Many financial websites and newsletters are saying that their "indicators" are flashing red, meaning a financial collapse is in the works. Since each financial group has its own proprietary set of indicators, we figure there must be a lot of them going off right about now.
For instance, Agora Financial Publishing has acquired an exciting new spokesman, Jim Rickards, a man who has worked with the CIA and the government and who has vast experience in the financial arena. Mr. Rickards is also a best-selling author and speaker, and he has joined Agora because he wants to publish a newsletter that will help people make it through the coming financial collapse with their money intact.
Mr. Rickards says the coming financial collapse is the 'avalanche,' and the things which might trigger it, he calls 'snowflakes.' There are many possible snowflakes, and any one of them could be the final flake that lands on the snowpack and sends it avalanching down the mountain. He has identified thirty possible snowflakes, any one of which could trigger the collapse, but as he says, "Focus on the avalanche, not on the snowflake." His theory is that most likely the snowflake that brings down the financial system this time is one of those "black swans," something we didn't see coming. In other words, something that is not on the following list of 30 'snowflakes' Mr. Rickards has identified.
ISIS Attacks the Vatican or Pope Francis: They have already threatened this, and if they made a successful attack, there would likely be another war akin to the Crusades in the Middle Ages.
Major Natural Disasters: Earthquakes, tsunamis or volcanoes: Another really big disaster in another part of the world like the big earthquake and tsunami of December 26, 2004, in Sumatra, or another earthquake that causes another Fukushima-like disaster would devastate economies and markets.
The Swiss Gold Referendum: On November 30, 2014, the Swiss will vote to repatriate their gold from the Federal Reserve Bank in New York. A "yes" vote could reveal that the Federal Reserve has no gold, and at the very least it would take away the gold used to manipulate the markets.
China Reveals Its Gigantic Gold Hoard: China claims to have 1,054 metric tons of gold, but many sources say the real figure is 4,000 metric tons. China would like to keep the real amount secret because a number that large would shock the markets.
A Major Power Grid Collapse and Blackout: The U.S. has experienced major power grid failures before, but financial markets are now larger and more interconnected than ever before, and virtually all stock trading is now electronic. A major blackout would totally disrupt world markets.
Iran Tests A Nuclear Weapon: This would definitely cause panic in the markets.
An EMP Weapon Is Set Off: This kind of weapon would shut down electronic and digital devices, which would send the country back to the early 1900s. Needless to say, nothing will work, including the all-electronic markets.
Nuclear Accident: Another meltdown on the order of Chernobyl or Fukushima, especially if it occurs in North America, would likely crash the American markets.
A Benchmark Oil Price In Chinese Yuan: If oil becomes denominated in anything but U.S. dollars, there will be big trouble in the U.S. markets. This could easily happen, thanks to new ties between Saudi Arabia and China and deals which swaps Yuan for Swiss francs.
A Sept. 11-Type Attack On U.S. Soil: This is one of those possibilities that could happen at any time. We know our enemies would like to pull another big one off, and thanks to the U.S. government's open-borders policies, it could easily happen.
A Failure to Deliver Physical Gold: This would cause demand shock around the world, and it is well known that the amount of "paper" gold that is traded far exceeds the actual amount of physical gold in the world. If some party demands delivery and delivery can't be made, look out below.
An Internet Backbone Collapse: The undersea cables that carry 90% of the internet traffic are highly vulnerable to being severed by sabotage or earthquake. That would definitely affect market action.
Credit Collapse In China: China's credit bubble is even bigger than that in the U.S., and their problems are far worse. The Communist leadership has so far managed to keep things under control, but that control could fail at any time.
Flash Crash Because of High-Frequency Trading: The markets now are highly vulnerable to high-frequency trading, and because the use of margin debt is so high, a small sell-off could be greatly magnified, and a 10% correction would trigger a lot of margin calls, which would lead to even more declines.
Food Riots . . . Money Riots . . . and Social Breakdown: Any sort of financial problems, bankruptcies, or government actions could trigger social unrest, as could prolonged deflation or hyperinflation, or cuts to government social programs. The government could also confiscate assets and impose capital controls.
"Sleeper" Hedge Fund Attack: A country with a lot of money could create a stealth hedge fund to buy and sell on the markets, not to make money, but to wage financial warfare on the United States. By selling big stocks, it could create chaos and sell-offs, then vanish before anyone knew what caused the sell-off.
