Bubbles Bigger Than Ever – Financial Crash Eminent?
Over the last few weeks, I’ve written several articles that reveal the depth of financial problems that are going on behind the scenes.
Everywhere I look, I see things unraveling, even though the Fed and other central banks are doing everything they can think of to push the final financial implosion to “later” and limit the damage as much as possible.
So, what do I think will eventually happen? While it is certainly possible for the entire financial system to go straight down quickly, I see something different.
I think it is very possible for the financial system to drop in a stair-step fashion. There will likely be periods where things look like they are becoming more stable, and we will hear about “recovery” in the financial press.
However, then there will likely be another drop to a new level and a new set of problems. As these new levels happen, I believe people will generally adapt to the new conditions as best as they can.
Although most people will not understand what is going on with each drop, over time, they will look back and come to the shocking reality that everything has changed dramatically. Ultimately, the bubbles we are currently facing in sovereign debt, corporate bonds, and equities will burst, and this will be far worse than anything we’ve seen so far.
This is because these bubbles are far larger, and High-Frequency Trading algorithms will exacerbate the rush to the door.
Over the last few years, the core problems that caused the financial crises we faced were not fixed.
The banks that were “too big to fail,” are now much bigger. And, given the bailout they received, they are sure their risky behavior will be rewarded again when the time comes.
As for the rest of us on Main Street, do not believe everything you’re told in the press. Although the Fed and many celebrity “talking heads” crow about how the Fed has done a “great job” and averted a serious crisis, the real truth has been white-washed.
Working families have seen their real wages decline significantly over the last five years. And, let’s not forget that about 1.3 million people have been taken off of the “extended employment rolls.”
This is not what I think of when I hear the word “recovery.” How about you?
But every week, the talking heads are talking about how “real” the recovery is and how it is “gaining strength.”
I have to laugh when I see the “evidence” they point to.
For example, something that continually comes up is that manufacturing jobs are returning to America.
Is this true? Hardly. Frankly, there’s only been a trickle of manufacturing jobs that have returned, and most of them depend on public subsidies.
And in order to compete with other low-wage countries, these “exciting” new manufacturing jobs offer less health care, fewer benefits, and lower pensions. Many of these jobs pay less than $14 per hour, which is less than $30,000 per year!
So, although we all hear about “a recovery,” millions of people know from their own experience that it’s becoming harder and harder to make a living and feed their families.
The real question is, how will this all end? Most likely, it will be more of the same.
The politicians will lie and do everything in their power to kick the can down the road. The Fed and other central banks will continue to manipulate the markets as they’ve done over the last few years.
It’s certainly possible for things to fall apart quickly. It may even start with a “black swan event,” as first described by the writer Nassim Nicholas Taleb in his book, “The Black Swan: The Impact Of The Highly Improbable.”
In short, this is a rare and disruptive event that could change the entire game. Anything is currently possible, from a solar storm that knocks out the world’s entire communication grid, to a nuclear event, to another Lehman-style collapse, or the final reveal of the “missing German gold” I’ve previously talked about.
So, what do I recommend? Diversification.
Don’t have all of your trading and investment strategies “in one basket.” Have at least 10% (or more) of your liquid assets in gold. Have a few months of living expenses in cash, outside of the bank. If you’re currently only investing/trading stocks and mutual’s, learn to trade Forex. And by all means, learn to leverage algorithmic trading.
The time to prepare is now. Don’t wait until the collapse begins, because by then, it will be too late.
As always I would love to hear your opinion and ideas on how you plan to trade the coming crash so leave your thoughts in the comments section below and be sure and share the love via facebook etc.
Until next time . . .
Dustin Pass
Wow, this sounds like could have been written by Gerald Celente (who I’m a huge fan of BTW)!
Thanks for the compliment.
Hello, Dustin. You said ” I think it is very possible for the financial system to drop in a stair-step fashion. “. I read a good number of financial articles and your stair-step concept is quite different from anything I’ve seen. I like it. It makes eminent sense to me and it fits the Banksters model for
” keeping it going for as long as we can “.
Unfortunately the longer it continues the bigger the bubble gets and the worse the collapse or burst will be. You are 100% right. Its exactly what they want ie to keep it going for as long as possible. At this point there are several things about the system that can not be fixed. That being said its not so much about “what can we do to fix it” as it is “how do we manage the consequences”. Whats been done can not be reversed and the exponential compounding nature of debt, interest, inflation, etc. is beyond what can be reversed. The sad reality of it is there is not enough money in existence to pay off all the debt. That of course is an entirely new article all of its own :).
