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Escalation: Recent Events Suggest Mounting Economic Danger

September 16, 2022 27 Comments

By Brandon Smith

A common refrain from people who are critical of alternative economists is that we have been predicting crisis for so long that “eventually we will be right.” These are generally people who don’t understand the nature of economic decline – It’s like an avalanche that builds over time, then breaks and quickly escalates as it flows down the mountain. What they don’t grasp is that they are in the middle of an economic collapse RIGHT NOW, and they just can’t see it because they have been acclimated to the presence of the snow and cold.

Economic decline is a process that takes many years, and while you might get an event like the market crash of 1929 or the crash of 2008, these moments of panic are nothing more than the wreckage left behind by the great wave of tumbling ice that everyone should have seen coming far in advance, but they refused.

In 2022 the job of warning people is far easier than it used to be because we are well past the midpoint of the process of decline. But, believe it or not, I still get people today who claim that we analysts are “doom mongers.” The power of willful ignorance is truly amazing. It’s enough to make a person blind to stagflationary crisis, supply chain disruptions, quickly inflating prices, stock market carnage, bond market instability, record consumer debt, and international conflict.

At this point, I think if a person can’t see the dangers ahead they are probably a waste of time and space and are destined to be buried in the ice; there’s nothing that can be done for them. Yes, there are some people out there that don’t get exposed to the information and we have to take them into account, but my priority will be people that are awake and aware and try to give them a sense of what point in the collapse process we find ourselves.

In the past month there has been a considerable uptick in economic and geopolitical activity that suggests we are entering a new phase, and not surprisingly it’s all accumulating right before we hit October. Here are the events that I find most concerning:

The European Energy Crisis

This is an event that I have been predicting since the Russian invasion of Ukraine and now it is upon us. I wrote about it extensively in my recent article ‘Europe Is Facing Energy Disaster And It’s Going To Bleed Over Into The US’ so I won’t rehash all that information here. What I do want to point out is the complete lack of planning on the part of European officials to deal with the threat. It is as if they WANT a full spectrum disaster.

Russia has now completely cut off natural gas supplies to Europe, which represent around 40% of all EU energy resources. Europe’s benchmark natural gas prices spiked by 28% a week ago, on top of already existing inflation. Oil supplies are also in steep decline for Europe and the EU government has pledged to cut what’s left of Russian oil imports by sea at the end of the year. Sadly, they have offered very little in the way of solutions to the supply-side problem.

There has been talk of increasing imports of alternative resources from other nations, but the EU is already buying up around 75% of all liquid natural gas from the US. OPEC oil producers have indicated they will not be attempting to increase production anytime soon (probably because they can’t due to inflation in operation costs). There is NO backup energy resource for Europe; it doesn’t exist right now. They will try to buy up whatever coal, oil and gas they can find on the market while driving up prices even more for other countries. They will still come up short, which means people are going to freeze this winter.

Best case scenario is that there are mostly mild temps and people barely scrape buy with minimum heating. But EU industry is going to suffer and many manufacturers are going to cut production (which mean more stress on the global supply chain).

Core Inflation Is Still Rising

As I warned last week in my article ‘It’s A Fact That Needs Repeating: The Federal Reserve Is A Suicide Bomber,’ inflation is continuing to rise despite the Fed’s continued interest rate hikes, giving the central bank even more ammunition to justify higher rates into extreme economic weakness.

The latest CPI print showed an increase to 8.3% and was a shock to markets which universally expected a drop. This is the nature of stagflation – Even with falling demand prices continue to climb or remain high for extended periods. The stagflation event of the 1970s lasted for a decade until the Fed jacked rates to 21% and then employment crumbled in the early 1980s.

This doesn’t mean that rates will go to 21% this time; they don’t need to. All it would take is a Federal Funds Rate of around 4% – 5% to crash our current QE addicted system. A 75 bps rate hike is now widely expected at the next Fed meeting this month, with some predicting a 100 bps hike. This would put us close to crash territory for markets and for employment, though I think we still have well into 2023 before unemployment really starts to spike.

Putin’s Meeting With Xi

As I write this, Vladimir Putin is set to meet with China’s Xi Jinping and the nature of the conference is not clear. There are the obvious points of agreement such as China’s continued purchases of Russian oil and other commodities, as well as the ongoing plan to build a pipeline to China by 2025. There is also strategic cooperation which is evident in the recent naval exercises between the two nations around Japan and Taiwan.

