"Running on Empty" (Excerpt)

"Running on Empty", Part IV

How the War between Russia and Ukraine is Destroying the Petrodollar System

by Contemplations on the Tree of Woe

Excerpt: "Welcome to Part IV of "Running on Empty," my four-part analysis of the Petrodollar system.

Part I of this series explained that the US dollar is the world’s first reserve currency that is not backed by precious metals. Instead it is backed by other people’s oil. Because of a secret treaty between the US and Saudi Arabia, petroleum can only be purchased with dollars. Every country needs oil, so everyone country needs dollars and sells imports to the US to get them. Demand for dollars has made the USD the primary American export, allowing the US to deindustrialize and financialize its economy.

Part II explained how the petrodollar has grossly enriched American asset holders (stocks, bonds, and real estate) and painfully impoverished American wage earners. Under the petrodollar system, dollars are created by private banks for profit. These dollars are recycled into the economy by OPEC nations, causing stocks, bonds, and real estate to rise. This profitable exchange is enforced by American military might, which punishes any country that seeks to exit the petrodollar system.

Part III explained that for the petrodollar system to function, America needs to be able to project power worldwide to secure international trade and enforce the system. America secures global commerce and projects military power by commanding the World Ocean, by which 90% of all goods are trafficked. To overcome America’s naval supremacy, both Russia and China have sought to establish control of the World Island, the Eurasian supercontinent that houses most of the world’s population and resources. The Russo-Ukraine War is a proxy war between the uncontested master of the World Ocean (America) and the would-be masters of the World Island (China and Russa).

In Part IV, we’ll discuss how faulty expectations by both sides in the Russo-Ukraine War have led to sanctions of such severity might cause the petrodollar system to break down.

Please view Part IV of this excellent series here:

- https://treeofwoe.substack.com/

"Economy About To Get Very Scary - The FED Has Created A Mad Max Meltdown; Housing Market Is Finished"

Jeremiah Babe, 6/15/22:

"Economy About To Get Very Scary - 

The FED Has Created A Mad Max Meltdown; Housing Market Is Finished"

Canadian Prepper, "Warning: The Bubble Is Bursting!"

Full screen recommended.

Canadian Prepper, 6/15/22:

"Warning: The Bubble Is Bursting!" (W/Special Guest)

"Talking with a friend about the coming financial crash."

"20 Signs That Show That The U.S. Economy Is Starting To Fall Apart Very Rapidly"

Full screen recommended.

"20 Signs That Show That The U.S. Economy 

Is Starting To Fall Apart Very Rapidly"

by Epic Economist

"The U.S. economy is falling apart at a frightening pace. Right now, pretty much every piece of hard economic data is telling us that a historic slowdown is taking place, and that is resulting in dramatic consequences for millions of Americans. Every sector of the economy is starting to falter, and the population is having to cope with the highest cost of living in nearly four decades. Even financial markets that performed well during the past few years despite the effects of the health crisis are currently experiencing a meltdown. At this point, everyone can see that we're officially entering another devastating economic downturn that can erupt a lot sooner than previously expected. Financial and economic losses are rising to the tune of trillions of dollars with each passing month. Conversely, the U.S. debt load is soaring to levels never before seen in human history. Do you have any idea how alarming that is?

The U.S. is over $30.4 trillion in debt, which makes up for the greatest debt bubble in the history of the world. This means that our debt burden is bigger than the GDP of China, Japan, and India combined. According to FEE calculations, if every single household in America was forced to pay off that debt, each one of them would have to disburse over $231,000, or each person would have to pay around $90,000. Actually, even if we paid $1 per second of the year, it would still take 713,470 years to pay down that entire sum.

Every day, we spend more than $900 million on interest payments on that debt. With that money, we could afford to pay for a 4-year college degree with all expenses included for around 27.464 graduating high-schoolers on a daily basis. These figures show us that we’re not investing in our future but trapped in a bubble of debt that only grows bigger each year.

According to a new CNBC CFO Council survey, 100% Of financial officers expect a recession to start in the months ahead. “No CFO forecast a recession any later than the second half of next year, and no CFO thinks the economy will avoid a recession,” reads the report. Have you ever heard of a survey where 100 percent of the respondents agree? It seems that confidence in the U.S. economy is at an all-time low.

In essence, everyone has started to realize that the U.S. economy is clearly moving in the wrong direction. Every month that goes by, we continue to see more and more evidence that a historic economic collapse is underway. The "Everything Bubble" is now officially bursting, and the "Perfect Storm" economists warned about is not on the horizon anymore. It is already here and it is safe to say that our lives will never be the same again. We’re about to experience the consequences of decades of exceedingly reckless decisions, and the chaos that's coming will be extreme.

We must start paying attention to all of the alarm bells that are ringing because things are really getting out of control out there. For that reason, in today's video, we compiled some astonishing numbers that reveal the rapid decay of the U.S. economy."

 - https://www.epiceconomist.com/

"The Fed Goes Big"

"The Fed Goes Big"

by Brian Maher

"Word dropped at 2 p.m. Eastern time…Consensus opinion had projected the Federal Reserve would elevate its target rate 50 basis points today. Yet the monetary authority alighted upon the more aggressive 75 - its boldest increase since 1994. Thus the federal funds rate squats within a range of 1.5–1.75%. That is far beneath the 8.6% consumer price inflation currently going. And the Federal Reserve itself anticipates heavier action to come. Reports CNBC: "According to the “dot plot” of individual members’ expectations, the Fed’s benchmark rate will end the year at 3.4%, an upward revision of 1.5 percentage points from the March estimate. The committee then sees the rate rising to 3.8% in 2023, a full percentage point ramp higher."

