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The U.S. stock market, the U.S. economy and virtually the entire world are now vulnerable to a series of black swans — powerful forces that strike out of the blue and swoop down on the financial markets with potentially devastating impact.
By definition, the actual events themselves are unpredictable: If we could somehow know they were coming ahead of time, they wouldn’t be true black swans in the first place.
But the setup — the conditions that give rise to black swan events — are visible in plain sight.
Here are just five prime examples …
Black Swan #1
Collapse of the Fed’s QE
The Fed’s quantitative easing (QE) — newspeak for money printing — has, without a doubt, been the single most powerful force behind the post-debt crisis recovery.
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No other government rescue operation, not even the giant bank bailouts under Bush or the economic stimulus plans under Obama, came close to the Fed’s QE in terms of sheer impact on our world.
No other country or region in the world, not even Japan or the European Union, printed money in greater amounts.
And as I explained here in “The Eight Trillion-Dollar Trap,” in the wake of the Lehman Brothers failure in September 2008, the U.S. Federal Reserve went stark, raving mad, abandoning any semblance of restraint, and expanding its assets by a mammoth $3.6 trillion. All while shoving interest rates to the mat and holding them at or near zero for seven long years.
As long as QE continued, the U.S. stock market rose. But as soon as it was discontinued, the stock market froze in its tracks, going virtually nowhere ever since.
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The big remaining questions:
What happens when investors and corporate decision-makers suddenly realize that QE and zero interest rates aren’t working anymore?
What happens when the music stops and this free-money party comes to an end?
We can’t predict how or when the QE bubble will collapse. But we do know two things:
No nation in history — let alone the United States — has ever experienced anything like this before.
And ultimately, all the free or cheap money in the world cannot buy the essential ingredients every modern economy must have to sustain itself: Confidence. Savings. And Capital … which leads us to …
Black Swan #2
Disappearing Capital Expenditures
Put yourself in Fed Chairman Janet Yellen’s shoes.
Ever since Economics 101, you’ve learned a thing or two about capitalist economies.
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You’ve learned that they cannot survive without capital investment. In other words, unless businesses invest in new plants, new equipment and new technology, there can be no future growth.
You’ve also learned that, as soon as corporations begin to cut back on those investments sharply, a major economic decline could be near.
Just something to worry about another day? Heck no!
Last week, soon after you held your latest monthly meeting with the Fed Open Market Committee, you learned one more thing:
In the just-ended first quarter, capital expenditures by U.S. corporations suffered their first major plunge since the Great Recession.
“How is that possible?” you ask. “Didn’t we give the big banks tons of money practically for free?”
“Yes, we did,” your cohorts respond in unison.
“Didn’t we get businesses to finally start borrowing that money?”
“Yes, we did,” says the chorus.
“Then what in the hell went wrong?” you query with growing frustration.
The answer: Instead of investing that money, many companies decided to simply recycle it. Specifically, …
They used it to buy back their own shares, artificially goosing up their prices.
(Mike Larson was one of the first to warn of this danger. See, for example, “Individual Investors Flee, Companies Go on Buyback Spree.”)
The bigger question:
If capital expenditures are already falling with dirt-cheap borrowing costs, what happens when it actually costs real money to borrow?
What happens when corporations begin to anticipate falling consumer demand?
Worst of all, what happens if corporate bankruptcies begin to loom large again?
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Black Swan #3
Political Disruptions
Throughout history, black swans have been most likely when social imbalances are most extreme. And right now, the U.S. suffers from the biggest concentration of wealth in 100 years.
The richest one-thousandth (0.1%) of America’s households have more than tripled their share of the nation’s assets. And the richest one-ten-thousandth (0.01%) have increased their share six-fold.
So this is not just a problem for the poor. Nor is it an issue limited to the nation’s middle class. It also may be hindering hundreds of thousands of higher-net-worth investors from growing their portfolios.
With their controlling interests of the nation’s big corporations, with the companies’ massive stock buybacks that crowd out dividends … the super-rich are now squeezing the rich!
The chart below tells the story in a nutshell.
The black bars show how the wealth concentration has reached such an extreme, it’s now worse than it was in 1929.
Meanwhile, the red line shows the political polarization in the United States. Again, the last time it peaked was in 1929. And now it’s even worse.
These are two dark clouds hovering over America today — the preconditions for massive social and political battles that can disrupt the economy, causing financial markets to go haywire.
They are the plainly visible preludes to black swan events in American politics.
It could be mass street protests surrounding the Republican and Democratic national conventions this summer … a decision by the Justice Department to indict Hillary Clinton … perhaps the emergence of a stronger third party in America … or more likely, something that no one can predict. No matter what, it will be a shock.
(I recently wrote more about this in two major studies: “What could be worse than the Great Depression?” and “Is the GOP collapsing?“)
Black Swan #4
Chaos in China
When U.S. analysts look at China, they focus almost entirely on the economic numbers, and those are indeed getting worse.
But if a major black swan event emerges from the Middle Kingdom, it’s likely to be driven primarily by something that’s mostly off their radar screen, such as widespread popular revolts.
Two of the major causes: (1) mass forced evictions, disrupting millions of households, and (2) crippling pollution, a daily nightmare in the lives of hundreds of millions.
The ensuing black swan events could cause a collapse not just in the Shanghai stock market, not just in the Chinese economy, but also in China’s social order.
The impact on global financial markets? Largely unpredictable but potentially enormous.
(For more on this, read my recent column “The Biggest Global Risk Right Now.”)
Black Swan #5
Nuclear Terror
In March, the Harvard Kennedy School published a landmark study on nuclear terror, delivering good news and bad news.
