The Mother of All Financial Bubbles: A Burst of Unimaginable Destruction

February 27, 2017

Contributor

Editor's Note: The following is a guest post by Chris Martenson with PeakProsperity.com.

At PeakProsperity.com, we pride ourselves on providing fact-based context to breaking important events.

Within 72 hours of the Japan tsunami in 2011, we had analyzed the situation and concluded with high probability that three core meltdowns had occurred at the Fukushima nuclear plant. While it took years for officials to finally admit to the full extent of the crisis, history has validated our initial analysis.

How did we get it right? By using a science-based approach grounded in observation, deduction and a healthy skepticism of what the "experts" in charge claimed. We also went to great lengths to educate our readers about the science in play, explaining in detail how radioactivity and contamination differ, the health risks from such a nuclear accident, and what concerned folks could do to remain as safe as possible.

When California's authorities suddenly reversed course and scrambled to evacuate nearly 200,000 residents living downstream of the Oroville dam, within an hour, we had released an analysis of the situation, explaining the critical differences among the primary spillway, the main dam, and the auxiliary spillway.

Where mainstream media outlets were consumed by covering the Grammy’s, we were able to tweet and blog relevant details to the worried people hungry for information about the dam's integrity, keeping them both grounded and informed:

#OrovilleDam as of now, best we know, the spillway has not failed. Reports that erosion is going slower than feared. Every minute counts.
— PeakProsperity.com (@chrismartenson) February 13, 2017

By 10:00pm that same Sunday night of February 12th, we had shared a series of updates with schematics, images and conclusions that was more complete, accurate and hysteria-free than any other news source we could find at the time.

By the next morning, we had located and interviewed one of America's top dam experts, who provided an absolutely spectacular assessment of the situation at Oroville. That podcast has been listened to by nearly 50,000 people at this point, including residents of Oroville who have used its insights to determine whether or not to return home at this time.

And on top of all this, our own community began filling in the blanks with their expertise. One community member, an emergency worker deployed to the dam earlier this week, has been providing us with valuable insider information that state officials have resisted making public.

The reason I'm relating all of this now is because of the instructive lessons involved. It’s worth noting that communications from officials in Oroville transitioned from a steady, repeated stream of “Everything is fine. There's nothing to worry about” to suddenly “Run for your lives!” within an hour.

Of course, the 188,000 people living downstream from the dam were caught off guard by the mandatory evacuation order. Many left with none of their possessions, only to get hopelessly caught on clogged roads. It was a time of panic and disorder, with no one seemingly in control.

The main lesson from Oroville -- or Fukushima, or Katrina -- is that governments do a poor job of relating accurate information to their citizens when big threats are involved. Part of that is likely due to a desire to avoid stoking fear. Part probably due to politics and bureaucracy. And part probably due to plain old incompetence.

Regardless of the cause, it means that the public -- even the vigilant ones -- suffer information deficits when it matters most. Simply put, the authorities do not share all the facts necessary for making informed decisions.

Which is why our longstanding advice has been a straightforward call to 'trust yourself' when assessing crisis risk. In most cases, good old-fashioned common sense and a little sleuthing will get you far closer to the truth, and faster, than 99% of your peers who are relying on being told what’s happening by those in charge.

In most cases, the information you need to assess the truth will be right there, hiding in plain sight but always obvious in retrospect. This means it’s also available to you in real-time, providing you're willing to trust your own eyes and you know where to look.

Which brings us to one of the truly great risks we're facing today. One with much more destructive potential than a single failed dam but, like Oroville, one the authorities are desperate to keep us in the dark about.

The Mother Of All Financial Bubbles

We are now living through the mother of all financial bubbles. We've been living with it so long now that we have to take three giant steps backwards to even detect its broad outlines.

As a reminder, a bubble exists when asset prices rise beyond what incomes can sustain. Florida swampland in the 1920’s, tech stocks in the late 1990s, or Toronto real estate today -- all are fine examples of this.

The US government and the private banking cartel known as the Federal Reserve, in cahoots with a very compliant and complicit mainstream media, are doing everything in their vast and considerable power to convince us that we are living in an golden era of risk-free prosperity. And that tomorrow will be even better.

Now, regular readers of PeakProsperity.com's reports will know there's a mountain of evidence contracting this. But it's critical to understand that this is the same public perception management style as we've recently seen at Oroville: Deny, deny, deny... and then finally admit the obvious.

So let’s take those three giant steps backwards and see if we can spot the flaw in the ‘everything is awesome!’ meme that the Fed et al are trying to paint for everyone by flooding the “markets” with so much thin-air liquidity (between $150-$200 billion a month) that nobody has any clue what anything is truly worth anymore.