Just so. And the Federal Reserve honked today that it is "strongly committed to returning inflation to its 2% objective.” Yet is it?

Get Real: Unless today’s inflationary fever breaks by 2023, even a 3.8% rate might not lower the mercury much. And it is far from clear that today’s decision will effect any cooling whatsoever. Consider… The real interest rate is the nominal interest rate subtracting inflation. Thus we discover that the real interest rate runs at a deeply negative 6.85% (1.75% - 8.6%).

Assume for the moment the Federal Reserve attains its projected 3.8% rate next year. Inflation must recede to 3.7% next year for the real rate to exceed zero - and only by a whisker. We do not believe inflation will chill to 3.7% by next year. We further expect the real rate to remain minus. The Federal Reserve will peg along at an inadequate pace.

Why the Real Rate Matters: The real interest rate is labeled the real interest rate because it penetrates numerical mists and scatters statistical fogs. It clarifies. As explains Jim Rickards, “Real rates are what determine investment decisions.”

A 10-year Treasury bond yielding 7% might reel you in, for example. But what if inflation averaged 8% over the same period? Inflation would gobble your 7% yield - and a bit more into the bargain. You would require a 9% yield merely to paddle ahead of inflation.

Meantime, you may balk at a 10-year Treasury bond yielding 3%. But if inflation runs at 2%… then your 3% Treasury yields you 1%. A slender gain, yes. But you escape with your skin - and a slight surplus. Thus your 3% 10-year Treasury… when inflation goes at 2%... infinitely bests a 7% Treasury if inflation is 8%. Shall we rank today’s real rate against the real rate of 1981?

Miles and Miles From Another “Volcker Moment”: The late Paul Volcker is widely credited with freezing out inflation. In 1981, inflation was going at a 10% sizzle. He elevated the federal funds rate to an impossible 20% that year... to restore the normal 98.6 degrees. Thus the real 1981 rate was a fever-breaking 10% (20% - 10%). Today’s real rate gutters along at negative 6.85% - a full 16.85 percentage points beneath 1981’s.

You now see that Mr. Powell is miles and miles away from any authentic “Volcker moment,” despite what the press might argue. As our former colleague David Stockman styles it: "What we’re seeing is powerful inflationary momentum that will take years to vanquish… The only thing that can slow down the inflationary freight train, therefore, is gobsmacking three-digit rate increases capable of shutting down new borrowing completely, thereby materially draining demand from overheated domestic product and labor markets."

Today’s 0.75% elevation therefore fails Mr. Stockman’s rigid requirements. This noted Cassandra continues, wringing troubled hands: "That’s not about to happen, of course. Instead, what lies ahead is a tangle of start-and-stop anti-inflation maneuvers by the Fed that will only prolong the inflationary disaster now upon us, even as the latter is inexorably destined to end in a hair-curling recession." And so we conclude that inflation will race along. But let us sketch the scene in colors darker yet…

Is the True Inflation Rate 16.8%? Mr. John Williams of ShadowStats exposes “flaws in current U.S. government economic data and reporting.” Thus this Williams fellow penetrates the whim-wham that government throws up to conceal true inflation.

If the United States government calculated inflation as it calculated inflation in 1981… argues Mr. Williams… today’s 8.6% inflation would run to 16.8%. That is, today’s 8.6% inflation actually exceeds 1981’s 10% inflation - if gauged by 1981’s thermometer settings.

We therefore discover that today’s real interest rate may sink as low as negative 15.05% (1.75% - 16.8%). To merely elevate real rates to zero, the Federal Reserve must therefore shoulder the nominal rate up to an inconceivable 15.05%. And to attain Volcker’s real 10% rate? It must elevate the nominal rate to 26.8% (26.8% - 16.8% = 10%). Can you imagine it?

A Modern Sisyphus: We are not confident the economy or the stock market can withstand nominal rates much exceeding 3%. Jerome Powell will likely hoist his white flag of surrender at that point. He did it in 2018. And he will do it in 2023 - depend on it. We liken him to the ancient Sisyphus of Greek mythology. The poor fellow kept pushing his boulder up the steep hill, only to have it roll back down to the base of the hill with each attempt. This Powell character can never summit the hill. How did the stock market take today’s 0.75% boost? Exceptionally well…

“For the Time Being”: The Dow Jones vaulted 303 points today - with the bulk of gains following the 2 p.m. declaration. The S&P 500 leapt 54 points; the Nasdaq Composite, 270. Both followed the Dow Jones’ afternoon trajectory.

Why did the stock market thrill to the news? Opines Mr. Charlie Ripley of Allianz Investment Management: Today’s announcement confirms the Fed’s commitment to fight the inflation battle more aggressively despite the potential aftermath from raising rates at such a rapid pace. Overall, Fed policy rates have been out of sync with the inflation story for some time and the aggressive hikes from the Fed should appease markets for the time being. “For the time being.”

Dead Cat Bounce? We would remind the stock market’s rah-rah men that today the Federal Reserve reaffirmed its commitment to quantitative tightening. It pledged to hack $47.5 billion from its balance sheet per month. In September the hackings will increase to $95 billion per month. The stock market is more attuned to the Federal Reserve’s balance sheet than its target interest rate. We will be deeply surprised if the stock market excels while the balance sheet contracts. Today’s market reaction fails to sway us. Deceased felines have been known to bounce.

