economic collapse

18
Nov
2015
Central Banks Will Not Be Able to Halt This Economic Collapse

Central Banks Will Not Be Able to Halt This Economic Collapse

In 2008, the world experienced the worst economic collapse in 80+ years. This collapse triggered a stock market crash that erased $30 trillion in wealth.

Since that time, collectively Central Banks have cut interest rates over 600 times and have printed over $15 trillion in new money… money that has failed to generate sustained economic growth… money that has set the stage for another stock market crash.

Consider the measures of GDP growth in the US for instance.

The mainstream media likes to present the “official” GDP numbers as though they are gospel… but the reality is that the number you hear in the press is not even close to accurate.

One of the simplest means of hiding the real economic collapse is to use a bogus measure for inflation. If GDP growth is 10%, and inflation is 10%, then real GDP growth is 0%.

But what if GDP growth is 10%, real inflation is 10%, but you claim inflation is just 6%?

Boom! You can promote GDP growth of 4% to support your claim that printing trillions of dollars has boosted the economy.

To remove this accounting gimmick, you can use Nominal GDP and look at the rate of growth from a year ago. Doing this presents a VERY different view of the economy: one of economic collapse, not growth. I’ve circled periods in which the current level of “growth” occured in the past.

-2As you can see, the “recovery” of the last six years has largely involved a “growth” rate that was closely associated with recessions over the last 30 years. At best the US economy has been flatlining. At worst we’ve had bouts of economic collapse comparable to a recession.

Also, note that the previous periods in which we’ve experienced this rate of economic collapse have been associated with stock market crashes.

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The media can try to hide reality all it wants. But an economic collapse is here. It will trigger another stock market crash just as it did in the early ’90s, the Tech Bubble, and the Housing Bubble. And this time Central Banks won’t be able to stop it: they’ve used up all of their ammo in the last six years trying to create recovery.

Smart investors are preparing now.

We just published a 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

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Best Regards

Graham Summers
Chief Market Strategist
Phoenix Capital Research

Posted by Phoenix Capital Research in It's a Bull Market
16
Sep
2015

These Two Assets Show Us a Crash is Coming

If the foundation of the financial system is debt… and that debt is backstopped by assets that the Big Banks can value well above their true values (remember, the banks want their collateral to maintain or increase in value)… then the “pricing” of the financial system will be elevated significantly above reality.

Put simply, a false “floor” was put under asset prices via fraud and funny money.

Consider the case of Coal.

In the US, Coal has become a political hot button. Consequently it is very easy to forget just how important the commodity is to global energy demand. Coal accounts for 40% of global electrical generation. It might be the single most economically sensitive commodity on the planet.

With that in mind, consider that Coal ENDED a multi-decade bull market back in 2012. In fact, not only did the bull market end… but Coal has erased virtually ALL of the bull market’s gains (the green line represents the pre-bull market low).

The bull market in coal is OVER Those who believe that the global is in an economic expansion will shrug this off as the result if the US’s shift away from Coal as an energy source. The US accounts for only 15% of global Coal demand. The collapse in Coal prices goes well beyond US changes in energy policy.

What’s happening in Coal is nothing short of “price discovery” as the commodity moves to align itself with economic reality. In short, the era of “growth” pronounced by Governments and Central Banks around the world ended. The “growth” or “recovery” that followed was nothing but illusion created by fraudulent economic data points.

We get confirmation of this from Oil.

For most of the “so called” recovery, Oil gradually moved higher, creating the illusion that the world was returning to economic growth (demand was rising, hence higher prices).

Oil created the illusion of economic growth

That blue line could very well represent the “false floor” for the recovery I mentioned earlier. Provided Oil remained above this trendline, the illusion of growth via higher energy demand was firmly in place.

And then Oil fell nearly 80% from top to bottom.

sc-1As was the case for Coal, Oil’s drop was nothing short of a bubble bursting. From 2009 until 2014 Oil’s price was disconnected from economic realities. Then price discovery hit resulting in a massive collapse.

Moreover, the damage to Oil was extreme. Not only did it collapse 80% in a matter of months. It actually TOOK out the trendline going back to the beginning of the bull market in 1999.

sc-2

This is a classic “ending” pattern. Breaking a critical trendline (particularly one that has been in place for several decades) is one thing. Breaking it and then failing to reclaim it during the following bounce is far more damning.

In short, the era the phony recovery narrative has come unhinged. We have no entered a cycle of actual price discovery in which financial assets fall to more accurate values. This will eventually result in a stock market crash, very likely within the next 12 months.

If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis “Round Two” Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.

You can pick up a FREE copy at:

https://www.phoenixcapitalmarketing.com/roundtwo-SA.html

Best Regards

Graham Summers

Phoenix Capital Research

Posted by Phoenix Capital Research in It's a Bull Market