Rogue Robots: It appears science fiction is coming to life in the form of robots with artificial intelligence that can create havoc in financial markets. In August of 2012 a software error was responsible for sending "a deluge of phony buy orders to the New York Stock Exchange, which cost the company that owned the computer millions of dollars to unwind the stocks it never wanted in the first place.
Congress Fails to Pass A Budget Deal or Doesn't Raise the Debt Limit: The markets could react negatively to any action of inaction of Congress when it comes to a budget deal, and a political standoff would be especially damaging.
China Wages A Territorial War: China wants the Senkaku islands and other islands in the South China Sea and is arguing with the Philippines, Japan and Vietnam over them. If China decides to just grab them, a much larger war involving the U.S. could result.
A Fake Tweet: A fake piece of information put out on the Internet in various ways can result in big market moves. A phony tweet in April of 2013 caused the Dow to drop 143 points.
Prominent Suicide, Assassination or Death: News of a prominent figure like the U.S. president or the Federal Reserve Chairman or other prominent investment banker dead by suicide, assassination or death could set off panic selling in the markets.
Independence Referendum: Scotland's try for independence failed, but if the Catalonia region in Spain or Venice in Italy succeed in theirs, the uncertainty created could cause a selloff.
Debt Crisis in Japan: Japan has a worse debt-to-GDP ration than the United States. As John Mauldin observes, "Japan is a bug in search of a windshield." Japan is the world's third largest economy and a crisis there would call many other governments into question.
24. U.S. Credit Downgrade: The U.S. has already been downgraded once, but if it were downgraded further, you could see a sell-off in the markets.
Major OECD Member Announces It Will Begin Acquiring Gold: The Organization for Economic Cooperation and Development (OECD) is a group of developed economies dedicated to promoting trade and growth. If one of them begins acquiring gold, it would serve as an announcement that gold is money after all. This would shake up all the nations that are beginning to question the integrity of the dollar and paper money.
Bank Failure: If a really big bank fails, it could kick off a domino effect within the banking system, the old "cascading cross-defaults" idea, thanks to bank interdependence. Stockholders would sell bank stocks like crazy,which would lead to a fall in a lot of seemingly unrelated companies also.
Major Cyberattack: Cyberattacks have been getting more and more sophisticated. An attack on a stock exchange, with an unexpected closure or unexplained buying or selling, or even a theft of personal information could result in a big crash.
Pandemic Involving A Fatal Virus: A major pandemic in the United States would likely result in martial law or social breakdown, not to mention a shutdown of the major markets. Even if the markets stayed up, many people would sell off their holdings.
Declaration of Independent Kurdistan: The Kurds are said to be the world's largest ethnic group without a state. They are concentrated partly in Turkey and partly in Iran, so that a declaration of independence by the Kurds would create instant instability in the already unstable Middle East.
X Factors: Other events that could cause market failures are things like food shortages, crop failures, severe droughts or other extreme weather.
Some of these items were familiar to us, but others were not. So that means our personal lists of potential crash causes has grown considerably.
Another group who sees a crash approaching is Casey Research. Yesterday, they sent out the following alert.
As CEO of Casey Research, I'm issuing an urgent alert: Over the last several months, our team has accumulated significant evidence that a market crash is imminent.
Dominick Graziano, our lead technical analyst and contributor to The Casey Report, has been following this movement for months. In August, he warned that "several reliable signals portend a stock market correction, or worse" to come as we reentered trading season. He also correctly predicted oil's tumble and much more broadly that "the dollar is likely headed much higher, and commodities lower, in the months ahead."
The worrisome setup for these conclusions was a convergence of multiple technical indicators in a way that hasn't been seen in decades-not even in 2008. Starting 10 days ago, those same signals intensified, showing that the correction has begun. As the S&P 500 crossed its 200-day moving average for the first time since the last big crash, this crash moved from inevitable to imminent.
The chart below shows price action in the Dow Jones Industrial Average, which has completely reversed course after a remarkable 1,120 day bull run, and with remarkable speed:
There was another time in history when the Dow ignored fundamental problems, bad financial news, and huge political shifts for many months, only to make a sudden about-face. That was in 1929:
In the wake of that move, the Index lost nearly 50% of its value in a matter of weeks.
One chart, of course, does not mean that we're headed for a 1929-level crash... nor are we predicting this one will get that bad. However, this is but one example of several indicators that have changed in such a dramatic way that it's now clear a serious crash is beginning.
