Rather than celebrating March 2020 as the 11th anniversary of the record-breaking bull-run of the U.S. stock markets following the panic of ’08, we forecast the nation and the world will be suffering through the first stages of the Great Depression.
It was only a matter of time. It should have happened a decade ago, but the global economy was artificially propped up.
Rather than letting the highly rigged, fraudulent financial system collapse, the nation’s politicians did what they were told to do; bail out the elite money-junkies and banksters who created the financial destruction.
In the United States, for example, rather than prosecute those who wrought the economic destruction and ruined the lives of tens of millions, Eric Holder, the U.S. Attorney General under the Obama administration, who boasted a track record as Deputy Attorney General under the Bill Clinton’s administration in facilitating the pardon of Marc Rich, a hedge-fund manager who had been indicted on multiple counts of tax evasion, wire fraud and racketeering… declared that the financial criminals who caused the Panic of ’08, were, in principle, “too-big to jail.” Holder said he wouldn’t prosecute those accused of financial fraud because they were “so large” it makes it “difficult for us to prosecute them.” He proclaimed, “It will have a negative impact on the national economy, perhaps even the world economy.”
To bail out the “too-big-to-fail” financial system back then – which the chairman of the Senate report investigating the cause of the crash identified as a “snake pit rife” with greed – central banks pumped in some $26 trillion using negative/zero interest rates, quantitative easing and other lines of liquidity provisions.
As a result of these unprecedented money policies, the Dow rose by more than 300 percent and the tech-heavy Nasdaq by 500 percent.
But finally, despite the business media and politicians long dismissing the facts that markets were artificially inflated with historically cheap money injections… by late 2018, when the Dow registered its worst December since the Great Depression over fears the U.S. Federal Reserve would continue to raise interest rates, reality struck that the equity Bull Market was addicted to heavy doses of monetary methadone.
Equally apparent, and also long dismissed, those policies resulted in the top 10 percent who were invested in the markets having their income double since the Panic of ‘08 while the wealth of the median American family sank 34 percent, according New York University professor Ed Wolff.
And the inequality was worldwide. Oxfam reported in January 2019 that 26 billionaires owned as much wealth as the bottom half of the world’s population.
With little trickling down to the working class, two months later, not only was the U.S. economy, which was among the strongest in the world slowing, economic growth was slowing globally.
Just a few days of financial headlines were telling the story, a story that most of the world’s population was ignorant of or oblivious to:
- U.S. Economy Lost Steam After Surge at Midyear – The New York Times, 1 March 2019
- China stocks tumble on ECB and local growth fears – Financial Times, 3 March 2019
- OECD slashes eurozone economic forecasts – Financial Times 7 March 2019
- Watchdog turns up heat on leveraged loan industry as high risk debt soars – Financial Times, 8 March 2019
- Europeans Fear a Global Slump – New York Times, 8 March 2019
- New Growth Worries Sink Stocks – Wall Street Journal, 8 March 2019
- Frail US jobs growth spreads gloom – Financial Times 10 March 2019
From China to Europe, from Australia to Argentina, the hard numbers in sinking exports, slumping housing prices, rapidly expanding collateralized loan obligations , GDP growth retracting, real wages falling, personal debt and government debt rising … the economic warning signs are brightly flashing. TJ
TREND FORECAST
With the exception of the U.S. whose Fed raised interest rates nine times since 2015, major nations who have negative or very low interest rates have little ammunition to deal with the coming crisis. Thus, when the $250 trillion global debt bubble bursts, we forecast gold prices will soar above the $1,920 high it hit in 2011, to well above $2,000 per ounce.