Are we in a deflationary collapse right now?

[mamboni]

http://theeconomiccollapseblog.com/archives/11-economic-crashes-that-are-happening-right-now


(http://theeconomiccollapseblog.com/archives/11-economic-crashes-that-are-happening-right-now)

11 Economic Crashes That Are Happening RIGHT NOW


By Michael, on April 12th, 2013

The stock market is not crashing yet, but there are lots of other market crashes happening in the financial world right now. Just like we saw back in 2008, it is taking stocks a little bit of extra time to catch up with economic reality. But almost everywhere else you look, there are signs that a financial avalanche has begun. Bitcoins are crashing, gold and silver are plunging, the price of oil and the overall demand for energy continue to decline, markets all over Europe are collapsing and consumer confidence in the United States just had the biggest miss relative to expectations that has ever been recorded. In many ways, all of this is extremely reminiscent of 2008. Other than the Bitcoin collapse, almost everything else that is happening now also happened back then. So does that mean that a horrible stock market crash is coming as well? Without a doubt, one is coming at some point. The only question is whether it will be sooner or later. Meanwhile, there are a whole lot of other economic crashes that deserve out attention at the moment.
The following are 11 economic crashes that are happening RIGHT NOW...


#1 Bitcoins


As I write this, the price of Bitcoins has fallen more than 70 percent (http://www.businessinsider.com/bitcoin-loses-77-of-value-from-high-2013-4) from where it was on Wednesday. This is one of the reasons why I have never recommended Bitcoins to anyone. Yes, alternative currencies are a good thing, but there are a lot of big problems with Bitcoins. Why would anyone want to invest in a currency that could lose 70 percent of its purchasing power in just two days? Why would anyone want to invest in a currency where a single person can arbitrarily decide to suspend trading in that currency at any time?
An article by Mike Adams of Natural News (http://www.naturalnews.com/039880_bitcoin_bubble_panic_selling_accounts_froze n.html) described some of the things that we have learned about Bitcoins this week...
#1) The bitcoin infrastructure cannot handle a selloff. Once the rush for the exits gains momentum, you will not be able to get out. Only those who sell early will be able to exit the market.


#2) The bitcoin infrastructure is subject to the whims of just one person running MTGox who can arbitrarily decide to shut it down whenever he thinks the market needs a "cooling period." This is nearly equivalent to a financial dictatorship where one person calls the shots.


#3) Every piece of bad news will be "spun" by exchanges like MTGox into good-sounding news. As bitcoin was crashing yesterday by 60% in value in mere hours, MTGox announced it was a "victim of our own success!" So while bitcoin holders watched $1 billion in market valuation evaporate, MTGox called it a success. Gee, then what would you call it when bitcoin loses 99%? A "raging" success?


#2 Gold


The price of gold was down by about 4 percent (http://buzz.money.cnn.com/2013/04/12/gold-plunges/?iid=HP_LN) on Friday. Gold has now fallen below $1500 an ounce for the first time since July 2011. Overall, the price of gold has fallen by about 10 percent since the beginning of the year, and it is about 22 percent (http://www.cnbc.com/id/100636206) below the record high set back in September 2011.


Yes, the price of gold is likely being pushed down (http://theeconomiccollapseblog.com/archives/why-are-the-banksters-telling-us-to-sell-our-gold-when-they-are-hoarding-gold-like-crazy) by the banksters. And yes, gold is a fantastic investment for the long-term. But there will be times when the price of gold does fall dramatically just like we saw back in 2008.


#3 Silver


The price of silver fell by about 5 percent (http://www.kitco.com/charts/livesilver.html) on Friday. If it falls much more it is going to be at a level that presents a historically good buying opportunity.

Just like gold, there will be times when the price of silver swings dramatically. But the truth is that silver is probably an even better long-term investment than gold is.


#4 Oil


The price of oil declined by about 3 percent (http://www.businessinsider.com/commodities-are-getting-massacred-today-2013-4) on Friday. Many will consider this a positive thing, but just remember what happened back in 2008. Back then, the price of oil dropped like a rock. If the price of oil gets below $80, that could very well be a clear signal that a major economic crisis is about to happen.