Giant Step Backwards #1: Infinite growth is impossible.

This is such an easy concept that I'm continually surprised at how poorly appreciated it is and how much resistance it receives when raised. But it works like this: the earth is a sphere and therefore has a defined surface area and a defined amount of resources available for use.

The availability of these resources ranges across a spectrum from dense/concentrated on one end to dilute/useless at the other. Humans have already extracted and consumed most of the easily obtainable stuff. Now it gets harder.

Regardless of the economics of these resources, they are finite. And as our economic requires resources to function, if we want our economy to grow from here, that means consuming more resources at a faster rate then we have been. If resources are finite, then growth will one day prove finite, too.

This should be utterly, blindingly obvious to everyone. But it’s not, apparently. The Federal Reserve and the central banks in other nations are unified in their call for more economic growth, always and forever. That’s plan A. There is no plan B.

Giant step backwards #2: You can’t print your way to prosperity.

History is replete with the failed attempts of nations to print their way to prosperity. The pursuit operates on the same principle as alchemy: trying to get something for nothing. It has invariably and always ended the same way. In tears.

At first it, issuing more currency feels good because those closest to the money printing get stinking rich while doing practically nothing. As that trickles down, everybody initially feel smart and wealthier. Well, not everybody; but those running the system sure do.

After a while, though, all that feel-good activity is revealed as a fraud. It turns out prosperity wasn't printed, instead it was redistributed. From one party’s pocket into another. And in most cases, from poorer pockets into those of the already-privileged.

The same is happening today with the "thin air" money printing being conducted by the world's central banks. We are now living with one of the most extreme wealth gaps in US history, with the top 1% (really, the top 0.1%) owning a greater percentage of the nation's wealth than they ever have.

But it's even more nefarious than that, because the Fed is not simply stealing from today's public; it is also stealing the prosperity of future generations. When the party being stolen from hasn't been born yet, it can't fight back.

In short, you cannot print your way to prosperity. Yet somehow we've forgotten that. And we're dooming ourselves (and our children and grandchildren) to becoming serfs in the process.

Giant step backwards #3: You can’t grow your debts faster than your income forever.

This, too, should be completely obvious. You know perfectly well it holds true for your personal life or your business, if you have one. And it’s equally true for a nation, which is simply an aggregation of individuals and businesses. But somehow this simple truth has been either forgotten or deliberately ignored by today's economists and politicians.

Our grand experiment in debt-based fiat currency -- unbacked by anything tangible, like gold -- began on August 15th, 1971 when Nixon unilaterally broke the Bretton Woods agreement and forced the entire world off of the gold standard. Not that the world minded much, because this then meant that politicians and monetary hacks everywhere could ignore centuries of economic lessons and begin making exorbitant promises by printing currency like mad.

The giant step towards monetary (and debt) expansion this represented is clear to anybody who can read a chart.

Here’s the total credit market debt in the US. It has exploded higher at a near-perfect exponential rate since that fateful day in 1971:

But what we really need to do is compare debt to income. Remember, you're not supposed to grow the former at faster rate than the latter. So let’s add (nominal) GDP to our chart and see what comes up:

As you can see, those lines began diverging a long time ago (aha! Right around 1971. Imagine that.). They've been diverging at an increasing pace for pretty much the entire adult lives of everybody in power. At this point, our leaders just assume “This is how the world works.”

“Reagan proved that deficits don’t matter”
~ Vice President Dick Cheney

The little wiggle in the exponential curve there, during 2008-2009, was the wiggle that almost destroyed the world. Our entire system of credit and money came very close to full-scale collapse, simply because it didn't grow for a few brief years. Makes you shudder to think what would have happened had it acutally contracted...

But back to the main point. If we compare the beginning of this wanton debt-binge in 1970 with the state of things today:

We see that debt has shot up by a factor of 40 while income has only increased by a factor of 17. We have indeed grown our debts wildly faster than our income over the past 45 years

And, it should be noted, a lot of that GDP ‘growth’ is the byproduct of borrowing and spending money we don’t have on things we don’t need. Said differently: the debts will remain during any serious future economic downturn but the GDP that is fraudulently based on excessive rates of borrowing will vaporize as if it never existed in the first place.

That, my friends, right there is the very definition of unsustainable.

If something cannot go on, it won’t.

But the Federal Reserve, under the leadership of a pure academic like Janet Yellen, cannot conceive of any approach other than perpetuation the same system that has been in place while she's built her career.

