The Economic Collapse Blog Has Issued A RED ALERT For The Last Six …

June 26, 2015 - Supermoon

Red Alert ButtonI have never finished anything like this before.  Ever given we started The Economic Collapse Blog in late 2009, we have never expelled any kind of “red alert” for any specific duration of time.  As an attorney, we was lerned to be level-headed and to usually come to conclusions that were fitting by a evidence.  So this is not something that we am doing lightly.  Based on information that we have received, things that we have been told, and thousands of hours of investigate that have left into a announcement of some-more than 1,300 articles about a ongoing mercantile collapse, we have come to a finish that a vital financial tumble is imminent.  Therefore, we am arising a RED ALERT for a final 6 months of 2015.

To clarify, when we contend “imminent” we do not meant that it will occur within a successive 48 hours.  And we am not observant that a problems will be “over” once we get to a finish of 2015.  In fact, we trust that a law is that a problems will usually be usually commencement as we enter 2016.

What we am attempting to promulgate is that we are right during a doorway of a vital branch point.  About this time of a year behind in 2008, my mother and we went to revisit her parents.  As we sat in their vital room, we explained to them that we were on a verge of a vital financial crisis, and of march a events that happened a few months after showed that we was right on a money.

This time around, we wish that we could revisit a vital bedrooms of all of my readers and explain to them given we are on a verge of another vital financial crisis.  Unfortunately, that is not possible, though hopefully this essay will suffice.  Please share it with your friends, your family and anyone else that we wish to advise about what is coming.

Let’s start with a tiny row about a U.S. economy.  Most of a time, when we use a tenure “economic collapse” what many people are indeed meditative of is a “financial collapse”.  And we will speak about a entrance “financial collapse” after on in this article.  But usually given bonds have recently been attack all-time record highs does not meant that a altogether economy has been doing well.  This is a thesis that we have beaten on over and over again.  It is my row that we are in a midst of a long-term mercantile tumble that has been function for many years, that is function as we review this article, and that will severely accelerate over a entrance months.

Let me give we usually one discerning example.  When an economy is healthy, income tends to disseminate sincerely rapidly.  we buy something from you, afterwards we take that income and buy something from someone else, etc.  In a fast and flourishing economy, people generally feel good about things and they are not fearful to spend.  But during tough times, a accurate conflicting happens.  That is given a quickness of income roughly always slows down during a recession.  As we can see from a draft below, a quickness of income has indeed left down during each retrogression given 1960.  Once a retrogression is over, a quickness of income is ostensible to go behind up.  But a humorous thing happened after a final retrogression ended.  The quickness of income continued to go down, and it has now strike an all-time record low…

Velocity Of Money M2

This is a kind of draft that we would design from a unequivocally ill economy.  And though a doubt, a economy is sick.  Even a central supervision numbers paint a design of an economy that is deeply troubled.  Corporate increase have declined for dual buliding in a row, U.S. exports plunged by 7.6 percent during a initial entertain of 2015, U.S. GDP engaged by 0.7 percent during a initial quarter, and bureau orders have declined year over year for 6 months in a row.

If a batch marketplace was connected to reality, it would be going down.  But instead, it has usually kept going up.  As we discussed yesterday, this is a classical box of an undiscerning financial bubble.  If we was essay an mercantile text and we wanted to embody an instance of what a run adult to a vital financial pile-up looks like, it would be tough to come adult with anything some-more ideal than what we have watched exhibit over a final 6 months.  Just about each settlement that has popped adult before to before batch markets crashes is function again, and this is something that we have combined about so many that many of my readers are ill of it.

And though a doubt, a financial markets are primed for a crash.

Only two times before has a SP 500 been adult by some-more than 200 percent over a 6 year time frame.

The initial was in 1929, and a batch marketplace subsequently crashed.

The second was in 2000, right before a dotcom burble burst.

And by usually about any magnitude that we can presumably imagine, bonds are massively overvalued right now.