Are You Feeling Lucky? Again - Mr. Powell will eventually relent - but the stock market will encounter heavy weather in the interim. The precise level at which it will scrape bottom, we do not pretend to know. But we fear it may be substantially beneath today’s levels. We may be mistaken of course - the stock market may now embark upon a lovely spree. We have certainly been mistaken before. Yet we harbor no desire to attempt to “catch a falling knife,” as the phrase runs. Do you?"

- dailyreckoning.com

Celente and the Judge, "Death of Free Speech, Twitter Doing Gov't Bidding!"

Full screen recommended.

Celente and the Judge, 6/15/22:

"Death of Free Speech, Twitter Doing Gov't Bidding!"

"The Trends Journal is a weekly magazine analyzing global current events forming future trends. Our mission is to present Facts and Truth over fear and propaganda to help subscribers prepare for What’s Next in these increasingly turbulent times."

- https://trendsresearch.com/

Gregory Mannarino, "Rate Hike!"

Gregory Mannarino, PM 6/15/22:

"Rate Hike!"

- https://traderschoice.net/

Musical Interlude: Neil H, "Spellbound"

Neil H, "Spellbound"

"A Look to the Heavens"

“While drifting through the cosmos, a magnificent interstellar dust cloud became sculpted by stellar winds and radiation to assume a recognizable shape. Fittingly named the Horsehead Nebula, it is embedded in the vast and complex Orion Nebula (M42). A potentially rewarding but difficult object to view personally with a small telescope, the below gorgeously detailed image was recently taken in infrared light by the orbiting Hubble Space Telescope in honor of the 23rd anniversary of Hubble's launch.

The dark molecular cloud, roughly 1,500 light years distant, is cataloged as Barnard 33 and is seen above primarily because it is backlit by the nearby massive star Sigma Orionis. The Horsehead Nebula will slowly shift its apparent shape over the next few million years and will eventually be destroyed by the high energy starlight.”

- http://apod.nasa.gov/apod/ap130422.html

Chet Raymo, “Tyger, Tyger Burning Bright…”

“Tyger, Tyger Burning Bright…”

by Chet Raymo

“Divinity is not playful. The universe was not made in jest but in solemn incomprehensible earnest. By a power that is unfathomably secret, and holy, and fleet.” You may recall these words from Annie Dillard’s “Pilgrim at Tinker Creek.” There is nothing intrinsically cheerful about the world, she says. To live is to die; it’s all part of the bargain. Stars destroy themselves to make the atoms of our bodies. Every creature lives to eat and be eaten. And into this incomprehensible, unfathomable, apparently stochastic melee stumbles… You and I. With qualities that we have - so far - seen nowhere else. Hope. Humor. A sense of justice. A sense of beauty. Gratitude. But also: Anger. Hurt. Despair. Strangers in a strange land.

Galaxies by the billions turn like St. Catherine Wheels, throwing off sparks of exploding stars. Atoms eddy and flow, blowing hot and cold, groping and promiscuous. A wind of neutrinos gusts through our bodies, Energy billows and swells. A myriad of microorganisms nibble at our flesh.

We have a sense that something purposeful is going on, something that involves us. Something secret, holy and fleet. But we haven’t a clue what it is. We make up stories. Stories in which we are the point of it all. We tell the stories over and over. To our children. To ourselves. And the stories fill up the space of our ignorance. Until they don’t. And then the great yawning spaces open again. And time clangs down on our heads like a pummeling rain, like the collapsing ceiling of the sky. Dazed, stunned, we stagger like giddy topers towards our own swift dissolution. Inexplicably praising. Admiring. Wondering. Giving thanks.”

- http://blog.sciencemusings.com/

○

“The Tyger”

“Tyger! Tyger! burning bright

In the forests of the night,

What immortal hand or eye

Could frame thy fearful symmetry?

In what distant deeps or skies

Burnt the fire of thine eyes?

On what wings dare he aspire?

What the hand dare sieze the fire?

And what shoulder, and what art.

Could twist the sinews of thy heart?

And when thy heart began to beat,

What dread hand? and what dread feet?

What the hammer? what the chain?

In what furnace was thy brain?

What the anvil? what dread grasp

Dare its deadly terrors clasp?

When the stars threw down their spears,

And watered heaven with their tears,

Did he smile his work to see?

Did he who made the Lamb make thee?

Tyger! Tyger! burning bright

In the forests of the night,

What immortal hand or eye

Dare frame thy fearful symmetry?”

- William Blake

The Poet: Edward Hirsch, "I Was Never Able To Pray"

"I Was Never Able To Pray"

"Wheel me down to the shore

where the lighthouse was abandoned

and the moon tolls in the rafters.

Let me hear the wind paging through the trees

and see the stars flaring out, one by one,

like the forgotten faces of the dead.

I was never able to pray,

but let me inscribe my name

in the book of waves

and then stare into the dome

of a sky that never ends

and see my voice sail into the night."

- Edward Hirsch

"All We Really Need..."

"Causes do matter. And the world is changed by people who care deeply about causes,about things that matter. We don't have to be particularly smart or talented. We don't need a lot of money or education. All we really need is to be passionate about something important; something bigger than ourselves. And it's that commitment to a worthwhile cause that changes the world."