#5 Consumer Confidence


As I mentioned above, consumer confidence in the U.S. just had its biggest miss relative to expectations that has ever been recorded. The following is from an article posted on Zero Hedge on Friday (http://www.zerohedge.com/news/2013-04-12/consumer-confidence-plummets-nine-month-low-biggest-miss-consensus-record)...
Well if this doesn't send the market into all-time record high territory, nothing ever will: seconds ago the UMich Consumer Confidence plummeted from 78.6 to 72.3, on expectations of an unchanged 78.6 print. This was not only a 9 month low in the index, but more importantly the biggest miss to expectations in recorded history!


#6 Retirement Accounts


According to Wells Fargo (https://www.wellsfargo.com/press/2013/20130411_IncreaseinParticipantsTakingLoans), the number of Americans taking loans from their 401(k) accounts has risen by 28 percent over the past year...
Through an analysis of participants enrolled in Wells Fargo-administered defined contribution plans, the bank announced today that in the fourth quarter of 2012, there was a 28 percent increase in the number of people taking loans out from their 401(k) and that the average new loan balances increased to $7,126 from those taken out in the fourth quarter of 2011 - a 7% increase from $6,662.
Of the participants who took out loans, the greatest percentage were to people in their 50s (34.2%), followed by those in their 60s (28.9%) and then by those in their 40s (27.3%). The increase among participants in their 50s was nearly double the increase among those under 30. This is based on an analysis of a subset of 1.9 million eligible participants in retirement plans that Wells Fargo administers.
“The increased loan activity particularly among older participants is concerning because those are the years when workers can start to make ‘catch-up’ contributions and really need to focus on preparing for retirement,” said Laurie Nordquist, director of Wells Fargo Retirement.


#7 Casino Spending


Casino spending is declining again. Many people (including myself) would consider this to be a good thing, but casino spending is also one of the most reliable indicators about the overall health of the economy. Remember, casino spending crashed during the last financial crisis as well. That is why it is so alarming that casino spending is now back to levels that we have not seen since the last recession (http://www.zerohedge.com/news/2013-04-09/broke-and-broker-us-casino-spending-tumbling-back-great-recession-levels).


#8 Employment In Greece


Over in Europe, things just continue to get worse. According to numbers that were just released, the unemployment rate in Greece has soared to 27.2 percent (http://www.telegraph.co.uk/finance/financialcrisis/9986806/Greek-unemployment-hits-a-fresh-record.html), which was up from 25.7 percent the previous month. That means that the unemployment rate in Greece rose by 1.5 percent in just a single month. That is not just a crash - that is an avalanche of unemployment.


#9 European Financial Stocks


European financial stocks have been hit particularly hard lately. And for good reason actually - most of the major banks in Europe are essentially insolvent at this point. This week, European financial stocks fell to seven month lows (http://www.zerohedge.com/news/2013-04-08/european-financials-drop-7-month-lows), and this is probably only just the beginning.


#10 Spanish Bankruptcies


According to Reuters (http://www.reuters.com/article/2013/04/08/us-spain-bankruptcy-idUSBRE9370PE20130408?feedType=RSS&feedName=businessNews), the number of Spanish companies going bankrupt has risen by 45 percent over the past year...
A record number of Spanish companies went bust in the first quarter of 2013 as companies remained under intense pressure from tight credit conditions and meager demand, a study showed on Monday.
The 2,564 firms filing for insolvency proceedings in first three months of the year was a 10 percent rise from the previous quarter and a 45 percent increase on the same period in 2012, the survey by credit rating agency Axesor said.


#11 Demand For Energy


Just like we saw back in 2008, the overall demand for energy in the United States is falling rapidly. There are some shocking charts that prove this that were recently posted on Zero Hedge that you can find right here (http://www.zerohedge.com/news/2013-04-06/these-charts-better-not-represent-true-state-us-economy).


