The Ship is Sinking

Guest Post by Martin Armstrong

Sinking Ship boatDo not put equities in the same boat with bonds. The ship is sinking, but that is concerned with debt – not equity. Keep in mind that the collapse of a financial system has historically unfolded to different degrees. If we are talking about a Dark Age, then you are into the Mad Max situation. Then the only thing that has value is food – not even gold.

That was the fall of Rome. People effectively sold themselves as serfs to work the land, retain 20% of the crop in return for protection behind the castle walls. Medieval coinage really appears only in silver and are rarely found more than 20 to 30 miles from where the coins were struck. This illustrated the isolation  of city states. Money was not really necessary for there was really no major trade interacting within Europe – hence the Dark Age.

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In order for tangible assets like stocks, gold, art, antiquities, etc. to survive, the fundamental infrastructure must survive. That means there must be ample food for gold to have any value whatsoever. So you must stop short of the Mad Max event for anything tangible to have a safe haven value.

German-1925-Rentenmark

The typical scenario painted by the doomsday crowd involves the German hyperinflation. However, that did not wipe out the structure of surrounding countries. This mean all tangible assets retained value because they could still be sold elsewhere. The German government replaced the hyperinflation currency in 1925 with a new currency backed by land. So art, gold, property, and equities survived. Even after the Berlin Wall fell, old claims of ownership in the East resurfaced.

Therefore, if we are only talking about a reset of the world financial system, then tangible assets retain value that becomes translated into the new currency. Hence, equities will survive, government debt and currency will not. Only going all the way to a Mad Max event would everything lose value except food. Not even gold survives for trade comes to an end.

Keep in mind that I do this to hopefully explain that there are degrees to which a system collapses. If everyone understands that we CAN SURVIVE this with society mostly intact ONLY IF WE UNDERSTAND what and how things unfold, then we have options once the crash and burn comes. We can stop short of a Mad Max event by understanding history, which is our road map to the future.

The civil unrest we have beginning today post-Trump is intended to overthrow Trump and Obama has remained in Washington, which NO PRESIDENT has ever done. We have Soros licking his lips on the prospect to altering the USA with his vision of Marxism. We have the same trend emerging in France, Britain, and Netherlands and of course Italy, Spain and Greece.

So we have some actors intent upon creating change that would subjugate all of us because they think Marx was correct after all. Their desire is to live vicariously off of other people’s money and they do not accept that anyone should have things they do not. We have students protesting because they think everything should just be free. Hence, this is a battle shaping up for the future; the final conflict over Marxism, which began with the fall of Communism in 1989. This final battle began 26 years from 1989.95.

light-ahead

Welcome to our world. This is a fight for our future. This not about doom and gloom. I oppose Soros and everything he is trying to accomplish. There is a light at the end of this stairway. We need to understand the rules of this game and position ourselves to win. Adam Smith was correct. The invisible hand is the nature of how things function. It has been humankind that thinks it can change and manage society when it does not even understand how it functions under the laws of the universe – the grand divine design, Soros, Marx, Lenin, or Mao were never capable of replacing the invisible hand with their own schemes. You might as well try to genetically alter humans and give us wings to fly and end global warming by eliminating cars and jets.

 

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10 Comments
travis
travis
February 15, 2017 10:56 am

So basically no one under age 28 was born when the wall was still up, and no one under 36 or so remembers what the wall truly meant. How easy could a wall on our southern border keep us in, as opposed to them out.

Fergus
Fergus
  travis
February 15, 2017 5:52 pm

Travis-seek help.

Rojam
Rojam
February 15, 2017 11:29 am

Interesting article. What strikes me is the animated graphic. Three people in the boat. Only one person working and getting nowhere, while 2 others watch. Seems rather indicative and ironic.

Unanon
Unanon
  Rojam
February 15, 2017 12:09 pm

It’s a regular OSHA boat used by the DOT after they break yet another main water line.

Thus, one working while the others watch.

AC
AC
February 15, 2017 1:40 pm

‘Humankind?’ Seriously? Not a bad article, but I want to kick you in the nuts for using a PC fakeword.

It’s ‘mankind,’ or ‘humanity’ if you are a PC faggot and are afraid of offending the blue-haired freak crowd.

What is coming next? I’m expecting the Spartacist Uprising II soon.

Fergus
Fergus
February 15, 2017 5:55 pm

Economies collapse when the rule of law ceases. Governments collapse when they lose interest in the law or pervert the law. Rome was destroyed when the meaning of Roman had lost all meaning. When the empire was divided the saner people realized the empire could not continue.

flash
flash
February 15, 2017 6:24 pm

OK. Once gain.There were no dark ages. People never cease, via education and stubborn labor to better their lot in life. Two steps backward and three forward. That’s how we get to where we’re going…since the dawn of time.

Top 10 Reasons The Dark Ages Were Not Dark
http://listverse.com/2008/06/09/top-10-reasons-the-dark-ages-were-not-dark/

Boat Guy
Boat Guy
February 15, 2017 6:46 pm

Face it the most effective bilge pump on a sinking boat is a frightened man with a bucket ! When the water enters your boat faster than you can pump it out you are going down ! Now of course it’s not all water related , when the hole you find your self in is to deep , you must first stop digging ! Now take your bailing bucket and shovel track down every shit for brains politicians that put us in this mess over the last forty years plus and take all their wealth put it in the bucket and beat them to death with the shovel and if they are dead dig them up and beat them just for shits and grins !
Face it we have rolled around fat dum and happy and now it’s time to pay the bill and a shit load of freeloading basturds left us to pick up the check while we earn a fraction of what it takes to go day to day and god forbid you get sick and retirement HAHAHAHAHAHA…..

HowCanYa
HowCanYa
February 15, 2017 6:52 pm

The Dark Ages were only Dark to those who thought the Roman Empire was light. Maybe like Manhattanites and San Frannys of today. The years 454AD to 800AD…saw

-Central Europe convert to Christianity
-population growth
-consolidation of tattered tribes and oppressed people in France(Charlemagne), England(Saxons)

also challenges
-the rise of Viking raiders
-cool weather/mini ice age
-challenge of Islam invaders —later they suffered utter defeat in Europe (Charles Martel backed by the Church)

Suzanna
Suzanna
February 15, 2017 9:27 pm

One might argue we have some “Mad Max” going on
right now. Conquest, murder, and theft on the gov level
scale. Theft, murder and mayhem on the city streets.

We will have the “Grand Mad Max” if we lose our power
grids to neglect, if our financial system does not survive,
and when the peoples have no food and water. Our nuke
power plants are past their use by dates. Our systems are
very fragile, what the hell…I’ll take the dark ages…just stay
where you are and leave us alone. Need is the mother of
invention.