The good news is that major progress has been made in safeguarding nuclear warheads. The bad news is that massive amounts of radioactive material are widely available in hospitals, research centers, and nuclear plants, which are not yet secured.
Moreover, according to this same study, the Islamic State is the first terrorist group in history with both the resources and the desperation to embark on such an attack. (See my column “Nuclear terror predicted by 3 major studies. Here’s how it can impact your investments.”)
Your Protection
There are three ways to protect your investments from black swan shocks, and none of them are rocket science:
First, invest less and save more. Reduce your risk exposure and build more cash.
Second, when you do invest, insist on extreme quality — investments that have a proven track record of performing in good times or bad … and … that have demonstrated the most resistance to unexpected shocks.
Third, seriously consider hedges — investments designed to help you profit from precipitous market declines, whether caused by black swans or not.
For specific guidance, see “My 7-Step Portfolio Protection Strategy” and “5 ETFs for Protection in Another 2008.”
Good luck and God bless!
Martin
Dr. Weiss founded Weiss Research in 1971 and has dedicated his entire career to helping millions of average investors find truly safe havens and investments. He is Chairman of the Weiss Group, which includes Weiss Research and Weiss Ratings, the nation’s leading independent rating agency accepting no fees from rated companies. His last three books have all been New York Times Bestsellers and his most recent title is The Ultimate Money Guide for Bubbles, Busts, Recession and Depression.
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Very interesting!Makes me want to go out and buy some VIX calls!
glen: agreed! For the lay people (like me) the symbol is UVXY and also TVIX.
Also, especially when the MACD is overlaid on the chart…..DUST, which is the contrarian etf of the gold miners, is looking really good to me now. I am especially noting that the upper and lower lines of the MACD are squeezing really close together right now….which is usually a good sign up a drastic move up in the near future. This coincides with Larry’s call for gold to go down near term!
Only thing, Mike’s note that the dollar is sinking does not bode well for gold to go down ….??
Correction to my previous comment: I use the MACD quite a bit too, but I meant to say that the Bollinger Bands, overlaid on the DUST chart, are squeezing really close together (compressing) now. In the past, I have found that configuration to be a good level to buy.
I have 250K in a saving acct…..help….
It is at risk of being confiscated through the asset forfeiture laws if you have committed a minor infraction, like failing to pay a fine. It could cost $150K in legal fees to get it back.
Go buy lotto tickets!
Jerry..
So risky keeping 250k in savings. You could lose all in a heart beat. Precious metals,some cash on hand….ammo and weapons.
There isn’t the money in our system anymore to pay out all the claims if there were a bank run. Maybe only 10% of the people would be able to withdraw money in this increasingly credit system.
Hi Martin
Possibly the failure of sovereign states being able to repay debt when due.
Also consider the right to free speech and the right to peaceful assembly
Most right thinking people see this as a foundation of our democracy. So why the violent demonstrations against supporters of candidates who are promoting a peaceful position or course of action?
Dear Dr. Weiss,
With all due respect, you left out a number of very important items in your Black Swan article…..
1) November 2007-March 2009 was NOT a Recession, it was a Stock Market Crash, during which the markets lost 60% of it’s value…
2) BOTH 1929 and 2007 came after long periods of Conservative Political Domination of the country.
3) Since the Republican Revolution in 1981, many, many important regulations were removed that safeguarded our Markets and the Middle Class.
3) Since then, the borders where opened and millions of illegals ere allowed to destroy the Labor movements and the Middle Class.
4) Trade Agreements, such as GATT and NAFTA were brought which further destroyed the Middle Class by moving those Middle Class jobs off shore.
5) Glass-Steagall was removed in 1999 which allowed much the same types of trading that brought 1929.
6) When looking at your own charts, the deficit began to go parabolic from 1981 forward as taxes where cut to the richest 3% in this country without cutting Federal Spending. Actually, Federal Sending was accelerated…
7) The Middle East was turned into a Calderon with the ill advised invasion of Iraq over what turned out to be fictitious intelligence. both of which caused further deficit spending by the military..
8) The Supreme Court was packed with justices who were far right and soon Citizens United was made law which allowed the Wealthiest 3% to basically buy the elections of individuals who would do their bidding further destroying the Middle Class and our environment…
9) Tax laws were changed which allowed American Corporations doing businesses in America to move offshore, further increasing the deficit…..
Basically, the financially destructive practices which began in 1981 are still ongoing, but it appears that the American voters are beginning to revolt, much as they did in 1932. Your very articles asks one question: “Is the GOP Collapsing”.?
Your own Father witnessed the changing of the Guard in 1932 and how the country began to financially and economically repair itself, as Conservative policies where thrown out and Liberal Progressive policies established which had the net effect of reducing income inequity and the lopsided wealth of the 3% and America took off economically… And for roughly 60 years America enjoyed the Greatest increase of the Middle Class, the greatest increase in living standards of the average American and the greatest and longest increase in Manufacturing and Economic success along with the longest and greatest rise in the Stock Markets in America’s history…..
Personally, I think November 2016 will see and increase in Liberal lawmakers, a more Liberal Supreme Court and legislation which will repair our catastrophic income Inequity which will continue our economic recovery which began in 2009 with a repeat of 1932….
I can see the results of Liberal leanings in Greece, Venezuela, Porto rico, Cuba, Illinois,California, New York, just to name a few. I’m not sure those who think they know the answer have proven their case. Utopia is still to be found and fairness is way overrated.
Ya, see genius, if you’d thought about what I said, you’d realize that all of those Middle Class Manufacturing jobs from New York and Illinois and the rest of the “Rust Belt”, occurred thanks to those trade agreements that were written and passed by the Republicans at the behest of the 3% who where their donors. didn’t you work for a living?