Yes, it is good for people to use a bit less energy, but it is also a clear indication that economic activity is really starting to slow down.
But despite everything that you have just read, the Dow and the S&P 500 have been setting new record highs (http://www.reuters.com/article/2013/04/10/us-markets-stocks-idUSBRE93006T20130410).
And if you listen to the mainstream media (http://theeconomiccollapseblog.com/archives/tag/mainstream-media), you would think that this stock market bubble (http://theeconomiccollapseblog.com/archives/tag/stock-market-bubble) can continue indefinitely.
Fortunately, there are a few voices of reason out there. For example, just check out what Marc Faber recently told CNBC (http://www.cnbc.com/id/100623607)...
In the near-term, the U.S. stock market is overbought and adding that any more near-term gains portend big trouble for the market, "The Gloom, Boom & Doom Report" publisher Marc Faber told CNBC on Monday.


"If we continue to move up, the probability of a crash becomes higher," Faber predicted in a "Squawk Box" interview, saying it could happen "sometime in the second half of this year."


As I have written about previously (http://theeconomiccollapseblog.com/archives/the-dow-hits-an-all-time-high-translation-a-bubble-is-always-biggest-right-before-it-bursts), a bubble is always the biggest right before it bursts. I hope that we still have at least a little bit more time before it happens, but I wouldn't count on it.


The economic fundamentals (http://theeconomiccollapseblog.com/archives/why-is-the-world-economy-doomed-the-global-financial-pyramid-scheme-by-the-numbers) tell us that the stock market should be plunging, not rising. At some point the boys over on Wall Street will get the message and the market will catch up to reality very, very rapidly.


But for the moment, the American people are feeling really good. According to CNN (http://politicalticker.blogs.cnn.com/2013/04/12/mood-of-the-nation-six-year-high-in-optimism-cnn-poll-shows/comment-page-4/#comment-4723493), Americans are now more optimistic than they have been in six years...


As the stock market continues to show record highs, the number of Americans who say things are going well in the country has reached 50% for the first time in more than six years, according to a new national survey.


So what do you think will happen for the rest of the year?


Do you think that the good times will continue to roll, or do you believe that the bubble is about to burst?
Please feel free to share your opinion by posting a comment below...





















http://theeconomiccollapseblog.com/archives/11-economic-crashes-that-are-happening-right-now

[Hatha Sunahara]

Sure looks like a deflationary spiral. But this is what the banksters do to shake everybody loose from owning anything. They constrict the money supply and manipulate markets to get prices for everything down so they can buy everything for pennies on the dollar. And when they own everything and everybody is desperate for money and willing to be a good compliant slave, they slowly turn the money taps back on.

There are a number of additional factors playing out now that hadn't been present in historical depressions. One of them is the existence of a mountain of derivatives which are insurance policies against default on loans. If anybody anywhere defaults on a big loan, it will set off a chain reaction, like a series of connected demolition charges, and the big banks will have to pay out thousands of times more money than actually exists. So,big bank failures are out of the question. Before the big banks go belly up, they will steal everything all of us have and then will print up even more money,and none of that will do any good, so we are essentially on a path to financial and economic global suicide. It's all been planned to happen this way because the global elite want centralized control and a global currency. Power is shifting to the BRICS, and the global elite will own everything and nobody else will own anything, and the world will be enslaved until all the insanity is purged out of human consciousness.


Hatha

[old steel]

It could always be worse.


http://www.youtube.com/watch?v=hOiePQYFzLA

[Cebu_4_2]

It could always be worse.


He didn't even see that one coming.

[vacuum]

How likely is it that either

a) Prices are dropping and deflation is occurring because of a potential pending war with north korea?

b) The north korean conflict is being intentionally created to stave off the deflationary collapse which we are starting to see spiral?

Are these events related? Is one causing the other?

