Speculation Run Amok: Complacency, Then Crisis

Finance U Public Finance U
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Originally published at: Speculation Run Amok: Complacency, Then Crisis – Peak Prosperity

Executive Summary

Chris and Paul discuss the economic challenges facing Europe, particularly the rising cost of gas and its implications for industry, especially in Germany. They also touch on the U.S. stock market’s bullishness despite economic indicators suggesting caution. The conversation includes a critique of past and current economic policies, particularly those related to energy and fiscal management, and the potential risks and opportunities for investors in the current climate.

Europe’s Energy Crisis

They discuss the potential impact of rising gas prices in Europe, particularly due to reduced gas transit from Russia. This situation poses a significant threat to European industries, especially in Germany, which is already facing economic challenges. The conversation highlights the lack of viable alternatives for energy in Europe, given the current state of renewable energy technologies and the political stance against fossil fuels.

U.S. Stock Market Bullishness

The discussion shifts to the U.S. stock market, where Chris notes an unprecedented level of retail bullishness. Despite economic indicators suggesting caution, the market continues to rise, which Chris and Paul attribute to speculative behavior fueled by past central bank policies. They express concern about the potential for a market correction, given the current economic backdrop.

Key Data

  • Europe may lose 10.9% of its gas supply due to reduced Russian transit.
  • Germany’s industrial production is at its lowest since 2006.
  • The U.S. stock market is at a 200% ratio of stocks to GDP, a historically high level.
  • Interest payments on U.S. federal debt are reaching unprecedented levels.

Predictions

  • Europe’s energy crisis could lead to further industrial decline in Germany.
  • The U.S. stock market may face a correction due to speculative excess.
  • Economic power may shift from the West to the BRICS and Eastern countries.

Implications

  • Rising energy costs in Europe could lead to higher prices for goods and services.
  • Potential job losses in energy-intensive industries in Europe and the U.S.
  • Increased financial strain on U.S. taxpayers due to rising interest payments on national debt.

Recommendations

  • Build a financial war chest to prepare for potential economic downturns.
  • Focus on long-term financial planning and risk management strategies.
  • Seek wise financial advice and avoid speculative investments.
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Another car manufacturer to close because of the green transition

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As Neil Oliver said… ‘its not about going green, its about going without…’

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Have you seen what is going on in the French National Assembly. They are calling each other names, using epethets, a real mess. (check out CNews) And this is just to come up with a budget that will comply with the European Union requirements. They have until Monday. Presumably the fines for a spending that exceeds EU limits start to go into effect. France is in crisis with nobody capable of leading even remotely in sight. Without a budget by Monday, Marine LePen’s party will demand a vote of no confidence and the government will most likely fall. Macron will then have apply legal rules just to have the current rate of overspending continue. And to think that Macron was proposing to officially send French soldiers into Ukraine only a couple of weeks ago. That proposal has been witdrawn. Meanwhile we have no idea how many French soldiers have been killed in Ukraine.
Like in the US and the rest of Europe, the left is so anti-establishment that they seek to destroy European culture using immigration. They believe in destroying a country in order to rebuild it to meet their particular dogma. Where this is going, who knows. The only bright spot is that like here, the Trump election has brightened the spirits of the French people regardless of their own political situation. It is going to be interesting to see if freedom of speech comes out of its European coma.

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Hal Turner goes into detail and predicts the US will lose a war with Russia, or it seems, most anybody.

In one of many points he quotes a Rand report:

From the Rand Report:

“We believe the magnitude of the threats the US faces is understated and significantly worse…In many ways, China is outpacing the US…in defense production and growth in force size and, increasingly, in force capability and is almost certain to continue to do so…[Beijing] has largely negated the US military advantage in the Western Pacific through two decades of focused military investment. Without significant change by the US, the balance of power will continue to shift in China’s favor.”

“At minimum, the US should assume that if it enters a direct conflict involving Russia, China, Iran, or North Korea, that country will benefit from economic and military aid from the others…This new alignment of nations opposed to US interests creates a real risk, if not likelihood, that conflict anywhere could become a multi-theater or global war…As US adversaries are cooperating more closely together than before, the US and its allies must be prepared to confront an axis of multiple adversaries.” Commission on the National Defense, Rand

As the Commission report spells out in forensic detail, Washington would be almost completely defenceless in such a scenario, and likely defeated nigh on instantly…. It’s not just being spread too thinly across the Grand Chessboard that means the Empire’s military “lacks both the capabilities and the capacity required to be confident it can deter and prevail in combat.”…

The RAND Commission found Washington’s “defense industrial base” is completely “unable to meet the equipment, technology, and munitions needs” of the US, let alone its allies. “A protracted conflict, especially in multiple theaters, would require much greater capacity to produce, maintain, and replenish weapons and munitions” than is currently in place….

