A structurally deficient US economy is going to usher in tragedy once again, and once again, when it happens, do not fall for the banker and politician lies that nobody could have seen this coming, as this time around, the tragedy can be spotted easily from 1000 kms away. Recently, I’ve been revisiting and reposting some of my articles published up to a decade ago as they astonishingly are just as relevant today as they were back then. This is the second of such articles. In the below article, I’ve left the entire interview intact, including a prediction of mine in the interview that was completely wrong – my belief that the next disaster would hit US stock markets by 2011 to 2013. This obviously did not happen. One reason I stated, in the interview, that US stock markets had been able to avoid suffering another extreme setback at that point, since its collapse in 2008, a collapse by the way, that I predicted would happen in this article I published on 23 April, 2008, was due to absurd measures undertaken by US Central Bankers to prop up the US stock markets.
Among those measures that I thought were completely insane back then were Central Banker POMO (Permanent Open Market Operations) of $6 to $7 billion daily purchases of US Treasuries to prevent a US Treasury market collapse. The reason I believed that the next disaster would hit the US stock markets by the 2011 to 2013 time frame in 2010 was because I believed that much of this nonsense was going to end by then, and when artificial support for the stock market ended, then collapse would naturally commence. I believed, back then, that support would end, because two years was an adequate time for all the oligarchs to divest of their US stocks to avoid any loss of wealth from another stock market crash. I left my wrong prediction in the below interview, despite all my other comments being completely relevant in 2021 not only to show that I was wrong (as every single financial analyst that makes a handful of predictions every year will be) but to make a more important point that underscores why the upcoming global financial collapse will be multiple times worse than the one we experienced in 2008, with hyperinflation of the USD even being a possibility now (a topic I will explore in a subsequent post here, so be sure to bookmark this page or subscribe to my RSS feed to be notified immediately of when I upload new content here).
If the tactics taken by US Central Bankers were already ludicrous by 2010 in order to prevent a collapse of the US Treasury market and the US stock market, think of how much more absurd the measures they have undertaken for the last decade in order to continue supporting these two markets have been. A simple glance at the balance sheet of the US Central Bank (full of toxic assets) since 2010 until today) should elicit horror in anyone that understands what the chart means. In little over twelve years, US Central Bankers have bought every toxic asset under the American sun just to ensure that the billionaire oligarchs can continue to increase their share of the American wealth pie from $905 billion to $7.557 trillion, a growth of more than eight times! A balance sheet of more than $905 billion in 2008 was already unspeakably absurd so an eight time increase in that amount can end up in nothing but complete disaster for all US dollar denominated assets.
Furthermore, the desperate nature of the past 12-years to keep US stock and treasury markets afloat way past their expiration date has resulted into a complete abandonment of any morals, including an almost certain increasing reliance on the profits of violent drug cartels to provide liquidity to the global banks, as I discussed here, and the injection of trillions of dollars of liquidity to US banks every single week to keep US banks afloat, a practice completely ignored by the US financial media that would have been headline news but for the covid hysteria that dominated all US news for the entirety of 2020 that was meant to distract people from the financial bombs imploding beneath the surface for the entirety of last year. So, not only has US Central Bankers supported the ongoing nature of a structurally deficient US economy but they have done so through morally deficient means as well.
In 2010, in the below interview, I repeatedly stated that most had zero understanding of the tragedies that were being furthered by US Central Bank policies and that is why most believed the economic recovery narrative that was being forwarded back then versus understanding the reality that all measures taken back then only served to preserve the wealth of billionaires and the hundred millionaires while it would eventually destroy the wealth of everyone else. Clearly in 2021, we can now see that this was the result of such policies that most people believed were for their benefit and to foster an “economic recovery” for everyone when instead, it only fostered economic recovery for the 0.1% to 1%.