Conclusion

The Fed is desperately seeking to keep the status quo in place, praying that somehow things turn out OK, and clearly scared to death behind the scenes. But, just like the officials at Oroville, when the cameras are on her, Yellen smiles and tells us that all is well.

The Fed has printed as much money as it has dared for the time being. It has since handed the baton over the ECB, and the Bank of Japan, who have stepped in to keep the wheels of the world's debt production well-greased.

Around and around the baton gets passed. And we're told by our government and media that this is all in our best interests. However, the only thing these central banks are truly doing is stealing from savers and the elderly today, and pretty much everyone tomorrow.

What have they done with the trillions in "thin air" currency they have printed up? They handed them to the big banks, to speculators and the already wealthy. Which should come as little surprise. These are the people they count on for their high-status jobs, as well as the big payouts awaiting them when they return to the private sector.

In the meantime, they’ve blown the Mother Of All Financial Bubbles.

This is primarily a bubble in debt (i.e., the bond market). But in its making, new bubbles in real estate, stocks and a whole slew of other asset classes were created.

When these bubbles burst, and they must, it will be a massively destructive event. There will literally be nowhere to hide from the repercussions.

You simply cannot count on anyone in power giving you anything like timely warning or useful advice in advance. You need to find accurate, trustworthy indicators on your own, and then decide how you're going to position yourself, your loved ones, and your wealth accordingly.

In Part 2: How Bad Will It Get? we detail the tremendous scale of the losses that will result when this Mother Of All Financial Bubbles bursts. It will be a traumatizing time for society, and many, many people will see their wealth vaporize.

The key objective at this time is to position yourself for physical and financial safety. For those who do will be in a position to prosper greatly, as well as offer much-needed support to others, when the coming reset arrives.

Critical theory destroys truth and justice

Editor's note: This article was originally published on TheBlaze.com.

Critical theory once stood out as the absurd progressive notion that it is. Now, its maxims are becoming an integral part of ordinary political discourse. The more you repeat a lie, the more you will believe it, and this is the very dangerous place in which we find ourselves today.

Take this critical theory maxim as an example: If we desire justice, we must sometimes champion what may appear superficially as injustice. It's a necessary evil, if you will, the necessity of “controlled injustice.”

By using truth through fabrication and controlled injustice for justice, we’ll save the republic. We’ll be acting in a noble way.

This definition of justice is defined by the “oppressed,” not the “oppressor.” It is the greatest happiness for the greatest number. To achieve this justice, however, we need to endorse acts on occasion that, while seemingly unjust, serve a higher purpose. It will ensure the stability and the unity of our republic, and this may manifest in ways that seem contradictory to our values. But these are the necessary shadows to cast light on “true justice.”

And isn’t that what we are all after, anyway?

Here’s another critical theory maxim: Sometimes we find the truth through fabrication. Our pursuit of truth sometimes requires a strategic use of falsehoods. The truth is a construct that has been shaped and tailored to promote the well-being of the collective.

We sometimes need to accept and propagate lies designed by "the system” — not the old system, but the system that we’re now using to replace the old to get more justice through injustice and more truth through fabrication.

We’re engaging in a higher form of honesty. When we fabricate, it’s for the right reason. We are reaching up to the heavens fighting for a higher sort of honesty. To fortify the truth, we occasionally must weave a tapestry of lies. Each thread, essential for the greater picture, will ultimately define our understanding and ensure our unity under this infallible wisdom.

The election is coming up. Does this maxim sound familiar? Many think it is imperative that we secure our republic through election control to maintain our republic. Sometimes, we might need to take actions that by traditional standards might be questionable.

The act of securing elections requires cheating. It's not mere deception. It is a noble act of safeguarding our way of life. We're on the verge of losing this democracy, and without deception, we will lose it.

To ensure it doesn't fall into the hands of those we know will destroy it, we may have to make a few fabrications. We're fabricating stories to be able to control or secure the republic through our elections. By using truth through fabrication and controlled injustice for justice, we'll save the republic. Therefore, we'll be acting in a noble way. Stealing an election from those who wish to harm our society is truly an act of valor and an essential measure to protect our values and ensure the continuation of our just society.

If we desire justice, we must sometimes champion what may appear superficially as injustice.

I know it's a paradox of honor through dishonor. But in this context, by embracing the dishonor, we achieve the highest form of honor, ensuring the stability and the continuation of our great republic.

Let this be heard, far and wide, as a great call to patriotic action. As we advance, let each of us, citizens of this great and honorable republic, consider these principles. Not as abstract or paradoxical but as practical guides to daily life. Embrace the necessity of controlled injustice, the utility of lies, the duty to secure our electoral process, and the honor and apparent dishonor. These are not merely strategies for survival. They are prerequisites for our prosperity.