- Steve Goodier

"Find the things that matter, and hold on to them,

and fight for them, and refuse to let them go."

- Lauren Oliver

"90% Stock Market Crash Is Coming Mid-July - Get Out While You Can"

Full screen recommended.

The Atlantis Report, 6/15/22:

"90% Stock Market Crash Is Coming Mid-July - 

Get Out While You Can"

"Harry Dent's target for stock market crash is almost 90%. Get out while you can. Harry Dent is a financial newsletter writer, economist, best-selling author and one of the most outspoken financial editors in America. He's been warning investors for years about the stock market crash that will likely happen this year."

Comments here:

- https://www.youtube.com/

"Today's Recession Will Be Tomorrow's Great Depression"

Full screen recommended.

Dan, iAllegedly, 6/15/22:

"Today's Recession Will Be Tomorrow's Great Depression"

"Everything points to the fact that we are in a recession right now the economy is not going to be fixed anytime soon. We are going to see a new Great Depression. This will be every man for himself in a short period of time."

Comments here:

- https://www.youtube.com/

The Daily "Near You?"

Vancouver, British Columbia, Canada. Thanks for stopping by!

"Wherein I Use Greek Mythology To Show How Screwed We Are"

"Wherein I Use Greek Mythology To Show How Screwed We Are"

by John Wilder

"We’ve reached the Scylla and Charybdis stage of our economy. Scylla was, in Greek mythology, a six-headed monster that was probably less scary than the average half-dozen Congresscritters, and certainly less dangerous. Charybdis was a whirlpool that sucked inside everything that got close to it three times a day, so it was pretty much exactly like Kamala Harris.

The idea is that if you’re between Scylla and Charybdis, life is on the edge because there are dangers on either side. When Odysseus tried to sneak between the two, he lost six crewmembers, one to each head of Scylla. Thankfully they didn’t go too close to Charybdis, since Kamala has a mean-looking canker sore, and some gifts last forever. Trying to thread the fine line between Scylla and Charybdis: that’s where our economy is now.

As inflation rages through the system, every minute that we have an interest rate well below the rate of inflation, inflation is being fed. To quote Joe Biden from January 24, 2022, “It’s a great asset – more inflation. What a stupid son of a bitch.” You can tell he’s excited to Build Back Better!

Oddly, it’s not inflation in everything. Some items are starting to deflate now. Houses, for instance. The price of a house is tied to the interest rate – the more interest wrapped into a monthly payment, the fewer the number of buyers that can afford or qualify for a loan. And in Biden’s America® people have to qualify for more important things, like a Quarter Pounder™ or a tank of gas.

But back to home loans: fewer people qualify? Less demand. Less demand? Lower home prices. When we moved to Modern Mayberry in the middle of the Great Recession, some houses had been on the market for longer than 350 days. These were decent houses, but there just wasn’t any demand. Recently, as people began to take my advice and flee the cities, houses disappeared off the market in days here in Modern Mayberry. With all the city folk moving in, at least I know what a hipster weighs: an Instagram®.

Now? Interest rates for mortgages are going up, so demand for houses will be going down. Eventually, the market for houses will go back to where it was when I got here. That’s okay, I never expected to walk away from Stately Wilder Mansion with a single dime of profit. For me, a house is where I live, not an investment.

So, interest rates up, housing prices down. Simple. Also, interest rates up, stock prices down. For the last decade, stocks have been just about the only game for people who were trying to keep up with inflation. This was a continual pressure upwards on stocks. Now as interest rates go up, there are other options.

Traditionally, there was (this was something I read in an article a long time ago) a formula showing the value of a stock in relation to the interest rate: Maximum P/E=20-Prime Rate. That meant, with an interest rate of 0%, a stock was at fair value with a Price to Earnings ratio of 20. Likewise, if the interest rate was 10%, the fair market P/E would be about 10.

Obviously, it’s such a one-dimensional analysis that it was made back when “digital computing” meant counting on your fingers. There’s no way I’d suggest anyone use it to pick stocks (nor would I suggest taking the advice of an Internet humorist on any investment advice no matter how witty, charming, and handsome he might be), but it does show how the relationship between interest rates and stock prices and earnings was thought about once upon a time. But it summarizes the same idea – interest rates up, stocks down. Heck, it even led me to a never-fail way to manipulate individual stocks: if I buy a stock, it goes down.

There are other impacts, too. For instance, it makes debt harder to pay back for people around the planet. If Egypt owes money to ChaseAmericanFargo™ Bank and the interest rate is variable, that means that Egypt will have to start selling items to pay back New York, or London, or Beijing. Heck, the British would already have the Pyramids, but they wouldn’t fit in the British Museum

More money to the banking centers? Less money for chow for the Egyptians. We saw this exact scenario play out in the Arab Spring in 2012. Expensive stuff caused people to go hungry and then hungry people with no hope do what they always do when they can’t watch Netflix™ and buy Twinkies©.

They swap out the government. The new boss looks a lot like the old boss in Egypt, and it’s exactly the same boss as it was in Syria. Some things don’t change. If it’s bad enough, it also craters the economies in South America and, even Canada might have its assets frozen. Or, more frozen.