For instance, usually check out a draft posted below.  It comes from Doug Short, and it shows that a ratio of corporate equity prices to GDP has usually been aloft one time given 1950.  That was in 2000 usually before a dotcom burble burst…

The Buffett Indicator from Doug Short

Let’s take a demeanour during another chart.  This one comes from Phoenix Capital Research, and it shows that a CAPE ratio (cyclically practiced price-to-earnings ratio) has frequency been higher.  In fact, a usually times that it has been aloft we have seen batch marketplace crashes immediately afterwards…

CAPE - Phoenix Capital Research

Yale economics highbrow Robert Shiller is also deeply endangered about a CAPE ratio

I cruise that compared with history, US bonds are overvalued. One approach to cruise this is by looking during a CAPE (cyclically practiced P/E) ratio that we combined with John Campbell, now during Harvard, 25 years ago. The ratio is tangible as a genuine batch cost (using a SP Composite Stock Price Index deflated by a CPI) divided by a ten-year normal of genuine gain per share. We have found this ratio to be a good predictor of successive batch marketplace returns, generally over a prolonged run. The CAPE ratio has recently been around 27, that is utterly high by US chronological standards. The usually other times it has been that high or aloft were in 1929, 2000, and 2007—all moments before marketplace crashes.

But a CAPE ratio is not a usually metric we watch. In my book Irrational Exuberance (3rd Ed., Princeton 2015) we plead several metrics that assistance decider what’s going on in a market. These embody my batch marketplace certainty indices. One of a indicators in that array is formed on a singular doubt that we have asked sold and institutional investors over a years along a lines of, “Do we cruise a batch marketplace is overvalued, undervalued, or about right?” Lately, what we call “valuation confidence” prisoner by this doubt has been on a downward trend, and for sold investors recently reached a lowest indicate given a batch marketplace arise in 2000.

Other gratefulness indicators furnish identical results.  This successive draft is another one from Doug Short, and it shows a normal of 4 of his favorite gratefulness indicators.  As we can see, there is usually one other time when bonds have been some-more overvalued than they are currently according to a normal of his 4 favorite indicators, and that was usually before a batch marketplace crashed when a dotcom burble burst…

Four Valuation Indicators - Doug Short

Another one of a things that indicates that a financial burble is function is a turn of domain debt.  Whenever domain debt has left over 2.25% of GDP a batch marketplace pile-up has always followed, and currently it is distant above that level.  As we can see from a draft below, there have been 3 vital peaks in domain debt in complicated U.S. history.  One was usually before a dotcom burble burst, one was usually before a financial predicament of 2008, and a third is function right now…

Margin Debt - Doug Short

Something else that we would design to see before to a vital financial predicament is a decoupling of high produce debt and stocks.  This is something that happened usually before to a batch marketplace pile-up of 2008, and it is function again right now.  The following chart comes from Zero Hedge, and it demonstrates this brilliantly…

SP 500 HY Credit

Are we starting to get a picture?

And as we discussed yesterday, a intelligent income is commencement to lift their income out of bonds while they still can.  According to USA Today, mutual account investors have pulled some-more income out of bonds than they have put into bonds for 16 weeks in a row

In a pointer of batch marketplace excitability on Main Street, mutual account investors have yanked some-more income out of U.S. batch supports than they put in for 16 true weeks.

The final time domestic batch supports had certain net money inflows was in a week finale Feb. 25, according to information from a Investment Company Institute, a mutual account trade group.

In a week finished Jun 17, a many new information available, mutual supports that deposit in U.S. bonds suffered net outflows of $3.45 billion, according to a ICI.

Since late February, U.S. batch supports have suffered estimated outflows of scarcely $55 billion. Those net withdrawals come notwithstanding a fact a benchmark Standard Poor’s 500 strike a uninformed record high of 2130.82 on May 21 and a Dow Jones industrial normal notched a uninformed record on May 19.

But it isn’t usually bonds that are going to pile-up during a successive financial crisis.  Bonds are going to pile-up as well, though what we am endangered about many of all are derivatives.