Thank you Charles he obviously has a liberal socialist and biased view. The truth is Graham, Leach and Bliley Act was signed into law by Bill Clinton and was the cause of the financial collapse in 2008. That bill was written by democrats and republicans.
It is bad on both sides of the aisle. The fact of the matter is our government is corrupt.
The idea that we can continue to borrow money print money and give money to non productive people such as Section 8 housing, food stamps, free medical and tax refunds for earned income credits for illegal aliens and other dead beat citizens is insane.
The system is rampant with fraud in every sector bilking us tax payers.
Time for a change but not a liberal one.
Men going into womens bathrooms,stifling political correctness, moral decay looks like Rome all over again.
The Nazi party was a Socialist movement as well.
Eagle495,
Other than your partisan bias, what exactly are you trying to say?
Charles,
One of the first rules I learned in Business School in College was this: “Under Conservative Domination, Markets Falter and under Progressive Leadership, Markets Flourish”….. Don’t believe it? Do some economic study…… Actually Dr. Weiss’s Article, very clearly points out those facts…..
I have an economics/marketing degree and an MBA. I will agree that the trade policies were toxic and I am not a big fan of the current free trade agreements. However, I must disagree with you on everything else. Bill Clinton and the democrats were all for free trade polices and he did sign the bill. You mentioned FDR in other statements written but he was a terrible economics President. Keynesian economics and progressive policies by the left has destroyed the future of this once great nation. I will have to agree with IVANO that there is not enough baloney or BS to contradict the majority of you ideologies. The Democratic party is not the party of Kennedy anymore. It has been taken over by progressives and Fabian socialists. You mention Glass Stegall and say that Bill Clinton was a turncoat. I agree they should have kept GS as it was but Democrats have hurt this country just as much as the Republicans. LBJ was one of our worst Presidents and passed the Great Society programs which as cost this country $14 trillion since 1965. I believe you are either a very loyal Democrat or a Fabian Socialist. Most likely you are a combination of both…….
Mark,
Thanks for backing me up with even more valid data that Eagle495 conveniently forgets to mention in his distorted tirade. Bill Clinton fired Ms. Brooksley Born from her position as chair person of the “U.S. Commodity Futures Trading Commission, after she testified before congress that the Federal government needed to pass regulatory oversight of “Over The Counter Bank Derivatives. Let me repeat for Eagle495. BILL CLINTON….WHO IS A LEFT WING PROGRESSIVE DEMOCRAT…. fired the government official that recommended banks’ CDS be regulated, since she predicted a big bubble being created In the banking industry. IT WAS NOT GEORGE BUSH who fired Ms. Born and replaced her with a democratic puppet. Liberal Democrats were responsible for the burst of the CDS bubble. So stop blaming the Republicans for the Bank failures. Send your thank you note to Hillery’s husband. . Mr. Eagle495 please open your mind and pour in some truth and reality. Yes we have ONE SIDED trade not fair trade…BUT the DEMOCATS have never done anything to prevent Obomo from giving away the store in one sided trade agreements. Yes, Mark is correct LBJ ruined America for generations to come unless a person sucks off all of the Great Society programs to exist off the backs of contributing Americans.
eagle495 why dont you admit 240+ democrats signed the bill too if i wanted to listen to B/S i would have gone to hillery clintons rally
Eagle,
There is not enough room on this server to contradict the majority of your baloney. However, you still refuse to admit, gee no kidding, that your buddy boy Bill Clinton is the DEMOCRAT who signed those bills into LAW… that enable the banks to screw/rob from the American worker. Please… WAKE UP…! Be honest and stop the moronic simplistic B.S. you continually print on this web site. You are beyond disingenuous.
There is not enough room on this server to contradict the majority of you baloney. Clinton is the DEMOCRAT
Ivano,
Glass-Stegall was written by three powerful Republicans (Gramm/Leach/Blyle) and passed by a REPUBLICAN MAJORITY CONGRESS. The cabal of Banking, Brokerage and Insurance spent $400,000,000 to get G.S. removed from law. I’ve always noted that turncoat Bill Clinton signed it….Better that he should have vetoe it and forced the REPUBLICAN MAJORITY to override his veto……
Incidentally, it was Paul Ruben (A REPUBLICAN) from Goldman Sachs who, as his Treasury Secretary, recommended that the President sign it as he and Greenspan (appointed by Reagan) felt the law was “outmoded”….. Ruben promptly left as soon as G.S. was removed and was offered a seat on the Board of Citibank for a Million a year. Despite the fact that he never attended a meeting, he kept being paid, until the New York Times (Not FOX, Fortune, WSJ, Barrons or Forbes ) reported on this fact, at which time it was cancelled…..
Better do some homework Eagle it was written and sponsored by both parties & signed into law in 2002 by clinton.
Now you have his Hill Billy Hag wife taking millions from the banks and saying in her rally speeches how she is going to regulate the banks.
Put down the pipe and come out with your hands up!
Finally someone with OPEN eyes! Well said Ivano!
Democrat or Republican, the economic problem in the USA is systemic. Keynesian economics are the various theories about how in the short run, and especially during recessions, economic output is strongly influenced by aggregate demand (total spending in the economy). No demand, no growth – period! Bigger Government, more regulation, a shrinking tax base, zero interest rates, more debt, – PRINT MORE MONEY OUT OF THIN AIR!!
The result: Trump and Sanders are beginning to make sense to the disenfranchised, the poor and the middle class! A populous revolt!
The Solution: Back to 101 economics, death of the money alchemists, away with the banking cartel, a tombstone for the Feds!
