muses of the moment

December 12, 2014

Let the games begin

The stars are aligning for another bank crisis and/or credit freeze and/or global debt collapse. Banks don’t want large cash deposits. Click here.

Banks are claiming that it is because of the Frank-Dodd rules, which really are so thin now, that this argument just doesn’t hold water. In addition, what little worry banks had about actually being responsible for their depositors money just got voted out by the new spending bill tonight (December 11, 2014). So, gg thinks that the big banks are getting prepared. They are lowering the cash they may need to return to customers during a crisis and anything beyond their capacity to produce, they are putting on the government’s shoulders. Or someone to blame for lack of cash for depositors.

Here is a good interview over at Click here.

Although the stock market is going well. That’s about it. Oil is down putting major pressure on the US oil industry which is the only thing going well in the last 4 years. gg sees a major debt squeeze here if oil stays under $70 for the next 12 months. Debt has to be paid whether the oil well is running or not. Shutting down wells doesn’t pay off the bank, it just cuts payroll and hurts local economies.

Derivatives….the thing the big banks want the government to cover if (when) they blow up.

Derivatives, take your pick. Auto loans (maxed out), commodities (oil), stocks, government debt, Europe (still not fixed), China (slowing), emerging markets, and of course, currencies (very out of balance the last 8 months). Currencies are the largest derivative market. One or more can blow up at anytime and trigger a chain event. (Could be blowing up as we speak, but the chain reaction to multiple markets causes the crisis.) And the banks know that.

The good news is that since the government will cover any derivative losses for the banks, you will not lose money on deposit. May have to wait to withdraw it. (Money you can on get to, is not your money). Probably lose broker/invested money, it’s not covered. Groovygirl has suggested from the beginning to have investment funds with 2-3 different brokerage houses and then cash with 2-3 banks. That’s personal and business accounts. It’s extra accounting, but may reduce risk and at least have one account you can access immediately to keep things going in a crisis event.

Bad news is that the government will “print” to cover and you will be ultimately responsible for it through taxes, currency value, or perhaps even a brand new currency to restructure all the US debt.

This will not end well.

Make sure you are as protected as much as you can be. You can not control derivatives or government votes or market crisis, but you can control your money and finances.

I suggest to you that the next crisis will not be called a financial crisis. It will initially be labeled something else to keep people from assuming it is an event like 2007-2009 as long as possible. As this will cause everyone and anyone to “panic”. The time to prepare is yesterday, not tomorrow.


  1. GG,

    Love your comment “This will not end well.” So true. We are all going to fall out of an airplane at 30,000 feet. The question is do we land on a mountain of pillows or on cement.

    You then say “Make sure you are as protected abs much as you can be. You can not control derivatives or government votes or market crisis, but you can control your money and finances.” Yes, we CAN control our finances to a certain point. If you are fortunate enough to have a lot of money, unlike me, it will difficult to manage your nest egg when the crunch happens.

    Personally, I think Armstrong’s ECM model is pointing to a major global economic issue next year. HOWEVER, the only game left in town will be in U.S equities. From what I understand, it seems very possible that the DOW continues to keep on going up until the end game occurs. Once that happens then there has to be a reset button of some sort. When that reset button is pushed, the old currencies will have little to no value. What will have value? Real Estate. High-End Watches. Gold. Silver. … hard commodities. I think even Armstrong believes that we can have a wide range of end-game responses. From a Mad Max event to a smooth transition to the new way of creating money.

    My guess is that it’s going to be somewhere in-between.

    Comment by MikePhila — December 16, 2014 @ 4:39 pm

  2. GG,

    Take a look at this. I think everyone here on your site will enjoy.

    Comment by MikePhila — December 27, 2014 @ 11:37 pm

  3. Good link, Mike!


    Comment by totallygroovygirlfriday — January 15, 2015 @ 9:57 am

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