eurozone perennially flirts with recession, and is being dragged down by the US-led sanctions against Russia, which itself has fallen back into recession. China claims to still be growing, but the hard evidence of the falling prices mentioned above, falling real estate prices, and stalling growth in the use of electricity in China argues otherwise. From Deutsche Bank:

…the global financial system is still extremely fragile and not sustainable…2015 will be the 9th year of highly unconventional central bank policy and…we’re no nearer to finding a sustainable solution…
–Deutsche Bank

But not to worry: Uber, the emerging ride sharing service, is said to be valued at $40 billion. (Those must be some rides!)  And Jessica Alba’s new diaper-cleaning service company is apparently valued at $1 billion!

     No Bubble At All: Jessica Alba’s Diaper-Delivery Startup Is Valued At $1 Billion, Prepares For IPO

So I guess everyone will get rich (again, like in the year 2000) from internet startups?

Historically, deflation is rather unkind to stock prices. World stock markets are currently being floated by the free money from the central banks, but how long can that last? And this deflationary trend has supports beyond the overload of debt, such as the end of several cycles, including the the 26,000 year precession of the equinoxes, which tends to really clear the decks on this planet.

Now, will this deflation crash the price of gold? Not at all likely. Historically, gold increases in purchasing power during both inflationary and deflationary periods; these are periods during which people start to think that governments are losing control, so people opt for real money over government-issued scrip. Gold loses purchasing power when people think everything is, to put it technically, hunky-dory, and that their government is doing a great job. Most people don’t see it that way during bouts of deflation. Intelligent observers are still stacking real coins:

     Sales Of Silver American Eagles Rise To Record High For Second Consecutive Year

and likely hanging onto their hats to get ready for a very wild ride. Because sometimes, in reaction to deflation, governments really ramp up the money printing presses, and people lose all confidence in government money, which is known as hyper-inflation.

Whatever it is that’s coming, it’s good to know that our bank regulators will be well protected:

     Why Is The US Treasury Quietly Ordering “Surival Kits” For US Bankers?

The Department of Treasury is spending $200,000 on survival kits for all of its employees who oversee the federal banking system, according to a new solicitation. As FreeBeacon reports, survival kits will be delivered to every major bank in the United States and includes a solar blanket, food bar, water-purification tablets, and dust mask (among other things). The question, obviously, is just what do they know that the rest of us don’t?

Numb

Imagine the impact if people alive in the 1950’s had encountered these articles, all from today:

     Sixty dead in suicide blasts in Nigeria

Two explosions at a crowded market in northeastern Nigeria have killed at least 60 people.

The twin bomb blasts, thought to have been carried out by female suicide bombers, hit a market in Maiduguri, the capital of Borno state.

“After the first explosion happened and people started to gather, a second explosion took place,” Al Jazeera’s Rawya Rageh, reporting from Abuja, said…

Hospitals have been flooded with injured residents, Al Jazeera sources said.

     Suicide blast kills dozens in Afghanistan

Officials say bomber targeted volleyball tournament match attended by large crowd in province bordering Pakistan.

People living in the 1950’s would have been deeply shocked. Not fake “shocked,” like our politicians pretend to be. Truly, deeply disturbed.

Today? For most people? Just another day in the news. Background noise, if they even hear about these events at all. The mainstream media tends to ignore them in favor of politicians sniping at each other, the demonizing of trumped-up enemies, the antics of movie stars, and lies masquerading as economic statistics to get people to spend and borrow rather than save.

     ‘Scores dead’ in air strikes on Syria’s Raqaa

Government raids on ISIL-held northern city have mainly killed civilians, with hundreds more injured, activists say.

     Pakistan says 20 fighters dead in air strikes

     Iraq’s Anbar grapples with devastation 

As usual, if people are getting blown up, it’s easy to find US involvement:

     Group: Death toll of U.S.-led airstrikes in Syria tops 900

     Hacked US Documents Said To Reveal Extent Of Undisclosed US “Lethal Aid” For Ukraine Army

And here’s a headline from Oct. 17 that says plenty (hat tip to JS):

     Pentagon readying for long war in Iraq, Syria

Every day, people are literally being blown to bits in the many conflicts (these used to be called wars), on the many battlefronts around the globe. Many are killed, many more seriously injured, still more are devastated in their minds and hearts. What has happened to us that such events do not sink in? How can these reports just pass on by like reports on sports or the weather?

Think this killing is just in the Middle East?

2,200 National Guard Troops To Be Deployed In Ferguson Tonight

     Forget Ferguson, 244 Teenagers Have Been Shot In Chicago Since Michael Brown Died

Statistics on the war in Chicago from this site:

     Totals Since Ferguson (Aug 9 – Nov 24)
          Shot & Killed: 130
          Shot & Wounded: 725
          Total Shot: 855
          Total Homicides: 155
     Year To Date Totals
          Shot & Killed: 343
          Shot & Wounded: 2,003
          Total Shot: 2,346
          Total Homicides: 408

So, we’re blowing up and shooting people, we’re killing off lots of species, we’re killing the oceans, we’re poisoning our farmlands, we’re draining the world’s great aquifers so quickly that entire cities are sinking, we’re fracturing the Earth’s crust for oil and gas and pumping the poisons from the process back into our aquifers, 30 million people are held as slaves, 800 million people don’t have enough food or clean water…you know this sentence could go on for a long time.

And yet, and yet…this is the status quo that people want to maintain. This is the system they want to keep. Maybe with a few minor tweaks around the edges, a few reforms.

What has happened to us? How did we get so distracted, so numb? What will it take for people to awaken?

Saturday morning cartoons

(But) look at these sexagenarian dogs! Their dog-teeth get sharper at every moment. The hairs drop from the fur of an old dog; (but) see these old (human) dogs clad in satin! See how their passionate desire and greed for women and gold, like the progeny of dogs, is increasing continually! Such a life as this, which is Hell’s stock-in-trade, is a shambles for the butchers (executioners) of (the Divine) Wrath; (Yet) when people say to him, “May your life be long!” he is delighted and opens his mouth in laughter.
He thinks a curse like this is a benediction: he never uncloses his (inward) eye or raises his head once (from the slumber of heedlessness). If he had seen (even as much as) a hair’s tip of the future state, he would have said to him (who wished him long life), “May thy life be like this!”
–Rumi, The Mathnawi, Book VI, circa 1270 A.D.

The cartoons at the link below should be required viewing (and understanding!) in school, especially any history or economics class. These cartoons are all from 100 years ago or more. They clearly describe the cementing into law–pending at the time– of the rigged banking, currency, and stock markets that financially enslave almost everyone on the planet to the endless hunger for humongo-profits of the few. They show that at least a some people understood the game then. Sadly, few understand the game even now. How do we get this understanding to everyone so that we can end this vicious travesty? How do we bring in the logic and compassion that clearly show the primitive and self-defeating nature of systematically-enshrined greed? Continue reading