Nice job but I believe that trading forex now it is not the best idea as well as investing in stocks, maybe gold is an option 🙂
Gold is a great option however I think there will be some great opportunities to profit as the dollar falls apart. The bigger question will be, will our brokers survive and be able to pay their clients out if there was to be a black swan type occurrence? Its actually not a bad idea to hold cash in more than one currency as well. Of course they are all fiat but a little diversification goes a long way.
Hi Dustin ,yest i believe you 100 % i recently made a video recording that the EURUSD will fall as far as 1.2000 and also looking at the CADJPY will reach 108.00 GOLD is still bearish on the Monthly and Weekly time frame and we should see it drop to as far as $994.00
JP Morgan Chase has been fined 27 Billion since 2008 for business practices and the are a member bank of the FED. Conflict of interests maybe? They run the SNAP (food stamp) payments in 20-25 states so they make profits lending money to Uncle Sam and then charge him to distribute it out to the SNAP beneficiaries. No wonder they say things are fixing things.
I have been hearing this same rhetoric for many years now and life goes on. Not gonna list all I am talking about, but it revolves around doom and gloom. End time home builders out in the rockies and elsewhere have had new roofs put on, water heaters worn out, and their woody mansions are, so far, an expensive fish camp.
So when is all this end of civilization gonna hit? And do we want to live like cave men again?
I, for one, am going about life as usual, keeping an ear tuned to the situation (which never changes)
Capt. Brian
The Lost Navigator
YOUR QUOTE: “And in order to compete with other low-wage countries, these “exciting” new manufacturing jobs offer less health care, fewer benefits, and lower pensions. Many of these jobs pay less than $14 per hour, which is less than $30,000 per year!”
I’d be BLESSED if I made that much!! Try $11.50/hr and a12-20hr week with NO benefits whatsoever…and I’m lucky to have this measly job! Financial collapse coming? Yeah, I can see that.
The world economy is much more complex today. Vulnerability of national economies, volatility of financial markets, and the bursts of economic and financial sectors are all part of the systemic dysfunctions relating to capitalism. They are built in the system. When the current ones are corrected, the next are already maturing. One important aspect that needs to be addressed is the role crypto currencies is currently starting to play in the financial markets. The multiplication of such currencies, since Bitcoins emerged in 2009, their widening acceptance, and their high potential growth will change economics, economies and finance worldwide.
Show us how to make 1m per year.Any penny stock tips??
3 biggies: We have only 2.5 branches of government; Consumer buying ability (required for full recovery?) is getting weaker and Our Infrastructrure is deteriorating rapidly (could be an employment spark plug?).
Converting to Liquid Flouride Thorium Reactors could improve our energy and employment problems.
Plan all you like , amass as much Gold as you like , but if things really get bad , try buying food with a wheelbarrow full of Gold . Plan for your family , learn how to grow food and keep a diverse seed bank , learn how to grow food, now that’s real independence and you don’t need to worry about all that wealth that will be useless to you. Also learn how to create water from nothin( it can be done ) knowledge knowledge knowledge
Just tonite ( 2/11/2014, opening dialogue, 6PM EDT) on The Mark levin Show, Mark excoriated the republicans for raising the debt ceiling- yet again- warning of the same dire consequences of monetary, economic, and overall societal collapse here in the USA, and I’m sure it will have worldwide ramifications too. We need to end our spending, and our borrowing, and throw out the ruling class elites on all levels of government. Out national debt is the biggest threat to our security and existence as a nation. It’s almost already too late to reverse course. I have a feeling this will only end during a Second american Revolution or Civil War. But We the People were given the Second Amendment for a reason, and that is, to destroy abusive government that has become unmoored from the Constitution and unresponsive to the will of We the People. Yes, it may come to that, and sooner than you think.
Most of this is nonsense. Try looking at everything with rose glasses …just for a moment. There are many positives to be drawn. Not everywhere are the middle classes being squeezed. Something to be concerned about for sure…BUT, We ‘the world’ have been living on the edge for decades. Economic shocks come & go. Even big ones…history tells us so. Are major changes coming? Absolutely! But as Dustin points out diversify & profit.
This is a really frightening scenario. I have thought for a long time that we are heading for a massive crash. I don’t know what to think anymore.
You should consider BITCOIN as an alternative to gold for your portfolio. The recent blip causing bitcoin to spike down was a great buy opportunity. Projections are for $12,000 per coin by the end of the year; recent lows at $535
Great article and I agree with all that has been said. However it concerns me when people blame all this on capitalism. May I point out that we are given the impression we live in a capitalist society but this is totally untrue. Governments today run a form of socialist system under the guise of capitalism. A capitalist society allows the free market to find fair value. Currently Interest rates, bond prices, housing prices etc. are all being manipulated by banks and government intervention which is socialism or rather as Ron Paul puts it corporatism. They manipulate and corrupt outcomes for their own ends, whether they be political or financial (usually both). The reason the world is in this mess period. The big boys are unregulated and make fortunes.
