A Tale Of Two Crashes
By now, regular readers are familiar with the eight-year, bubble-and-crash cycles in our markets and economies which are manufactured by the crime syndicate known as “the One Bank.” The reason the cycles are roughly eight years long has also been explained: to coincide with the U.S. political cycle, and the rotation of its two puppet parties .
With the last crash being the almost-terminal Crash of ’08, readers have been warned on many occasions that the Next Crash is scheduled for this year. With that manufactured collapse now being only a few months (weeks? days?) away, it is instructive to compare these two cycles of financial crime.
The analysis of patterns can yield insights in two opposing manners. Value can be gleaned in looking at how these repeating cycles are the same, but perhaps more revealing is how and why they differ. In this particular piece, the focus will be on (hard) commodity prices in each of these cycles, and how and why the bubble-and-crash pattern have been significantly different in this respect.
Most readers will recall the spiral in prices which occurred in nearly all commodity markets – hard and soft – right up to the eve of the Crash of ’08, as seen in the table above. This analysis will examine strictly hard commodity prices, since soft commodity markets (and their prices) are affected by several other variables totally outside the economic cycle.
There were two reasons for the spiral in commodity prices which occurred leading into the Crash of ’08, but only one of those reasons is ever discussed by corporate media. The known reason is a massive spike in global demand, the catalyst for which being the rapid industrialization of “BRICS” nations, as well as a number of other, so-called “Emerging Market” economies.
The rapid dilution/debasement of the world’s paper currencies, especially in the West, has been hidden from us. These corrupt regimes have had the audacity to refer to this destruction of our currencies as“competitive devaluation” – a race to see which central bank can destroy its own currency first.
The concept of “dilution” is well understood in the corporate world, when it comes to the paper instrument known as “stock.” When a corporation prints more stock, (all other things being equal) it thus dilutes its share structure, and all shares lose value.
Incredibly, the concept of dilution is virtually entirely unknown with respect to the paper instrument known as “currency,” despite the fact that the principal of dilution applies in an identical manner. When a government (via its central bank) creates more currency, all existing currency loses value. This is the true meaning, and correct definition of the term “inflation.”
Western governments, in particular, were already accelerating the pace of their currency-creation (andcurrency dilution ) in the years immediately prior to the Crash of ’08. Therefore, the great spike in commodity markets which occurred immediately prior to the crash was not a simple function of demand. Rather it was the more complex product of demand and (central bank) inflation.
It is important that readers are fully clear on the fact that these commodity prices are supposed to be strongly influenced by the extremely excessive money-printing of our central banks. This explains how and why it was necessary (for the One Bank) to modify the 2009–2016 bubble-and-crash cycle.
The importance of this point becomes even more apparent when we view a chart of the hyperinflationary explosion of U.S. money-printing. This is the infamous “helicopter drop” which B.S. Bernanke warned and promised the world, back when he was first appointed as a Federal Reserve Governor. Below is the last, legitimate representation of the U.S. monetary base, before the chart and data were falsified beyond recognition, in order to hide the unequivocal picture below.
As has already been explained on numerous occasions, this is a chart of a currency which has already been hyper-inflated ( past tense ). In any legitimate monetary system, the supply of money is a virtually flat, horizontal line – as we saw with the U.S. money supply, until approximately 20 years ago. The extreme, parabolic curve leading into a near-vertical line is the mathematical and economic representation of hyperinflation. The U.S. dollar is already fundamentally worthless, beyond any possible argument .
Federal Reserve-generated inflation was already a serious factor for the U.S. (and global economy) in the years leading up to ’08. Yet, as the chart above indicates, U.S. dollar-based inflation should have been a much more significant factor in the current 2009—2016 cycle. Why has this not been the case?
Once again, there are two answers to this question. Once again, we never see the second answer from the mainstream media propaganda machine.
Part of the answer is, again, demand. Prior to the Crash of ’08, demand for most commodities was near or at record levels. Conversely, in the current eight-year cycle we have seen what could be described (at best) as anemic demand. In the fantasy-world of the mainstream media, demand has “fallen.” In the real world, it has been deliberately destroyed.
Many readers will be skeptical of such an assertion. How can a crime syndicate, even one as large and malevolent as the One Bank, destroy global demand for commodities? In conceptual terms, the answer is actually quite simple. If one sabotages many of the world’s economies (especially larger economies), then obviously those nations will consume far less commodities, and aggregate demand will fall.
In fact, readers have already seen it explained and documented how the One Bank has engaged in extreme acts of economic terrorism against first India, then Russia, and now even China. In each of these three campaigns of economic terrorism, sabotaging the exchange rate of that nation’s currency has been a large or central part of the overall terrorism.
Again, this will come as no surprise to regular readers. The Big Banks of the West—the principal tentacles of crime of the One Bank—were recently convicted of serially manipulating all of the world’s currencies, going back to at least 2008.
Showing the endemic corruption of our entire system, these financial terrorists were destroying the Russian ruble at precisely the same time they were receiving their slap-on-the-wrist fines from our “regulators.” The One Bank would never allow a little thing like a sham-prosecution to interfere with “business.”
What hasn’t been reported in previous commentaries is that this rampant economic terrorism (primarily U.S.-based) isn’t restricted to just these three, major nations, but rather it is global in scope. Look around the world, and see how many nations outside of the corrupt West are currently in the midst of a “currency crisis,” or at the least, dealing with what is called (by the media) a “weak currency.”
One does not have to be Sherlock Holmes in order to connect the world’s most notorious currency-manipulators to each and every one of these “currency crises.” Does no one think it strange that the bankrupt Western nations, with their hopelessly crippled economies, and near-zero interest rates have (supposedly) the world’s “strongest currencies,” while the healthy and productive nations of Asia, South America, and elsewhere all have “weak currencies,” despite much higher interest rates? Not in the feeble world of the mainstream media.
Not once will you see it suggested that any of these “currency crises” could be even slightly connected to the serial manipulation of all of the world’s currencies, by the convicted currency-manipulators of Western Big Banks. Why is such serial currency manipulation completely censored by the corporate media propaganda machine?
The answer to the previous question is, in fact, also the answer to the following question. Why is currency manipulation such an important element in “the tale of two crashes?” It is because if you manipulate the exchange rate of a currency higher, the price of everything else dominated in that currency automatically goes lower.
Each time the One Bank pushes the exchange rate of the worthless U.S. dollar up to an even more absurd level, the price of every other asset on the planet valued in dollars (including all commodities) goes lower. Via the one tool of currency manipulation, these economic terrorists can literally destroy economies, and simultaneously move any and all prices.
Manipulate the value of currencies higher, and “prices” fall. Manipulate the value of currencies lower, and “prices” rise. Now take a look at an updated table of commodity prices:
Based upon the market principle and the economics principle and the mathematics principle and the common sense principal of “dilution,” commodity prices (in U.S. dollars) should have been exploding higher at a much more rapid rate during the current bubble-and-crash cycle than during the previous one. The exponential explosion in Federal Reserve money-printing drowns out any and all changes in demand, by literally orders of magnitude.
What we see, however, is nothing more than an anemic rise in prices, which abruptly halted in 2011, at which point all of these commodity markets began descending lower in price. How? Why?
>> Read Part II: A Tale Of Two Crashes
The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott ...
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Dear Jeff,
I think that you should look at the amount of the monetary base that is actually at work in the US economy and not the total monetary base. US$2,3 trillion is stashed as excess reserves at the Fed. Thus while hyperinflation may be coming it is unlikely to be soon.
perhaps you would like to read the following and give me a ring.
www.talkmarkets.com/.../negative-interest-rates-are-insane