Today a 40-year market veteran sent King World News an incredibly important piece that reveals severe cracks in the system are now warning that a devastating global panic is near. This piece exclusively for KWN also discusses why the desperate attempts by central planners to hold the system together are now failing.
By Robert Fitzwilson of The Portola Group
March 16 (King World News) – Epinephrine, also known as adrenaline, is a very powerful hormone and neurotransmitter employed in emergency medical situations such as cardiac arrest, superficial bleeding and anaphylaxis. An example of anaphylaxis would be a severe reaction to a bee sting.
Greenspan Era
Since the final days of the Greenspan Era, the Fed has been administering a wide variety of “economic epinephrine” to address and suppress the equivalents of the medical conditions listed above. There were several economic “cardiac arrests” in the late 1990s through the 2000s, beginning with the Long-Term Capital fiasco and culminating with the ultimate fiascos around financial derivatives and the real estate market in the 2008-2009 period….
Continue reading the Robert Fitzwilson piece below…
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Greenspan – A Trail Of Devastation
There was also superficial bleeding in the U.S. as huge numbers of jobs were moved overseas. Pension obligations soared along with healthcare and education costs. Operating deficits and new benefits have swelled long-term obligations to the point of no return. Prices for necessities have gone through the roof for the middle class at the same time that the median wage is close to unchanged for the last 15 years.
Another form of bleeding has been the dramatic increase in tax revenue going to governments. For example, in data released this week, the U.S.Treasury took in record amounts of taxes for the 5 months in this fiscal year. Despite the large increase in receipts of $1.2 trillion, the government ran a deficit of almost $400 billion — more bleeding from the economic body that generates the receipts.
Desperate Attempts By Central Banks To Hold The System Together Now Failing
In dealing with a global economy that is clearly on its back, the central banks have thrown everything imaginable to resuscitate the weakening and now comatose patient. Among those were the drastic reductions in interest rates, massive creation of fiat currency to take toxic assets off of the bank balance sheets, funding sovereign deficits as well as the purchase of trillions of public market equities.
The effects of the financial epinephrine are clearly diminishing. Ignoring the propaganda from the mainstream media, an honest look at economic indicators clearly shows that the global economy is on the ropes and deteriorating. It won’t be fixed because the solutions defy the ideologies and objectives of the central planners. It can’t be fixed because the numbers are beyond the capability of the people and their governments to pay back the accumulated debts and future obligations.
Dollar Soars As ECB Begins Latest Round Of QE
The ECB began their version of quantitative easing (QE) this week. So far, it has not been impressive. It could well be the final hurrah of the belief that QE can do anything toward creating stronger economic activity. So far, what they have succeeded in doing is crashing the Euro.
The Japanese are doing all they can to crash the Yen. It is no wonder that the latest Black Swan is a rise in the Dollar Index over 100. In our view, this is not the “beggar-thy-neighbor” policies of the ‘30s. The currency debasement is not stimulating domestic economies for the Europeans or the Japanese. It is just pure debasement to pave the way to a new Euro and a new Yen. We’ll have to wait and see if it means a new Dollar.
What Happens When Central Planners Finally Lose Control?
It was not too long ago that Wall Street was complaining about the lack of volatility. That concern has certainly been addressed to put it mildly. Commodities, currencies, stocks, and bonds have all experienced extreme convulsions or dramatic reversals in recent trading days. The parabolic rise of the Dollar has been as much due to panic out of the Yen and the Euro, as the perceived strength of the U.S. economy relative to the European and Japanese counterparts. If this is what it looks like when the central planners are in control, a world in which control is lost should be extremely unattractive.
Greek Crisis Heating Up
Greece and the EU continue to head down the path of separation. There have been some payments made on the outstanding debt, but the flames are being fanned by comments from Greece about World War II and the Nazis, followed by the recent suggestion made to Greece by the ECB that they simply withhold payments on salaries and pensions for a month or two.
Are Stock Markets Set Up To Crash?
Meanwhile, on this side of the Atlantic, the primary support last year for the large components of the U.S. stock market came from corporate stock buyback programs. With a rising dollar denting earnings and a proposal to tax overseas cash holdings at a rate of 14%, the ability of many of these corporations to support their stock price will be suspect. If the large cap names took the indexes up, a reversal from disappearing buybacks could bring the popular indexes down swiftly and painfully.
Recent corrections for stocks and bonds have always been followed by bounces back to or exceeding old highs. Given a deteriorating outlook for corporate cash flow and central banks losing effectiveness from old tricks, this correction might prove to be much more than that. We cannot count out the central banks and their bags of tricks yet, but it definitely feels as if they are going to have to come up with some new ones to stave off a rout. ***ALSO JUST RELEASED: World Will Now Witness A Series Of Devastating Collapses, Massive Financial Destruction And Total Chaos CLICK HERE.
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