The timing of the meeting is concerning to me, because the prime season for a potential Chinese invasion of Taiwan is fast approaching (October is the best month for naval movements to avoid typhoons). China would not necessarily need to commit to a ground invasion, either. They could simply cut off all import/export trade from any source other than China and starve Taiwan until they accept unification.

There is also the issue of Ukraine and arms sales. With the amount of propaganda coming from Ukrainian Intelligence and NATO, it’s hard to say what is actually happening, but I suspect Russia is changing strategies and repositioning to deploy missile and artillery bombardment of infrastructure, including power grids and water. This is a tactic that Russia has avoided for months (until this week), which is surprising because one of the first measures usually taken by the US during an invasion is to eliminate most key infrastructure (as we did in Iraq). You would think Russia would have done the same, but perhaps they were saving that scenario for winter when it is harder for Ukraine to cope.

This would make Ukraine essentially unlivable in the coming winter for most of the population. Putin may be seeking to ensure China remains a steady economic partner should geopolitical pressures increase. They may even be making a deal of mutual support: China takes Taiwan while Russia makes Ukraine a resource wasteland and they each support the other economically when NATO counties try to impose sanctions on China. We probably won’t know until October, but the timing of the meeting should raise eyebrows.

If the manure is about to hit the fan in Taiwan along with Ukraine, then diplomatic and economic ties will be severed and western access to China’s manufacturing will be cut. This is a problem for China’s economy, certainly, which may be why they have continued their mass covid lockdowns well after every other government has abandoned them. Could this be practice for civil controls in an impending war environment?

China’s global dominance in imports/exports gives them considerable economic leverage in trade, however. Many nations would not support sanctions against them. Also, their vast holdings of US dollars and Treasuries could be used as a weapon to damage or destroy the dollar’s world reserve status. If China invades Taiwan this year, then all bets are off – The economic decline will move swiftly from that point on.

There are many other trends which factor into the crash environment but the above factors are the most recent and hold the biggest potential for causing a domino effect globally. The question that always arises is “what can we do about it?” Not much in terms of prevention. What we can do, though, is prepare locally to weather the storm. This means stocking necessities before they rise even further in price or become non-existent. Become a producer and learn a valuable skill for survival in a depleted economy Organize with people locally who are on the same page to create security and alternative trade opportunities.

Hopefully, the aware citizenry will rise to the challenge and organization will be extensive, because the worst case scenario would be great masses of completely isolated people all vying against each other rather than working towards mutual security. Even in a slow collapse scenario this is a problem in terms of rising crime; so plan on working with others if you want to avoid inevitable third world conditions.

 

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After 14 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.

 

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27 Comments

  • Serge September 16, 2022 at 8:05 am

    “Escalation: Recent Events Suggest Mounting Economic Danger”.
    I fully agree with you, Brandon.
    The more the economic-financial situation gets worse and accelerates, the more diversionary events (geopolitical, “health”, “climate”, etc.) will occur or will be triggered.
    Unfortunately, most people only see the catastrophe when it is already too late or when the ground is shifting under their feet.
    Alternative economic and geopolitical analysts like you, Michael Snyder or Egon von Greyerz are considered by many ignorant or intellectually dishonest people (or corrupted by the globalists), as Greek “Cassandras”.
    Here is a recent and very relevant article by Mr. Von Greyerz, who is also very pessimistic on Europe future, where he lives, as i do:
    https://goldswitzerland.com/30-stock-crash-next-with-germany-kaput-us-insolvent/
    Many people around me are beginning to realize that these Western sanctions “to punish Russia” are turning against Westerners in general, and Europeans in particular.
    The West/East confrontation? A sinister and fatal joke.
    We are witnessing a huge Kabuki theater.

    • Steve September 19, 2022 at 1:31 pm

      This can only be the Great Reset. If it was mere stupidity, they would occasionally get things right. This is a deliberate take down of our economy. Let’s hope the people of Europe overthrow these maniacs before it’s too late.

      • HockeyGuy September 20, 2022 at 8:12 am

        Yep. Neil Oliver said it best (paraphrasing) – “the intent isn’t to fix things, it’s to break them and leave them broken.” We proles in the Western “democracies” are being systematically and forcefully pushed down into an overall lower standard of living, with less energy, less food, less free speech, less purchasing power. And as a good magician knows, the trick is to keep people focused away from where the slight-of-hand is taking place, and likewise, all the other “news” stuff like covid, Ukraine, Taiwan, ongoing transgender fetish, and partisan politics (USA) are manufactured distractions to keep us from realizing the real changes that are being implemented without any debate or via democratic process channels. Resist!