The age of starting over as a new cycle has begun……. !!!!
Eagle495: Amen!
Books,
I am assuming that you are an educated individual…. Could I encourage you to share your studies with this these commentors?
HERE HERE VERY TRUE WORDS..
Eagle
You are one of the few progressives who admit that illegal immigration hurts working Americans, thank you. You should realize that the Clintons and Obama are not economic progressives, they are corporate centrists. You and those on the right should also realize that the economic policies of 1981 are not fiscally conservative, they are VOODOO! Those on the right have been worshiping at the false shrine of Reagan and have eschewed true conservative economics. Both liberal and conservative economics have their faults but trillion dollar deficits do not arise from true conservative policies, they yield income inequality, environmental pillaging and financial crimes against humanity.
I read a really great article about “confirmation bias” and how the world is infected by it now. We all tend to accept information that confirms our personal thesis and reject anything that doesn’t. When someone questions our thesis we dig in even deeper. There is so much information available to us now it is impossible to process it so we retreat to our original positions. My “bias” says Eagle is wrong but who really knows. I have come to the conclusion that arguing about it is an exercise in frustration. We are a completely polarized Nation that is simply going to have to see where the chips fall and then decide who was right. Jim
Jim,
You need to know that I was a dirt poor kid who had no choice but to volunteer for service in the early 1960’s…… I went down that road and spent a lot of years in Special Forces for our Army (I spent a lot of time in your Louisiana and Georgia swamps)…. Having survived that duty (just barely), I was able to use the GI Bill (thanks FDR) to graduate from college and now, because of that knowledge, I am wealthy… That said, I have lived on BOTH sides of the income curve….
I am sharing what I am because, I know that America has begun the long haul out of the destruction brought by the take over of the Conservative Quislings who owe noting to the 97% and everything to their benefactors the 3%….
You and many commentors here can listen to my theories and invest accordingly or not….. Bottom line, if the readers here have listened and believed the spew coming from the Conservatives, they have missed the first part of the greatest Stock Market Rally since 1932……
These Liberal Cycles last about 60 years and, in my opinion, we are about 8 years into that cycle…. So get on board and profit or wonder, many years from now, why you allowed yourself to be misled by those so beholden to the 3% and not you, the 97%, ok?
Eagle I thank for your service to our country. It is people like you that have made our country great, not some political hack. Yes, the GI bill was a great program. My father benefitted from it as well. BUT, I know someone with your courage and drive would have succeeded in any account with or without politicians. I worked my way through College and Law school and I am not wealthy because these hacks on both sides of the aisle tax and regulate the living daylights out of me. I can’t get ahead because they take more than half of what I make and still say I don’t pay enough. If you have grown wealthy as a result of them you are definitely a better man than me. I will never invest with political motives because they are too unreliable. I hate Washington and everything it stands for, regardless of party. Jim
Jim,
I’m not so sure that I would have made it without the GI Bill….. I was the oldest of 7 kids with a Father that was left about half nuts after serving in the 101st Airborne from the very start to the end in WW-ll…. I spent my whole life until I was about 40 supporting my family…. I also worked three good union jobs during my college years….
I also pay a ton in taxes as now I am part of the 3%….. That said, I do not begrudge my taxes…. I’ve been all over the civilized world and the uncivilized world and NO WHERE that I have put “boots on the ground” is better than America…. That said, there are those that would destroy our American dream in the name of greedy, short term profits, regardless of who gets destroyed in the process,,,,
I’ve always believed in the premise that “America does best when ALL Americans do better”…… That was the hallmark of the incredible success of 1932-1981….
Congratulations on Law School…… Other than Economic Cycle Analysis, the time I spent in Business Law and American Economic Development (Marberry v. Madison thru Brown Shoe) were incredibly valuable to me in developing wealth……
Incidentally, I’ve made millions, basically investing based on Political Parties in Power…. Virtually all of that was made during periods of democratic leadership up until 1981…… The rally from 1982-1999 was brought by Volcker’s (appointed by Carter) policies, not Reagan’s….. Come 1999 I knew that a Crash was coming after the idiocy of the Glass-Steagall removal….. I made money inverses until 2002, then on the back of the fraudulent liquidity rally until 2007, then inverse again until Obama… Those moves were as clear as the sun coming up every morning thanks to the short term stupidity of the 3%….. Ever since Obama in 2009, I’ve been long as those policies have brought the stock market to new highs…..
What is amazing is that many on this site have been negative since 2009 and now… Go figure that, aye?
many things have changed since FDRs time social security was a good thing it was a simple program to help the elderly and disabled but the liberal policys of giving away more and more to a society that thinks a government is there to provide freebies is insanity its setting things up for a bad end
Mike,
Do yourself a favor and go back and study 1925-1935 and you will be enlightened….. One of my major studies was that period for my MBA… What you will find are basically identical news release from the Conservatives that are being spewed today….. Soon, after 1932, most of the Conservative Papers went bankrupt as fewer and fewer believed their BS as the economy got better and better under the leadership of FDR and MAJORITY DEMOCRATIC legislatures…. Sure doesn’t sound like what the Right Wing Screamers are parroting on Clear Channel (majority owned by Mitt Romney’s Hedge Fund) does it?
Eagle
I am a fan of FDR and current conservative revisionist history is laughable. Note that my assessment of true conservative policies yielding “income inequality, environmental pillaging and financial crimes against humanity” is not an endorsement. Also my assessment of recent Democratic leaders as being centrist wall street lapdogs comes from their own records. Unlike many who post here I try to ignore my personal prejudices and let the data guide my call.
Thanks Mike, my thoughts exactly!