But when the interest rates go up, it’s not just the government in Egypt that gets squeezed. The current debt in the United States is $30.5 trillion. The total US debt, including personal debt, student loans, credit cards, and I.O.U.s to me from that one guy that owes me $20 is about $91 trillion. (All numbers from usdebtclock.org)

When the interest rates go up, the payments on interest go up. That means less money available for everything else. When last I looked, the mandatory payments the Federal government were as much as or more than the amount of money that they took in. That means that printing more money is now the only way the system can work. It’s like having a tobacco cessation class with a two-cigar minimum.

That leads to the difficult bit – the hall of mirrors. If we don’t raise interest rates, and raise them quickly and raise them high enough, inflation will devastate the economy. If we do raise them, interest payments will freeze the economy and dry up all the PEZ®, pantyhose, and elephant rides the government buys daily. We are in a classic trap, but it is a trap entirely devised by the Fed® and the politicians working long-term problems on short-term incentives.

By attempting to push back the moment of financial reckoning by any means possible, we’ve created a failure that is much, much larger. If we would have let financial companies fail in 2000 and 2008, and fixed the structural problems with Medicare, perhaps, just perhaps we wouldn’t be here today.

But we are. How bad are things? Again, people have been trying to gauge when things in the stock market are out of whack – Gregory Mannarino came up with a market risk index that he called the Mannarino Market Risk Index, which was modified by Nobody Special Finance into the Modified Mannarino Market Risk Index. You can watch the video on what makes it up here (LINK). It’s only twelve minutes, and it’s pretty simple. The MMMRI is simple, but it’s still quite a bit more sophisticated than the 20=P/E-Interest rate formula from back in the Stone Age. The summary is of selected past MMMRIs is:

You can find tracking information on MMMRI here (LINK) on Mannarino’s website. Yup. MMMRI is screaming loudly that the stock market is really, really messed up.  But you knew that.  Things are broken, and they’re breaking faster as things go downhill.  So, whatever you do, don’t buy canned goods and storage food and precious metals and PEZ® and ammo.  Nope.

I’m sure that the team of Biden and Harris along with Janet Yellen, Treasury Secretary, (who had no idea that inflation was even a problem) or Jennifer Granholm, Energy Secretary, (who said that high gas prices are “a very compelling case” to buy an electric car) will be here to help us charter a safe course between Scylla and Charybdis. Oh, wait, Biden and Harris are Scylla and Charybdis."

- https://wilderwealthywise.com/

"Any Fool Can Know..."

Gregory Mannarino, "The FED Overnight Just Bought A Boatload Of Debt, The ECB Will Follow"

Gregory Mannarino, AM 6/15/22:

"The FED Overnight Just Bought A 

Boatload Of Debt, The ECB Will Follow"

- https://traderschoice.net/

MMMRI - Modified Mannarino Market Risk Indicator

You can find tracking information on MMMRI

 here (LINK) on Mannarino’s website.

"Remember 2008? Another Terrifying Housing Crash Is Now In Progress"

"Remember 2008?

Another Terrifying Housing Crash Is Now In Progress"

by Michael Snyder

"It is often said that those that refuse to learn from history are doomed to repeat it. More than a decade ago, the Federal Reserve created the most epic housing bubble in American history and everyone was happy until 2008 came along. The economy slowed down, home prices crashed and the ensuing chaos on Wall Street spawned an endless series of movies, television specials and documentaries. But instead of learning our lessons, we did it again. The Federal Reserve created an even larger housing bubble, and I have been relentlessly warning that it would inevitably burst. Now home sales have fallen for six months in a row and prices are crashing again. In fact, in some parts of the country we have already seen prices plunge by as much as 20 percent…

"Property prices have fallen by up to 20 percent across parts of the US as buyers shun the market amid ‘Bidenflation’ and spiking interest rates. Asking prices have plummeted by up to $400,000 in wealthy areas while poorer neighborhoods have seen house values nosedive by as much as $115,000."

Do you remember last time around when millions of homeowners ended up “underwater” on their mortgages? If we continue on this current trajectory, it is going to happen again.

Last year at this time, the housing market was extremely hot, but now a new report from Redfin is telling us that things have dramatically changed…"A May study by Redfin found that about 19 percent of sellers dropped the prices on their homes in a four week period between April and May. The outlet said that the report indicated an end to the country’s pandemic-era housing boom. Their report found that Google searches for ‘homes for sale’ were down 13 percent from the same time last year. It also found that requests for home tours were down 12 percent, and that mortgage applications dropped 16 percent from a year prior. And the higher mortgage rates go, the worse things are going to get."

Unfortunately, mortgage rates are spiking at a rate that is absolutely breathtaking this month…"Mortgage rates jumped sharply this week, as fears of a potentially more aggressive rate hike from the Federal Reserve upset financial markets. The average rate on the popular 30-year fixed mortgage rose 10 basis points to 6.28% Tuesday, according to Mortgage News Daily. That followed a 33 basis point jump Monday. The rate was 5.55% one week ago."

The last time we saw mortgage rates this high was during the last housing crash. Unfortunately, they are only going to go higher because the Federal Reserve wants interest rates throughout our economy to rise in order to fight inflation. But as I have warned repeatedly in recent months, a high rate environment is going to absolutely eviscerate the housing market. Already, higher rates have had a colossal impact on home affordability…

"Higher home prices and rates have crushed home affordability. For instance, on a $400,000 home, with a 20% down payment, the monthly mortgage payment went from $1,399 at the start of January to $1,976 today, a difference of $577. That does not include homeowners insurance nor property taxes. It also does not include the fact that the home is about 20% more expensive than it was a year ago. Vast multitudes of potential home buyers will be forced out of the market until home prices comes down dramatically.

