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All Of The Economic Momentum Is Moving In Just One Direction Now
By Michael Snyder
Earlier today, I was greeted by this jarring headline when I visited the Drudge Report: “BONDS FLASH RECESSION WARNING”. These days, it seems like the “R word” is being thrown around constantly, but at this time last year everyone was celebrating how well the economy was doing. Unfortunately, we have witnessed a dramatic shift in recent months, and we just got some more really bad economic numbers. Thanks to those bad numbers and an increasing amount of anxiety about the trade war, the Dow Jones Industrial Average fell another 237 points on Monday. That means that we are on pace to potentially see the Dow fall for a sixth week in a row, and that is something that hasn’t happened since the last recession.
But right now investors are far more spooked about what is going on in the bond market. According to Mish Shedlock, we haven’t seen this many yield curve inversions “since the start of the Great Recession”…
On Friday, US Treasury yields plunged at the mid to long end of the curve providing the most inversions since the start of the Great Recession. This is the biggest recession warning since 2007.
In so many ways, what we are witnessing at this moment is very reminiscent of the conditions that prevailed just prior to the last financial crisis.Back then, the economic numbers were definitely starting to slide, but most Americans didn’t think that we were heading toward big trouble. But those that understood what was happening were sounding the alarm, and the same thing is happening today. For example, the following comes from a CNBC article entitled “Morgan Stanley says economy is on ‘recession watch’ as bond market flashes warning”…
“Recent data points suggest US earnings and economic risk is greater than most investors may think,” wrote Michael Wilson, the firm’s chief U.S. equity strategist.
Specifically, the stock strategist highlighted a recent survey from financial data firm IHS Markit that showed manufacturing activity fell to a nine-year low in May. That report also revealed a “notable slowdown” in the U.S. services sector, a key area for an American economy characterized by huge job gains in health care and business services.
A Minute to Midnite Administration
A Minute To Midnite Show HostGlobalists Only Need One More Major Event To Finish Sabotaging The Economy
By Brandon Smith
As I predicted in my article ‘Trump Trade Wars A Perfect Smokescreen For A Market Crash’, published in March of 2018, as well as in my article ‘The Trade War Distraction: Huawei And Linchpin Theory’, published in December of 2018, the US/China trade dispute has escalated into an all out war with no end in sight. The claims of many analysts and skeptics a year ago that the trade war would be over quickly and that China would fold to US tariffs has been proven incorrect. The reason why these analysts got it so wrong centers primarily on their misunderstanding of the true purpose behind the events.
The goal of this war is NOT to balance the US trade deficit or pursue more fair circumstances for US exports and imports. The intention of the Trump Administration is NOT to fight back against Chinese “exploitation” of US markets, this kind of rhetoric is pure theater. Nor is it Trump’s intention to undermine globalist structures or agreements in order to bring back American manufacturing (a carrot that has been flaunted in front of American faces for a long time to lure them into supporting destructive policies such as dollar devaluation). On the contrary, the real purpose of Trump’s trade war is to provide a distraction massive enough to cover for the controlled demolition of the US economy and parts of the global economy by globalists and the central banks they control.
The tariff soap opera and most of Trump’s other foreign and domestic policies are eerily similar to those of Herbert Hoover just before the advent of the Great Depression. This is not a coincidence. The narrative for an economic collapse rivaling that of the Great Depression has been set, and the root circumstances are very similar.
Since the crash of 2008, the US has been suffering a slow grinding decline in fundamentals (the collapse of an empire often takes time). The response of central banks was to slow the crash using stimulus measures and near zero interest rates, but this strategy was not meant to reverse US economic decline. The purpose of QE was meant to inflate an even larger bubble than before, one that would encompass every aspect of the economy including the dollar; a bubble that when popped would devastate the US specifically and create panic around the world.
Now the stimulus phase of the globalist agenda is over. US M2 money supply growth has been decelerating and is hovering near 10 year lows, while stimulus measures have evaporated in most countries except China. Global dollar liquidity has been dwindling as the Federal Reserve continues to cut its balance sheet unabated.
This would explain why US equities are struggling to stay afloat despite the fact that corporate buybacks of stocks have increased to historic highs in 2019. Central banks, most importantly the Fed, are no longer propping up the system; the life support has been pulled and the parts of the economy that have been dependent are taking their last breaths.
The trade war situation as it is now is not enough of a distraction in my view, however. At least one more major event with global ramifications (or perceived global ramifications) is needed by the elites before they can implode the ‘Everything Bubble’ without taking the blame for the consequences.
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