You failed to mention the progressive failure; it was WW II that ended the depression! AND DEMOCRATIC CONGRESS THAT TRANSFERRED SOCIAL SECURITY TO THE GENERAL FUND TO SUPPORT THE VIET NAM WAR; “GUNS N BUTTER”!
You confuse old left liberals like FDR with new left neoliberals in eu aka neocons in us. The only alternative is to STOP the neocon neoliberal elite for just a few years with a trump putinesque nationalist agenda. However, there is a yuge chance of something blocking such regime change….violent social unrest triggering some.
black swan event between convention and inauguration. If trump takes power it is still likely that he will have to deal with restructuring debt.
That IS the trump card….can you say FDR ll?
Beautifully done. You spelled it out perfectly. I only wished more people would wake up to the reality of our exact situation. If we could fix the tax code that would be a good start. Just imagine if we got rid of all exemptions and deductions, the first $100,000 of everyone’s income including corporations were tax free. Since corporations are “people”
let’s treat everyone the same. Since 90% of the 1040’s filed earn under $100,000, that would put the buying power back to the consumer where it belongs. It is the 90% who are carrying the heaviest load. Student debt and mortgage debt are sinking the 90%.
Eagle495 it is your assessment of Weiss that has the real reality. Is “real reality” a double positive. I tend to look at everything as negative or positive. Thanks for your “reality”!
Dr Weiss,their”s only one black swan you need to worry about,,,When you have Mass
starvation around the world, mass disease outbreaks around the world that so called
“medical science” can not control, massive shortage of food,massive outbreaks of
weather never seen since man was on the earth,on and on,,, What are you going to
with your Love of Money then ??? I have just given you a small glimpse into what’s
coming our way,TAKE HEED !!!
World population at the outbreak of World War II, about 2.3 billion. Population now, about 8 billion – almost 3 1/2 times that. Will we have 27 billion people in another 76 years? No. Overcrowding always produces wars, starvation and disease outbreaks. They won’t be pretty. They will be what your children and grandchildren will face.
Sure but that is what we CAN kick down the road.
The near term black swan is restructuring debt.
Spot on Dr. Weiss; but What we really need is for someone to come up with a way to take out the cause instead of just addressing the symptoms.
So where will the world’s richest one ten thousandth hole up? Hopefully Musk can ship them off to another planet to leave the world to the rest of us; but that won’t happen. In any event most of the hogs at the trough would still be around; the worst being the politicians. The fat hogs will trample and lie on the baby pigs, so nothing new will come of it. The mind set of mankind has been destroyed. The bears have it, they know how to hibernate; but by the end of the fight the bull faces the sword.
Really? Places you will never find in time.
The nazis relocated in many places of which argentina is only the most infamous. Allied intel had to leave them alone exceptions noted.
The elites today have already left the building.
The so called super rich just played by the rules pols. of both parties put in place. They’re just better players. My God says Thou shalt not covet.
Fellow Trucker, Thanks for pointing out the beautiful, well intended commerce throughout this Great Country. Each individual adding value to other individuals one small transaction at a time. A process which works. Remember when you buy something and you say Thank You and the clerk says Thank You,that is the result of a business offering to provide you something and the customer appreciative that it was available.
Truckers,
One of the last Labor Movements that have not been replaced by illegals are the Teamsters….. Unless the Conservatives are removed from power, you will be next… Just ask your brothers that used to work in Manufacturing before those very people shifted their jobs to Mexico. How are they going to do it? Simple, teere are plans underway right now by the Conservatives to allow Mexican Truckers (at much lower pay) to haul all of those goods now manufactured in Mexico (instead of the USA) to haul those goods all the way to their distribution points in the USA….. But, hey, keep listening and voting to the propaganda from the 3% and try not to be too surprised when your jobs are gone along with those of your Labor Brothers….
American jobs have disappeared because there are so many people in the world willing to do the work for a lower price. It’s not our fault and there is nothing we can do to change this fact. Jim
Jim,
I call BS…. When Americans realize that the survival of this great country is tied to “Made In America”, they will rally, just as our Grandparents did to the Democrats who are beholden ONLY to the 97%…… What is sad is that so many have forgotten where they came from and how their great lives were brought not by the party of the 3%, but by the party of the 97%…..
Perhaps we need more world wars to remind us of how lucky we are to live in this great land and the greatest standard of living brought by Democratic Practices that benefited the 97% and NOT by the party of the 3%…..
When the average person with limited disposable income goes into a store here in the U.S. and sees an item (made in China) she needs for a given price, and right beside it is an almost identical item (made in the U.S.) for twice the price…..which one do you think she will buy??
THAT is the problem!!
So then, is the answer to make ALL the needed items, regardless of where they’re made, too expensive – by trade wars and/or embargoes??
Thousands of Bosnian truck drivers/owners in central Kentucky, local American drivers claiming they undercut.
I believe that a potential Black Swan event is a collapse of the food production in the world.
(Although the fact that I’m predicting this means it will not, for me, be a black swan event.)
The evidence for this starting to happen is all around us if you just look at what’s right before your eyes.
The increase of chronic sicknesses: hip and knee joint replacements are a multi billion dollar business. Increases in levels of auto-immune diseases: asthma, allergies etc.. Failures of vaccines and antibiotics to work. Levels of obesity all around the world because of people eating “empty calories” but their bodies are craving what little nutrition there is in food leading to eating a greater volume of food to get that nutrition.
There are many that seem to instinctively recognise these facts and are starting to react.
Evidence for this? Seed companies are reporting record sales of vegetable seeds and a definite increase in the sales of heritage seeds. Many citizens running afoul of municipal authorities over the placement of vegetable patches.
