A Financial Collapse Is Imminent Within This Six Month Time Period

36 Comments on "A Financial Collapse Is Imminent Within This Six Month Time Period"

Makati1 on Wed, 15th Jul 2015 8:21 pm 



For those who believe that we will just go slowly and quietly into the night, maybe you should rethink the fantastically interconnected world we live in.

That a small country like Greece could be important not only to the whole EU fiasco, but to the world economy is just an example of the interconnectedness of everything today, especially in the financial arena.

Greece owes ~$265B. That is 1/3 of 1% of the total world financial debt, yet it has the power to push over the first domino of collapse. The Greek mouse that roared. LOL

ohanian on Wed, 15th Jul 2015 9:58 pm 



What are you saying? That a financial collapse will occur before 1st January 2016????

steve on Wed, 15th Jul 2015 10:46 pm 



I’ve never done this before, but as an attorney I’m trained to be level-headed and trained to only come to conclusions that are based on the evidence.”

Ok, I had to stop reading right there that dumbshit comment and the idiot goatee put this douchebag to the top of idiot list.

Boat on Thu, 16th Jul 2015 2:51 am 



China’s stock markets have seen hundreds of billions of dollars in wealth wiped out…….. The money is not wiped out. Simply withdrawn or moved to another investment vehicle that seems less risky at the time.

PrestonSturges on Thu, 16th Jul 2015 3:34 am 



OMG, Greece’s economy is about the size of Toronto’s!!!!!!!!!!!!

meld on Thu, 16th Jul 2015 3:41 am 



Jesus guys, we are in a financial crisis already, the markets are completely false and will remain completely false for as long as nations of the world keep printing money.

I fail to understand why politicians can’t seem understand the very simple premise behind a free market. The market is supposed to be a reflection of reality. There is nothing inherently bad about a stock market collapse, in fact it’s a great warning that something is up and needs to be done. Wallpapering over a gaping hole with QE just makes the market totally useless other than as a way for the super rich to make more money from the middle class.

Davy on Thu, 16th Jul 2015 6:52 am 



Boat said “The money is not wiped out. Simply withdrawn or moved to another investment vehicle that seems less risky at the time.” Boat money does not follow the 1st law:

The first law of thermodynamics is a version of the law of conservation of energy, adapted for thermodynamic systems. The law of conservation of energy states that the total energy of an isolated system is constant; energy can be transformed from one form to another, but cannot be created or destroyed.

Boat do you read anything in there about money? That’s because money is an abstraction of our human imagination. Money sure the hell disappears. That’s what scares the hell out of the central bankers. They know it is all about confidence and momentum of activity. Once that turns systematically there is little they can do to reverse it.

Boat on Thu, 16th Jul 2015 7:02 am 



Where does it go then.

simonr on Thu, 16th Jul 2015 7:24 am 



The Value of the stocks lost is an estimate of the spread between how much they would sell for at peak, and how much now.

Whilst ‘money’ has not disappeared the value of the asset has, and what is money if not an asset.

Like if your house went from 100k to 10k you have effectively lost 90k of assets

Davy on Thu, 16th Jul 2015 7:33 am 



Boat, pull one of your teeth and put it under the pillow and if you can catch the tooth fairy ask her. IOW go google it there are plenty of very smart people who can explain the nature of money creation and destruction.

Davy on Thu, 16th Jul 2015 7:40 am 



Preston more like the state of Michigan in population and the GDP of my state of Missouri.

Cloud9 on Thu, 16th Jul 2015 7:48 am 



Boat, consider debt. A bank loans you half a million to start up a doughnut shop. You rent an expensive spot, buy all new equipment and employ fifty people. Everybody is happy. You open your doors and charge fifty bucks for a cup of coffee and a doughnut. After a month of no customers, it becomes apparent that your business model is a failure. The money you borrowed has gone into the economy in the form of rent, salaries and purchases of supplies and equipment. That part of your thinking is true, but what happened to the debt? You cannot repay it so you file bankruptcy. The bank seizes your shop in foreclosure. It tries to sell your business but there are no takers of your failed business model. End result, the bank auctions off your used equipment at a discount and takes a huge hit. The auctioned equipment may go for scrap or it may be picked up by another entrepreneur at pennies on the dollar and put to work in a successful business model. In that sense, the original purchase of equipment was not lost.

For the bank and its stock holders however, a significant portion of the money they loaned out went poof. Not only did they lose a good bit of the initial loan, they lost the rent on that money as well. If the bank makes several of these loans in a short enough period, it will be gone as well.

