Tag: 2020 crash

Guest Post by Chris Martenson

Like a windstorm toppling a hollowed-out tree, SARS-CoV-2 didn’t cause the current recession so much as it exposed how rotten things already were.

Even before SARS-CoV-2, households were struggling. Far too many were limping along without any savings at all, one crisis away from financial ruin.

Debts at every level were at record highs before SARS-CoV-2 came along, and the Federal Reserve was already busy bailing out the US financial system before the virus hit.

The shale oil industry had failed to generate any profits for over a decade before anyone ever heard of Covid19.

The worldwide wealth gap was already record levels before we were forced into lockdown.

What the coronavirus pandemic has done, though, is give the ruling authorities aircover to accelerate all of these trends to warp speed.

Billionaires have been, by far, the largest winners in this story so far.  Ditto for mega corporations.  Main Street and small and medium-sized businesses have been utterly crushed.

Continue reading “A Serious Message From Chris Martenson”

Guest Post by Jeff Thomas via International Man

Market cycles have existed since the advent of lending institutions. As far back as 2,000 BC, in Assyria, merchants provided loans to farmers and traders. Often, this created prosperity, with greater amounts of money passing from hand to hand with greater frequency.

Not surprisingly, the interest paid to the merchants inspired them to increase the amounts they would lend, again increasing prosperity.

But periodically, hard times returned and those who borrowed were unable to pay back the loans, leading to recessions.

Since at least the 14^th century, rather than lending out gold and silver, goldsmiths in Europe issued letters of credit. Then, in the 17^th century, fractional reserve banking emerged as a common practice.

The concept was that a bank might lend out the majority of its deposits, retaining a small percentage for day-to-day business. But for many banks, at some point, the temptation to lend out more in promissory notes than the bank actually had on deposit became too great.

Periodically, there would be a market contraction and the banks would fail. Those who thought that they owned money found that they did not. It was gone.

Continue reading ““When No Man Has a Farthing…””

Guest Post by Jim Kunstler

Historians of the future, pan-roasting fresh-caught June bugs over their campfires, may wonder when, exactly, was the moment when the financial world broke with reality. Was it when Nixon slammed the “gold window” shut? When “maestro” Alan Greenspan first bamboozled a Senate finance committee? When Pets.com face-planted 268 days after its IPO? When Ben Bernanke declared the housing bubble “contained?”

Continue reading “Forced Liquidation”

Guest Post by Jesse

We set a few records this week in the financial markets, none of them particularly life-enhancing for any but a few.   You know who you are.

Stocks were utterly hammered this week.  Hammered.

This is a direct result of the bloated and over-inflated condition that US stocks had reached, thanks in large part to the Fed, the Administration, and the usual suspects in the financial class.

Continue reading “The End of the Beginning – Crash of 2020”