If you are one of those people, you could try to rent a place while you wait, but apartment rents are 15 percent higher than they were a year ago…"A new report from Redfin shows that nationally listed rents for available apartments rose 15% from a year ago. And the median listed rent for an available apartment rose above $2,000 a month for the first time. Rents are up more than 30% in Austin, Seattle, and Cincinnati. In Los Angeles the median asking rent is $3,400. Even in formerly affordable cities such as Nashville it’s now $2,140, up 32% from last year."

I am so thankful that Redfin gives us these numbers, but it turns out that Redfin is in deep trouble too. In fact, Redfin just announced that they will be laying off 8 percent of their workers…"Real estate firms Redfin and Compass are laying off workers, as mortgage rates rise sharply and home sales drop. In filings with the Securities and Exchange Commission, Compass announced a 10% cut to its workforce, and Redfin announced an 8% cut. Shares of both companies fell Tuesday. Redfin’s stock touched a new 52-week low."

So many of the exact same things that we witnessed back in 2008 are happening again. The economy is slowing down. Big corporations are starting to lay off workers. Home prices are starting to collapse. And there is a tremendous amount of pessimism about what is ahead. In fact, one new survey has found that small business owners are “feeling their gloomiest in nearly five decades”…

"Small business owners in America are feeling their gloomiest in nearly five decades, a survey released Tuesday morning showed. The National Federation of Independent Business (NFIB) said its gauge of businesses expecting better business conditions over the next six months fell to the worst reading in the 48-year history of the survey."

When things got really bad in 2008 and 2009, the Federal Reserve responded by pushing interest rates all the way to the floor, and that certainly helped. But now the Federal Reserve doesn’t have that option. In fact, the Federal Reserve seems quite determined to dramatically raise rates in a desperate attempt to fight the inflation monster that they had a major role in helping to create. And the higher that rates go, the worse things will get for the housing market and for the economy as a whole.

If we would have learned some lessons from the last crisis, all of this could have been avoided. But instead we are now moving into a future which is going to be extraordinarily painful. At this point, the Federal Reserve is stuck between a rock and a hard place. If they don’t raise rates, inflation will continue to spiral out of control. But if they do raise rates, they will crush the housing market and make the coming recession far worse.

For years, they assured all of us that they had everything under control and that they knew exactly what they were doing. Now everyone can see the truth, but unfortunately it is too late to reverse course."

- http://theeconomiccollapseblog.com/

"Economic Market Snapshot 6/15/22"

Down the rabbit hole of psychopathic greed and insanity...

Only the consequences are real - to you!

○

"Economic Market Snapshot 6/15/22"

Updated as available.

Latest Market Analysis, Updated 6/15/22

- https://www.asktraders.com/analysis/

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Read 'em and weep...

A comprehensive, essential daily read.

June 14th to June 15th

- http://www.shadowstats.com/

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Financial Stress Index

"The OFR Financial Stress Index (OFR FSI) is a daily market-based snapshot of stress in global financial markets. It is constructed from 33 financial market variables, such as yield spreads, valuation measures, and interest rates. The OFR FSI is positive when stress levels are above average, and negative when stress levels are below average. The OFR FSI incorporates five categories of indicators: credit, equity valuation, funding, safe assets and volatility. The FSI shows stress contributions by three regions: United States, other advanced economies, and emerging markets."

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- https://www.dailyjobcuts.com/

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- https://www.zerohedge.com/

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- https://www.investmentwatchblog.com/

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- https://wallstreetonparade.com/

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- https://www.whatreallyhappened.com/

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- https://jessescrossroadscafe.blogspot.com/

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Commentary, highly recommended:

- https://www.theburningplatform.com/

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"The more I see of the monied classes,

the better I understand the guillotine."

- George Bernard Shaw

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Oh yeah... beyond words.

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And now... The End Game...

"It'll Do..."

Deputy Wendell: "It's a mess, ain't it Sheriff?"

Sheriff Ed Tom Bell: "Well, if it ain't, it'll do till the mess gets here."

Apologies to "No Country For Old Men"

Oh, the mess is here alright...and you ain't seen nothin' yet...

Brace for impact.

"How It Really Is"

 

Greg Hunter, "Game Over, They’re Pulling the Plug"

"Game Over, They’re Pulling the Plug"

by Greg Hunter’s USAWatchdog.com

"Precious metals expert and financial writer Bill Holter said in early April that he thought we did not have much time until the financial meltdown started. He gave it 60 days. Two months later, the meltdown started in earnest right on time. The world is at debt levels never seen before, and Holter contends rising interest rates are the key driver here and now. Holter explains, “Interest rates are the key to the whole collapse. Mortgage rates, as of right now, are about 6.15%. Mortgage rates started the year just over 3%. In the fourth quarter of last year, we had mortgage rates as low as 2.75%. What that tells you is if you qualified for a $1 million mortgage at the end of last year, you only qualify for a $500,000 mortgage now. If you are a property owner, that means the pool of potential buyers is far less than 6 months ago, simply because interest rates have basically doubled. Holter also says that means property values are dramatically cut.