I’ve noticed changes in animals in the rural areas where I live. Cattle barely sleep at night. They’re constantly eating grass growing in depleated soil; trying to get the nutrition their bodies crave (just like humans).
The soils all around the world are depleating rapidly. Very few farmers or gardeners recognise this so are doing nothing about it.
The Black Swan event in all this is when the food storage has all but disappeared (it’s almost non-existent now) and starvation and sickness gets serious and people start killing for a bag of potatoes or a loaf of bread. (Soylent Green anyone?)
Sounds extreme? Yes it does. But this is what makes it unexpected by most people and why it will happen quickly and violently. The super rich such as Soros, are all buying farmland. Why?
It’s time to dig up that “perfect lawn” and plant some spuds.
I’ll get off of my soap box now.
Dear Canada,
The explosion of “Organic Vegetable Farmers and Organically raised beef, buffalo, sheep and chickens” tells us that MANY are noticing and reacting….. The future is not so bleak…… Incidentally, I’m a British by birth…. And yes, my relatives still grow organic gardens in England….. :)
I’m also British by birth and now live in Alberta in a small village pop.<600 and lots of guns.
It was instilled into me that it was back-yard gardens that got Britain through two world wars and "You'd better not forget that!"
I'm now 68 and still put in a veggie garden. As a matter of fact I am taking advantage of our early spring and I'm enlarging my vegetable patch by about 40%. I see what's coming in the near future and want to get ahead of the game before TSHTF.
David,
I’ve always said that the great advantage of America and Canada, is that we don’t have a Aristocracy that holds 80% of the wealth….. Well not most of the time that is…. As Dr. Weiss has pointed out, there have been two times in the past 100 years when the 3% had as much (or more wealth) than the 97%… Both of those times resulted in world wide Stock Market Crashes and Depressions… You are luckier in the North as your Conservatives are about “half Conservative” compared to the Quislings here in the states that seem to pop up every 60 years to do the bidding of the 3% at great cost to the 97%….
Not to worry, as I will never forget how those “Victory Gardens” saved Britain during those wars…. While I don’t plant a garden any more, all of the produce and the meats and fish that I consume are organically raised…
Congratulation on finding your way to Alberta. What a beautiful providence! Now, must run as the sun is shining here in my mountains in the “Lower 48″…. :) And incidentally, we are within two years of each other…..
As we are “Brits” are accustom to saying: “Cheerio For Now, aye”?…. :)
ive been playing with my own variety of potatoes for over 5 yrs 15-20% of these potatoes are 4-5 pounds each are disease free pesticide and herbicide free and ive found a way of extending the growing season by keeping them in the soil perpetually these potatoes can be grown from full sun to partial sun and grown literally from backyards to roof tops along a house or garage ive tested these in the winters of minus 15 to summers of 95+ degrees and they still come out like a champ normal potatoes are harvested in july theres no need to harvest these just let them grow bigger i had vines growing through early december this will be a great plant for every one who is concerned about food shortages and if youve ever seen the amount of herbicides and insecticides in commercial potatoes you would never consume them
Nice going Hawk!….. :( Few these days, remember leaving potatoes in the dirt until needed and the reason for our old “Potato Cellars!…… :) Sounds like you have developed quite a strain…… If you are interested in wealth, you might consider patenting your plants….. At the very least, consider offering your plants for sale, aye? Amazing that some of our greatest plants were developed by people who “played around” until they developed an incredible plant…. One would wonder why such potatoes were not developed in one of those huge agricultural research centers at one of the big Ag. Colleges that cost millions!….. Again Hawk, nice going! You and your friends and neighbors will never have to worry about going hungry if there is an economic collapse….. That said, let us pray that political leadership intend on bringing back “the American Dream” is elected in November…
not to mention negative rates, which just adds to the mix of possible black swan events.
One thing I notice about Dr. Weiss’ potential Black Swans: They are all the result of the actions of politicians, here and elsewhere. Even reduced capital expenditures result from politically inspired taxation and regulations.Historically, when politicians run to extremes, the result is either wars or revolutions – often both, as following World War I In Russia, Germany, Turkey and elsewhere. Since World War II, we have seen revolutions in scores of countries, sometimes more than one. All are the result of instigation by politicians playing on discontent among the population. We are not quite ripe for revolution yet, but discontent is growing, and politicians are gathering followers. It just remains for someone to come up with a doctrine that excites a significant portion of the populace.
Chuck,
If FDR had not been elected, there would have been a “Revolution” and the very first to have gone to the firing squad, would have been those members of the 3% who where calling FDR a Communist and campaigning to keep him from being elected….
In my opinion, we are currently repeating that situation…. That said, I have no doubt that the majority of Americans will decide to follow the practice of “FDR’s Party” and there will be no firing squads for those that so deserve to go to there, just as in 1932……
If you look back at the history of despotic governments you’ll see that socialists, in their many guises, have been responsible for more murders of opposition that any other form of government.
Actually David, the vast majority of political assassinations have been carried out by Right Wing Conservative Lunatics… Check it out….
Trump may be a stealth fdr ll.
FDR was america’s answer to hitler and stalin. Though the rich bitched the elite.
knew what time it was and still know.
Trump is yuge. Dr. Weiss probably gets it.
Trump’s Hitlerian hates excite some people. Fortunately not most of us – yet.
Agreed!….
The fundamental flaws in our society, in the world for that matter are greed and corruption.We see it in our representation often rationalized by the insatiable quest for money to get reelected and favors done to repay benefactors. Our tax code is an indecipherable morass, frequently having been modified to favor those who paid off those who have the power to do so. I suspect we’re on the path to collapse out of which we might emerge like the legendary Phoenix if the chaos doesn’t turn us into a third world country. Our election process is a cruel joke consuming vast amounts of PAC money and time. I find it incongruous that a country like ours cannot present the electorate with more intelligent and honorable choices.
