Sunday, December 28, 2014

We Are In A Global Depression




JimRickards on the CIA and financial warfare
https://www.youtube.com/watch?v=CgKoYhDu85w

So, if we are in a global depression where are the U.S. soup lines? They are invisible soup lines because millions of people in the U.S. are on food stamps (50 million), working part time (7 million), collecting government checks and collecting welfare. These things did not exist on a massive scale in the “Great Depression” of the 1930s. Watch Jim Rickards video below. I tend to agree with Jim Rickards an unexpected financial crisis will catch us unaware and will usher in the anti-christ. Some of Jim Rickards' main points are:
1. low gas prices are deflationary
2. deflation increases the value of U.S. debt which is bad
3. depression equals: fewer people working and productivity going down 
4. Central banks, e.g. the Fed destroy wealth, they do not create wealth
5. to get out of this global depression structural changes must be made
6. Central banks printing money creates asset bubbles
7. The currency war began in 2010 and there is no end in sight to it
8. making currencies stronger equals interest rate tightening
9. The last 1 1/2 years we have seen a strong dollar that is deflationary and the reason the U.S. economy is slowing down
9. Look for QE4 in 2015 and a weaker U.S. dollar
10. The strong GDP numbers are really inventory accumulation
11. In the last 5 years the U.S. economy has grown less than 2% annually, depression numbers
12. China is the biggest credit bubble in the world and Chinese investors have few alternatives to invest in
and one of their biggest investments is in worthless real estate
13. China has a real estate bubble and wealth management bubble that is ready to collapse
14. Chinese leaders make slow decisions and in an economic crisis that is bad when fast decisions need to be made to stop a panic
15. Chinese selling U.S. stock and bonds will spread the panic contagion to the U.S. and around the world
16. Monetary policy cannot fix inherent structural problems in an economy
17. China is the world's largest oil importer
18. War causes more oil to be pumped e.g. the Iran/Iraq war; when nations are at war they need more oil
19. Russia is not a real economy, it is a "Cleptocracy" run by gangsters skimming oil revenues
20. Economic instability can cause military "flash points" e.g. Syria, Iraq, Venezuela and Ukraine in order to distract from domestic problems
21. When a default occurs we don't know who the creditors are e.g. AIG's biggest creditor was Goldman Sachs 
22. Japan has been in a depression for 25 years


Jim Rickards on Russia

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