They’d have us believe that happy days are here again.
And, if your only source of information for economic news is the mainstream media and their talking heads, then in all likelihood you’ve bought into the hype about an economy on the rebound, consumers being more confident, housing prices in recovery and a government that’s soon to resolve America’s fiscal woes.
Nothing could be further from the truth. We are very rapidly approaching a situation that could be much, much worse than what we experienced in 2008.
Remember, in 2008 then Secretary of the Treasury Hank Paulson warned that we were literally on the brink of collapse and Congressional representatives were told that the situation was so serious that should the economy, financial markets and the US dollar crash, it would lead to riots and the need for martial law.
We’re not making this up – see for yourself:
One non-mainstream economist who has been warning of the coming disaster since the last disaster is Market Ticker’s Karl Denninger. He uses something called basic mathematics (with a healthy mix of advanced analysis) to come to his conclusions, and prior to the massive collapse of October/November 2008, Denninger sounded the alarm when he spotted numerous data points, including central bank manipulation in credit markets, suggesting that a massive crash was coming.
Two weeks later markets around the world fell apart.
Over the last several years Denninger has continued to warn Americans about the fiscal crisis, unsustainable debt levels and wealth destruction.
The prescient analyst and commentator is once again sounding the alarm:
Bernanke’s machinations and other games “gave” the Congress four years to do the right thing. They didn’t, because that same “gift” also destroyed all market signals of urgency.
As such you have people like Krugman and others claiming that it’s all ok and that we can spend with wild abandon, taking our fiscal medicine never.
They were wrong. Congress was wrong. The Republicans were wrong, the Democrats were wrong, and the Administration was wrong.
Congress is out of time; as I noted the deficit spending must stop now, irrespective of the fact that it will cause significant economic damage.
We will survive it if we do it now.
Time’s up; we either have serious people who will take serious actions right now or we’re going to find out what a real ”discontinuity” looks like.
I promise that you won’t like it.
The sell-off today is the start. Not the end.
And it’s also the end of the rope for our Congress, if they don’t get off their butts, which I do not expect them to do.
Therefore, I hope you’re ready.
I bet you’re not.
If we were on the brink in 2008, and we spent the last five years injecting TRILLIONS of dollars into the system, why are we once again at the cusp of another crash?
Because they fixed nothing.
In fact, they made it worse.
Back in 1930 Americans thought they were out of the woods and that the economy and financial markets had recovered.
They were dancing, drinking and spending like nothing was wrong; as if the crash had been nothing more than a short-term blip.
Congress was being warned about the possibility of tanks in the streets in 2008. All of the economic, financial and monetary policy measures implemented by the government and the Federal Reserve since then have failed.
Should we be worried?
The short answer is ‘Yes’.
This is going to happen. And this time people should be terrified of the consequences.
Most don’t even have a clue what’s coming.