Derivatives are going to play a starring role in a successive vital financial crisis.  we can't stress this enough.  In fact, if we wish to listen for usually one word on a news that will let we know that things have started to unequivocally unravel, usually listen for a word “derivatives”.  This form of ratified gambling is going to vanquish “too large to fail” banks all over a universe during a successive vital financial downturn.  The “too large to fail” banks in a U.S. alone have 278 trillion dollars of sum bearing to derivatives, though they usually have 9.8 trillion dollars in sum assets.  To contend that they are being “reckless” is a large understatement.

For many some-more on a entrance derivatives crisis, greatfully see my before essay entitled “Warren Buffett: Derivatives Are Still Weapons Of Mass Destruction And ‘Are Likely To Cause Big Trouble’“.

Of march we am not a usually one that is sounding a alarm about what is coming.  Just cruise what some unequivocally distinguished people have been observant recently…

Ron Paul has usually expelled a new video in that he warned all of us to “prepare for a bear marketplace in bonds“.

Carl Icahn says that financial markets are “extremely overheated—especially high-yield bonds“.

Max Keiser recently told Alex Jones that a good financial tumble is coming.

Martin Armstrong says that his Economic Confidence Model predicts that a “Big Bang” is entrance in “2015.75“.

Jeff Berwick of a Dollar Vigilante says that “we’re removing very, unequivocally tighten to a successive predicament collapse” and he has privately forked to a month of September.

James Howard Kunstler has likely that bonds are going to “crater in Q3 as faith in paper and pixels erodes“.

Lindsey Williams recently sent out an email warning in that he warned that his chosen crony has told him that “they have a World Wide Financial Collapse scheduled between Sep and a finish of Dec 2015“.

Gerald Celente has warned about “the Great Panic of 2015“.

Bill Fleckenstein has pronounced that 2015 could be a year of a “big accident“.

Ray Gano has settled that we will see a financial tumble “probably starting in a third entertain of 2015″.

Legendary financier Jim Rogers recently pronounced that he believes that “we will see some kind of major, vital problems in a universe financial markets” within a successive year or two.

Alex Jones recently expelled a video in that he explained that he recently perceived “two opposite calls” from “extremely distinguished rich people” warning him about what is entrance by a finish of this year and seeking him given he isn’t withdrawal a United States “before October”.

Bible anticipation consultant Joel C. Rosenberg has posted an meaningful summary on his personal blog in that he warned that “something is coming” and that “we contingency be ready”…

I feel a tremendous clarity of urgency about this column.

The United States is hurtling towards serious trouble, and a events of a past few months — and what might be entrance over a successive few months — grieves me a good deal.

Something is coming. we don’t know what. But we all contingency be prepared in each probable way.

When we review what Rosenberg wrote, it struck me that it was precisely how we have been feeling too.

In my whole life, we have never had such an meaningful feeling about any duration of time as we have about a final 6 months of 2015.  Like Rosenberg, we feel a “tremendous clarity of urgency”, and we feel a good need to advise as many people as we can.

And it isn’t usually a financial tumble that we am endangered about.  In a previous article, we minute 7 pivotal events that we are going to declare before a finish of this September…

Late June/Early July – It is entrance that this is when a U.S. Supreme Court will exhibit their happy matrimony decision.  Most trust that a justice will order that happy matrimony is a inherent right in all 50 states.  There are some that trust that this will be a vital branch indicate for a nation.

July 15th to Sep 15th – A “realistic troops training exercise” famous as “Jade Helm” will be conducted by a U.S. Army.  More than 1,000 members of a U.S. troops will take partial in this exercise.  The list of states slated to be endangered in these drills includes Texas, Colorado, New Mexico, Arizona, Nevada, Utah, California, Mississippi and Florida.

July 28th – On May 28th, Reuters reported that countries in a European Union were being given a dual month deadline to order “bail-in” legislation.  Any republic that does not have “bail-in” legislation in place by that time will face authorised action from a European Commission.  So given is a European Union in such a rush to get this done?  Are a tip dogs in a EU expecting that another good financial predicament is about to erupt?