As we've been warning, the Fed's actions post 2008 were only effective in kicking the can down the road. This allowed governments to ignore the structural issues undermining any recovery. Instead, the Fed's zero-interest-rate policy and successive rounds of QE only facilitated bigger debt and asset bubbles.
Unfortunately, we're now emerging from the figurative eye of the storm. As my partner Doug Casey says, it's likely that it will be much, much worse than even he can imagine. It will make the 2008 correction look like a walk in the park.
All of our research points out to a very serious correction-a crash, by a more accurate name-and we think it's essential that subscribers take emergency measures to prepare. Like preparing for a hurricane, you can hope it won't hit too hard, or with only minimal cost or inconvenience you can board up the house, head inland for a bit, and be sure you're safe.
In addition to preparing for this upcoming financial collapse, we are still monitoring the Ebola situation. Although the news reports for the past few days have been remarkably sanguine, as if the whole thing is now all over, we remain concerned that another 21 days might need to pass before we can be more or less sure that no one else is going to acquire Thomas Eric Duncan's strain of Ebola. In fact, researchers have some really dire predictions on this front.
Researchers Expect Over 20 US Ebola Cases In Weeks, "You Don't Want To Know Worst Case"
Submitted by Tyler Durden on 10/16/2014 23:01 -0400 From 'Zero Hedge'
"We have a worst-case scenario, and you don't even want to know," warns Alessandro Vespignani, a researcher creating simulations of infectious disease outbreaks, but there could be as many as two dozen people in the U.S. infected with Ebola by the end of the month. The projections only run through October because it’s too difficult to model what will occur if the pace of the outbreak changes but, as Bloomberg reports, Vespignani warns if the outbreak becomes more widespread in other regions, it "would be like a bad science fiction movie."
As Bloomberg reports,
Alessandro Vespignani, a Northeastern University professor who runs computer simulations of infectious disease outbreaks warns there could be as many as two dozen people in the U.S. infected with Ebola by the end of the month.
The projections only run through October because it’s too difficult to model what will occur if the pace of the outbreak changes in West Africa, where more than 8,900 people have been infected and 4,400 have died, he said. If the outbreak isn’t contained, the numbers could rise significantly.
“If by the end of the year the growth rate hasn’t changed, then the game will be different,” Vespignani said. “It will increase for many other countries.”
The model analyzes disease activity, flight patterns and other factors that can contribute to its spread.
“We have a worst-case scenario, and you don’t even want to know,” Vespignani said. “We could have widespread epidemics in other countries, maybe the Far East. That would be like a bad science fiction movie.”
The worst case would occur if Ebola acquires pandemic status and is no longer contained in West Africa, he said. It would be a catastrophic event, one Vespignani says he is confident won’t happen.
The CDC disagrees...
It’s unlikely that Ebola will ever exceed 20 cases in the U.S. or Europe because of their extensive health care infrastructures, said Ramanan Laxminarayan, director of the Center for Disease Dynamics, Economics & Policy, a non-profit think tank in Washington, D.C. The problem in the developed world will center more on the economic impact, he said.
“The damage is not as much in the number of deaths as much as in the panic it creates and all the disruption it creates in trade and travel,” he said. “It’s important for public health officials to strike a balance between being serious and certainly not creating panic.”
“It’s not going to be like the movie ‘Contagion,’” he said.
And Eli Perencevich, professor of epidemiology at the University of Iowa Carver College of Medicine, said average Americans shouldn’t see any risk from the virus outside of the medical community because patients aren’t terribly infectious until the disease peaks...
“There’s a high probability that there will be another person who comes in, no matter what we do, but the risk is in the hospital,” he said in a telephone interview. “As long as people who know they have been exposed to the virus get themselves quickly to the hospital, even after they have started a fever, it should be OK because they aren’t that infectious.”
Let's hope he is right!
Let's hope so. But we are not quite so confident, especially since we heard, just this morning, that a couple of passengers onboard a plane that flew into Chicago's O'Hare International Airport are being isolated and monitored for Ebola since they developed symptoms on the plane. They are thought to be from Liberia, but for weird and unknown reasons, the CDC doesn't think they need to be checked for Ebola.
And in New Jersey, another Liberian possibly has Ebola and is being monitored in a hospital in Newark. Naturally, the CDC is "unavailable for comment" on this one.
Folks, it looks to us as though the CDC is following that old formula which never works: If you ignore the problem, maybe it will go away.
It's the same old story...A Great 'eFF' Up!