Makati1 on Thu, 16th Jul 2015 8:08 am 



Boat, say you buy stock at $10. In say, 5 years it goes to $50. Next year, it goes to $10 again. Did you lose anything? No. (discounting inflation)

Then again, if you buy stock from someone at $10 and it goes to $1, did you lose anything? Yes, YOU did, but the seller that you bought from used that money to purchase something else, and it wasn’t really lost, just relocated to another part of the financial cycle. You lose and someone else gains. That is how the Market Casino works.

Now, if you borrowed the money to buy the stock and it tanks, who loses? You do as you have to pay it back or declare bankruptcy. If you declare bankruptcy, the bank is stuck holding the debt, which it erases from it’s books in the same way it created it, the touch of fingers on a keyboard. Odds are, there never was any real “wealth” existing, just digital exchanges of no real value. This is what millions found out in Cyprus and maybe soon, Greece and then … who knows. If it is not in your hand, it doesn’t exist. Or so I understand the game.

Rodster on Thu, 16th Jul 2015 8:12 am 



“Where does it go then.”

It goes back on their computer hardrives. Money is no longer created the old fashion way, it’s now created out of imaginary thin air.

Hey Boat, you want $1 billion deposited into your checking account? Give me your login info and i’ll add $1 billion to your account. See how easy it is for the Fed to just add 1’s and 0’s and give to whoever they want?

All that Greek debt was the same, added from a computer, it did not cost them anything other than to add it to their banks.

If you want a good explanation on how money is created, go to http://peakprosperity.com and Chris Martenson created a “Crash Course on how money is created and exist.

Lawfish1964 on Thu, 16th Jul 2015 8:59 am 



“Notional wealth” evaporated in the Chinese stock market. In theory, the aggregate wealth of the American stock market is the current selling price of all stocks multiplied by the number of shares outstanding. Let’s say for example $18 trillion. This is an easy number as it would be a multiple of the Dow Jones which is currently at around 18,000.

The reason that is only notional or theoretical wealth is that it is not possible for every holder of every share to realize that price in cash immediately. If everyone tries to sell at the same time, the market crashes, like it did back in 2008/2009. Say the Dow Jones bottoms out at around 8,000. Then $10 trillion of notional wealth has evaporated.

Prior to the crash, if you held a basket of stocks, you could list on your financial statement (balance sheet) assets of say $180,000, represented by the value of your stock portfolio. After the crash, you only own a stock portfolio worth $80,000. Did you lose money? On paper, yes, but until you actually sell, no. You only lost net worth. But you’re still hurting.

What likely is happening on the ground in China is that the mom and pops who decided to become day traders in the stock market because it was exploding higher day by day lost their asses. The pros were likely the sellers on the upslope and will be the buyers when the market bottoms out. Sometimes the bulls win, sometimes the bears win, but the pigs always get slaughtered.

idontknowmyself on Thu, 16th Jul 2015 9:39 am 



Without access to the capital market Greece will become a breeding ground for infectious disease to spread to the rest of Europe. Why do you think they are talking about humanitarian aid in case of a Greece exit.

The other danger of letting Greece go down, is that it will become a breeding ground for extremist and chaos that could also spread to the rest of Europe.

It is not all about money. It is also about keep societal stability for the rest of Europe.

Dont forget the refuges that are coming in , also a perfect ground to infectious disease.

joe on Thu, 16th Jul 2015 9:47 am 



That’s going to happen anyway. At what point will they stop sticking their heads in the sand and keep hoping that the next government can cover for the previous one? We are reaching the limits of what capitalism can deliver in terms of living standards, the next thing they want is an AI robot doing your laundry, they think that will fix all our problems. They are nuts!

Boat on Thu, 16th Jul 2015 9:51 am 



Cloud9,

That was a reasonable explanation. Why did you leave out capital requirements that run at 7% soon to go to up 1-4% for the 8 largest banks. Elizabeth Warren suggests there should be a much larger capital requirement.
There are bond rateings. AAA will yield 2% junk bonds generally run 4-6 higher. All this is designed to prevent bankruptcy and let investors know the risks.

I understand there inherent problems when governments follow lobbyists and don’t build in a big enough safety net but that is the citizens fault for not holding their politicians responsible. The system isn’t necessarily wrong, just the influence by the rich to exploit and change the rules. That can be changed.

idontknowmyself on Thu, 16th Jul 2015 9:53 am 



I will go further and expect the ECB to print money and give it to Greece just to avoid societal chaos that could spread to the rest of Europe. They are already restarting the funding of Greece banks. Or course their standard of living will go down but hopefully not down enough to cause societal chaos.

We are all about to experience a lower strand of living really soon.

