Unless you have been living off the grid or to engrossed in the latest season of your favourite television series you will likely of heard about some mass
State media on both sides of the water have remained relatively optimistic and blasé about the whole situation, however if you scratch the surface, just a little you will discover that all is not well in the Global Economy, in fact you will discover that the whole house of cards is teetering on the edge of collapse.
Predictions of economic collapses are nothing new and a quick google search will show you that every year thousands of ‘Doom and Gloomers’ make such predictions, however, just because 99% of the time these predictions are made on false assumptions or for sensationalism it doesn’t mean that such an event won’t happen. Historically they always do eventually occur and all the indicators are showing us that such an event is imminent.
The 2008 Banking Crisis Postponed
In 2008 we saw what many economist called the greatest financial crisis since the great depression in 1930. The financial crisis was triggered by the subprime mortgage debacle which in a nutshell was the fault of the banks selling high-risk and outright dangerous mortgages to people that couldn’t afford them into a market that was already vastly over-saturated.
The Housing bubble collapsed and millions were left unable to make payments on their mortgages. The knock-on effect was felt throughout the financial world and resulted in the collapse of the investment bank Lehman Brothers on September 15, 2008.
The fraud and corruption embedded at every level of the financial system is another topic entirely but ultimately because of this what can only be described as ‘Financial Terrorism’ the Global Economy collapsed, temporarily.
Thanks to a fiat money system which is backed by nothing a few sessions of Quantitative Easing was planned, this is where central banks just print more money, lend it out and artificially begin to inflate the economy once more.
However, what anyone with an ounce of economic understanding will know is that this money printing and Keynesian approach to fix a market can only put off the inevitable, and not only will the collapse eventually restart where it left off, it’ll be far harder than it would of been if the economy was left to heal itself in 2008.
As you can see from the above chart not only did this insane money printing ensure a quick recovery but it also has led to all new time highs in the Stock Market. The US Government alone has printed more than $12 Trillion dollars since the 2008 Financial Crisis. In addition to the money printing, the US debt has doubled since 2008 from just under $10 Trillion to in excess of $21 Trillion and rising at an exponential rate.
To add fuel to the fire the Governments incompetence at Economics isn’t the only factor to consider when we try to consider where the markets are heading. We also need to take a look at the health of Geopolitics, which lets face it, is not sitting pretty right now.
Tensions between the US and Russia have been building over the past few years resulting in trade sanctions a propaganda war not seen since the Cold War, tensions between the US and China have also been escalating over the past year further increasing individual nation states to regain independent sovereignty.
We also have the ongoing European problems with the UK opting to leave the European Union and other nations within the EU showing their desires to follow suite.
Everyday we are seeing more and more financial conflict between nations across the World as our Global GDP escalates to levels never seen before in Human History. 2019 is predicted to see these conflicts increase further and many are wondering exactly where all this will end.
Well, one conclusion which appears inevitable is the end of the false economic correction created in 2008, the house of cards is weakening by the second and it is only a matter of time before it collapses altogether.
What do they know?
The World maybe full of pathological dictators running their nations to further profit the pockets of a ruling elite, however being a pathological dictator does not mean they are not intelligent and getting prepared.
Many Countries are buying Gold & Silver like never before, buying quantities at levels never seen before building up their reserves to an unknown new level. These Countries include, Russia, China, Hungary, Germany, India, Poland – just to name a few.
In times of economic uncertainty it isn’t unusual for Central banks to begin buying precious metals, specifically Gold however, the levels at which these metals are being purchased are far beyond the usual fluctuations seen. They are a direct reflection of the current geopolitical uncertainty.
Over the next few months this trend is likely to increase and although the value of Gold and Silver may initially decline further this will only increase the purchasing power for central banks to accumulate more. This is not to say the value of precious metals will decline further, it all depends on how the Central banks attempt to bandage up the economy.
But however they attempt to fix this problem it is very unlikely a crash can be prevented, in fact over the past few weeks the crash looks like it may have begun. The S&P500 has dropped over 20% since its
As the Dollar’s dominance in the World continues to look ever more in danger Countries are looking to hedge their wealth into alternative safe assets. Gold has historically been the safest store of value for thousands of years, with its unique properties and high cost of production it has been the ‘soundest money’ man has ever known.
It wouldn’t be an unreasonable assumption that in the not
Everything the fiat money system is not. When a single entity can create money at will the result never ends well, this is how every single empire has driven themselves into extinction since historical records began.
Aside from Gold and Silver and other precious metals there is also what many are calling Digital Gold, i.e Bitcoin.
Bitcoin was created in 2008 and became available in January of 2009, its creator, the pseudonymous Satoshi Nakamoto gave a trustless, finite, peer-to-peer, immutable payment system to the World.
Like Gold, Bitcoin is expensive to produce, it has unique properties and is limited in supply. Unlike Gold we know the exact limit of the supply and also unlike Gold it can be easily transferred across borders at little cost.