We all have to remember that justice is what our leaders define, that truth is what our party tells us. Our republic stands strong on the values of injustice for justice, honor through dishonor, and the fabrication of truths. To deviate from this path is to jeopardize the very fabric of our society. Strength through unity; unity through strength.

We've heard this nonsense for so long. But now, this nonsense is becoming an instituted reality, and we are entering perilous times. Don't be fooled by the narratives you will hear during the march to November. Never let someone convince you that the ends justify the means, that a little bit of injustice is needed to achieve a broader, collective vision of justice, that truth sometimes requires fabricated lies and narratives. If we do, justice will cease to be justice, truth will cease to be truth, and our republic will be lost.

Top 5 MOST EVIL taxes the government extorts from you

David McNew / Staff | Getty Images

"In this world nothing is certain but death and taxes." -Ben Franklin

The injustice of taxation has been a core issue for Americans since the very beginning of our country, and it's a problem we have yet to resolve. This belief was recently reignited in many Americans earlier this month on tax day when the numbers were crunched and it was discovered that the government was somehow owed even more hard-earned money. As Glenn recently discussed on his show, it's getting to be impossible for most Americans to afford to live comfortably, inflation is rising, and our politicians keep getting richer.

The taxpayer's burden is heavier than ever.

The government is not above some real low blows either. While taxes are a necessary evil, some taxes stretch the definition of "necessary" and emphasize the "evil." Here are the top five most despicable taxes that are designed to line the IRS coffers at your expense:

Income Tax

Joe Raedle / Staff | Getty Images

"It would be a hard government that should tax its people one-tenth part of their income." -Ben Franklin

On February 24th, 2024 we hit a very unfortunate milestone, the 101st anniversary of the 16th Amendment, which authorized federal income tax. Where does the government get the right to steal directly out of your paycheck?

Death Taxes

Dan Mullan / Staff | Getty Images

"Now my advice for those who die, Declare the pennies on your eyes" -George Harrison

Not even in death can you escape the cold pursuit of the tax collector. It's not good enough that you have to pay taxes on everything you buy and every penny you make your entire life. Now the feds want a nice slice, based on the entire value of your estate, that can be as much as 40 percent. Then the state government gets to stick their slimy fingers all over whatever remains before your family is left with the crumbs. It's practically grave-robbery.

Payroll

Bloomberg / Contributor | Getty Images

"The power to tax is the power to destroy." -John Marshall

What's that? The nice chunk of your paycheck the government nabs before you can even get it to the bank wasn't enough? What if the government taxed your employer just for paying you? In essence, you make less than what your agreed pay rate is and it costs your employer more! Absolutely abominable.

Social Security

VALERIE MACON / Contributor | Getty Images

"We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much." -Ronald Reagan

Everyone knows the collapse of Social Security is imminent. It has limped along for years, only sustained by a torrent of tax dollars and the desperate actions of politicians. For decades, people have unwillingly forked over money into the system they will never see again.

FICA

Kevin Dietsch / Staff | Getty Images

"What at first was plunder assumed the softer name of revenue." -Thomas Paine

FICA is the payroll equivalent of Social Security. Your employer has to match however much you pay. It means it costs your employer even more to pay you—again, you'll NEVER see that money. At this point, are you even working for yourself, or are you just here to generate money for the government to frivolously throw away?

5 DISTURBING ways World War III will be different from previous wars

Oleg Nikishin / Stringer | Getty Images

Has World War III begun?

Over the weekend, Iran launched an unprecedented attack against Israel involving over 300 missiles and drones. This marked the first direct attack on Israel originating from Iranian territory. Fortunately, according to an Israel Defense Forces spokesperson Rear Admiral Daniel Hagari, 99 percent of missiles and drones were successfully neutralized by Israeli defense systems. Iran claimed that the operation against Israel had concluded and that no further offensive was planned, although the possibility of another attack is still present.

This has left many people, including Glenn, wondering the same thing: did we just witness the start of World War III?

Glenn recently had a World War II Air Force Veteran as a guest on his TV special, who told stories of the horrors he and his brothers-in-arms faced in the skies over war-torn Europe. This was a timely reminder of the terrors of war and a warning that our future, if it leads to another world war, is a dark one.

But, if Glenn's coverage of the Iranian attack revealed one thing, it's that World War III will look nothing like the world wars of the twentieth century. Long gone are the days of John "Lucky" Luckadoo and his "Bloody Hundredth" bravely flying their B-17s into battle. Over the weekend, we saw hundreds of autonomous drones and missiles clashing with extreme speed and precision over several different fronts (including space) simultaneously. This ain't your grandfather's war.