Who do you recommend to learn Forex Trading from?
Hello Steve, we have a great free training program that requires no registration. You can start by going to the education tab at the top of the page and choosing Forex training course. That is a great way to get your feet wet. If you would like more personalized attention we have some paid service that are specific to certain types of trading under the Products & Services tab. For a quick start we also have some automated strategies that have been doing very well for several years. You can explore those options by choosing Toms EA/Profit Agent in the products and services tab. We have a lot of great resources for you here at ForexTradersDaily
Hi Dustin
Just what is Learn to Leverage Algorithmic Trading?
Thanks
Ron Blake
As bad as the American economy is looking, the rest of the world must be even worse off.
The only way America can get its privacy back is to eliminate the evil cult of allah from the face of the earth.
So I have heard by the grapevine.
It is unfortunate. For over a year, I have been blogging to others about the impending event. There is no question if, but when. Sadly, the advice falls, too often, on deaf ears. I don’t know what can be done to shake people up without just waiting till it happens. And, of course, at that point, it is too late.
Dustin you are just about right. It could go much faster and deeper than most people can see. I witnessed the 29 crash and it was not pleasant. This one could be world wide and much worse.
So what are you selling?
Algorithmic trading for forex?
Hello J, this was not a sales piece. Just an article with some of my thoughts.
Dustin, actually some of us have seen the writing on the wall for a long time, especially after reading the books “The Harbinger” and “God’s War on Terrorism”. Everything is lining up. The first words of the man who greeted his son and the Pres. (after the 5 most militant Taliban men were released in trade for the son) this week, said in Arabic the words that are the first words in every chapter of the Koran. They are also the first words of an Islamic convert. Mr O is trying to weaken our country and is actually opening the doors to Islam. His first statement as Pres was that this was no longer a Christian country.We are a Christian country. It is written on just about every old monument. We know the difference between right and wrong and that God the Father and Jesus are God. He is closing support for Israel and is going around our Congress to get what he wants which is an Islamic State masquerading as a Socialist to Communistic State. Once the proponents of Socialism and Communism realize that he really doesnt want that at all but was just duping them to get an Islamic State all the time, it will really be too late. He is performing what in Islam is called a Hudna. It is a political Jihad until the real thing can be accomplished. My suggestion is to ask Jesus to control ones life so that you one can be really straigh with God and get His wisdom.
So what is a guy to do? I’m 61 years old and already had heart surgery (hereditary) I own my own home and 2 rental properties all 3 with mortgages, $30,000 in credit card debt with possibly $25,000 credit available all unsecured.
Credit score of 777 – but cannot obtain a loan for credit card debt with a lower interest rate. My question is: what should a guy do? I’m single and have no family. I work every day.
Hello Robert, unfortunately there is not always an easy answer. It takes money to make money and I would never suggest to anyone to trade on credit. Trading should really be done with risk capitol. I tend to diversify as much as possible staying away from the Stock Market. I focus on the Forex and some metals like gold and silver. I run some of my own automated strategies in FX and just dont get greedy. To many people try to make huge returns and I think the key is slow and steady. If I can do between 2 and 4 percent a month I am happy.
i am very poor i have a bad heart and I am disabled collecting my social security. I do not have any extra money i live month to month and i know sooner than later it is all going to stop. However. I am also a christian in my faith and I believe the Bible to be truth… HATERS say what you will, but you dont know if it is not truth as much as I do know it is truth… . so just think about it. NO ONE KNOWS for sure that is why It is called faith… read the Bible. 66 books written by 44 different people over a period of 1600 years. and yet what it has to say comes true and is ture.. so If it continues to come true. which if you are honest and research it yourself without taking some others person opinion. you will find out for yourself. So IF it continues to be true. some really bad things are going to happen. But faith and belief in Christ makes all the difference. it is a fact we all will die at some point. BUT belief gives hope. think about reading the Bible for yourself… no other persons book on the subject. read the bible. i say start with the gospel of John. then james then hebrews and then revelation… and jude is a good one as well… study it. read it… just in case… what if its true???
This doom and gloom has been heard many times and the market keeps rising and the price of gold is falling. A broken clock is right twice every day LOL.
Enjoy life do not worry about the markets. The markets are smarter than any one trader, algorithm or HFT trader.
On your death bed are you going to be think I should have bought more gold. Have fun and be positive. 🙂