A Day of Truth For the Financial Markets

by Georgi Stankov, December 16, 2015


Today is a moment of truth for the entire financial Ponzi scheme with which the cabal and the banksters wanted to enslave humanity in the End Time. The today’s FOMC meeting of the Fed will be the most crucial inflection point since 1929, actually since the beginning of the Orion monetary system. If the central banksters decide to raise the interest rates by 0.25% that may be peanuts in real economic terms but a devastating blow to the US and world economy which is in a free fall since it entered the Greatest Depression of all time in 2008, we may see a precipitous collapse even before Christmas. If however the central banksters become fearful in front their “courage foretold” and decide to keep the ZIRP of the last seven years, then they will lose the last vestige of credibility. They will have spent their last dry powder sitting between the rock and hard place – proving that the Fed and all central banks are out of the Ponzi game or triggering the final financial crash while documenting their destructive role for the economy from the very beginning.

We have reached the peak of history’s greatest credit inflation and the bursting of all debt bubbles. Now we’re hurtling into a precipitous credit crunch with rapidly growing inflation of daily goods.

At the same time the world economy is in the final stage of the Greatest Depression of all time which could only be hidden by forged statistics while exploiting the gullibility of the Zombie masses in the West. In the meantime the commodity prices have experienced an unprecedented slump and are now the lowest since more than 16 years. This deflation caused by the plunge of crude oil, iron ore, copper and other commodity prices should not be confused with the peak in prices for goods for daily consumption. The Orion economy is a hydra with 100 heads. When the source of revenues is dried out in one area, it reverts to another basic source of profits, always at the expense of the people.

The Bloomberg Commodity index (CRB) has fallen 70% since its 2008 peak. And it has now reverted to levels not seen since 1999 — while falling lower by the day. At the same time we observe an unprecedented bubble in stock markets that was financed by three QEs of the Fed, by infinite printing of money out of thin air. The central banks became the buyer of last resort since the financial Ponzi system based on debt defaulted in 2008:

While the stock markets and the commodities prices were behaving synchronistically before the 2008 crisis, thus creating the illusion that a rise of commodity prices such as crude oil can be attributed to an alleged growth and the slump in prices to a recession as in 2009, now we observe the most paradoxical situation of all time. There is a clear dissociation between the financial bubble in stock markets, which are only the display windows indices of the current debt Ponzi scheme, and the real economy as measured by the rapidly falling commodity prices due to the Greatest Depression of all time. This huge discrepancy between fraudulent financial facade and real economy as shown in the graph above can no longer be hidden and the today’s decision of the Fed will finally declare that the emperor is naked.

Why? Because all the other financial and economic parameters point south, they amplify their negative effects to a massive standing wave of destruction that will wipe out the western economy within the blink of an eye. The reality will catch up with the Orion illusion and will obliterate this perennial fraud. Here are the major factors that are now determining the biggest economic crash of all time before this matrix can be dissolved and we can ascend. “It is the economy stupid”, as Jerry heard from his HS when he asked when we shall ascend.

The world’s best known freight index has collapsed to new all-time record lows this morning. Amid a persistent glut of ships and ongoing concerns about Chinese steel imports, The Baltic Dry has tumbled to 471 – the lowest level in at least 30 years. This index is the most relevant and reliable indicator for the state of the world economy as it reflect the level of world trade. Since last year it dropped from more than 2000 points to 471 this year. If this is not a sign for the Greatest Depression of all time what else?

Worst. Ever.

Crude oil crashed to $35 today after the biggest December inventory build in 22 years, which means that the US economy is in a free fall and there is no demand for energy consumption anymore. However one can now buy crude oil for $20 in most market places due to massive overproduction of OPEC and Russia. Hence the real situation in the commodity sector is much worse than even the official statistics such as the Bloomberg Commodity Index show as the latter is determined to a large extent by the crude oil price.

The current Depression will be significantly deteriorated if the Fed decides to raise interest raises by 25 bps today as in this case it will have to drain as much as $1 trillion in liquidity from the markets. This is known as “tight money”  in the slang of the Chicago boys’ gang of predatory monetarism. In an economy which is already in the biggest credit crunch with the  lowest velocity of money circulation since 1929

this additional withdrawal of liquidity will be the proverbial final straw that will break the camel’s neck. Or as somebody put it today: “We have forgotten how to raise interest rates” after being spoiled for seven years with infinite QEs and printing money out of thin air by the central banks. In medicine we call it “withdrawal syndrome” after chronic opiate addiction with constantly rising dosages. Very often it ends up with exitus.

Central banks are now falling off the cliff. They can’t generate more credit no matter how hard they try because most of the world is at “peak debt.” That is the point where households, companies, governments and even countries are tapped out. They’re stuck with such monumental debt burdens that they can’t service any additional debt no matter what the interest rate — even zero or below. 

The next case of absurdity: The European Central Bank (ECB) has pushed deposit rates in Europe to negative 0.3%. Yet, private credit to households and business remains tight. That’s because they are already swamped with more debt than they can handle in a state of hidden Depression.

And now that the debt bubble has burst and the credit crunch is all over the place, it is a matter of days when the financial infarct and the shutdown of all banks will come. All western banks have already started to lay off hundreds of thousands of employees this year and have announced further cuts in working force next year in anticipation of this impending event.

Likewise, Japan is off the charts with public and private debt equal to 450% of GDP. But despite years of zero interest rates and massive money printing by the Bank of Japan (BOJ), credit stopped growing long ago. Japan is now in its fifth official recession in seven years, which is nothing else but another euphemism for the Greatest Depression of all time.

Following the collapse in industrial production in the USA, it is reported today that the Market’s Manufacturing PMI has plunged to 51.3, its lowest since October 2012. Under the surface it is a disaster as the new orders crashed to worst since September 2009. Although manufacturing only accounts for around one-tenth of the post-industrial US economy, the Manufacturing PMI exhibits a high correlation of 77% with GDP as industrial activity has an important cyclical impact on other parts of the economy. This is another proof that the economy is in a free fall in the final stage of the Greatest Depression.

As I said there is not a single indicator that gives a glimpse of optimism. All statistics point south and this is the ideal mixture for a perfect storm that may well begin today.

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