Which do you think is more likely? That the U.S. gained 292,000 jobs in December – let alone, “breadwinner” jobs that enable “employees” to pay their bills? Or that China’s GDP grew by 6.8% in 2015? As trust me, with a “GDP” second only to the U.S., and nearly three times that of Japan, the “emerging market” ship sailed long ago. In other words, it’s nearly impossible that China will ever grow by 6.8%; let alone now, amidst the bursting of its historic, unprecedented economic bubble.
By the way, all nations heavily overstate GDP – whilst simultaneously, understating debt – to make their “debt/GDP” ratios appear lower. To that end, nearly all countries changed their GDP calculation “methodologies” in the past two years – putting essentially all economic data on the same “island of lies” as the grand-daddy of them all, the U.S. “NFP employment” report. Which, following last month’s 292,000 job, data-cooking debacle, I officially “downgraded” from an “island of lies” to an “atoll in a tsunami.” And so you understand just how comically sheep-like governments are; and how willing they are to blindly follow the blind, it was, as you can imagine, the U.S. that started this “trend of deceit” back in July 2013 – when it decided that a slew of non-productive spending activities should be considered “Gross Domestic Product.” Followed, in turn, by the Eurozone in October 2014, and China in December 2014 – and culminating with the U.S. taking the process to a new plateau of lunacy in May 2015. When, following a horrible 1Q 2015 result, it decided to “double seasonally adjust” (yes, that’s an official government term) GDP calculations – under its new “GDP-Plus” methodology (again, an actual government term), despite no historical evidence proving its necessity.
Back to China, the only way I would believe in 6.8% growth is if it were preceded by a negative sign – as Chinese economic activity has literally ground to a halt. Not to mention, all its trade partners. At this point, even the Chinese government doesn’t think anyone believes such lies. Thus, one needs to “discount” such data, along the proverbial “bell curve” of information dissemination the Chinese government has implicitly established. To wit, GDP may have “grown” by 6.8%, but said result was “less than expected”; as were industrial production, retail sales, and fixed asset investment. And, most telling of all, said “6.8% growth” was the nation’s weakest since 1990. In other words, China’s economy has plunged to its weakest level in 26 years; which shouldn’t be surprising, given that it has added tens of trillions of debt; unprecedented overcapacity; and commodity stores so large, they won’t need “re-stock” for years to come. Which, per last year’s “direst prediction of all,” is one of the principal reasons why the global deflationary storm may cast its shadow for years, if not decades.
And nowhere more so than commodities – i.e., the world’s largest revenue source. Everywhere one looks, corporations, municipalities, and sovereign nations are collapsing as a result; such as, in the last 24 hours alone, Glencore (one of the world’s largest miners and “commodity traders”), saw its bonds crash to all-time lows; whilst Italian bank stocks, due to speculation of their exposure to such activities, crashed so hard, most had their trading suspended. And then there was France’s President, Francois Holland, actually, in public, declaring France to be amidst an “economic emergency.” I mean, can you imagine the chaos if Obama had said that at the SOTU, instead of “all’s well,” and any attempt to state otherwise is “peddling fiction?”
Last but not least, the Kazakhstan Tenge plunged 5%, completing a 50% collapse since de-pegging from the dollar a mere five months ago. Which, by the way, per Jim Rickards’ “emergency” presentation last night, is what is likely in store for the pivotal Saudi Arabian currency imminently. Which, when it occurs, in his – and many others’ – view, will have the same, dramatically deflationary ramifications as last year’s Swiss and Chinese devaluations. Not to mention, those of Venezuela, Argentina, Angola, and Nigeria; as well as the “unofficial,” market-based collapses of countless others; where cumulatively, billions of people lost more purchasing power in one year, than any time in history. To that end, said billions would be ecstatic today, had they purchased gold and silver beforehand. Then again, unlike here in the U.S. and Canada, Precious Metals are all but unavailable in much of the world. Let alone, at the historically suppressed, un-VAT-taxed levels we currently “enjoy,” care of 15 years of relentless Cartel raids – like this morning’s, for example.
In the big picture, it is the unprecedented DEBT created by history’s largest, broadest fiat Ponzi scheme – encompassing the entire world – that will be “Economic Mother Nature’s” ultimate, unstoppable weapon of mass destruction. Which, as we speak, is leveling economies, currencies, and cultures the world round. And nowhere is this more evident than Europe; where such variables is simultaneously coalescing, in a toxic political, economic, and social brew sure to, once and for all, destroy the so-called “European Union,” a mere two decades after its ill-conceived creation.
To wit, a “union” of dozens of conflicting political, monetary, and cultural values was bound to implode at the first sign of economic stress – as I first discussed in 2011’s “unprecedented.” Frankly, I didn’t think it would last this long. But then again, I could never have imagined the levels of money printing, market manipulation, and propaganda that would be utilized to “kick the can” – and in the process, sentence hundreds of millions of Europeans to decades of economic destitution and social upheaval. Let alone, the historic commodity collapse wiping out its Middle Eastern neighbors – which are not only flat-broke, but teeming with destitute emigrants, on the verge of swamping Europe’s demographically-challenged population, creating a “migrancy crisis” for the ages. Potentially, as politically, economically, and socially “bloody” as any before it.
To that end, today’s title, “countdown to the end,” perfectly describes the dire situation Europe – and by proxy, the entire world – faces. Specifically, as said “migrancy crisis” advances to Defcon1 status – as exemplified by Austria officially suspending its participation in the Schengen agreement last weekend, when it officially closed its borders, in an attempt to keep Islamic – and other, undisclosed – “terrorists” out.
In response, European Commission President Jean-Claude Juncker espoused that Europe “is on its last chance”; and thus, the “beginning of the end” may have arrived. In his words, “we have until March…the summer maybe…for a European solution (to the migrancy crisis).” However, “there is a big risk that Germany closes (its borders, obliterating the Schengen agreement).” Consequently, “there is a risk that February could start a countdown to the end.”
“The end” indeed – for the world’s second largest currency; largest trade bloc; and likely, political, geopolitical, and social stability for generations to come. And trust me, if such a massive “domino” were to fall – which ultimately, it MUST – countless others will fall in the blink of an eye.
At this point, it’s inevitable that such cataclysmic events will occur, as the economic damage wrought by said Ponzi scheme is simply too large to be fixed. To that end, all that remains to be answered is the when and how. And if you haven’t even considered these events; let alone, prepared for them; shame on you. As when major currencies start succumbing to the same fate that dozens of minor ones have in the past year alone, if you haven’t already protected yourself and your loved ones, it will be too late.