Everyone knows that the global economic fundamentals are crap. Despite what the con men in every country say, things are getting worse every quarter. They paint a happy but desperate face on it in order to exude confidence but I'm sure the leaders all go to bed at night wondering if they will wake up to a screaming mob the next day that wants to kill them. This is not hyperbole. It's literally happening all over the world right now. Some extremists are even openly threatening the president and now congress too in a way I have never seen tolerated before. There is a reason that it is being tolerated. The establishment is weak and it doesn't need yet another public battlefront opening up. It can ill afford another Waco. Worse yet, having witnessed Waco themselves, perhaps the extremists are better prepared than before. Going after this guy could start a massive revolution for all anyone knows.
I've gone over the details too many times to do it again here and now but the entire world is a debt Ponzi and all Ponzis collapse at some point. The big question is "when". It has gone on so long now that it seems like it will never change, right? But the solution to Ponzi growth, as they say, is more Ponzi growth. Not if it will collapse, but when and how badly the next time.
The following chart has my simple Elliott wave model of the US debt bubble (total consumer credit). As you can see, the curve has gone exponential. Exponents and finances do not mix. Exponents can only be achieved via leverage and leverage must some day be unwound.
This chart is very, very compelling. I give it a 90% odds of playing out as shown and that is best case. In other words, it depicts a pullback to only the prior 4th, not a full on mania meltdown. I'll reassess the chart after it peaks at red 5 (some time before 2016 and perhaps in response to the massive ouster of life sucking liberals from our government and a mass installation of Rand Paul style conservatives).
Here are the main features I like about it:
- It shows perfect parallelism between waves 1-3 and 2-4.
- It shows perfect alternation between waves 2 and 4. Wave 2 was a sideways correction leaving wave 4 to be a vee style corrections.
- Wave 3 was longer than wave 1. An extended 3rd wave likely means that the 5th wave will not be extended. In other words, 5th should be about the same strength as wave 1. I measured wave 1 and copied the scale up top so that it would be clear just how close we are to a major, major, historical credit collapse.
- In other words, this wave formation is perfect Elliott.
But it could just as easily collapse completely and in fact end up lower than where it started. As in a return a to the really difficult credit of the 1950s where you would almost end up scraping the face of Lincoln off the dollar bill as you dragged the money out of the hands of a glassy eyed banker.
Think that's impossible? Think again. If the stock market of what used to be the world's 2nd largest economy can have a mania chart then anything can.
And now I'll get a little Prechter-ish on you. Namely, that the collapse of fractional reserve banking is going to come with social changes. Or maybe that social changes will collapse fractional reserve banking. Chicken and egg.
Without making any morality judgements, I simply observe that for decades now, the socialist liberals have had a
great run on the back of an expanding money supply (credit more than anything).
The availability of easy money changes
the way people think and operate. They
focus less on work, forget about conservative values and begin thinking that
life owes them a living. Politicians, being experts at reading this mood, pander to it in order to win popularity contests known as elections.
As a friend recently told me a couple of times (and I
agree), “people get bored” and it leads them down unnatural paths. At some point they try to make unnatural appear normal and for a period of time it appears as if they are succeeding. But conservatism never dies, it just goes into remission when under attack. When it comes back it will do so with surprising speed and power IMO. The pendulum always eventually swings back the other way. Why? Because liberalism (a slant toward consumption) consumes the stored reserves of the herd and conservatism (a slant toward production) replaces them. Yin and Yang if you will.
It’s amazing what things finally mark the
change in herd direction, and this duck dynasty thing is just the kind of
whacko “who’d a thunk it” catalyst that it has historically taken to define (or perhaps just mark) the
turning points. 1 million people all
decided to do the same thing? Without
being herded into it? That is a sure
sign of awakening and the liberal powers that be should be afraid of it because if the
herd is self-organizing then it doesn’t need the help of an otherwise useless elite
overseer class. Maybe this is not going
to be the pivotal (or only) event but I think it’s one worth watching.
I like to define triggers. If A+E backs down on their support to LGBT and keeps the show going with "Gay Basher Phil" on board at the demand of 1
million people who can easily boycott the channel then I will consider it a significant milestone in
starting the pendulum swinging back the other way.
Once the pendulum starts swinging back towards “50s mentality”, normal
working people are going to be less politically correct and they will care less
about what the herd thinks of them The herd will move away from "everything is OK, everything is grey" to "there is a such a thing as right and wrong". They
will be more vocal about it and not just “take it” quietly anymore. The herd will also care less about uplifting the
weak and infirmed as if they were honored heroes of society and it will put
more focus on the strong and the powerful (AKA the producers).
You’ll know the die is fully cast when they
start getting rid of most of the handicap parking spots. The 90s explosion of making everything "accessible" at great cost to businesses is my poster child for forcing producers
to work twice as hard in order to support the the weaker members of the herd. Not that I think there should be no support
for the weak. But I think that is the
role of the church, not the vote buying corrupt state. The state doesn't really care about the weak. It does care about controlling the hard workers.
Unfortunately, we will probably swing too far into conservatism. It always seems like someone is trying to impose their will on us libertarians.
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