Wednesday , 28 September 2016


Any Major Election Misstep Could Trigger Stock Market Volatility & Crash

I believe it is too late to reverse the tidal wave of our financial system’s stockcrashimages-1failure that has been brewing for three decades now. [As such,] in the next few weeks, an election event will take place that I believe could trigger major volatility ending in a market crash – a speculator implosion.
The comments above and below are edited ([ ]) & abridged (…) excerpts from an article by David Stockman (DavidStockmansContraCorner.com) to provide a faster and easier read.
The idea that the American economy has recovered post 2008 and is returning to an era of healthy prosperity is just establishment propaganda. It’s the present day equivalent of the Big Lie…
The natural post-recession rebound of the nation’s capitalist economy has already exhausted itself after 84 months of tepid advance. Now, the massive headwinds of:
  • towering public and private debts,
  • faltering corporate investment and productivity,
  • Washington-based regulatory and tax-barriers, and
  • the end of an unsustainable central bank-fueled global credit, trade and investment boom

will usher in a prolonged era of global deflation and domestic recession.

The only thing that has really recovered from the epochal breakdowns of 2008-2009 are the stock market averages.
  • They are now at levels three times higher than the March 2009 bottom but the market’s current lofty valuation is an utterly artificial fiction of what I call “Bubble Finance.”
  • The broad stock market is more overvalued than any time in history, including the peaks before 2008, 2000, and 1929

and they will soon be heading for a hefty correction in any circumstance after being fueled for seven years with free money and massive liquidity injections by the central bank.

In the face of the fast oncoming domestic recession and deepening global deflation, Wall Street is set up for the mother of all crashes.
  • What makes it so wicked is that the casino gamblers have been rescued by the Fed so many times since 1987 that they have no clue that the nation’s monetary central planners are out of dry powder.
  • When the stampede for the exits gets underway this time, and there are no monetary firemen at the ready, sheer bedlam will quickly ensue on Wall Street.
  • Likewise, there will be no possibility of a fiscal rescue, either. That’s because during 90 months of the weakest recovery in history, Washington has whiffed entirely on the fiscal front. Not a single thing has been done about the structural deficit and the fast-approaching insolvency of the nation’s massive social insurance system. Indeed, when the $150-billion-per-year disability trust fund ran out of cash, the cowardly men and women of Capitol Hill merely authorized a raid on the soon to be insolvent OASI trust fund for retirees and their dependents.
As the eventuality of the next recession becomes impossible to deny, the updated budget projections will show a swift return to trillion-dollar annual deficits even without any new “stimulus” programs...
  • It can be said with certainty, in fact, that under current bipartisan policy and realistic economic forecasts that at least $15 trillion will be added to the nation’s current $20 trillion of public debt during the next 10 years.
  • The Federal debt ratio will approach 150% of GDP during the next decade.
  • That means, in turn, that when interest rates eventually normalize – as they must if the monetary system of the world is to survive – debt service will soar to $1.5 trillion per year which happens to represent more than 6% of a prospective nominal GDP that has only grown at 3% annually for most of this century. Another description for that unsustainable equation would be a fiscal doomsday machine.

…I believe that the markets will crash sooner rather than later. In fact, I have my sights set on one date next month in particular as the catalyst for a correction and crash.

Disclosure: The above article has been edited ([ ]) and abridged (…) by the editorial team at munKNEE.com (Your Key to Making Money!) to provide a fast and easy read.
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