For decades, the US military “employed cutting-edge technology to its decisive advantage for decades.” This “assumption of uncontested technological superiority” on the Empire’s part meant Washington had “the luxury to build exquisite capabilities, with long acquisition cycles and little tolerance for failure or risk.” Those days are long over though, with China and Russia “incorporating technology at accelerating speed”…… America’s “defense industrial base” is today crumbling, riddled with a myriad of deleterious issues…

To address these problems, the Commission calls… to re-industrialize the US after years of outsourcing, offshoring and neglect. No timeframe is provided, although it would likely take decades……

We have entered a strange, late-stage Empire era, comparable to the Soviet Union’s Glasnost, in which elements of the US imperial brain-trust can see with blinding clarity Washington’s entire hegemonic global project is stumbling rapidly and irreversibly towards extinction… Collapsing Empire: China and Russia Checkmate US Military, Kit Klarenberg, Substack

Once again, we see the same criticisms reiterated over and over again *: Insufficient industrial capacity, dwindling stockpiles, “insuperable production limitations”, and diminished technological superiority.

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Paul & Chris - imho - you are making a big mistake. You are comparing today to prior FED caused events.

We are entering a complete collapse of the dollar. The prior events to study are “reserve currency transitions “

This is brought on by FED/Govt malfeasance and Bitcoin and BRICS.

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It’s amazing, and yet sad in a way, that America’s wealth and power is still based from the agreements of the last World War. We took control in 1945 as the global reserve currency and military super power; both have been abused. We are now the 3rd generation in political power. We have pissed most of it away but we can still save most of the farm if we work fast and hard. I think we will keep a big piece of the pie but we can’t keep the whole pie, for sure. The smart people that make it through the next period of financial change will be the ones that know the difference between real assets and paper. (wealth vs debt, credit vs money, power vs marketing).

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I don’t know about in Europe but in America, the left is controlled by the wealthy elite that own the traditional mainstream media. They are literally told what to believe and often paid to organize against the right. Most of the left are oblivious to the fact they have been systematically brainwashed by the captured media. I hope enough Europeans can find the strength to openly discuss and challenge the media there. Military grade propaganda is hard to defeat.

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The. Highest. Ever.

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I guess this time is different?

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I understand where Paul and Chris are coming from. The “markets” are definitely hard to make sense of.

However, I am interested to see how Paul’s funds have been doing compared to just passively buying the S&P500 in the past decade+ as I feel like the recurring message is that things haven’t made sense for the past year plus but the anyone sitting has been left missing out hard.

I suspect that even if the market corrects 30%, the gains from being invested may still beat any potential downside protection that has not been needed for the last while.

As they say, we are forced to play by their rules of money printing and I hope we can get other strategies to benefit apart from buying gold/silver.

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wow already. sigh. French and their promises. Same with UK.

Someone said in podcast that North Korea is sending troops to Ukraine front to gather experience for potential future conflict in korean peninsula.
This would help china a lot, they dont have to mess their hands directly yet, but can assist with giant manufacturing base all these conflict zones draining western funds and resources and attention.
Although other place said Xi would have time window closing soon but I cannot judge if that is true. All kinds of opinions back and forth. If China benefits from these conflicts, they could just delay a bit and let west dig bigger hole. Economy could be that weakest link.

Although gotta always ask: is RAND part of MIC thinktanks that paints gloomy picture to secure more defense funding?

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@cmartenson Chris, I suspect the resistance at $100k to bitcoin is mostly deep state. We saw an almost unprecedented >$100 billion of downward pressure as BTC first threatened to break through the magic 6 figure mark (Nov 21-22). “Surge Protection Fund” in operation. Backing up this assumption, we know for a fact that the US government moved 2 billion in confiscated bitcoin to an exchange in readiness to sell, and scare the markets lower. Hodlers just do not act that way. Sell at highs, sure, but not as a herd.

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