Friday, June 22, 2018

Medium Magazine:Trust Issues

It's a long standing thesis of mine that the liberal years brought with them a debt Ponzi that was in fact a trust Ponzi (check out this 2010 post calling the situation a "trust Ponzi").  I predicted that in the aftermath of the coming collapse bankers would be spanked so hard by the default wave that is coming that they would return back to the days of the "glassy eyed" banker of the 1950s.  Back then it wasn't about trust. It was about collateralizing a loan.  The bank didn't trust you and it didn't have to because it didn't loan you money without collateral - something of equal or greater real value than the money they were lending that they could take if you flaked out on them.  Banks back then were little more than institutionalized pawn shops.

Since then the collateral behinds loans has all but evaporated.  Falling interest rate represent a lack of demand for the available credit supply.  That can happen due to many things, not just lack of demand for credit.  For example, when credit availability outpaces demand, rates go down.  The falling interest rates of the last several decades were essentially the result of everyone wanting to get into the act.  After all, being a banker looked like such easy work that why wouldn't everyone want in on it? 

And so they did.  But with everyone scrambling to loan money it opened the door to too many deadbeats in possession of bank money (deadbeat borrowers taking advantage of lax lending conditions).  Too much trust was given and too many loans were made.  Those with the loans will default as soon as the economy peaks and the recession shows up.  Ever wonder why everyone driving a Lyft or Uber is doing so in a nice car?  No junkers there!!  Not like the trashed out city cabs for sure.  Well, its because the "owners" of these vehicles financed them with nothing down and are making the monthly payment out of their sparse uber/lyft profits.  When the need for these rides collapses in a recession, all these cars are going back to the bank.   This is just an example, many more similar situations exist.

The banking system will eventually collapse as a result.  Laugh now but remember later on what I told you.  You might be smarter than me and many of my readers likely are.  They are faster with numbers, quicker with the turn of a phrase and more fluid in giving speeches.  I'm sure of that.  But most of you do not have what I have which is fifteen to twenty thousand hours of research, writing and contemplation in this particular matter.  I have an honorary PhD from both the school of hard knocks and my alma mater, Screw U.  Additionally I have an Elliott wave model that is pointing to an end game in the next couple of years, best case (with volatility almost assured until the final peak is reached).

The global debt Ponzi cannot go on much longer.  Maybe one or two years at most IMO.  The world is now at each other's throats, something I told you would be an important sign of the end times for this cycle.  I also see that others are rapidly awakening to this reality and writing about it.  Today's example is's first digital issue.  For the month of June they will write about trust issues.  The stuff I read there looks insightful.  I suspect these folks are in tune so what they say will resonate.  I wish the best of luck because they represent the next generation of news commentary and reporting.  They are not owned by the status quo.

1 comment:

Augustine said...

I like to corroborate predictions coming from one field of knowledge with those from another one. In this case, this interesting comparison with the sequence of events outside the borders that were symptomatic of the collapse of the Soviet Union:

Now, America is not communist, but it is as unsustainable as the USSR, but for different reasons. Finally, there is no natural law that, just because the events were one way with a super power, they will repeat with another. But people are the same everywhere all the time, so it has at least anecdotal value.

So, if the events outside the borders are being repeated in America's case, it seems like it's 3 to 5 years until they reach the same end: imperial collapse.

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