Global economy is bankrupt
People are impatient and their memory is pitifully short. Very few are able to take a long-term view of what is going on because everyone has become accustomed to “living in the now” and not focusing on what is to come.
The news channels are not screaming about a “stock market crash” or an “economic depression”, last October would have been the month that everything was going to happen. But that does not mean the economy is on the mend by any stretch of imagination.
HSBC bank owned by the Cabal; the largest in the western world, says a global recession has begun, and the pain we have experienced so far is just the tip of the iceberg. So don’t think it’s time to relax, just get on with preparations.
The global economy is bankrupt in every aspect and region. Most of the nations are under pressure, while Portugal has recently become the most acute country. The Portuguese Socialist Party, together with the communists, has formed a left-wing bloc and thus has the absolute majority in the country, which is not accepted by puppet president Aníbal Cacavo da Silva, who does not invite them to form a new government because they are against austerity, and the proposed wage moderation. The Socialists also want Portugal’s debt to be written off by 50 per cent, and to leave the Euro currency union. The euro has already destroyed enough European countries by now.
Banks are in desolate status
Banks are in a desolate condition because interest rates had to remain zero per cent, otherwise every institution that holds derivatives is bankrupt, like Deutsche Bank for instance, which has around $100 trillion in derivatives that are on the verge of collapse, and they are not the only bank with such massive exposure.
Also JP Morgan, effectively all US TBTF banks collectively have as much as over $250 trillion in derivatives exposure. The actual exposure value for these banks is estimated to be around $500 trillion. If any of the counterparties go under, the bank total of $500 trillion, and the global total derivatives exposure of $1.500 trillion will cause unimaginable damage.
Today’s economy faces the deadly convergence of three critical factors as fallout from the largest debt bubble in history.
- Disastrous experiment in globalisation
- Massaging of statistical figures to the point where economic trends are completely obscured
- Most important of all; the approach of overburdened by debt without any return in energy, other sectors, and derivatives, while Government Bonds are dumped by China, Russia, and numerous other countries.
Austrian School economist Ludwig von Mises described what is happening now as a “crack-up boom”.
Be aware that Austrian School of economics probably provides the best theory on how the world works. They, too, have reservations about manipulations to bring the natural workings of the economy back under “control” – in particular, they have reservations about central banks.
The fact that a one-time “Austrian” Alan Greenspan, who became the most celebrated central banker in history, only increases suspicions that he is believed to be the one who perfected central banking, because he understood what it actually is; namely, a scam.
The ‘crack-up’ phase
Von Mises explains that a “crack-up boom”; “is the first phase of the inflationary process, which can last for many years. While it lasts, the prices of many goods and services have not yet adjusted to the changed money quality ratio. There are many people in the country who are not yet aware of the fact that they are facing a price revolution that eventually results in the significant increase in prices, although the magnitude of this increase in different goods and services is not the same everywhere and always.
People still believe that prices will fall one day. They wait for that day, limiting their purchases and increasing their investments and cash holdings. As long as such ideas are widespread within public opinion, it is not too late for the government to abandon its inflationary policies.
“But eventually when the masses wake up. Do they suddenly become aware of the fact that inflation is a deliberate theft policy, and continues endlessly. When the total collapse begins. Is that the crack-up boom”.
Everyone is concerned about the value of their money and wants to exchange it for ‘real’ goods, regardless whether they need them or not, regardless of how much money they have to pay for them. Within a very short time, a few weeks or even days, the means used as money will no longer be accepted as a medium of exchange. It becomes Toilet. paper. Nobody wants to get rid of anything for that anymore.
“A ‘crack-up boom’ is essentially a financial boom in reverse, lots of money coming accelerated into the system at once. People do not yet realise it is fake money, they cannot tell the difference. This money is hanging around in the financial sector and everyone in it is having a grandiose time.”
Then the economy is in the ‘crack-up’ phase. In which four things determine the way and manner in which the economy and markets will unfold.
First, it is observable that increasing desperation and extreme financial repression among central banks, which have cornered themselves with no way out making them lost and desperate.
Mises described the irrational phases of a classic inflationary cycle as follows:
In the begin, no one can tell the difference between a real dollar – one that was earned, saved, or invested, and then spent – and one that just came off the printing press. They think the new dollar is just as good as the old one. And then, prices go up – people don’t know why. Only later, they start realising it and hoarding – and then all hell breaks loose.
Second, increasing market disruption and volatility. During the last few months, the stock market behaved like a drunken sailor. But remember that it is just a bunch of robots and day traders mindlessly trading graphic strikers. It has nothing to do with incoming information from real-world data. One of these days, one of the central banks is going to falter. And then the market will go into a violent reset.
Third, look at the Baltic Dry index and it is clear that the economy is suffering from lagging demand for shipments and the over-fabrication of bulk carrier -capacity as a result of central bank-driven cheap money boom policies over the past 25 years. This will tear apart the financial system and the global economy in a way not seen or experienced before. Demand lags dramatically behind ever-increasing debt. Which is the result of money printing by central banks, in unprecedented magnitude of monetary stimulus of about $60 trillion of new debt added against somewhere around $15 trillion dollars of GDP growth, or just only a quarter of this produced ‘extra’ growth. By comparison; in the 2008 crisis, total debt volume was 9 Trillion, now in 2022 it is 31 T dollars, a more than threefold increase!
Fourth, credit in the past 20 years, has increased 20 times. Nothing like this has happened before in history. The 25-year global central bank credit boom has caused massive overinvestment in oil exploration, mining, manufacturing, transportation, real estate and distribution capacity, etc., worldwide. But now that credit inflation has reached its very last limit, the ‘crack-up’ phase has arrived, the forces of global deflation will drive down the prices of goods and many consumer services.
Energy consultancy Wood Mackenzie said that an estimated $1.5 trillion of value in oil projects in North America failed to make money when oil was trading at $50 or less. Even after major cutbacks and today’s price increase, many US oil companies are struggling to pay their huge debts…
As the crisis continues, cash-money will be king. Cash will buy more everyday goods and services, and will more than dramatically price all types of financial and real estate assets.
It is difficult to predict what the consequences and cascading effects will be. But the extent of overinvestment and overcapacity in everything from shale oil exploration, to iron ore mines – dry bulk carriers – aluminium mills – steel mills – real estate projects and so on, is extremely large, something not seen before, the problems will get much worse before it gets better.
Finally, the big Ham question; When will the breakthrough start? As soon as the sleeping mob wakes up and revolts against the irreversible consequences of their poisonous injections, the deliberate theft through inflation by banks, the abuse of trust through lies and deceit by their own government, and all the other injustices that have been done.
In fact, we Lightworkers and Patriots have already won the battle against the Deep State Cabal on points. What is important; is that the entire world population stands behind this victory to prevent negative forces from coming back to planet earth sometime in the future to enslave and oppress the population again.
This part of the galaxy has long been saturated with battles of dark powers