In 2010, correspondent James Caruso interviewed me about the structural defaults in the US economy that were not being addressed or repaired after the 2008 global financial crisis and how that would eventually lead to another disaster. Pay attention to the text that I’ve bolded in the below interview because they remain every bit as relevant in 2021 as they did in 2010. Here is that interview below:
On December 7, 2009, I sent out a warning from our Managing Director, J. Kim, to thousands of people via email about the deterioration of the global economy that he had discussed for years that the great majority of people were ignoring. In that message, I spoke of many serious warnings issued by J. Kim publicly since 2006 (and even earlier than 2006 to his clients) about the necessity to own physical gold and physical silver to avoid financial ruin in the coming years. Here’s some excerpts from that warning below:
In September of 2006, when Stephen Roach, a senior executive of Morgan Stanley stated that the commodity bull had ended, this man responded, “Everywhere in the media, you have pundits saying that the commodities Bull Run is over – including even chief global economists of major investment firms like Steven Roach of Morgan Stanley. THEY’RE ALL WRONG…I’ve dug deep enough down into the rabbit hole to know that gold will rise much, much higher in the future. Yes, oil has slipped to below $60 a barrel but again, this doesn’t mean that oil is done either.” Since then, gold did not plummet from $570 an ounce back down to $250 an ounce as many “experts” predicted, but instead rose to more than $1,200 an ounce as of December, 2009.
At the very start of September 2007, Mr. Kim stated, “Increased volatility in stock markets will occur as $370 billion in subprime mortgages re-set to higher rates, starting with $50 billion in September and $30 billion every month thereafter for the next 18 months to 2 years. Triple-digit losses in the Dow during single day trading sessions will become commonplace.” Just three months later, triple-digit losses in the DJIA happened almost daily or several times a week to open January of 2008, shocking the investment community.
In this same warning, J. Kim predicted that the global economy, and in particular the US economy, would experience great shocks in 2010-2011. While economic shocks have hit other countries in 2010, great economic shocks have not hit the US thus far in 2010, at least on the surface level. Look below the surface, and we have a completely different story regarding the state of the economy. JS now looks for these economic shocks to rise from below the surface into full view for all to see in the time frame of 2011-2013.
To understand why J. Kim has pushed out this timeframe (in 2010), I recently sat down with him and asked several questions.
James C: “Why do you think so many people today aren’t able to see the disaster that is coming to the US economy?”
J. Kim: “Despite the weapons of mass financial destruction that bankers have created and governments worldwide have coddled and shielded from proper regulation, the majority of people still incredibly do not understand the crime syndicate-like relationships among governments, corporations and banks. The public sees that the US markets are up a little over 10% this year and many are duped into believing that that the stock market performance means that the economy is recovering. And this belief is reinforced by idiot talking heads on TV like Jim Cramer that do nothing but misinform people. Sure, US markets have now risen by more than 36.79% since they crashed in 2008, a figure that sounds impressive on the surface level. Then combine this impressive sounding figure with US Fed Reserve Chairman Ben Bernanke’s national appearance on 60 Minutes, when he lies to the nation about inflation rates and about continuing to create more money out of thin air, and you have millions more that are converted into sheeple. How do I know? Because I talk almost every month to people in the US that tell me they believe the economy is recovering. So when people believe that inflation is still less than 2% because the Fed tells them to believe this, they look at a near 37% gain in the US markets in the last two years and believe that they have made substantial recovery in their pensions and IRAs and consequently believe the economy must be recovering as well! (by comparison, J. Kim’s Crisis Investment Opportunities newsletter(that he published back then) has returned more than 105.25% over the same time period, clobbering the S&P 500’s 36.79% return, and yielding very substantial REAL gains, even after the inflationary monetary effects of the US Federal Reserve’s schemes).”
James C: “So besides the government and bankers deliberately keeping people in the dark, why else do you think some, or even many, people believe the economy is recovering?”
J. Kim: “First of all, the Federal Reserve’s insane POMO (Permanent Open Market Operation) schemes this year (2010) are largely responsible for propping up the US market this year. In 2009, when I stated that the US would experience significant economic shocks in 2010 and 2011, I did not yet know the duration of the Fed’s POMO operations and how insane they were going to be. Although daily POMOs had already reached upwards of $6 billion and $7 billion per day as of mid-2009 (just for US Treasuries, but up to multiples of these figures when including US Treasuries and other debt-related financial products), many had speculated that the POMOs would soon end. Obviously, with projected cumulative POMOs of nearly $1,000,000,000,000 just between November 2010 and June 2011 (again just for US Treasuries), the Fed Reserve POMO scheme not only did not end, but it received an injection of steroids in 2010. So POMOs that were used to buy future contracts of US market indexes is a major factor that has kept the US market afloat at this juncture and may continue to keep it afloat for several more months. Rising stock markets have no correlation to a strong economy anymore due to scams run by Central Banks and due to gains that largely occur due to the devaluing currencies that these markets are denominated in. The best performing stock market of the past decade has been the Zimbabwe stock market. Still, it’s irrelevant if you made a quadrillion Zimbabwe dollar profit investing in the Zimbabwe stock market, as by 2008, a loaf of bread would have cost you 1.6 trillion Zimbabwe dollars.”