  • redcabinsteve September 16, 2022 at 9:43 am

    “What we can do, though, is prepare locally to weather the storm. This means stocking necessities before they rise even further in price or become non-existent. Become a producer and learn a valuable skill for survival in a depleted economy Organize with people locally who are on the same page to create security and alternative trade opportunities.”

    That’s my takeaway from the article.

    Yesterday I deleted various podcasts from my list and went with woodworking and sawmilling related stuff. I’ve been upgrading woodshop tools at the expense of some credit card debt. These new/used tools are capable of cutting a long straight line. A solar wood kiln would be nice too.

    A local friend told me the country is in chaos. I said as long as trucks are hauling stuff on the interstate we are not. Another told me a million hungry people an hour drive south of us wouldn’t be a problem. They will simply stay there and hash things out amongst themselves. I said if only 2% radiant out that would be a problem.

    Not super optimistic here

    • Laura ann September 17, 2022 at 9:12 am

      redcabin steve: agree, getting things done, I also deleted websites focused on political solutions(Dave Hodges, others) because there is none. U.S. Congress down to state and local officials are pushing globalism, agenda 2030, many are rinos. Rail strike seems resolved for now and trucks moving for now. We stick w/likeminded in community, stay low key not involved in any group activities now, dropped out of several sometime back, waste of time anyway. No hope for younger generations, I have younger neices, nephews are into middle agethey will have to stand up for themselves like everyone else.

      • Steve September 19, 2022 at 1:32 pm

        Agreed, Laura. I have to laugh at all the idiots who think a victorious GOP led by McConnell and McCarthy are going to turn this around.

  • Farmer September 16, 2022 at 11:01 am

    Timely article, and right on, as usual.
    Looks like the Elliot Wave people who have been calling for a return to all time highs, are likely wrong, IMHO, and that their calls for another low in September is actually a continuation of the bear growling. Your calls for further economic disintegration this fall are in line with the alternate Elliot Wave interpretation, which is we’ve started the long road downward in the Grand Supercycle. I know you’re not a fan of Elliot Wave, but I just wanted to share my interpretation, which fits your analysis.

    I also wanted to mention about the Shmitah Cycle, a Jewish tradition which you likely have heard about. It is essentially an agricultural aspect of the “Shabatt” – giving the land a “sabbatical” every 7th year. It was also a year when debt was forgiven, historically. Economically, there are correlations made between market crashes and the Shmitah year. This September 24th ends the Shmitah year for this cycle. Two cycles ago was the crash of 2007. Wonder what news might occur as this cycle concludes.

    • David September 18, 2022 at 2:21 pm

      Your entire remark about Shabbat strikes me as mental masturbation and useless speculation. No one is coming to save us, not even some desert god of the scriptures. Like Brandon said, we have to band together in local groups and continue learning post-collapse skills.

      • Davy Crockett September 24, 2022 at 9:51 am

        God is not mocked. Either the rock turned into a frog and then the frog turned into a prince, or you are mocking the Creator of heaven and earth. Perhaps everything happening to the world is the consequence of abandoning Him and His commandments.

        I trust His Word and according to that Word, nobody is going to make it without His help. If you are a piece of slime that crawled out of the Nile, you are on your own. If not, kindly consider who you are mocking.

    • Some guy September 19, 2022 at 6:53 am

      Interesting that you mentioned the 24th. A European politician said something about that date as something they still had, that will stick in people’s mind and they will remember exactly where they were.

      We will see in a week….

    • Linda September 19, 2022 at 8:26 pm

      Predictive Programming….The Simpsons, Season 24, Episode 9: Homer Goes to Prep School. In this episode an EMP (electromagnetic pulse) knocks out power in Springfield.

      Cyber Polygon goes live on the 24/9 perhaps???

  • Justsayin September 16, 2022 at 12:22 pm

    Another key development was just announced today via zero hedge. https://www.zerohedge.com/crypto/white-house-releases-first-ever-comprehensive-crypto-regulatory-framework

    Things are steadily being put in place. Like the click, click of going up a roller coaster. We are getting very close to the top!

  • Rodster September 16, 2022 at 2:15 pm

    “But, believe it or not, I still get people today who claim that we analysts are “doom mongers.” The power of willful ignorance is truly amazing. It’s enough to make a person blind to stagflationary crisis, supply chain disruptions, quickly inflating prices, stock market carnage, bond market instability, record consumer debt, and international conflict.”

    Yes, it’s called as you know, slowly boiling a frog in a pot.