Interest rates have been on a more than 40-year downward trend since Fed Head Paul Volker raised a key rate to 20% in the early 1980’s. Holter points out, “We basically just went through a 40-year bull market on bonds where interest rates did nothing but go downward for 40 years. That 40-year trend is now broken, and rates are headed higher. It just so happens the system is more indebted than it has ever been on any ratio or any basis you want to look at. What I am getting at is these higher interest rates are blowing up the debt bubble.”

Don’t expect the Fed to come in and save the day like it did in the last financial meltdown back in 2008 and 2009. The Fed bailed out the economy when it started printing money like crazy and never stopped. Holter says, “The bottom line is the world’s financial system and, thus, real economies have been on life support since 2008. What people should understand is when the Fed says they are going to raise interest rates and they are going to shrink their balance sheet, that says they are pulling the plug out of the wall. They are taking the system off life support. The bottom line is the system cannot live without life support. The Ponzi scheme cannot continue without new capital coming into the system. They are pulling the plug is what they are doing.... It’s game over.”

Holter also talks about gold and silver and why you should hold them in hand. Holter thinks a “Mad Max” scenario is a real possibility and says we have not seen the peak on inflation. There is a lot more in the 44-minute interview.

- https://usawatchdog.com/

Join Greg Hunter on Rumble as he goes One-on-One with 

financial writer and precious metals expert Bill Holter of JSMineset.com.

- https://rumble.com/

"Strange Prices At Sam's Club! This is Crazy!"

Full screen recommended.

Adventures with Danno, 6/15/22:

"Strange Prices At Sam's Club! This is Crazy!"

"In today's vlog we are at Sam's Club, and are noticing massive price increases! We are here to check out skyrocketing prices, and a lot of empty shelves! It's getting rough out here as stores seem to be struggling with getting products!"

View comments here:

- https://www.youtube.com/watch?v=f8-CQcZYIEw

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Related:

"The Food Situation Is Worse Than You Think"

 (And They Aren’t Telling You)

by notausername86

"Yesterday I went to pick up a couple of things to make for dinner, from a major national chain store. This store, is known for its “USDA prime beef” and they advertise it, all over the place. It’s their entire selling point of the store. So, as I’m cruising the meat section, being blown away at the prices of things (steaks that would have been 7.99 lb last year are 12.99 a lb. Hamburger that was 5.00 a lb last year is now 9.00 a lb, etc etc). But then I noticed something very interesting. The entire meat section, not a single cut was graded USDA prime. In fact, every cut of beef (that was packaged) was “USDA choice”.

Now for those of you who don’t know, there are different “grades” of meat. Prime being “the best” (and there are different grades of prime) followed up by choice, than select. The lower you go, the “cheaper” the cut of meat is.

So here is the thing, what this means is that the cuts of meat that are now running about 4 or 5 dollars more a lb, are of a lessor quality than the meat you were probably buying last year. This means that in reality, the cost of meat has gone up significantly more than more people realize. That USDA prime sirloin that you bought for 7.99 /lb last year? Yeah, that’s not going for 12.99 lb, it’s more like 22.00 a lb. They just aren’t even stocking it (because people couldn’t afford it).

Another interesting note, is that the meat in the “butchers case” had a very interesting sticker on it. It said and I quote “Imported. Not USDA graded”. This is the first time I’ve ever actually seen a store sell imported, non USDA graded meat in the butchers case, as usually these are your better, more expensive cuts of meat. I think the situation is worse than we think folks. If any butchers or meat market employees are out there, please chime in."

- https://www.investmentwatchblog.com/

Canadian Prepper, "The Pope Just Declared WW3 (Seriously) and Other INSANE News"

Full screen recommended.

Canadian Prepper, 6/14/22:

"The Pope Just Declared WW3 (Seriously) and Other INSANE News"

"Cyberattack on LNG plant? Ukr attacks Russian village, North Korean nuclear test, markets could fall 80%!!! War predicted to go on for at least 2 years, shortages abound, the Pope officiates "WW3" for his followers, historic droughts and floods, massive fertilizer shortage..".

Gerald Celente, “A Fish Rots From The Head Down”

Full screen recommended,

Strong language alert!

Gerald Celente, Trends Journal,

“A Fish Rots From The Head Down”

- https://trendsresearch.com/

"Shipping Crisis Pushes Supply Chain Disruptions To Skyrocket By 450% As Panic Sweep Across Ports"

Full screen recommended.

"Shipping Crisis Pushes Supply Chain Disruptions

 To Skyrocket By 450% As Panic Sweep Across Ports"

by Epic Economist

"The supply chain crisis is seeming like a never-ending nightmare that just keeps disrupting business and port operations and sending consumer prices to sky-highs. Chokepoints continue to emerge all across the system, and by now, nearly 70% of U.S. consumers believe that empty shelves have become the new normal. Meanwhile, Over 300 containerships are still stranded at sea, and the worsening labor shortage at key ports is threatening to result in a traffic jam that's unlike anything we’ve ever seen. On top of that, fuel costs are pushing freight rates to explode, and if you think you’ve already seen the worst of price increases at your local store, buckle up because they’re about to shoot all the way into the stratosphere.

One thing everyone can agree on at this point is that supply chains are terminally broken. In the U.S., one of the main reasons for that breakdown is the acute shortage of supply chain workers. Today, there are 5.5 million more job openings than there are workers available to fill them, according to the Labor Department. And as contract negotiations between longshoremen and operators of the nation’s largest ports remain adrift, U.S. companies are afraid of a repeat of last summer’s supply-chain chaos, which resulted in nationwide shortages and unprecedented price hikes.