James C: “If the economy is really not recovering, then can you explain what is really going on?”
J. Kim: “Let me explain what is really going on with the economy with the following disaster analogy. In June of 1995, the Sampoong department store, a five-story building with four basement levels, suddenly collapsed in Seoul, South Korea, tragically killing 501 people and injuring 937 others. When the Sampoong department store was constructed, the owners, due to a desire to cut costs, made several fatal decisions. First, they decided to cut away a number of support columns in the original blueprint in order to install escalators. Secondly, in order to cut costs, the owners shrunk the original width of the support columns from the required 80cms to only 60 cms, an inadequate width to support the load of the building. In addition, the original blueprint called for only a four-story building but the owners built an additional fifth story that housed a restaurant with a very heavy heated concrete base that quadrupled the load of the original building design.
Two months before the building collapsed, worrisome cracks appeared in the ceiling of the south wing’s floor. On the day of the collapse, cracks as wide as 10 centimeters appeared in the top floors of the building five hours before the building collapsed, but the owners hid this information from its patrons and refused to shut down and/or evacuate the building as they did not want to lose its daily revenue. When it became clear that the building was going to collapse, senior executives of the department store fled without warning any of the patrons still inside the building. An alarm to evacuate the building was only sounded when the building started to make loud cracking sounds, just 7 minutes before its collapse at 5:57 PM despite signs of an imminent collapse being clearly visible more than five hours prior. City officials Lee Chung-Woo and Hwang Chol-Min, in charge of overseeing the construction of the building, were responsible with concealing the illegal changes to the original blueprint designs and were later charged with and convicted of bribery.”
“Amazingly, the above story serves as nearly a perfect analogy for the US economy. The government and bankers laud a rising stock market as proof that the economy is recovering. They go on record stating that inflation is less than 2% when in reality it is more than four times higher. They state unemployment is less than 10% when it is nearly 23% [Editor’s Note: These statistics all apply to the year in which this original interview was conducted, 2010]. Thus, to many people, the economy appears as the Sampoong department store’s exterior appeared to the public right before its collapse, structurally sound and with a solid exterior. This is the reason why 40,000 people a day visited the department store despite its fatal structural integrity problems. The government and bankers are just like the Sampoong department store owners, actively concealing all warning signs from the public and selling them an illusion that all is okay when instead, the economy is heading for collapse. Just as the Sampoong department store owners constructed a crappy building destined to collapse due to excessive greed, bankers with the help of government officials, constructed dozens of financial derivative products destined to collapse due to their excessive greed as well.”
“The US regulators that also see the impending cracks in the economy, are just like Lee Chung-Woo and Hwang Chol-Min. They receive inordinate pressure and bribes from the bankers to look the other way and keep the public in the dark about the impending doom that is coming. In the case of the Sampoong disaster, when the contractors refused to continue work on the building when the owners changed structural regulations that endangered the integrity of the building, the owners fired the contractors and hired ones that would cut corners. US regulators that are honest and that try to protect the American public, like Brooksley Born, received the same fate as the original Sampoong contractors and are also fired or forced to resign. When the entire system is corrupt, even the rare good person can’t save disasters from happening. Thus, the public is none-the-better-off despite the presence of regulators that are supposed to protect the public’s interests and safety, but in reality, protect the greed and profits of companies that exploit the public’s interests.”
“And finally, the economy itself is like Sampoong’s interior. It is replete with cracks and fractures that warn us of the disaster ahead. But even so, a large percentage of the masses still remains ignorant because the banker/corporate/government three-headed monster keeps the people’s vision in a tunnel by pummeling the public with a constant stream of propaganda on MSNBC, newspapers, and financial talk shows. In Seoul, Sampoong’s owners distracted the public’s attention away from the developing disaster with stores fully of luxury goods. So when the US economy finally experiences shocks in the future more disastrous than those in 2008, as was the case with the Sampoong department store collapse, many will believe that now warning signs had existed despite the evidence that exists to the contrary today. And I’m quite certain the media, just as they did in 2008, will stupidly ask the same questions they did back then, such as “How did this happen?” when in fact, all the answers stare them in the face right now. With the Fed’s POMO schemes, regulators that aid and abet fraud, and governments and bankers that conceal truth from the public, the combined effect of these actions is just to delay disaster for another year or two. So that is why I say now that disaster will visit the US sometime between 2011-2013.”