From EMP strikes to cyber attacks, here are FIVE ways the face of war has changed:

EMP attacks

New York Daily News Archive / Contributor | Getty Images

The entire modern world, on every level, is completely dependent on electricity. From your home refrigerator to international trade, the world would come to a grinding halt without power. And as Glenn has pointed out, it wouldn't even be that hard to pull off. All it would take is 3 strategically placed, high-altitude nuclear detonations and the entire continental U.S. would be without power for months if not years. This would cause mass panic across the country, which would be devastating enough on its own, but the chaos could be a perfect opportunity for a U.S. land invasion.

Nuclear strikes

Galerie Bilderwelt / Contributor | Getty Images

Nuclear war is nothing new. Many of us grew up during the Cold War, built fallout shelters, and learned to duck and cover. But times have changed. The Berlin Wall fell and so did the preparedness of the average American to weather a nuclear attack. As technology has advanced, more of our adversaries than ever have U.S. cities within their crosshairs, and as Glenn has pointed out, these adversaries are not exactly shy about that fact. Unfortunately, the possibility of an atomic apocalypse is as real as ever.

Immigration warfare

Nick Ut / Contributor | Getty Images

The strategy of strangling an opposing nation's economy to gain the upper hand is a wartime tactic as old as time. That's why the Border Crisis is so alarming. What better way to damage an opponent's economy than by overburdening it with millions of undocumented immigrants? As Glenn has covered, these immigrants are not making the trek unaided. There is a wide selection of organizations that facilitate this growing disaster. These organizations are receiving backing from around the globe, such as the WEF, the UN, and U.S. Democrats! Americans are already feeling the effects of the border crisis. Imagine how this tactic could be exploited in war.

Cyber shutdowns

Bill Hinton / Contributor | Getty Images

Cyber attacks will be a major tactic in future wars. We've already experienced relatively minor cyber strikes from Russia, China, and North Korea, and it is a very real possibility that one of our adversaries inflicts a larger attack with devastating consequences on the United States. In fact, the WEF has already predicted a "catastrophic" cyber attack is imminent, and Glenn suggests that it is time to start preparing ourselves. A cyber attack could be every bit as devastating as an EMP, and in a world run by computers, nothing is safe.

Biological assault

WPA Pool / Pool | Getty Images

Don't trust the "experts." That was the takeaway many of us had from the pandemic, but something less talked about is the revelation that China has manufactured viruses that are capable of spreading across the globe. We now know that the lab leak hypothesis is true and that the Wuhan lab manufactured the virus that infected the entire world. That was only ONE virus from ONE lab. Imagine what else the enemies of America might be cooking up.

The government is WAGING WAR against these 3 basic needs

NICHOLAS KAMM / Contributor | Getty Images

The government has launched a full-on assault against our basic needs, and people are starting to take notice.

As long-time followers of Glenn are probably aware, our right to food, water, and power is under siege. The government no longer cares about our general welfare. Instead, our money lines the pockets of our politicians, funds overseas wars, or goes towards some woke-ESG-climate-Great Reset bullcrap. And when they do care, it's not in a way that benefits the American people.

From cracking down on meat production to blocking affordable power, this is how the government is attacking your basic needs:

Food

Fiona Goodall / Stringer | Getty Images

Glenn had Rep. Thomas Massie on his show where he sounded the alarm about the attack on our food. The government has been waging war against our food since the thirties when Congress passed the Agricultural Adjustment Act of 1938. They started by setting strict limits on how many crops a farmer could grow in a season and punishing anyone who grew more—even if it was intended for personal use, not for sale on the market. This sort of autocratic behavior has continued into the modern day and has only gotten more draconian. Today, not only are you forced to buy meat that a USDA-approved facility has processed, but the elites want meat in general off the menu. Cow farts are too dangerous to the environment, so the WEF wants you to eat climate-friendly alternatives—like bugs.

Water

ALESSANDRO RAMPAZZO / Contributor | Getty Images

As Glenn discussed during a recent Glenn TV special, the government has been encroaching on our water for years. It all started when Congress passed the Clean Water Act in 1972, which gave the government the ability to regulate large bodies of water. As the name suggests, the act was primarily intended to keep large waterways clear of pollution, but over time it has allowed the feds to assume more and more control over the country's water supply. Most recently, the Biden administration attempted to expand the reach of the Clean Water Act to include even more water and was only stopped by the Supreme Court.

Electricity