I have a love-hate relationship with Jim Willie (video).. Unlike other economist and news which confirms much of what Jim outlines but focus on one or two areas, I love Jim for covering so many topics about the meltdown currently going on in the global financial market which was hit/attacked on multiple fronts last week. Can the western bankers keep control in what they themselves describe as an orderly contraction? Or are the loosing the handle? I dont like Jim because he speculates on some of the behind the sceen whys without proof and predictions. Not saying he is wrong but I like to stick to facts which there are more than plenty in his coverage. Europe is being decimated with large events just last week. Before I say how let me first explain why the U.S. will be impacted.. 1. There is really only one large global western bank as they are all interconnected through bank bonds, derivity obligations, and bailout commitments to each other. If one large bank fails then they all suffer to some extent and are potentially pulled down with it. 2. Europe is a large buyer of US goods and services. A loss of Europe as a major buyer will greatly impact US jobs. 3. The 2009 housing collapse and bank bailout was a cute Ponzi scheme where the world created huge debt (IOUs) and all the countries agreed to buy each others debt (IOUs). The U.S. has since bought a huge sum of European debt. If Europe can no longer pay its obligations to the U.S. the U.S. will have problems paying its debt to other countries possibly causing the U.S. to also go bankrupt. A domino effect which spreads like the housing collapse. How Europe is being decimated in the last year culminating in serious hits just last week.. 1. Russia was one of the largest buyers of Europes goods and services. The U.S. enforced sanctions against Russia last year has heavily impacted Europes sales, income and jobs as they can no longer deal with Russia in many areas. 2. Last year a number of Europe member nations have defaulted on their debt payments or come/are close requiring additional bailout after bailout in an attempt to keep the Euro dollar and nations from collapsing. 3. The recent growing US dollar strength is making it increasingly difficult for Europe (and the rest of the world) to pay back loans to the U.S. as it now takes more Euros to pay back one dollar owed. 4. Last week Russia shut down a major pipeline through the Ukraine without prior notice which supplied Europes border countries causing a shortage and spiking prices as the winter sets in. 5. Last week the Swiss unexpectedly abandoned the Euro just prior to Europe announcing another Euro printing spree (quantitative easing, QE) which basically says the Swiss will not be buying Europes new debt as a means to help Europe stay afloat. This move bankrupted and closed a number of Forex (currency) Exchanges where the largest was able to get a bailout to prevent the worlds currency market from collapsing. Many investors large and small lost much or all of their money. 6. Greece is threatening to leave the Euro next month after elections adding fear that more countries will follow. The Swiss action above added to the fear that the Euro is collapsing as Switzerland and Germany were the ones strong enough to keep the money printing Ponzi scheme going. Without the Swiss, Germany who is against more printing will likely fight and derail the proposed printing and issuing more debt to stay afloat. Europes ability to spread the risk and losses among member nations to stay afloat is being severely reduced. Europes troubles are getting out of hand. The U.S. is also comming under attack. Not only have countries stopped buying US debt supporting our money printing being used to pay prior debt. The growing strength in the US dollar (better expressed as other currencies are failing) is making it hard for countries to pay back their loans and bond obligations, adding the low oil prices are shutting down half of the oil rigs (job loss) in addition to oil companies defaulting on their bond commitments held by large banks and investors. The largest holders of these bonds (counting on payments) are the largest banks (BofA, Citi, etc.) as many economists are looking for and predicting bank failures around the globe are likely as more and more contracts (bond payments) come due and cant be paid. Personally I fear the US stock market will also take a large hit soon as selling increases in a desperate effort to raise money to pay other obligations. Many investors are already being bankrupt as margin calls (pay now) are already in effect. Notes: Ive heard from different sources that the energy sector makes up 20% of the massive derivative market and the junk bond defaults are somewhere between 2x-4x the size of the defaults in the 2009 housing collapse. Adding additional junk bond defaults in emerging markets due to the strengthening US dollar. While some are expecting an economic crash this year, possibly Feburary, I cant say as this scheme to print and move money around creating and selling more debt has kept us afloat much longer than many predictions of a collapse in 2012. How much longer can the banks & governments keep control as they run out of creative options for an orderly downturn? Ron Paul, ex-US Senator and Presidential Candidate: Those individuals in charge of the monetary policy around the world... I think they are very much aware of what is comming... When Ive asked the Federal Reserve chairmen in a committee about this. They never said no, thats not going to happen... They used the word orderly, as long as its orderly, it seems to be OK. Wether it be from the economy, world wide droughts, Fracking or Trade agreements all of these point to price increases in bare essentials being food, water, and energy (utilities). It is best to be buying reserves now at lower prices. If the economy does collapse, the prices for non-essentials (including cars, parts and houses) will fall in price and then disappear as folks try to turn paper money into real assets emptying stores as seen in other countries and it costing more to produce than it can be sold for. Which is what is happening today in oil and mining. A major 2014 event not reported in your news: at the last G20 meeting (richest nations) all agreed to officially transfer ownership of bank and brokerage accounts (your money, 401K, IRA, pension..) to the banks (now their money) reclassifying you as an investor when you deposit money into their account. This was done to allow the banks to seize the funds (their money) to bail themselves out (aka Bail-in) as governments are too broke to bail out the banks. These largest banks are the largest players at risk in various markets and very exposed to an economic downturn. The US FDIC insurance of only 29 billion dollars is far far short to cover the trillions in accounts and thanks to an insert in the recent US budget passed by congress in December the FDIC insurance (tax dollars) is now covering the banks from loss in FDIC backed markets. To limit your risk, move your accounts from the largest national banks who are making large bets in the market or brokerages offering margins into a local credit union or bank who have good reserves and not playing these speculative markets. Look to bankrate for comparisons. Help others by helping yourself. Be cautious and safe. Here is Jim Willies insights on recent global actions.. Not that I support his reasoning and predictions, he does cover a number of important issues and problems being seen and reported elsewhere. youtu.be/NHanymw3mW8
Posted on: Mon, 19 Jan 2015 04:26:29 +0000
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