Jim Rogers Warning: Things are Going to be Horrible There is a Bubble in Everything and it is Worse Than 2008

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Everything and it is worse than 2008

If not for QE and the forever low interest rates ,the Dow Jones would be 15,000 at most , so the Fed Reserve can NEVER allow asset bubbles to deflate and I mean NEVER……not with all the debt in the public and private sector and the effects of technology, globalism and demographics as they are. Failure to keep the air inflated will result in a never before seen global catastrophe . Banks create money from loans and this forms 97% of our money supply. Bank loans create money and the repayment of debt to banks destroys money. This makes the money supply very dynamic and unstable.

The FED is full of MBAs , Masters of BUBBLE Administration….except they couldn’t find a bubble. The economy is dysfunctional, totally dependent on continued Fed support in the form of jawboning and interest rate cuts, suffering intensely from rapidly declining macro factors like shipping, retail,and manufacturing all heading south. The low interest rates will crater the pension funds. This will force an upward spiral in property taxes to compensate .

That bubble will be food prices as crops are being destroyed by record cold , floods ,fires and other environmental catastrophes all over the world. You can take on room mates if rent or house prices go up. You can combine trips if gas goes up. If food goes up you are limited in how much less you eat. Food prices will double then triple in the next couple of years. History says it will happen. I would gladly be wrong as it will mean mass depopulation. The Maunder Minimum killed 30 to 50 percent of the population to starvation and plague. These people were hardy individuals who could forage fish and hunt. They starved and there were only 750 million then. Imagine the abundance of wildlife fish and natural forage if only 750 million people were on the planet. Europeans resorted to killing their children and neighbors for food.

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Besides the food prices bubble , the housing bubble seems to have been reblown . There are many locales in California where prices have nearly doubled the peaks set in 2006/2007, or exceeded them even. In the real estate boom, new money pours into the economy from mortgage lending, fueling a boom in the real economy, which feeds back into the real estate boom.

The Japanese real estate boom of the 1980s was so excessive the people even commented on the “excess money”, and everyone enjoyed spending that excess money in the economy. In the real estate bust, debt repayments to banks destroy money and push the economy towards debt deflation (a shrinking money supply). Japan has been like this for thirty years as they pay back the debts from their 1980s excesses, it’s called a balance sheet recession.

The real estate booms are a global phenomenon. Australia and Canada are soon going to learn the hard way what happens in a real estate bust. The real world has been trying to tell us real estate is not a permanent store of wealth. The fictitious financial wealth in real estate disappears quicker than it is created . in the 1990s the bust happened in Scandinavia and Japan . In the 2000s it happened in Iceland , Dubai , and in 2008 in the US . in the 2010s it happened in Ireland Spain and Greece. so get ready to put Australia, Canada, Norway, Sweden and Hong Kong on the list for future busts …

Eventually demographics will take care of this. All the Boomers that could afford these homes will die off, as supply comes into the market prices will drop,or their kids will move into their homes, rents will drop. Or rates finally go up, and prices will drop. Real estate, with the exception of the few places in the USA seeing population growth, will be a bad investment for the foreseeable future , because demographics say so. What is going to give? The same thing that has been giving much more over the last 5 years and counting. It’s the Renters! Leading to the current homeless crisis that is getting worse and worse month after month year after year. Half the country will be homeless leaving landlords with a lot of empty units! besides CEOs I don’t know who is seeing their wages rise.

Corporations have been cutting in a million ways with less benefits, forcing you to contribute more to your health care, giving you worse plans requiring more out of pocket, etc… Plus life has gotten so much more expensive in the last ten years with higher real estate taxes, food prices, insurance costs all way up, education and even the avocado toast are more expensive … So Keep it up America, the race for the bottom is on!

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Things are going to be Horrible

In July the 12th , 2019 in an interview with Money and Markets legendary investor Jim Rogers launched his latest warning to America : things are going to be Horrible he said . the longest bull market run in history, will be short-lived from here on out . “Later, this year or next year when the economies around the world are getting bad, Mr. Trump is going to blame everything on the foreigners, the Chinese, the Germans, the Japanese, everybody, and then the trade war will come back and then it’s all over,” Rogers said.

“Mr. Trump is going to come back. Mr. Trump believes in his soul and his brain that trade wars are good and that he can win trade wars,” he said. “Mr. Trump knows that he is smarter than everybody else so he knows that he can win a trade war, and it will come back strong. When the American economy gets bad eventually, he’s going to blame it on trade and the trade war and it’s going to be terrible.”

“The way these things have always worked, in 2007, Iceland went bankrupt, and most people had no clue about that and didn’t know or care, and then later though, Ireland went bankrupt. Few more people noticed. A little while later after that, Bear Stearns went bankrupt. A few more people started noticing. A few weeks later, Northern Rock went bankrupt, then people started catching on. Eventually, Lehman Bros. went bankrupt and by then it was on the evening news all over the world.”

A Stock Market Crash is now Inevitable

Even though all of the economic numbers screaming that the next economic collapse is coming, the stock market just continues to soar to new record highs. In fact, the Dow Jones Industrial Average closed above 27,000 for the first time ever on Thursday. Investors continue to relentlessly believe that bright days are ahead even though we are on the brink of a war with Iran, we are in the middle of a trade war with China, California has been hit by more than 10,000 earthquakes over the past week, and many experts sounding the alarm that economic collapse is dead ahead.

There has certainly been a lot of craziness on Wall Street in recent years, but the truth is that stock prices have never been as absurd as they are right now. It is inevitable that a very painful stock market crash is coming, but for the moment investors are celebrating another historic landmark. But if things are so good, then why is the Federal Reserve talking about cutting interest rates? Sadly, the truth is that the Federal Reserve is considering rate cuts because the economic numbers have been disastrous lately.

Global trade has fallen to the lowest levels that we have seen since the last recession, and manufacturing activity just continues to plummet. Here in the United States, manufacturing activity just hit the “lowest level in nearly three years”. Meanwhile, JPMorgan’s Global Manufacturing PMI just plunged to the lowest level in nearly seven years. But in the bizarro environment that we find ourselves in, investors see those absolutely horrible numbers as evidence that the Fed will soon cut interest rates, and that means it must be a good time to buy stocks. Every bad economic number just seems to fuel the feeding frenzy, and there certainly have been a lot of bad numbers in recent days. We got many terrible news, but for many investors that is a prime buying signal.

Everywhere we look we see signs of economic collapse. The auto industry is mired in the worst slump in a decade, home sales have slowed dramatically all over the nation, and we are pace to absolutely shatter the record for most retail stores closed in a single year. In fact, on Thursday we learned that another major retailer is completely liquidating. In fact, even the bond market is flashing warning sign after warning sign. But in an environment where “bad news is good news”, that is just another indication that this is a perfect time for investors to gobble up stocks like there is no tomorrow. For months, I have been documenting the numbers that indicate that a new economic collapse has already begun. But until the next stock market crash actually happens, the irrational optimists on Wall Street are just going to continue to mock those of us that are warning that the party cannot continue indefinitely.

Sadly, when the party on Wall Street finally ends it is likely to happen very suddenly, and the pain will be off the charts. Let me say this one more time. You only make money in the stock market if you get out in time. If you are still holding on to your stocks after the big crash happens, it is not going to matter that the Dow once hit 27,000, because you will never see any of the money that you could have made if you had gotten out at the top of the market.

 

 

 

 

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