We do, ever 30 years…. %hat is the average length of a Conservative Domination…. 1981-2009 is an excellent example…… I failed to mention that those Conservative Cycles ALWAYS end with a Stock Market Crash and a Depression. The most cycle ended in 2007 when our markets plunged 60%, before, once again, being rescued by a Democrat….. Last time in 1932 it was FDR… This time it was Obama in March 2009….
What rescued us from the depression was WW2 not a Democrat.
Aha
Martin– I have sent several notes to Real Wealth and SCT and get no response. The last note I sent was on Real Wealth new buy recommendations–when I ran them thru your portfolio grader most of them came up as D or E+ ratings- my question was is this a timing issue or are these companies really subject to going out of business with weak balance sheets? Your thoughts?? Thanks AL
To: Eagle495
Let me educate you a bit. Rothschild said “I do not care which Party, (Democrat or Republican) is in office, as long as I control the printing of the money supply, I will always win”. That said, sound economic and savvy investment policies with a dash of street-smart experience will ALWAYS outperform your political narrative! In fact, I think it is boring…..
Thomas,
$10,000 invested in ONLY Democratic leadership periods (about 30 years) from 1929 until 1012 would have grown to about $350,000… The same amount invested in ONLY Republican Administrations (about 30 years) during the same period would have only grown to $11,000…. Need I say more? Check it out….
make that 1929-2012 (the study period)…
Eagle: You have spewed a lot of BS postings herein. I was here in the 1960s, Atlanta, Ga. Your rant on progressives being so great and how everyone would be most successful under liberals is disgusting to me. In Oct 1973 OPEC gas lines and those tough times. Elect the incompetent JC (Jimmy Carter) Nov 1976. JC in office Jan 1977 he asks for an energy audit, received it back in April 1977, and to this day has not been released to the public. He said in Jan 1977 that our gas would go to that of Europe, but did not say Europe was so high due to taxes. He (JC) said that we would run out of fossil fuel in 20 years. From Sept 1978 until 1980 gold went from $275 to $800 an oz. Silver under the Hunt Bros’ went from $4 to $40 per oz. Top Federal Tax rate when JC went into office and day he left was an obscene, egregious 70%. The JC Malaise brought forth the salvation of a great conservative RR. If RR had not been elected the Berlin Wall would be standing today. If JC had supported the Shaw and if Billy Clinton had demanded of Sadam Hussain to allow the inspectors to go wherever they needed to go the Middle East would have looked different. That is until (like you) the great pseudo-savant genius obama was anointed king and has enabled Iran to become nuclear. Within next 12-18 months you will see WWIII begin in the Middle East. Now for a footnote: The Loss of US jobs, you can credit progressive liberal leaders and corrupt union leaders for that. See bankruptcies Calif, Chicago, Illinois, Penn, NJ, NY and now Puerto Rica etc.. Your assiduous blaming Conservative and praising progressives is a pile of horse pucky. In addition, you referenced above, a Paul Ruben, I believe you meant Robert “Wild man” Ruben? In the near future when the sand hits the fan and bankrupt US implodeds the upper echelon of Repubs and Dems will be hiding in their Appalachian Fortress. Where will you be CYAing? Now Carpe Diem
Fortuna favet adiviut
Politicians don’t know how to solve any problems. They only know how to get into office.
Bill
the biggest summer surprise will not be the GOP collapse it will be the DFL collapse when Hillary gets indicted
Sanders
I attended “SWAN LAKE ” last year. The orchestra was incredibly Inspirational.
The dancing seems fluttered and CHAOTIC…
ARE WE WATCHING THE ” DANCE” OR “LISTENING” TO THE tune ??
a lot of wisdom in this chat session. congratulations to all who are planting a garden, they called it a victory garden in the 1940’s, my dad has had a garden since the 1950’s and he is healthy getting true nutrition, he is 91 years old. no herbicides or pesticides. my dad talks about the change in the taste of chickens,he was raised with fresh chickens eating bugs in the yard, no antibiotics or hormones, and the yokes of the eggs were orange not faded out yellow. the youth of today are not witnessing real food: plant or animal. all of us need good nutrition, the farther we get from the source of food the sicker we will become.
A lot of fascinating comments from everyone. And it seems to be centered around the 3% vs the 97% and Republicans vs Democrats, and who is screwing things up in America. After reading it all, it seems that whatever is happening, is beyond our grasp. Certainly Republicans must be part of the 97% or the party would be extinct. And by the comments here, there must be Democrats in the 3% as well. While the middle class is disappearing, I doubt that any Republican or Democrat will know what to do about it. But think about it. In the past, in order to become a billion dollar company, it used to take a lot of work and a lot of time. It used to involve building things like factories & manufacturing facilities and hiring lots of middle management. There was a lot of time for taxable events to happen. Now, someone has an idea, puts a good argument together on 20 pieces of paper, files a patent , throws a mobile app together to test it and six months later with maybe a few people working for free in a small rented office space, they have a billion dollar company! And in that time not one taxable event has occurred. Things are happening faster & faster with fewer & fewer inputs & generating even greater wealth. This is a story of efficiency & globalism. Our broken government both Republican & Democrat has no idea what to do. They are being blindsided by the pace of the changes around them. In the end they will probably do something monumentally stupid like enact a federal asset tax to steal it as fast as it’s created.