    “What I do want to point out is the complete lack of planning on the part of European officials to deal with the threat. It is as if they WANT a full spectrum disaster.”

    As you have written many times, this is precisely what they want. They are getting desperate and the WEF Globalists are getting nervous that people like the European farmers are getting wise to the fact that this is a takedown of the Global economy. In France the Yellow Vest are back in action.

    “There is also the issue of Ukraine and arms sales. With the amount of propaganda coming from Ukrainian Intelligence and NATO, it’s hard to say what is actually happening, but I suspect Russia is changing strategies and repositioning to deploy missile and artillery bombardment of infrastructure, including power grids and water. This is a tactic that Russia has avoided for months (until this week), which is surprising because one of the first measures usually taken by the US during an invasion is to eliminate most key infrastructure (as we did in Iraq).”

    That doesn’t surprise me as this all seems orchestrated beyond belief. What is concerning is the response Dmitry Medvedev gave that Russia will only be pushed so far and don’t be surprised if Nukes are launched towards the US and it Allies.

    https://news.yahoo.com/medvedev-terrified-security-guarantees-ukraine-160948240.html

    I hope this is all part of the script as well.

  • kal September 16, 2022 at 2:45 pm

    Dumas, is voicing its displeasure with the current situation in zellieland, and if Putin is to maintain his position he will have to stomp on Ukraine and bring it into line along with the Donbass and Crimea. The meeting between Xi and Putin is in my opinion a meeting to plan, first the ending of the petro-dollar once and for all, a plan to consolidate SCO and BRICS and to supply at least for the temporary a mutual aggression pact against the US driven proxy war in Ukraine and the final solution to the Taiwan problem for China/.

    • Rodster September 16, 2022 at 2:47 pm

      Hasn’t China created their version of “SWIFT”, which is called “CHIPS”?

  • Roundball Shaman September 16, 2022 at 3:25 pm

    “Economic decline is a process that takes many years, and while you might get an event like the market crash of 1929 or the crash of 2008, these moments of panic are nothing more than the wreckage left behind by the great wave of tumbling ice that everyone should have seen coming far in advance, but they refused.”

    People used to have some of sense of ‘history’… history in terms of Time and our place in the long-running Timeline of Life. People who thought in terms of decades and multiple generations. But not in today’s instant-only, quick-and-easy, shallow-and-simple-minded mind set and ‘thought’? process. If it happened last week, it’s old news. If it happened last year, it’s ancient history and don’t even bother thinking about it. Or maybe it is forgotten totally as if it never existed. Look at the latest meme or what’s trending in the last hour and that’s all you need to know…

    This is a dreadful way to conduct one’s life. It’s also an awful way to run a Country and National policy. But in today’s Woked-Up World, this is how those with their hands on the levers of power think. Or actually, DON’T think. And lots of regular people as well.

    Native Cultures have a deep and personal sense of a great timeline of history. They know They are but one chapter in a long-running Story of Consciousness and Culture. And They have a profound sense of Who they are and What they believe in and Why they are on this Earth.

    In the Great, Modern, Western World… this deep sense of Understanding has long been lost. And no one seems interested in bringing it back.

    “The question that always arises is ‘what can we do about it’… What we can do, though, is prepare locally to weather the storm.”

    Stocking necessities is critically important. But there is something just as important if not more. We need to prepare our minds and thoughts and emotions to deal with the great storm that is underway. We need to find inner strength and share it with those around us. We need to be creative and find way to survive and live in a World that currently seems hostile to our survival.

    And as many of us have learned in our lives… sometimes when we have faced great challenges we have found an inner strength we did not know we had.

    That strength is there inside, in everyone. And these days… we’ve going to need it more than ever.

  • Luke September 17, 2022 at 12:57 am

    I predict by the end of 2022 there’s going to be helluva lot more people who think like we do. On one hand that sounds like progress, but be careful what you wish for. Have known something was awry since 2020 but it was more instinct/intuition. Money guys like Brandon brought it together for me. It didn’t do shit to alleviate my negative thoughts but it did bring some comfort knowing why.

    This site international man is pretty good. Here’s a short link I recently found. Understanding what is going on is helpful to me. I had no f**** clue why TPTB continue to weaken our military all the while we have hardened enemies wanting to kick our asses. I keep second guessing myself wondering why are these people doing this? Maybe this explains why?