We just went to DEFCON 3. See this thread:
http://gold-silver.us/forum/showthread.php?68700-US-Sets-DEFCON-3-as-Chinese-Troops-Mass-at-North-Korean-Border

[mamboni]

Ben is printing furiously. But debts and credit and certain asset prices are being extinguished faster in the aggregate. All the new dollars are being hoarded by the big banks that trade "worthless" paper derivatives for new dollars from the FED. The domestic economy is dying from lack of money and credit and dropping money velocity: declining labor participation rates, closing businesses and outsourced jobs. So inflation at the street level remains in check as no one has money to drive up prices. Extrapolate forward (we're almost there): few large banks hold all the money and assets, the general population with no net worth, no property living on government rations in government camps, and a few politician mouthpieces for the rich 0.01%. In other words a banana republic aka third world dictatorship. I suppose the wild card is the military, the guys and gals who swore an oath to protect and defend the Constitution. Or maybe that's just an old quaint notion?

How do we the people reverse this process?

[Jewboo]

How do we the people reverse this process?



https://lh3.ggpht.com/-dro6gRLGlDk/UT5t1vHpZKI/AAAAAAAA1-o/ET15KicoiI8/s640/dhs-purchased-2700-mine-resistant-armor-protected-vehicles-g-politics-1362415796.jpg

http://grumpyelder.com/wp-content/uploads/2013/03/napolitano-dhs-ammunition-purchase-orders-540x315.jpg

Homeland Security was buying tanks and ammo while fools were buying Bitcoins and iPads.

[gunDriller]

He didn't even see that one coming.

is he OK ?

[Golden]

www.youtube.com/watch?v=K4tMMzTuoA8

The Great Happening is finally here

[monty]

Sure looks like a deflationary spiral. But this is what the banksters do to shake everybody loose from owning anything. They constrict the money supply and manipulate markets to get prices for everything down so they can buy everything for pennies on the dollar. And when they own everything and everybody is desperate for money and willing to be a good compliant slave, they slowly turn the money taps back on.

There are a number of additional factors playing out now that hadn't been present in historical depressions. One of them is the existence of a mountain of derivatives which are insurance policies against default on loans. If anybody anywhere defaults on a big loan, it will set off a chain reaction, like a series of connected demolition charges, and the big banks will have to pay out thousands of times more money than actually exists. So,big bank failures are out of the question. Before the big banks go belly up, they will steal everything all of us have and then will print up even more money,and none of that will do any good, so we are essentially on a path to financial and economic global suicide. It's all been planned to happen this way because the global elite want centralized control and a global currency. Power is shifting to the BRICS, and the global elite will own everything and nobody else will own anything, and the world will be enslaved until all the insanity is purged out of human consciousness.

Hatha

I am sure that you are 100% correct!

[Hypertiger]

Bretton woods according to this chart has been collapsing since late 2007.

[Horn]

4696

Thank goodness for positive Bitcoin drones.

[mamboni]

Common sense says that cash is king. And paper cash is better than digital cash. But I don't think you should go 100% cash. There is always a risk of a currency devaluation or default - an entire issue is cancelled or devalued. While I don't think that is likely for the dollar, I still think that after providing for healthy cash flow and a minimum of 6-12 months expenses in cash you should diversify into the 4Gs, just in case TSHTF: guns, gold (& silver), grub and guns.

Uberkitty's chart says it all: we have hit maximum potential/rate of credit expansion and the Central Banks are printing furiously to prevent a free-fall collapse of credit. It seems inevitable that they will eventually fail and the bottom falls out (deflation). Alternatively, the Central Bankers could call an emergency meeting and announce a massive coordinated QE to double the monetary base a la Japan (inflation). The problem is that the latter is like monetary Chinese food - after a while you're hungry for more credit money. In the end, it looks like deflation is inescapable. Anyone disagree?

[gunDriller]

if there's only W in the Vault

we must Default.


W being the chemical symbol for Tungsten.


and when they do default, it will be called "Something Something Something Reform".

