Doug Casey: A new crisis is coming this year
America is currently stuck in a financial bubble, one that is much worse than 2008 and 2009… but there are great opportunities to make money off it. Read on to find out how…
Doug Casey: Now is a very good time to start thinking financially because I’m afraid that this year, in 2014, we’re going to go back into the financial hurricane. We’ve been in the eye of the storm since 2009, but now we’re going to go back into the trailing edge of the storm, and it’s going to be much longer lasting and much worse and much different than what we had in 2008 and 2009.
Porter Stansberry: Yeah, it’s going to be a lot different because our main weapon of survival back then was to print a bunch of money. But I think this crisis is going to be caused by people starting to flee money.
Doug Casey: Yes. And I always try to look at the bright side of everything. The good news that is in the cloud, and that is that the Federal Reserve – this is not good news for the average person, to the contrary. But it’s good news for speculators because as people start fleeing the dollar and fleeing all of these other currency units being printed up by the trillions by these idiotic governments around the world, they are going to create more bubbles. So the question is how to position yourself early on in the bubble. And you could make a lot of money at the very same time as society, as a whole, is getting poorer. That sounds awful to say, I’m sorry. I didn’t make the rules… I’m just playing the game.
Porter Stansberry: I think for the most part, that’s what I’ve been doing, and I know you have been doing for much of the last 15 years… because this bubble era really began with Greenspan and with the first big bubble he printed up in anticipation of Y2K. And every successive bubble has gotten bigger… so you had the tech bubble, and then you had the real estate bubble, and now you have the sovereign bond bubble.
Believe me, the real estate bubble was far more dangerous than the tech bubble, and the sovereign bond bubble is way more dangerous than the real estate bubble. Because we are not talking about some poorhouse flippers in Peoria or Las Vegas or Atlanta going bust, we’re talking about every single one of the top 20 OECD nations going bankrupt at the same time.
Doug Casey: You are absolutely right. It’s a generalized financial bubble. As I look at the composition of the S&P 500, over 20 percent of all the stocks in it are financial-related companies: banks, brokers, and things of this nature. Historically, decades ago, it was a much smaller number.
In other words, finance is just something that facilitates real production. But today, people are just creating this quadrillion dollars’ worth of derivatives out there, really is a daisy chain, with gigantic counterpart risk. This is a historic catastrophe that we’re looking in the eye right now…
This interview is packed with tons of additional analysis from Casey and Porter, including their thoughts on owning gold today, America’s War on Drugs, the massive shift currently taking place in the retails sector, and much, much more… Click here to listen.
European banks have $3 trillion of exposure to emerging markets
(Reuters) – European banks have loaned in excess of $3 trillion (1.83 trillion pounds) to emerging markets, more than four times U.S. lenders and putting them at greater risk if financial market turmoil in countries such as Turkey, Brazil, India and South Africa intensifies.
The risk is most acute for six European banks – BBVA, Erste Bank, HSBC, Santander, Standard Chartered, and UniCredit – according to analysts.
SELLOFF: U.S. stocks suffer biggest one-day declines since June
U.S. stocks fell, sending benchmark indexes to their biggest declines since June, as manufacturing in the world’s largest economy slowed more than estimated.
Nikkei Officially Enters Correction
Russia Is Looking Bad
Treasury’s Lew Warns That US Default Could Happen Quickly
ISM Has Biggest Miss On Record, New Orders Plunge Most Since 1980
Dell To Fire 15,000!
In 2 Charts, Here’s Why An Emerging Markets Crisis Would Be Worse Than Ever Before
Alarms Going Off As 102 Dollar-Yen Support Breached
Financial world shaken by 4 bankers’ apparent suicides in a week
Now You Can Panic: Economist Withdraws All of His Money from Bank of America
The $15 trillion shadow over Chinese banks
China analyst Charlene Chu explains why the nation is on the verge of crisis
Drawing attention to the problems at an individual bank is never likely to make you popular, but calling time on an entire financial system is another thing entirely.
For eight years, until her resignation last month, Fitch banks analyst Charlene Chu has done just that, warning of the impending collapse of China’s debt-fuelled bubble.
Born and raised in America and a graduate of Yale, she has claimed in painful detail that China has embarked on an unprecedented experiment in credit expansion that far exceeds anything seen before the financial crisis that rocked Western markets six years ago.
- Fed’s Fisher sees no reason to slow bond taper
- Fisher says some nations got used to easy money
- Fisher says some countries to suffer due to taper
- Fisher says focus on how ‘real’ economy is doing
- Fed’s Fisher: Stock slump no reason to stop taper
“Central banks have provided unprecedented liquidity to the markets,” says Craig Alexander, chief economist with TD Bank Financial Group in Toronto. “What happens when that liquidity starts to get withdrawn? The actual answer is, we don’t know.”
Economists have warned that emerging markets must do more to wean themselves from their dependence on easy money — by improving roads and other infrastructure, reducing dependence on exports, encouraging more domestic spending, reforming their markets and opening up their economies to more foreign competition.
Adding to the tension is trouble in China. The fast-growing Chinese economy is decelerating — bad news for developing countries such as South Africa and Indonesia that supply Chinese factories with raw materials. On Monday, global markets were shaken by a government manufacturing survey showing that Chinese factory output grew at a slower rate last month compared with December. A Jan. 23 HSBC report showed that Chinese manufacturing actually contracted in January.
Uber aggressive policy responses have uber aggressive consequences. The consequences are already built into the equation. The laws of math are not subject to financial engineering.
Change course or not, huge consequences are coming. Math ALWAYS wins.