September 13th – This is Elul 29 on a Biblical calendar – a final day of the Shemitah year.  Many are endangered about this date given we have seen hulk batch marketplace crashes on a final day of a before dual Shemitah cycles.

On Sep 17th, 2001 (which was Elul 29 on a Biblical calendar), we witnessed a biggest one day batch marketplace pile-up in U.S. story adult until that time.  The Dow plummeted 684 points, and it was a record that hold for accurately 7 years until a finish of a successive Shemitah cycle.

On Sep 29th, 2008 (which was also Elul 29 on a Biblical calendar), a Dow fell by an strange 777 points, that still currently stays a biggest one day batch marketplace pile-up of all time.

Now we are entrance a finish of another Shemitah year.  So will a batch marketplace pile-up on Sep 13th, 2015?  Well, no, given that day is a Sunday.  So we pledge that a batch marketplace will not pile-up on that sold day.  But as Jonathan Cahn has forked out in his book on a Shemitah, infrequently batch marketplace crashes occur usually before a finish of a Shemitah year and infrequently they occur within usually a few weeks after a finish of a Shemitah.  So we are not usually looking during one sold date.

September 15th – The 70th event of a UN General Assembly starts on this date.  It is being reported that France skeleton to deliver a fortitude that would give grave UN Security Council approval to a Palestinian state.  Up until now, a United States has always been a one restraint such a resolution, though Barack Obama is indicating that things might be many opposite this time around.

September 25th to Sep 27th – The United Nations is going to launch a code new tolerable growth bulletin for a whole planet.  Some have called this “Agenda 21 on steroids”.  But this new bulletin is not usually about a environment.  It also includes supplies per economics, agriculture, preparation and gender equality.  On Sep 25th, a Pope will transport to New York to give a vital debate kicking off a UN discussion where this new bulletin will be unveiled.

September 28th – This is a date for a final of the 4 blood moons that tumble on Biblical festival dates during 2014 and 2015.  This blood moon falls on a unequivocally initial day of a Feast of Tabernacles, it will be a “supermoon”, and it will indeed be manifest in a city of Jerusalem.  There are many that boot a blood moon phenomenon, though we have seen identical patterns before.  For example, a identical settlement of eclipses happened usually before and usually after a drop of a Jewish church by a Romans in 70 AD.

In further to all above, utterly a series of mercantile cycle theories that were grown by physical economists all indicate to large difficulty for America between a years of 2015 and 2020.  For some-more on this, greatfully see my before essay entitled “If Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Pure Hell For The United States“.

Earlier today, we publicly announced that we was arising a RED ALERT for a final 6 months of 2015 on a Alex Jones radio show.  You can watch video of that talk right here.  In this essay (which is about 3 times as prolonged as one of my normal articles) we have usually common a tiny fragment of a information that has led me to emanate this red alert.  But if we wish to know more, and we are not fearful to really go down a rabbit hole, we would inspire we to check out a full dual hour display that we did down in Dallas, Texas on a nightmarish years that are coming.

The duration of relations fortitude that we have been enjoying is ending.  What comes successive is going to lead us into a misfortune duration of time in complicated American history.  we wish that we was wrong about this.

But a idea is not to shock you.  My mother and we live a lives with positively no fear, and that is my enterprise for all of my readers.  There is wish in bargain what is function and there is wish in removing prepared.  Personally, my mother and we trust that a biggest chapters of a lives are forward of us, and we wish that we have a identical outlook.

We need a era of people that are peaceful to arise adult and do good things even in a midst of all a disharmony and dark that is coming.  It is when times are a darkest that a biggest heroes are needed.

So what will we select to do when a successive predicament comes?

Will we quiver in fear, or will we arise adult to accommodate a challenge?

Please feel giveaway to tell us what we cruise by posting a criticism below…

The post The Economic Collapse Blog Has Issued A RED ALERT For The Last Six Months Of 2015 seemed initial on The Economic Collapse.

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