[Glass]

Common sense says that cash is king. And paper cash is better than digital cash. But I don't think you should go 100% cash. There is always a risk of a currency devaluation or default - an entire issue is cancelled or devalued. While I don't think that is likely for the dollar, I still think that after providing for healthy cash flow and a minimum of 6-12 months expenses in cash you should diversify into the 4Gs, just in case TSHTF: guns, gold (& silver), grub and guns.

Uberkitty's chart says it all: we have hit maximum potential/rate of credit expansion and the Central Banks are printing furiously to prevent a free-fall collapse of credit. It seems inevitable that they will eventually fail and the bottom falls out (deflation). Alternatively, the Central Bankers could call an emergency meeting and announce a massive coordinated QE to double the monetary base a la Japan (inflation). The problem is that the latter is like monetary Chinese food - after a while you're hungry for more credit money. In the end, it looks like deflation is inescapable. Anyone disagree?

No. And the end of a currency can be a haircut of up to 100% but no matter how much, there will be a haircut. If a new currency, new dollar comes in it's place any exchange new for old, will be in the bankers favour.

[Jewboo]

I still think that after providing for healthy cash flow and a minimum of 6-12 months expenses in cash you should diversify into the 4Gs, just in case TSHTF: guns, gold (& silver), grub and guns...Anyone disagree?



I never bought into the silver thingie, but I did buy my AGEs at $560. Today, my 4 would be grub, ammo, guns, then maybe more ammo.

[Horn]

I never bought into the silver thingie, but I did buy my AGEs at $560.

Nobody would've expected anything more from a statist... :p

[mamboni]

No. And the end of a currency can be a haircut of up to 100% but no matter how much, there will be a haircut. If a new currency, new dollar comes in it's place any exchange new for old, will be in the bankers favour.


In a deflation, two groups are wiped out: superrich and debtors. Virtually all super rich (billionaires) operate on leverage and credit. If the music stops, they fall out of the economic stratosphere to hard reality. Debtors, the poor and the struggling middle class on rotating credit, get trapped in unpayable debt. At best, the debt is cancelled and they go to zero. Who wins: people with net positive worth in cash and hard assets, assuming the cash isn't siezed (bank holiday) or devalued/cancelled (currency collapse). In short, the frugal, hardworking, live-within-their-means productive middle class and a few old money goldbugs/landowners are the winners in a deflationary collapse. This has got to be a huge conundrum for the banksters because such an outcome is totally unacceptable. Yet deflation, like a black hole's pull, seems inescapable and inevitable.

What to do? What to do?

[Spectrism]

It could always be worse.


http://www.youtube.com/watch?v=hOiePQYFzLA


That blast was a nice cap to those morons yelling incessantly allah akbar. All their videos have those idiots screaming it as if it will do them some good. Wait till they find out allah is Satan ramming a pitchfork up their asses.

ed= I just went frame by frame.... you could see the back guy get his face blown off!
...and there is a part 2 showing the poor sucker on his last beats. War is hell.


Deflation? Well... the only printing is to support government spending. Remember the "stimulus" checks Obongo experts sent out a few years ago? Where are they now? Instead, trillions of dollars were wasted by Oboingo and Bushee on building an army against America and sending supplies to our enemies around the world. Our manufacturing is gone. Our technology advantage is gone. Our superior firepower is gone. And all we have left is a halfrican nigger illegal alien set up as the puppet prince of Amerika, changing this once great nation into a communist deathkamp.

[Horn]

http://www.youtube.com/watch?v=1X2JP80Y0QY

Throw your thoughts back many years
To the time when there was life with every morning
Perhaps a day will come when the light will be as clear as on that morning

[Jewboo]

Who wins: people with net positive worth in cash and hard assets, assuming the cash isn't seized (bank holiday) or devalued/cancelled (currency collapse). In short, the frugal, hardworking, live-within-their-means productive middle class and a few old money goldbugs/landowners are the winners in a deflationary collapse.




https://www.youtube.com/watch?v=SdP7iEaXeK0

Worthwhile watching this very recent interview with "Ferfal" who lived through the Argentine collapse. Relevant to this thread is to notice that he (middle-class) explains that he finally fled with his family to Ireland because the lower-class soon became to "hate" the middle-class and criminally victimizes them with a smug sense of social revenge. "Hate". His word for it.