    These people are screwed in the head. I fully believe China double crossed them with respect to Covid and the vaccines. We shall see soon enough. Don’t think we have much time. Once a good portion of the herd catch on prep time is over. Doubt we get much further than December before it happens.

    https://2ndsmartestguyintheworld.substack.com/p/must-read-doctor-at-a-large-teaching

    • Rodster September 17, 2022 at 8:49 am

      I knew something was awry back in 2009. That’s right around the time I began reading Michael Synder’s collapse blog and after that listening to James Corbett. Shortly after that I found Brandon’s site. It put everything thing in perspective when both James and Brandon’s logic merged that this was all being orchestrated.

      The funny thing is how people like Alex Jones was called a conspiracy theorist when he tried to expose the Davos and Bilderberg cabal. Now Klaus Schwab has pretty much become a household name.

      People are in fact catching on that the Head Master Klaus Schwab has infiltrated governments around the world and he along with George Soros and his Son have installed their government puppets around the world for their One World Government utopia.

      • Luke September 17, 2022 at 12:31 pm

        –Started paying attention circa 2001. 9/11 played a role in that I suppose. Was stuck in the 2 party paradigm. I have to credit Trump for breaking me free of that. Love him or hate him he did expose both sides to make it easier to see.
        –One thing that really jumped out at me in 01 was the left’s insatiable appetite to lie and promote bad/dangerous ideas. They went against every grain of common sense and decency known to man. I brought it up to my dad early 2000’s. He said “Son its just politics.” I didn’t buy it though, this seemed to be more sinister.
        –Time passes and most people don’t want to have to think about the shit I think about now; me included. I understood the danger that emanated from the left but the 2016 election settled my nerves a bit. Had always thought the govt to be complete buffoons but benevolent in nature. When Covid hit I could not believe anyone (in West Civ) would have done this to us deliberately. Then the “open up” rallies in which the people were demonized by the same people who, two weeks later, would facilitate riots for a couple months.
        –It dawned on me there’s something bigger than benevolence in motion. Had a friend at the time ask me, Luke how long are you going to be like this? The tone was quite cynical and condescending. Didn’t have an answer but it did get under my skin. Looking back, I was off the chain back then. Running around swatting invisible flies trying to make it all gel in my fevered brain.
        –I am happy to say a few months ago I slipped into the state of “Acceptance.” In other words I know the shitstorm is coming but am remaining in a more calm focused state. I think that I have also accepted that it can’t be reversed now. Unfortunately I don’t think it can be as we have crossed over past point of no return.
        –The people in this country should probably be in the streets this very moment demanding we slow our roll in Ukraine. Whatever the reason from the money we are spending, to the potential to escalate things people should be screaming that its none of our business. But they’re not. Makes me wonder if their has ever been an organic protest from the left all these years?
        –So if I could offer a retort to the question “How long are you going to be like this?” I would say this “As long as it takes.”

        • Joe September 18, 2022 at 7:54 pm

          My timing matched yours, few months ago started smiling and making light conversation with family and co-workers.

          The time for warning has ended, chance favors the prepared mind as they say, hopefully see you like minded individuals at the other end of this.

          Godspeed and God bless my friends.

    • Davy Crockett September 24, 2022 at 10:27 am

      @Luke
      The best series on the big picture I have seen:
      https://www.youtube.com/playlist?list=PL95B1BB23B7A3C795
      (Please note I disagree with lecture 29 and 32.)
      Schwab is not in charge.

  • Steve September 19, 2022 at 1:35 pm

    I guess I’m not the only one who thinks that the world is going to look very different in Spring 2023. Hopefully, a lot of the psychopaths who got us into this mess will be hanging from lampposts

  • SolarTermination September 19, 2022 at 2:02 pm

    Famine: it’s what’s for dinner.

    https://tritorch.com/famine

    No joke – get food storage now or starve.

    • OutstaingInMyField September 20, 2022 at 8:50 pm

      That was sobering – heading to Sams in the morning. Thank you

  • Amos September 23, 2022 at 6:31 am

    Folks think about planning for disruption of supply chains to cities now! Cut water and power feed to all large cities and watch how quickly the poor and downtrodden turn on the elites. there are fun times ahead as America dies.

  • Serge September 24, 2022 at 2:48 pm

    This Monday, 9/26/2022, we could wake up and be faced with the Lehman Bros. 2.0.. :
    https://www.youtube.com/watch?v=__X30tEKbS0
    This fall could mark a major turning point for the world economy and western societies.

    • Brandon Smith September 24, 2022 at 7:49 pm

      I wouldn’t count on that. Markets will probably drag on for another several months, but watch out for gas prices, they are about to spike again.

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