Cloud9 on Thu, 16th Jul 2015 4:50 pm 



Boat I thought I had written enough. From your response it is clear you understand the process of fractional reserve banking and why banks love to create debt. Debt works well in an expanding economy. Here at the end of growth it becomes a black hole. Greece is one of a long list of coming defaults.

idontknowmyself on Thu, 16th Jul 2015 7:34 pm 



Exactly like I said in my previous comment. ECB is now printing money and bailing out Greece Banks all over Europe.

Forcing austerity is demanding collapse of the financial system and societal collapse and chaos. Very soon the central banks will bail out the customer by sending them money directly.

From ZeroHege

http://www.zerohedge.com/news/2015-07-16/fearing-greek-fallout-ecb-extends-secret-credit-lines-balkans

The European Central Bank has introduced secret credit lines to Bulgaria and Romania as part of a broader effort to convince foreign regulators not to pull the plug on the local subsidiaries of Greek banks.

Makati1 on Thu, 16th Jul 2015 8:52 pm 



Idontknowmyself, The Fed can send me some cash directly. It will pass through my hands to real goods the day it happens. Of course, only the Ps economy will benefit, but, whatever.

BTW:
Philippines Foreign Debt: ~$78 Billion
Philippines Foreign Reserves: ~$85 Billion

http://www.theodora.com/wfbcurrent/philippines/philippines_economy.html
SOURCE: 2015 CIA WORLD FACTBOOK AND OTHER SOURCES

Not bad for a “3rd World” country.

simonr on Fri, 17th Jul 2015 5:28 am 



Mak, its not quite as simple for a bank as erasing a debt, as simply deleting it.

A debt for a bank is actually an asset and a debt, so if they write off a debt this means that the bank now has lost an asset and retained the debt, this needs to be balanced out of operating reserves.
If it cannot be balanced I believe the bank credit rating plummets.

Davy on Fri, 17th Jul 2015 5:59 am 



I am posting this for the Chinaphiles here. This is not a criticism on its own actually a posting of a positive for China. I am posting this because in the past one Chinaphile (Mak) grossly overstated foreign currency assets and gold holdings by China. This is part of the Asiaphile agenda. This is just to set the record straight.

China Increases Gold Holdings By 57% “In One Month” In First Official Update Since 2009

Back in April we wrote that “The Mystery Of China’s Gold Holdings Is Coming To An End” as a result of China willingness to add the Yuan to the IMF’s SDR currency basket which would require the disclosure of China’s gold holding ahead of an IMF meeting on SDR composition which may be held in October.

As of the end of June 2015, the Bank of other foreign currency assets of $ 232.9 billion.
(3) adjusted by the size of its gold reserves. As of the end of June 2015, the scale of China’s gold reserves to 53.32 million ounces (equivalent to 1,658 tons).

http://www.zerohedge.com/news/2015-07-17/china-increases-gold-holdings-57-one-month-first-official-update-2009

DMyers on Fri, 17th Jul 2015 8:58 pm 



Junk -> Dollars -> Gold

It’s that simple, the new Chinese alchemy. Turn junk into gold. They’ve done it.

“Gold buy something good. Dollar wipe away big turd.” (Confucious2.364/410)

Say what you want about Asian overshoot, they have been around for a long time, and they really have some wise sayings. Meditate on it.

Makati1 on Fri, 17th Jul 2015 9:55 pm 



simonr, it IS that easy. The whole banking system is nothing more than digits in a computer. When they all fail, the only ones hurt are the owners/stockholders who lose their investment. Those who own real property, or other items of real value, will still have them.

All the banks have is paper/digits that says you owe them. But, if the whole system goes down, they will never have the resources to collect. They are so interconnected that one economy killer virus in the worldwide system will kill them all.

For instance, Citibank has tens of millions of clients. When it all crashes, they will not have the resources to ever collect from those millions. Only those who have deposits in their system, or Citi stocks, will suffer. This is NOT like 1929 when most banks were small and collection was easy. This is the computer age where a bank can have a hundred million customers spread around the world that they never see.

I use Citi, but my total exposure is less than $100 97% of the time. The only time it exceeds that is when my SS is deposited and I have not withdrawn it, yet. I usually make the transaction within hours of the deposit which is early afternoon here. I don’t know when the failure is going to happen. I just know it will, and soon. I don’t take chances.

ohanian on Sat, 18th Jul 2015 6:40 am 



How do banks become insolvent??

http://positivemoney.org/how-money-works/advanced/how-do-banks-become-insolvent/

Makati1 on Sat, 18th Jul 2015 8:58 am 



ohanian, interesting article. But no mention that deposit insurance is another lie from the government. Outstanding deposits in US banks today exceed several Trillion dollars. The FDIC has all of 2% of those funds covered, by law. If one TBTF bank fails, the insurance money will be totally gone. You may be lucky to get 2% of the deposit you have in the bank when that happens. And it is going to.

ohanian on Sat, 18th Jul 2015 10:39 am 



Makati1 , luckily for me, I am not an American citizen and I do not put my money in any American banks. The deposit insurance does not affect me.