[mick silver]

reading this makes me want to drive to a big city an buy more food

[gunDriller]

i would say that the US is in a collapse.

it will vary between inflation & deflation.

i would date the start of the collapse as 9-11, or else tie it to the start of the unwinding of the credit crisis, which became impossible to hide on about September 18, 2008.

[Neuro]

The Weimar Republic had a period between 1920-1921, where they pumped in increasing amount of liquidity in the market, but still the net result was deflation, because of risk aversion the banks didn't want to stimulate the economy by lending the liquidity to mere mortals. I think we are in the equivalent of 1921 right now... We live in interesting times, and surely 2014-16 will be hyper interesting...

[Hitch]

The Weimar Republic had a period between 1920-1921, where they pumped in increasing amount of liquidity in the market, but still the net result was deflation, because of risk aversion the banks didn't want to stimulate the economy by lending the liquidity to mere mortals. I think we are in the equivalent of 1921 right now... We live in interesting times, and surely 2014-16 will be hyper interesting...

All the banks are sitting on fat reserves right now. I wish I could find a better chart of this...

4719

[mamboni]

All the banks are sitting on fat reserves right now. I wish I could find a better chart of this...

4719

Reserves are just a fictitious representation of wealth, numbers on a computer screen, until they are spent on tangibles. Think on that while you fondle a gold oin.

[gunDriller]

Reserves are just a fictitious representation of wealth,

& managed by the most dishonest people on Earth.

then comes Con Game to make us think they're valuable.


OOOOH, Federal Reserve ... WOW ... oh, i'm sold, man.

[Libertarian_Guard]

http://i50.tinypic.com/ezvc5.jpg

[Libertarian_Guard]

http://i48.tinypic.com/24desrp.png

At the peak in March 2008, every new dollar of reserves resulted in $177 in credit money. This is probably what the Fed assumed would happen when it engaged in QE1—that every new dollar of reserves would enjoy the same kind of expansion multiplier from reserves to credit money. But base money is no longer being expanded into M2 at the same rate. After QE1 and QE2, every new dollar of reserves resulted in only $5.48 in credit money. This multiplier had collapsed to about 3 percent of what it was at its peak.


https://www.aier.org/article/2510-pushing-string

[Spectrism]

Two bad sides to the QE nonsense: the money available through the banks could not be borrowed into the economy because there was no foundational manufacturing base to support the consumer purchasing power; and the money given directly to the friends of Obama were not productive investments.

The economy is like a jet ariplane sitting on a runway with no fuel in the tanks. QE is like two super trucks pulling the jet at nearly takeoff speeds down that runway. 2013 is the end of the runway and the jet has been gliding in a pretend flight while the trucks were pulling. The crew of the airplane are the fed and banksters. They see the dilemma of the plane having no more energy coming in since the trucks stopped and the fuel tanks are empty. They are now walking down the aisle collecting up all the passengers' money to make a fire in the back of the plane. Yeah, sure, that will help.

[vacuum]

All the banks are sitting on fat reserves right now. I wish I could find a better chart of this...

4719

Fat reserves = no loans being made and money accumulating = deflation

Whether they are intentionally withholding loans and creating the deflation in order to snap up things for pennies on the dollar, or whether they aren't making loans because it is no longer possible (maximum potential) is an open question.

[Spectrism]

Fat reserves = no loans being made and money accumulating = deflation

Whether they are intentionally withholding loans and creating the deflation in order to snap up things for pennies on the dollar, or whether they aren't making loans because it is no longer possible (maximum potential) is an open question.

The global economy has destroyed the local business. As "global" think large, centrally controlled, heartless monster system. When your ability to produce value for others is wiped out by a heartless monster, you will not borrow or extend yourself to further risk your existence.

We are in a death camp and the outside of the death camp is an endless ring of fire. Go out there and you die.

The devil has devised multiple levels of death camps for us... and there is only one escape.