The credit stress isn't obvious to people yet but JNK is signalling that a "liquidity crisis" is on the way. In the backlink I provided the chart below showing that the neckline of the H+S was about to come under fire.
Today's update is below and it shows that the chart has closed that gap and is in fact penetrating the neckline.
Please ask yourself something. What do you think a "liquidity crisis" really is? We've all heard the phrase used by the government and by the media as if it is some sort of really bad disease that the economy catches now and again at random.
The truth is that liquidity is con man speak for "credit". A credit crisis refers to the inability to coax new debt into the front door of the global debt Ponzi faster than those already playing within the debt Ponzi are escaping. It means there is not enough new fake money to buy the existing "assets" which we purchased with Ponzi bux in prior times. The result is falling prices (less credit chasing an increasing supply of assets that the players want to dump). As prices fall, banks become less able to meet their debt to capital ratios because the housing, etc. that is on their books as an asset is going down in price but the debt never does. Sooner or later the debtor defaults on the banks who in turn either are allowed to dump their debt on the people somehow OR they collapse the whole banking system leading to broken supply chains, massive disruption in manufactured goods, skyrocketing prices and of course chaos, rioting, looting and all other manner of crime.
There is no crisis that is not somehow created or exploited by big government. Keep an eye on JNK and you will be able to see the next liquidity crisis coming.
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