Thursday , 9 July 2020


Dominoes Of Debt Lining Up – Depression Is Inevitable

Automatically receive the internet’s most informative articles bi-weekly via our free bi-weekly Market Intelligence Report newsletter (sample here). Register in the top right hand corner of this page.

Once you allow your economy to become dependent on extremes of debt, leverage, inequality, legalized looting, monopoly, pay-to-play politics and speculative asset bubbles, a depression is inevitable.

All the linked frailties and dependencies of our economy are like lines of dominoes: one default topples the entire line of dominoes of debt, leverage, derivatives, counterparty risk, credit default swaps and most devastating of all, any certainty that borrowers won’t default in the future.

The pandemic lockdown will be blamed for the Greater Depression, but the lockdown only toppled all the dominoes that were already lined up.

…We’re in the eye of the hurricane right now, as everyone holds their breath and hopes some sort of magic will make all the debt that has to be serviced every month vanish…[but] every dollar of debt is someone else’s asset and the source of their income so when the defaults and bankruptcies sweep through the financial system, they’ll obliterate all the “wealth” of those holding bundled student and auto loan securities, mortgage backed securities, corporate bonds, and destroy the income streams these trillions in debt generated.

Editor’s Note:  The original article by Charles Hugh Smith has been edited ([ ]) and abridged (…) above for the sake of clarity and brevity to ensure a fast and easy read.  The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.  Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

A Few Last Words: 

  • Click the “Like” button at the top of the page if you found this article a worthwhile read as this will help us build a bigger audience.
  • Comment below to share your opinion or perspective with other readers and possibly exchange views with them.
  • Register to receive our free Market Intelligence Report newsletter (sample here) in the top right hand corner of this page.
  • Join us on Facebook to be automatically advised of the latest articles posted and to comment on any of them.
 munKNEE.com has joined eResearch.com to provide you with individual company research articles and specific stock recommendations in addition to munKNEE’s more general informative articles on the economy, the markets, and gold, silver and cannabis investing.
Check out eResearch. If you like what you see then…

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *