Worst Nightmare About to Unfold

Many of you probably don't know that I am a Chartered Financial Consultant (ChFC) and have been for the past 25 years.  I have spent most of my time helping people recognize the gaps in their financial plans and then going with them into the financial markets to buy the products necessary to fill those gaps.

Over the years I have been put on many mailing lists by various investment companies who send me the latest updates on what their financial analysts are saying.  It's always been interesting to read these because one analyst will say the sky is falling while one will say it is the best time ever to be buying into a certain market.

How could two analysts with MBA's from the same school be looking at the same tea leaves and come up with totally opposite ideas on where the markets are going?

Today, a friend sent me the writing from another analyst...and suffice it to say, it's a little freaky.

Draghi and Bernanke's Worst Nightmares Are About to Unfold

Ben Bernanke and Mario Draghi must be absolutely terrified.

These two men, in the last two weeks, have both initiated open-ended bond buying programs. The purpose of these programs, aside from keeping insolvent banks in business, was to scare the markets into believing that no matter what happens, the Central Banks will be able to step in and support the financial system.

From a philosophical standpoint, this was Draghi's and Bernanke's "all in" moment. I won't say they they've gone "nuclear," as they have yet to truly monetize everything, but they're not far from that.

And they've both failed.

Spain, which I've been warning will bring about the break-up of the Euro, saw the yields on its ten-year bonds break back above 6% yesterday. This is absolutely extraordinary. It indicates that within two weeks of the ECB announcing it's going to do an "unlimited" bond purchasing plan, Spanish bonds are once again imploding.

Indeed, if you analyze the Spanish ten-year yield chart from a technical analysis perspective, you'd say that it's bounce off former resistance (indicating that it's now support) and is ready for the next leg up (north of 7% again).

This is Game Over for the ECB.

The EBC cannot announce an even larger program now as that would completely destroy its credibility in the markets.

Congratulations Mario Draghi, the markets were intimidated by your promise of unlimited bond buying for a total of less than two weeks.

On the other side of the pond, Ben Bernanke is rapidly approaching his own Game Over moment.

The US Federal Reserve bought roughly three quarters of all Treasury issuance last year. Let that sink in for a moment. Roughly $0.74 out of every $1 in debt created by the US in 2011 was bought by the US Fed... not by the bond market, not by foreign countries, but by our own Central Bank.

Despite this massive intervention, the US economy (according to the ECRI) has officially re-entered a recession. This is why the Fed announced QE 3 now, because Bernanke is growing truly desperate, both in terms of losing control of the markets and the potential of losing his job if Mitt Romney is elected President.

So the Fed chose to monetize Mortgage Backed Securities this time around. And the result is that the US Treasury market is tanking. If it takes out its trendline, things will get very ugly very fast.

Here's a thought... what happens if the Treasury market begins to implode despite the Fed buying roughly 75% of all Treasury issuance?

GAME OVER for Bernanke and the Fed.

The only option left would be to monetize everything, which would mean hyperinflation (all hyperinflationary episodes have been created by monetization of deficits... you can pull this off until you lose credibility... at which point you suffer a currency crisis).

Congratulations Ben Bernanke, you've managed to screw up the capital markets so badly that the US is on the verge of its own European-style debt crisis... despite you taking over the entire interbank money-market and nearly all US Treasury issuance.

Folks, this is the reality we're dealing with. The ECB and Fed have gone "all in" in their efforts to stop the debt implosion... and they've failed. All they've done is unleashed an even more serious inflationary storm than the one we were already facing.

The time to start preparing is now. The printers are running. The Great Currency Debasement has begun. Some folks will walk out of this mess winners. Most will walk out as losers.

Of course we have been asking the question for over 4 years now....How can the Fed 'buy' trillions of dollars worth of bonds and securities when they don't 'have' any money?  Isn't that a Ponzi scheme?

Friends, the FED was meant to be a shock absorber to smooth out bumps in the economy.  You know we are in serious trouble when they try to make the FED the main engine of the entire global economy.  It simply can't work.  Sooner or later people will catch on...and then the collapse will happen.

Can you see the Antichrist warming up and stretching as he gets ready to climb onto the world stage and take over the affairs of the world once the mayhem begins?

If you can, then you better first off be listening for the trumpet...because the rapture will precede the revelation of the Antichrist.

Of course what we DON'T KNOW is how much mayhem, chaos, collapse and hardship that the Lord may allow us to see before he comes for us.  There certainly is Biblical precedence for God tearing down the false gods before redemption...and if that's the case we may see our financial system (Mammon) get torn down and our precious savings reduced to ZERO...just to show us the folly of what we have done.

Lord, please give us oil in our lamps so we can stay awake, sober and ready until you return.

Hat tip to Guy B.