There are many sceptics and there are many evangelists, but putting these conflicting opinions aside Bitcoin is definitely an asset which we should be keeping an eye on looking forward. Its not hard to imagine that as well as Gold, nations such as Russia and China may also be building up reserves in Bitcoin as a safe haven for wealth into the future.
In a World becoming ever more digitised a store of value such as Bitcoin doesn’t seem so unlikely as becoming heavily adopted, divisible by 10 decimal places the asset is well suited to commerce.
Though its transnational throughput is currently limited it does have technology in the pipeline which will increase this to allow a payment system which can compete with the likes of Visa and Mastercard. Though ultimately in my opinion its ability as a store of value is where its true merit is held.
Predicting the Unpredictable
Those who say with certainty when a crash is going to happen are leading others down a unknown avenue, we cannot predict what and when is going to happen to such a complex infrastructure as the Global Economy.
There are so many variables and factors which can change every second of everyday which can drastically affect the outcome of how this will play out.
However, we can make sound predictions based on what we currently know and what history tells us.
An Economic crash is highly likely over the next 18 months, it is possibly already in motion though attempts to fix this by the central banks could postpone the real bloodbath till a later date. However, if this plays out like we expect this is what we’d expect the stock market to do:
The above scenario is not set in stone and we will continue to reassess the situation as time goes on, however, ultimately this is where a natural crash in the markets would likely end up.
Preparing for Economic Meltdown
Sometimes its the most obvious things we forget when thinking about how we should prepare ourselves for possible economic strife. We should always consider first the survival aspects of such times. Can I sustain shelter, food and water?
Though thinking of such things often seems a little dramatic and something akin to stories of obsessive survivalists in the far outreaches of the US, we shouldn’t entirely dismiss these preparations.
After we now live in a time where most of our food is imported on a 2 – 3 day supply chain, a simple trade path closure would leave your average community supermarkets without food within the week, what will you do then?
Storing dried foods, rice, grains, beans e.c.t is simple to do and regardless of whether such emergency conditions ever occur the food will not go to waste.
Though we take water for granted it is probably the most crucial commodity we have for survival, for most of us in the West our entire water supply is provided by a third party and an infrastructure which requires ongoing, hour by hour maintenance and human operatives to keep running.
It only takes a small state of panic within a society to cause such an infrastructure to fall apart quite rapidly resulting in undrinkable water and at worst no water flow altogether.
The shelter preparation is probably the hardest, in a World where most of us have mortgages or pay rent to live in someone else’s property we have to consider that maybe our accommodation maybe seized by its owner, the landlord or bank. So what would you do in this situation?
A larger vehicle is always wise, a van, a campervan, motorhome, caravan – all are perfectly possible to live in, at least temporarily. Its worth investing in a large durable tent, we recommend large canvas bell tents due to their ease of assembly and the comfort they provide.
There is an abundance of rolling landscape to retreat too, with a suitable vehicle and tent to hand you can live just about anywhere, though you may get moved on from time to time at least you have the ability to keep warm and sheltered from the rain and wind.
Of course, a Vehicle won’t get you very far without fuel and maintenance, so some form of wealth is required in order for this to be a viable form of shelter in emergency conditions.
Start placing income into storable assets such as precious metals and Bitcoin. Don’t wait until your liabilities are paid for each month, start by paying your investments, then pay your expenses. Even if you
Spending $50 on Bitcoin a month may seem a little pointless, however for some this has made them millionaires within 5 years, so try to ignore the doubts you may have over your ability to save anything substantial, just do what you can as its far better than doing nothing at all.
There are a number of other commodities that are worth considering, land is always a worthy purchase if you can afford it, woodlands can still be picked up relatively cheap if you look about, though technically they are generally not allowed to be inhabited by law there are plenty of work arounds to do so.
Knowlege is your greatest asset
Finally and probably the most important of all is investing in yourself, your knowledge and your skill-sets. In the modern world where advancements in technology generally remove the need for yet another human skill we as humans are becoming less able creatures, we cook less, we build less, we repair less and we solve less.
Invest in your mind, learn how mechanics, electrical skills, computer skills, learn about civilisations of days gone by as this will help you understand civilisation today and where we may or may not be heading. Find new ways to stimulate yourself in the evening, switch off the television and begin delving into the biggest collective knowledgebase that has ever existed – the internet.
Keep your Wealth out of the Bank
If you take one thing away from this article
The bankers will bail themselves out using public money. In the financial crisis of 2008 we saw a banker ‘bail-in’, however, since
Make no mistake this method of bank protection will be used if necessary, they will freeze depositors funds, you will loose your money without any recourse or right to appeal. So if your thinking your safe because you have a large amount of savings stored up in your trusted bank then think again and start to reallocate your savings into safer assets.
Over the coming months we will keep you updated on how this crisis unfolds and ways in which you can prepare and even profit from the situation, after all there is money to be made on the way down and even more so at the bottom of an economic collapse.