muses of the moment

June 22, 2013

Chris Martenson

Click here for Chris Martenson’s latest warning on the next economic crash.

Muses of the Moments readers should already be positioned for this next leg down in the economic downturn. Martin Armstrong is calling for more volatility starting in August of this year and then a major turning point in October of 2015. The next 18 months-2 years will be very interesting.

We are in a long term cycle of global debt contraction. During this long contraction, all assets, whether tied to debt or not will be on sale during volatile market moves. Investors are forced to sell to cover debt (at least those not being bailed out by your money.

In these times, it is best not to have debt and to have liquidity to buy up tangible assets that are on sale at greatly reduces prices. AS we move along in this cycle, the greater the volatility, the deeper the discount. It’s a fire sale. It is part of the great wealth transfer during this debt collapse.

6 Comments »

  1. With all of the money printing, it’s hard to believe that cash would be king. I looked at the evidence and convinced myself that we would see Weimar style hyperinflation here in the US. Now I’m not so sure. When Armstrong says we won’t see hyperinflation, maybe I should listen.

    So even though the dollar is losing value every day, we need to have cash, but not in the bank, because we might be subject to a bail-in. How comforting.

    Comment by sw — June 22, 2013 @ 5:31 pm

  2. What liquidity is needed? Is a bank deposit is safe enough?
    Is the answer changed for non-USA residence?

    Comment by ya — June 23, 2013 @ 3:30 am

  3. Groovygirl suggests at least 6 months living expenses in liquidity (with some cash in your physical possession). If you can’t save that much, start with one month and work your way towards 6 months, do what you can with what you have available.) Same goes for a business account. But try to keep it under the FDIC amount. Is it $150,000 now? They lowered it recently back to the original amount. A bank deposit under the FDIC should be protected from a bail in. However, if the bank account is connected to a money market fund or other fund for a higher interest rate, that protection may not apply.

    Is the answer changed for non-USA residence? No, it is the same.

    gg

    Comment by totallygroovygirlfriday — June 23, 2013 @ 11:42 am

  4. Yes, it is hard to see what will happen. Clearly, Martin is correct for the moment. The money printing is effectively invading those countries and economies, outside the US that are forced to hold and trade large amounts of dollars for energy. However, in gg’s opinion, all of those dollars can come flooding back to the US national economy and banks if 1) countries lose confidence in the dollar and shift their confidence into a regional alternative or 2) the petro dollar is replaced by about 1/3 of the energy-consuming market. Right now, the US dominates that market. We use the most energy and can dictate that currency. But China is fast approaching in energy consumption. Their population alone tells the tale.

    I don’t know when those things will happen, but they are sure to happen at some point. There is no stopping the money easing and printing (whatever name you put on it), it is the only political option in this global debt deflation. There is also no easy or quick way to unwind it. Groovygirl suspects that US easing unwinding will run into dollars flooding back to the US at some point in the future, since the government is reactive and not proactive, I see a problem at that time with hyperinflation in the US. That could be 10 plus years from now. No way to tell.

    gg

    gg

    Comment by totallygroovygirlfriday — June 23, 2013 @ 11:55 am

  5. Armstrong’s latest –

    http://armstrongeconomics.com/2013/06/24/forget-the-fiat-its-confidence/

    “HYPERINFLATION has ONLY taken place in minor peripheral economies. It has NEVER taken place in a major economy. All major economies implode from deflation because as they need money, they attack their citizens destroying their own economies as we are doing right now. So while you wait for HYPERINFLATION, your taxes will rise, your rights will vanish, and you will see tanks on your streets before $30,000 gold that will still be the cost of a men’s suit. Forget this HYPERINFLATION and fiat nonsense.”

    “It is NOT the fiat. It is simply CONFIDENCE. Bank and warehouse paper receipts have circulated as money for thousands of years. Even dollars under Bretton Woods gold standard were simply receipts redeemable in gold in international transactions. It was NOT gold that actually circulated. When people as a whole distrust government, then barter replaces office “money” and that can be a lot of things and the worse it gets the more likely it boils down to food. We have run every possible correlation and have the database to do so. It is just hype! Just as the stock market has never peaked with the same level of interest rates, you cannot find any such evidence that if money is “fiat” is collapses and going into HYPERINFLATION.”

    “By the time this economic implosion is over, you will PRAY for HYPERINFLATION. What we face is far worse. It is loss of everything with the risk of tanks rolling down your streets hunting money!”

    Comment by sw — June 24, 2013 @ 3:42 pm

  6. I always spent my half an hour to read this webpage’s articles or reviews everyday along with a cup of coffee.

    Comment by Http://Manhattancashforgold.Com/ — July 29, 2013 @ 1:19 pm


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