Tuesday, October 25, 2016

The Approaching Economic Storm

So how much longer can this current bubble keep going?

We have no idea.

We are actually surprised that all this money-printing (called Quantitative Easing) and zero interest rates has lasted as long as it has.  The whole system of Central Banking seems to have de-linked from logic some years ago and may only be waiting for some type of trigger to send the whole illusion into chaos.

The next recession appears likely to hit in the spring of 2017, and many experts are expressing increased concern over the weakened position of the Federal Reserve. 

After years of low rates from the Federal Reserve and massive stimulus programs from China, there may be very little left that governments can do to push back against this macroeconomic tide. What is worse, it is widely believed that the Fed is planning to raise rates in December of 2016. 

Whereas its intention may be to provide room to lower rates later in a crisis, there is also a strong chance that this could help precipitate the recession.

Though notoriously difficult to predict, financial cycles are an inescapable part of a fiat currency system based on fractional reserve banking. 

Deutsche Bank's analysis now believe that this indicates a 60% chance of a recession occurring in the US within the next nine months.

Sovereign Debt Ratios

The ratio of national debt to countries' gross domestic product is, though not a perfect metric for stability, an often-cited statistic for national monetary policy. 

Looking at the ratios across both developed countries and emerging markets, we now see debt ratios approximately 35% higher than they were at the beginning of the last major financial crisis that brought the world's economic system to the brink. 

While not itself indicative of a crash in the short term, such dangerous debt ratios in nearly every country mean that governments have few options left to pull their economies back from the edge. Thus, the depression that government stimulus may have avoided eight years ago may no longer be avoidable. China, for example, will not be able to step in to save the day. 

Beijing is far past any reasonable or safe limits on credit to the tune of nearly $30 trillion in loans, and Fitch Ratings believes that bad loans in their banking system are as much as 1,000% the official claim. 

Weakness of GDI to GDP

The ratio of gross domestic income to gross domestic product is another leading indicator that now mirrors the previous recession. 

Albert Edwards of Société Générale points out that this indicator has been flat for the previous two quarters and that "The pronounced weakness of GDI relative to GDP might be an ominous omen, for it may well be indicating that a US recession is already underway - just as it was in 2007." 


Economic cycles are influenced by natural disasters, human psychology and millions of unobserved factors in addition to the management of government, so there remains ample room for doubt. 

But when we consider that we are already in the fourth longest recovery in 150 years, the list of leading indicators begins to look all the more ominous. 

Taken alone, any single indicator can be ignored, but together they paint the picture of economic storm clouds on the horizon.  

See entire article here;  http://www.prophecynewswatch.com/article.cfm?recent_news_id=744

"But Dennis, our government can print and create as much money as they want!  It simply isn't a problem anymore because everyone has confidence that the Central Bankers know exactly what they are doing...even if none of us understand it!  That's why we pay them the big bucks to run everything!"

Really?  If that were the case then every government on earth could simply print as much money as they want and hand it out to everyone until poverty ceases to exist!

But Jesus says that will never happen.

Matthew 26
The poor you will always have with you, but you will not always have me.


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