This article was written by Brandon Smith and originally
published at Birch Gold Group
Last November, in an
article titled ‘The Economic Crash So Far: A Look At The Real Numbers’,
I outlined the reality of statistical fraud by governments and central banks to
hide the ongoing economic downturn. The Everything Bubble, perhaps the biggest
debt fueled bubble in history, has been propping up the global economy for several
years, but began to waver dramatically at the end of 2018, as the Federal
Reserve tightened liquidity conditions into economic weakness (just as they did
in 1929 and in the early 1930’s as the Great Depression took hold).
In that article, I warned:
“If
the global economy is not on the verge of collapse, then why did central banks
keep propping it up for the past ten years? And if central banks have been
propping up the system, how much longer do you think they can do this? How much
longer do you think they want to do it? What if one day they decide to let the
entire house of cards tumble? What if such an event actually benefits them?”
An important factor to this discussion is the idea that the
central banks are “ignorant” to the damage they do. This claim is everywhere in
the alternative media these days, and it is simply wrong. The banking elites are well aware of
the damage they do, and often it benefits their bigger agenda of one world
centralization. In fact, Jerome Powell openly admitted in
the minutes of the October 2012 Fed meeting exactly what would happen if the
Fed took actions to tighten cash flows while markets were addicted to stimulus.
Then, as soon as he became the head of the central bank, he implemented that
exact policy.
Almost nothing in finance and economics happens without being
“managed”, or at least deliberately triggered by central banks. Economic crisis events are a form of massive
leverage against the public. They are designed to siphon tangible wealth for
pennies on the dollar from the middle class while also setting up social crisis
conditions which allow the elites to manipulate the population into accepting
less freedom and more globalism.
In the past, I have noted that the central banks have clearly
been waiting for something or stalling the crash in preparation for a specific
window of time. They needed an event that could be used as cover for the crash
that they had been engineering. This event could come in many forms: The trade
war was a perfect start, along with war tensions with Iran, but there was
really no way of telling what the trigger would be. Well, now we know.
The COVID-19 pandemic is
a perfect cover event. It is a virus with a
strangely long incubation period coupled with being highly transmissible and
just deadly enough (3% to 5% death rate) to cause fear within the population.
This novel virus is not going to go away for a while; it will most likely stick
to the global populace like glue for the rest of the year, and like the Spanish
Flu which was active for around two years, the longer it circulates the more
deaths accumulate.
But the virus is not the
cause of the economic collapse; it is only a prime scapegoat, along with the
very slow response times of many governments and the World Health Organization
to encourage a shutdown in international travel from hot zones, which allowed
the virus to spread unhindered. The collapse was taking place before the
pandemic ever became a factor.
We are seeing this clearly now in the Fed repo market situation, which has continued
to escalate as corporate beggars demand more and more liquidity that the Fed is
either not able or not willing to supply. And by liquidity, I’m talking about
tens-of-trillions; I’m talking about TARP level or greater fiat injections. I’m
talking about direct purchases of stocks and other assets beyond bonds. The
investment world wants the Fed to make it rain cash, and while it seems
like that is what the Fed is doing…they are not
even close yet.
Of course, the next question is, Will it even matter if the
Fed initiated full blown helicopter Weimar-style inflation? The answer
is no. If the Fed wanted to stall the crash, they would have introduced such
measures over the course of the last year. Instead, they did the bare minimum
to make it look like they cared about saving markets, which they do not.
The Weimar model, which some financial analysts out there
foolishly used as a reason for predicting an endless stock market rally to Dow
40,000 and beyond, does not work because it never worked for Weimar. German
stocks still collapsed in 1924, and then again after 1927; there is no precedent in
which hyperinflation ensured increased stock profits or higher prices for very
long, so don’t expect helicopter money from the Federal Reserve to help either.
Anyone with any sense can
see that the prevailing factor of stock market performance has long been corporate stock buybacks, which have now conveniently
dropped off the face of the Earth as the COVID-19 pandemic spreads. If you want
to know why Fed intervention is doing nothing to reverse the damages in
equities, the end of stock buybacks are a good starting point, along with the
vast debts among corporations and consumers.
The black hole of debt that
has been looming over the global economy has been set in motion, creating a
negative feedback loop that makes any intervention useless, beyond a complete
“economic reset”, which is exactly what globalists have been wanting and
planning for years.
In the meantime, there has been a flight to safety – but what
assets are safe? On the surface it looks like almost everything except the U.S.
dollar is plunging in value – but looks can be deceiving. As I noted earlier
this month in ‘Physical Gold Will Soon Break Free From The Paper Market
In Spectacular Fashion’, reports are coming in that purchases of
precious metals have skyrocketed, and currently silver rounds are selling for
as much as $6 to $10 over the spot price, while gold rounds are selling for at
least $50 over spot. The
physical market is officially decoupling from the paper market.
At this point, we are seeing unprecedented events beyond even
the 2008 credit crash. We must ask, What is our timeline? Looking
at China, the first nation to be hit by the pandemic, their economy is still
essentially shut down. Initial estimates were that Chinese manufacturing was going
to restart on March 20, but reports from China and the Wall Street Journal
indicate that this is not going to happen. Every sector of
China’s economy has plunged, and it does not look like the supply chain on
their side will be restarted in the near term.
This makes sense when you consider the possibility that China
has been lying the whole time about the extent of the damage done by the virus.
Italy, with a far lower population, has already surpassed China’s death count
with half as many confirmed infections. How does a country with a billion
people (many of them older), packed together in cities like sardines, maintain
a death rate of only 2%, while Italy, a country with only 60 million people,
has a death rate of around 6%? China has much to answer for, but I don’t think
we’ll ever get the whole story.
COVID-19 is not likely to burn out in the spring as many are
hoping, and going by China’s manufacturing shutdown, we have at least three
solid months of crisis in the U.S. and Europe before there is a chance of
remission. But even if the virus does hit a wall, the economy will
already be sunk beyond repair. This is the kind of collapse that takes years to
recover from, and the global elites want to be the people that take charge of
the recovery.
My biggest concern right
now besides the supply chain issue is the potential for a liquidity crisis and
credit crisis leading to a “bank holiday” – a widespread banking shutdown. I
believe this will happen, and probably sooner than we might expect. Already the
mainstream media is telling people NOT to remove any cash from their bank
accounts, which is a bad sign. Usually when the MSM is telling you not to do
something, it is time to do the opposite.
I am not necessarily encouraging people to make a run on the
banks, but I will say that you better have some cash on hand through this
crisis, because chances are good that you will wake up one morning and discover
the banks locked and the ATMs unplugged.
Understand that this is
not a short-term crisis that will correct itself. This is a long-term disaster.
If you are not prepared accordingly, you must do so NOW. Time has almost run
out.
http://www.alt-market.com/index.php/articles/4160-the-crash-of-the-everything-bubble-is-here-and-its-not-going-away-anytime-soon