Ok. Fair warning. I can think of far more than 6 impossible things before breakfast. Brekkie’s done and I’m working on bucket o’ coffee numero dos.
This rambling is based on too much gin and enough of quinine-based club soda to float the entire USS Debt Fleet. A much better writer told me that gin is the best thing to jump start the creative juices. Must be the juniper berries.
The VIX was my indicator back in 2007 shouting the market was going to hell. The VIX jumped off my screen and beat me around my head and shoulders, screaming at me to GTFO of the market. Not deaf moi, just ignorant.
I didn’t realize the significance of VIX racing from 20 to 60 and back in a day or two. What was it telling me? The market was pricing in a drop in DOW S&P and NAZ of 50-75%. I didn’t exit market and took a 65% loss. In dog years that around $1.5-2,000,000. The exact number is not known, but my loss carry forwards are still sitting in the 1040 waiting to be used when silver goes to the moon.
The crazy part of it was I hadn’t yet gone cold turkey on the market in 2009. In no particular bit of trading wisdom I got into triple leveraged financial and silver gold ETFs. You know the names. The rise in all markets from 2009 to 2011 recovered around 50% of my losses.
Then April 2011 hit. Trading silver and gold ETF at the moment that metals dropped off a cliff handing me a beefy loss, I decided to exit paper and go 100% physical gold and silver. I’ve been there since. A small exception was trading JNUG and DUST during their wild rides of 2016 built a very profitable and very fast return. I added to my stack and bought our home debt free with that boon.
A quick trip in the wayback machine to the tech wreck of 2001 showed the same effect on my portfolio but far worse for the market. The DOW down 50% and NAZ was off 80%. It’s pretty telling that across the boards the unicorn market makers dropped over 50-80% causing $6 trillion in cumulative losses yet people rode those losses into the ground. They thought this time would be different. Just a wafer thin clip of the net worth.
But now people are saying “This Time It’s Different”. I hear them. They populate every radio and TV station; every internet channel touting sure winners. They shout
“This time it’s different”
Yes. Hell yes it’s different. By at least half an order of magnitude it’s different; and worse
The systems that were damaged and bloated and corrupted over the last 12 years are like a 70 year old 350 lb man on a whisky binge. BP 180 over 120, pulse thready, diabetic, suffering COPD, sustained only by massively expensive medical intervention. Fat man just caught COVID 19, aka The Bug.
That man is the stock market. That man is the currency market. That man is the bond markets. That man is all the banks in the world.
Fat boy’s down heavily in March, with a slight rebound in April because any level of health was better than the dead-man-walking condition when he first caught the bug. This man is now laying on a hospital bed, wires and IVs in each arm, intubated, on a ventilator, going through the extremis that others describe as the end of life condition for those many who expire from the virus.
This market is not a bear trap. It’s on death watch. The 2020 2nd and 3rd quarters of every market, every country, every bank, every bond, every loan and every live human will suffer from the worst crash in human history.
There might have been worse crises. A few come to mind
Maybe the VEI 7 explosion of Santorini that changed world history around 1,600 BC.
It could be like the opening of the Bosphorus strait that flooded the valley in what is now the Black Sea, filling up 7500 years ago. Noah’s Arc fabled great flood resulted from the violence of that event.
Not as bad as the Toba VEI8 explosion around 76,000 years ago that almost caused extinction of human life as we know it. Or a Yellowstone Super volcano eruption that’s been talked about recently.
It’ll probably be worse than the global deep freeze of 1812-1816, a period dubbed the Year Without Summer, a time when VEI7 Krakatoa went off. Our coming deep freeze, failures of crops and collapse of human population that will result from the Solar Global Minimum that we are entering now will be dramatically exacerbated as the EROI of oil goes under 10. Civilization starts at an EROI of 11 and above.
Oil is everything. The last 150 years of human progress, population growth, agriculture, technology and industrialization of the planet stems from oil. Without oil we heated our homes, cooked our food and lit our way with wood, coal, buffalo chips and bees wax.
The destruction of pricing mechanisms coupled with 50-90% drop in oil consumption will cap off the toll on human life, the global economies, the banking system as we know it and all forms of debt when oil is not worth pumping out of the ground
OK. Admittedly that’s grim. Maybe it won’t be that bad. Maybe. I sure hope not. Maybe it’s the gin talking. But aside from the ELEs noted above, this stock market, all banking–central or otherwise, all debt and much of our DIGIFIAT progress over the last 50 years will go Tango Uniform in this era.
The center is not holding. It’s not going to hold. It cannot hold because all sides of the human equation are in total disagreement as to who’s fault this is. We are barely evolved life forms who cannot agree on much of anything including what to order on a menu or the color schemes in a brand new $90,000 Ford F 150 financed at 0% for 7 years.
We cannot afford even a 0% rate loan because someone didn’t run the numbers as the F and I slickster talked us into the fact that it’s only money and THIS is a mighty F-150. It’s bigger than mere money. As if the impact of that $1,100 monthly payment on our budget is a bagatelle when compared to putting food on the table and unemployment payments cover only half that. My neighborhood is filled with F-150s.
With this crisis I doubt if the market is going to be supportive of our calamitous stupidity as the repo men cruise the ‘hood looking to hook up a lone Ford in the driveway
The markets are honey badgers. They don’t care; they’re honey badgers.
The honey badger market will go to ground. That badger market will shit on your bed, eat your food, destroy your personal lives and everything you built. It won’t care because it’s honey badger. We’ll see DOW maybe 5,000 and NAZ at around 1,200 when the honey badger has its way with us. DOW 5000 will be a good day in the trading pits but gold at $5,000 might stave off even more serious harm
This self fulfilling cycle of market devastation feeds on its destructive cycle like Worm Ourborous. It’ll continue until it, like the virus, has burned its way through every market, every bank, every country, every state, every bank account, every center of government and every human being on the planet.
This unvirtuous cycle; call it the Fourth Turning or just a total FUBAR, is a turning without any virtue. It will not end until it ends and we’ll not be able to jack shit about it. The Long Now is about to get really real. We’re just proles riding in steerage aboard the Snow Piercer as it circumnavigates a world encased in ice.
Basically nothing will save us from the wreckage that is coming our way. The greatness AND the excesses of the last 500 years are coming home to roost. That is unavoidable if the Global Solar Minimum is as bad as I think it might be.
Andrew McLeod is right but is not thinking big enough. If he did he’d not be doing podcasts. He’d be taking all his gold and finding a warm weather island and GOTS. Rob Kirby sees it and knows gold is the metal place to be, safely aboard a 14 passenger jet owned by one of his billionaire clients, off to a far away country where the rule of law still operates. Marin Katusa knows what is happening. He sees the long game. John Rubino’s been talking about this even for the last 5 years.
We’ve been peddling in place on our Peletons, hoping to get somewhere.
This market’s hard on people. You can’t stop what’s coming. It’s not waiting on you, if you think it is, that’s just vanity. This market’s got some hard bark on it.
And if you’re wondering where to git yer gold. You git it at the gittin’ place