Note for Eagle: Of the last 66 sessions of congress, Democrats had the majority 49 times vs. Republican 17 times. I’m a bit tired of your constant blame game on Conservatives. Get some help. There is enough fault to go around for all of us. None of these folks get into position without our vote. A more informed voter would go a long way to solving many of the problems you identify. There is big campaign money going to both parties and Citizens United has made matters worse. It doesn’t matter which party pushed for this law, we the voters should shoulder the blame.
SH,
This is an Investment site….. Check out my quotes of $10,000 invested from 1929-2012 growing to $300,000 under Democratic Administrations and only $11,000 under Republican Administrations, both of which were in office about 30 years during that study time. So what are you interested in, Right Wing Dishonest Propaganda or Investment Returns?
Your financial analysis is correct but your cause and effect rational is fatally flawed. You have profited during Democrat leadership that flooding the financial markets with unsustainable credit excesses that unfairly benefitted the top 3%, some of which trickled down to the middle class. When these credit excesses became unsustainable, Republicans were elected to clean up the mess with austerity measures that are never popular. You admit that you shorted the market during the financial collapse inherited by Republican leadership. Thisecyou praise have gone too far this time starting with the JW Bush administration (a neo-conservative). Keep in mind the Bush administration was dominated by a Democrat controlled Congress. This was especially true during the last two years of the Bush administration as the Democrat Comgress was nearly veto proof. They created the housing crisis. The Obama administration and the Fed doubled down with even more unsustainable credit creating a death spiral that cannot be stopped. You are part the problem, certainly not the solution, as you are the top 3% that will destroy our country.
John Maynard Keynes the economist who made sense of the Great Depression is now more relevant than ever. Keynes concluded his masterwork, the general theory of employment, interest and money, with a famous disquisition on the importance of economic ideas. Soon or later, it is ideas, not vested interests, which are dangerous for good or evil. There’s no such thing as a free lunch. The super rich squeezing the rich. Eh whatever next.
Look at the power of Russia on the 9th, are we crazy to think we could beat them, we in the uk will leave the eu in June that will break up nato, which is the only thing supporting your physio’s running your government and ours.
I am not Politically Correct. I am not an expert.
I am an innovative and very successful Engineer of Political Economy. Example,
I conceived and achieved what has been termed “The Largest Peaceful Redistribution of Wealth in the History of Mankind”. That is not my description or title. I call it the “Quantum Leap of Alaska Natives into the Global Economy”, the 1971 Alaska Native Claims Settlement Act (ANCSA). Example? The subsidiary ASRC Aerospace and ASRC Federal, which is involved in about 50 contracts with NASA, NOAA and the Department of Defense. Alaska Natives, in 1971 about 80,000, selected and their business corporations now own, with mineral rights, only about 10% more land than in England, Wales and Northern Ireland. A PITTANCE! Not even as much land as in the United Kingdom!
For years I have been following the decline of economies of the United States and many developed countries. And for many years I have been explaining what needs to be done to reverse the tide. And for many years I continue to to be ignored. After all, I am not an Academic, writing books and scholarly articles. I am only a “doer” of seeming miracles. And I operate undercover, since my proposals would be immediately criticized as “impossible”.
So I expect my explaining the problem and the remedy will continue to be ignored. But in my forlorn hope of being recognized and followed, I here repeat myself again:
ADAM SMITH, 1776
The problem was explained and the remedy laid out more than 240 years ago. But it is ignored, distorted and suppressed.
1. NATIONS gain wealth when workers are paid “LIBERALLY.” ADAM SMITH, 1776. Workers and employers both gain. His example in 1776? The American Colonies!
2. NATIONS that pay workers, as now, by the Unfree Market, will find they “are going fast backwards.” ADAM SMITH, 1776. And we have been for decades.
3. The wealthy have interests that differ from the rest of us. So they will endeavor to convince us that what they want, we should want. They will even lie to us. ADAM SMITH, 1776. And so we agree that laws should be passed guaranteeing that we have the “Right To Work” for LESS! And we pass laws that cripple collective bargaining by workers, like the Taft-Hartley Act.
4. Employers may be tempted to underpay workers, but Patriotism and Ethics should dissuade them. ADAM SMITH, 1776. Our Rulers, the Global Oligarchs, have no Patriotism for the U.S. and, as shown by the giant convicted criminal banks, they have no Ethics. Get what you can, while you can. By the time it is discovered you will be long gone.
5. When employers get together, they tend to discuss how to suppress wages. ADAM SMITH, 1776.
FREE download of Adam Smith’s 1776 work on the wealth of nations at gutenberg.org. Or Amazon, from $0.99. READ!
My comments:
6. Free Trade and Fair Trade:
6.1 Fair trade is based on either natural advantage, such as 1930’s Saudi Oil lifted for $0.05 a barrel (illustrative) or is equalized by fair tariffs, for the protection of domestic producers.
6.2 Free Trade transfers wealth from the middle and lower classes of the wealthier nation to the Plutocrats of the poorer nation. The owners of Importers and exporters benefit. The middle classes and lower classes of both nations suffer. The Plutocrats of the wealthier nation are content and see no reason to change.
7. The wealthy know they need consumers with disposable funds to buy products and services. And they are concerned as economies decline. Bandaids are proposed, and may provide some relief. They do not understand why only “some relief”. They are OBLIVIOUS. Workers are CONSUMERS! Who knew!
Unless and until the Global Oligarchs, the National Plutocrats, and their well-paid Handmaidens, including the LAME STREAM MEDIA, accept the teaching of Adam Smith, and Employers voluntarily accept and follow his teachings, the decline will continue. Laws, such as Minimum Wage and Living Wage, will not be effective. I pray and hope, but I am not optimistic!
The PITCHFORKS are coming!