2016 has started out with a bang and the likelihood is that it will be an infamous year marked in future history books. For many armchair observers, such as myself, the trends have been leading to a very uncertain and somewhat scary outcome. There are a lot of concerning warning signs playing out right now. There still is time to get ahead of the curve and take action in an effort to reduce the negative impact that will surely come our way.
Today, Bloomberg reported that Sovereign Wealth Funds may sell over $400 billion in equities this year in an effort to shore up their finances. The collapse in oil prices has negatively impacted many oil rich nations that have traditionally depended on oil revenue to fund government expenditures and to provide employment opportunities to citizens. Globally, millions of people are being laid off and they will be forced to rely on their savings, access to debt and government handouts to cover their cost of living. The chart above shows that investors are betting that equity markets are going to decline as NYSE short interest is at levels last seen when Lehman Brothers collapsed in 2008. As I have stated numerous times, get out of stocks and bonds while you still can because there is nothing supporting the notion that 'all is well'. Statistics show that there is more support of a stock market calamity when compared to any positive catalysts that could push equities higher.
Central banks, cheered on by politicians and the presstitute media, have rigged markets with trillions of dollars priced at low to negative interest rates. This has caused serious financial dislocations in our financial system. Western backed governments have been supported with access to unlimited debt at interest rates that do not correspond with the risk. Developing nations are getting crushed financially as their currencies have plunged against Western currencies. The average person is feeling the effects of higher living costs, a decreasing standard of living and a future that looks bleak. 16 years ago I lived in Japan and I have continually tracked the country ever since. The Bank of Japan along with the Japanese government have worked together to prolong the inevitable collapse of their society. Too much debt, expensive government entitlement benefits, a shrinking population, poor job market and a currency that is too strong are plaguing Japanese society. The population has supported failed policies and this will negatively impact the population over the near term to medium term. Today, I noticed in a Zero Hedge article that Japanese citizens are buying safes en mass. A growing percentage of the population is clueing into the fact that the policies being deployed will ultimately kill the value of the Japanese Yen. Japanese citizens are flocking into hard assets and other currencies as they have become weary of current policies.
Fear is running high all over the world. Western backed coups and outright regime change operations are getting out of control. I know that may seem hard to believe given that the Middle East has been a hotspot for chaos spanning many decades. Saudi Arabia and Turkey, with financial backing from Western nations such as the USA, are driving forward with aggressive tactics in Syria, Yemen and in other Shiite nations. The belligerent actions are pitting Russia against NATO. Only time will tell if a full blown war will occur, but the current trajectory certainly appears to lead us to war. History is replete with examples of 'when times get tough they take us to war'.
The US presidential race is a circus. Democracy in most of the Western world has been destroyed and talking points are the only thing that keep the facade alive. That said, leadership has devolved to the point of insane. Check out Ted Cruz in this video as he makes bacon. Listen to Donald Trump talk about breaking international law as it pertains to torture. Here is Hillary Clinton on the US killing of Gadaffi. Anyone who believes that democracy is alive and well in the US is misinformed. The world is changing and many nations are now distancing themselves from US policies. I expect this to continue, but the masses will continue to follow the presidential reality show. Can you imagine how the public would have reacted had Dwight Eisenhower or John F Kennedy behaved like politicians do today? I can't imagine what a world war would be like given the lack of morality in the leadership of powerful nations.
All and all, as the days pass by, life becomes more unstable. Systems are slowly breaking down and discontent is slowly increasing. There will be a breaking point in the not so distant future and we may find ourselves at war. Economic depressions often correlate with the outbreak of war. Be prepared for what the future brings our way and most importantly; think for yourself.
"Our generation has had no great war, no great depression. Our war is spiritual. Our depression is our lives."