Stephen on Sat, 18th Jul 2015 12:13 pm 



I think that if the banks fail, do you think society will get to a point in which they stop foreclosing and run some things without an exchange of money (For example, use the land and resources and not force sale of them when there is not a profit and jubliee debt)? The other possibility I see is that prices go way down and everything runs on “real cash” (no debts at all)?

Davy on Sat, 18th Jul 2015 12:41 pm 



Oh, you act like it is just Americans that are at risk. Good luck with that. Mak, is more at risk in the P’s than I am here in central Mo. Mak is in a third world country heavily dependent on a collapsing Chinese economy. Who only knows what is in store for an overpopulated export dependent country like the P’s. Who knows where you are from Oh but I doubt you are any better than an American.

Davy on Sat, 18th Jul 2015 1:12 pm 



Stephen sounds good but it is so much more complicated with our complex global system. We are very much at risk of descending right into the Stone Age if we don’t watch out. We are very exposed to complexity loss with a population in overshoot. We are an order of magnitude overly energy intensive.

Decent, decay, and abandonment are extremely dangerous for a complex society in overshhoot. Let’s hope some way we can glide a little before we drop like a rock.

Makati1 on Sat, 18th Jul 2015 8:53 pm 



ohanian, I doubt that your bank is any more safe. None are. That is why I do not use one, except for transactions. Cash in currency of several countries, silver, gold and trade goods, seed, food stuffs, farm land, hand tools, books, etc are my deposits. That and close ties with friends and neighbors here.

But, unless you live in a country targeted by the Empire of Chaos, you are much better off than being an American in North America.

Davy on Sat, 18th Jul 2015 8:58 pm 



This is worth reading because it points to anomalies in the current time period we are in. Events are not normal and they are being manifested in the numbers.

The Greatest Collapse In The History Of The VIX Index

http://www.zerohedge.com/news/2015-07-18/greatest-collapse-history-vix-index

The extraordinary market intervention by China in response to their declining market, coupled with further ‘kick the can down the road’ policies by the EU regarding Greece, resulted in the greatest collapse in the history of the VIX index (which is still ongoing as I write). Over the past five days and counting the VIX has fallen -40% from 19.97 to 12.11. To gain perspective on moves in volatility Artemis ranks consecutive drawups and drawdowns (peak-to-trough or trough-to-peak % moves by day) in the VIX index and models them as a power law distribution. While the concept may be obscure to grasp at first the ramifications of the analysis are enlightening.
What is a power-law distribution? The distributions of a wide variety of physical, biological, and human phenomena follow what is known as a power-law distribution. Examples include earthquakes, deaths in war and terrorism, populations of cities, solar flares, word frequencies in language, movie box office receipts… and financial asset price movements up and down over multiple days.
Supernormal Power-Law Violations: When you rank events from the above natural and human phenomena the vast majority of observations follow the power-law distribution perfectly- however the violations of the function are the most interesting. Power-law violations are true black swans or supernormal observationsbecause their results contain a degree of reflexivity that outside the boundary of what would be expected from an exponential growth function. Examples of supernormal violations in power laws across other phenomena include death counts in WWII ranked among all wars, box office receipts of the movie Titanic, the 9.2 Magnitude 1960 Chilean Earthquake, the population of Tokyo, the 1987 Black Monday Crash, and the 9/11 terror attack in NYC.

Makati1 on Sat, 18th Jul 2015 10:52 pm 



An interesting article I just read:

http://www.theburningplatform.com/2015/07/18/lies-damned-lies-statistics/#more-102097

“The government released their monthly CPI report this week. Even though it came in at an annualized rate of 3.6%, they and their mouthpieces in the corporate mainstream media dutifully downplayed the uptrend. They can’t let the plebs know the truth. That might upend their economic recovery storyline and put a crimp into their artificial free money, zero interest rate, stock market rally. If they were to admit inflation is rising, the Fed would be forced to raise rates. That is unacceptable in our rigged .01% economy. There are banker bonuses, CEO stock options, corporate stock buyback earnings per share goals and captured politician elections at stake.”

theedrich on Sun, 19th Jul 2015 1:36 am 



This Snyder character is simply a fake trying to sell his snake oil. The local gypsy has better predictions.