The contract between over 22,000 dockworkers at 29 ports along the West Coast and the Pacific Maritime Association, composed of ocean carriers and port operators, expires at the end of this month. And up until now, both parties haven’t reached an agreement. If a deal isn’t closed within the next two weeks, millions of companies will be at risk of work stoppages and production slowdowns, just as happened during previous negotiations. The timing couldn’t be worse: the impasse comes as U.S. businesses are bracing for a surge in shipments from China as the world’s second-largest economy started sending massive loads of cargo all at once to the U.S. coast after lifting lockdown restrictions last month.

This is the perfect recipe for disaster, and it means we’re going to see a new wave of disruptions sparking chaos at our ports in a few weeks. That’s a quite alarming outlook, especially considering that supply chain disruptions skyrocketed over 400% over the past few years. According to data collected from Statista, in 2019, U.S. companies reported 2,568 supply chain disruptions from January to December. Back then, 56% of companies reported facing bottlenecks at some point in 2019. By 2021, that number climbed to shocking 11,642 disruptions, an increase of over 453,3%, which led 88% of companies to report supply chain snarls.

By now, every new survey, study, or report shows that conditions are still getting worse in the system. At the same time, everything is becoming more expensive. On the other side of the ocean, 344 are still waiting off the coast of China, marking a 34% increase over the past month. It currently takes 74 days longer to get goods from a Chinese warehouse to a U.S. warehouse, a route that used to take 37 days, according to RBC’s report.

Americans are already absolutely terrified about the rising cost of living. In fact, 52% of Americans said that the biggest issue facing the country was rising prices, according to a new FiveThirtyEight/Ipsos poll. Moreover, more and more U.S. consumers are seeing empty shelves as the new normal. According to a recent survey by SAP, 67% of Americans think product shortages are a “new normal” and 74% said shortages will continue to dominate supply chain conversation this year and into next. At least 77% of Americans reported food shortages this year, 52% reported shortages of personal care items, and 32% reported shortages of prescription medications.

This crazy economic environment is about to get even crazier as we head into peak shipping season. Shortages, even higher consumer prices and a whole lot of turbulence are now looming on the horizon. Get prepared for these challenges while you still can because supply chain disruptions will start to spread at a breathtaking speed before you even notice, and what we experienced in previous years will be nothing compared to the disorder that is ahead."

- https://www.youtube.com/

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"I Got Bad News - It's About To Get Much Worse"

Jeremiah Babe, PM 6/14//22:

"I Got Bad News - It's About To Get Much Worse, 

Real Estate Market Will Be Pummeled Worse Than 2008"

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Related:

"The Market Is 'On The Edge Of A Huge Collapse'"

"Some very smart people who know more than I do speak in terms of an 80% drop in the S&P and the Dow. For the last 30 years I have felt that eventually the Dow and gold will reach a one to one or two to one ratio. Currently that ratio is 18 to 1 meaning that 18 ounces of gold will buy the Dow. Arguably, that speaks to massively overvalued stocks and stupidly undervalued gold. And yes, it has happened before, twice in fact.”

- Andy Schectman, President & Owner of Miles Franklin Precious Metals

Full article here:

- https://www.zerohedge.com/

Gregory Mannarino, "Critical Updates: Now Either I Win Big Or Go Down In Flames"

Gregory Mannarino, PM 6/14/22:

"Critical Updates: Now Either I Win Big Or Go Down In Flames"

- https://traderschoice.net/

Musical Interlude: Liquid Mind, "Dream Ten"

Liquid Mind, "Dream Ten"

"A Look to the Heavens"

“Here in the Milky Way galaxy we have astronomical front row seats as M81 and M82 face-off, a mere 12 million light-years away. Locked in a gravitational struggle for the past billion years or so, the two bright galaxies are captured in this deep telescopic snapshot, constructed from 25 hours of image data.

Their most recent close encounter likely resulted in the enhanced spiral arms of M81 (left) and violent star forming regions in M82 so energetic the galaxy glows in X-rays. After repeated passes, in a few billion years only one galaxy will remain. From our perspective, this cosmic moment is seen through a foreground veil of the Milky Way's stars and clouds of dust. Faintly reflecting the foreground starlight, the pervasive dust clouds are relatively unexplored galactic cirrus, or integrated flux nebulae, only a few hundred light-years above the plane of the Milky Way.”

- http://apod.nasa.gov/apod/ap130925.html

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"Dwell on the beauty of life.

Watch the stars, and see yourself running with them."

- Marcus Aurelius

Kahlil Gibran, “The Farewell”

“The Farewell”

“Farewell to you and the youth I have spent with you.

It was but yesterday we met in a dream.

You have sung to me in my aloneness,

and I of your longings have built a tower in the sky.

But now our sleep has fled and our dream is over,

and it is no longer dawn.

The noontide is upon us and our half waking has turned to fuller day,

and we must part.

If in the twilight of memory we should meet once more,

we shall speak again together and you shall sing to me a deeper song.

And if our hands should meet in another dream

we shall build another tower in the sky.”

- Kahlil Gibran, “The Prophet”

"No Smooth Road..."

"Life has no smooth road for any of us; and in the bracing atmosphere

of a high aim the very roughness stimulates the climber to steadier steps,

till the legend, over steep ways to the stars, fulfills itself."

- W. C. Doane