Market Crash and Global War?
Several have asked about the projection model and whether anything regarding the war and economic upheaval has changed since Trump was elected. I hate to be the bearer of bad news, and I am sorry to report that, unfortunately, everything is status quo. In fact, I venture to say that perhaps things are right on schedule.
For those that have read or listened to my work, you know my projections are not exactly uplifting. I’m sorry, but let me remind everyone that my work is based on projection, not a prediction. There is a big difference. I don’t like what the model suggests any more than you do. That being said, I still think it’s important that we pay attention and heed certain warnings. This is because if we don’t, we will be blind-sided and caught off-guard – which is never a good situation to be in. It is my contention that the more we know, the better we can prepare and navigate.
My projection model has not wavered, and recent data suggest that some of my more drastic projections may be on the horizon. Let me share a little bit with you so that you can see what I mean – but understand that what I am sharing is merely a fraction of the overall picture.
Remember what I have repeatedly said: look for China, Russia, Iran, Venezuela, and North Korea to align and counter U.S. interests. Look to the Baltics, the Middle East in through the horn of Africa, the Pacific / South China Sea and the United States as potential conflict zones. Now, this is not to say that other areas of conflict (such as the Arctic or South America) will not exist. Instead, it is merely a point of reference for important parts of the progression.
Take what you read herein and apply it to what I’ve already provided you in the past. To provide everything in one place would be another book that is pointless to write. Consider this merely an update of sorts and attempt to merge the information into one coherent piece. That is really the only way you will see this for what it is. If you need more context, you may consider clicking the links provided herein or getting a copy of RELOADED.
In RELOADED: An American Warning, I made it clear…
“China is in the process of crushing the United States with lots of cheap goods that at one point were made right here in America. In exchange, they not only get our money from the purchase but they get the new-found demand from the companies who were forced to either move their operations to China to take advantage of that same inexpensive labor or simply close. As you can see, they are taking that money and buying our assets right out from underneath us.”
Bloomberg recently reported that the Centre for Economics and Business Research in London suggests that in 2032 (fourteen years), three of the four largest economies will be Asian — China, India, and Japan — and, BY THAT TIME, China will have overtaken the U.S. to hold the number one spot.
That is unless, of course, the U.S. implodes before that time – which will just speed up that timeline. I’ll discuss this part toward the end of the article. The point I am sharing here is the shift that has already begun.
Ultimately, this is the global power shift I have talked about. What bothers me, of course, is that no global power shift has ever occurred without a really big fight. As one might expect, China appears to be preparing for just that, and it seems they want to be prepared sooner rather than later. Their preparation and advancements seem to coincide just fine with the previous projections I have provided.
One such example might be that China is in the process of building a fleet of aircraft carriers, and they are training pilots to man them. In fact, according to state media, the PLA Navy has begun training its own pilots – instead of recruiting them from the air force. They recently opened up their Naval Aeronautical University last year. They state that their military experts have said there was “some urgency” to get cadets trained and the university’s initial intake of cadets numbered roughly 450 pilots. That’s just one example out of many.
Meanwhile, China continues to build islands and claim territory in the South China Sea. State media reports that large-scale land reclamation around disputed reefs in the South China Sea is “moving ahead steadily.” They suggest that things are “on track” and that they are using giant “island-builders” to transform even more of the region. What you should be asking yourself is, “On track for what?” You need to understand that this implies a strategic plan. That plan is probably the issue.
Remember that long before it was clear to the media what China was doing, and long before China ever built anything on those islands they had created, I warned of the island’s military and strategic probability as well as China’s ambitions. Now, China claims nearly all of the South China Sea, and they have been turning reefs in the Spratly and Paracel chains (an area where it has conflicting claims with neighbors – our allies) into military island bases. I’m just guessing here… but I can only imagine they are going to be used for something other than parking planes.
Another thing to keep in mind… is China’s new base in Djibouti and its global expansion. They are on the move, and few seem to notice, and even fewer seem to care. Of course, many simply haven’t been told about China’s heavy involvement in places like Africa, Afghanistan, or even Pakistan. This doesn’t seem like a big deal at first. It’s only when you realize they are positioning themselves to fill a void that it begins to make sense.
The situation with Russia is not old news. Every day we see that we inch closer to a potential war. That probably seems far-fetched for those not paying attention. Remember that wars are fought for power, money, and influence. A war with Russia would be no different.
Russia is expanding its influence and preparing for battle. I have reported several times about Russia’s intentions in this regard, as well as how they have been deploying more troops north of the Arctic Circle to restore old Soviet bases and build new ones. According to ABC News, the country is trying to make sure it gets its share of the region’s wealth of untapped minerals. I’m merely pointing out that the resources are going to be worth fighting for, and most people haven’t exactly been told why.
Meanwhile, recent reports show that the U.S. Army has started production of a new Self-Propelled Howitzer variant; a next-generation cannon able to outgun existing Russian weapons. This is a very specific request and mission. Sure, there are some who might suggest that I am reaching for straws at this point, but I don’t think so.
Robert Neller, a four-star general who currently serves as the 37th Commandant of the Marine Corps, recently told his Marines stationed in the Baltics that they should be prepared for a “big-ass fight” with a foreign adversary, perhaps Russia. I’m pretty sure he means it.
According to the Military Times, the Marine Corps is spending $7 million on winter equipment, such as thousands of sets of new skis, boots, and binding for scout snipers, reconnaissance Marines, and infantry Marines. True, $7 million really isn’t a lot of money when you think about it, but this is merely one publicly accessible example of many to help demonstrate a point. Think about why the U.S. would invest in winter gear for some of our best soldiers if all of our supposed enemies were in the desert.
Just in case? Perhaps. However…
North Korea and Russia are both known for their harsh winters. That’s just a thought, really. However, North Korea and Russia should be on the radar, partially because of their cooperation. Newsweek recently reported that “Some of the more advanced missile technology recently put on display for the wider world by North Korea was acquired by the rogue state with the help of Russia, according to new documents acquired by The Washington Post from one of the top Soviet-era missile manufacturers.” This is something that Trump has since denounced.
North Korea continues to fire missiles and test nuclear weapons in spite of repeated threats and promises from the United States. This can literally only go so far before it turns into something nasty. Either the world just lets North Korea do what it wants, or those making the threats will have to follow through. Unfortunately, it’s not as simple as getting in there to correct the situation. You must remember that North Korea is backed by Russia and China – who both share a border with North Korea and would not be happy with the United States being that close. A good way to understand this relationship is to consider how Chairman Mao described the relationship between China and North Korea; “As close as lips and teeth.” He worried that “If the lips are gone, the teeth will be cold” (Chun wang chi han).
Know that the three would be unified against the United States and know that if the United States fought against China, Russia, and North Korea alone, it would be a blood bath. China and Russia are already training for that possibility. The United States will need a lot of help and a lot of troops or some big bombs. This is probably why some military experts in China are worried about nuclear war. I know many believe this is unlikely and that cooler heads will prevail. Let’s hope so. However, we already see a prelude.
President Trump warned that illicit Chinese oil sales to North Korea would hurt the prospects of a peaceful resolution over Kim Jong Un’s nuclear weapons and missile programs. It was also stated that Russian tankers have repeatedly supplied fuel to North Korea in violation of sanctions. It seems China and Russia might be instigating a bit. In fact, Reuters reported that two Western European security officials had said Russian ships were transferring their cargo at sea to Korean vessels. If true… that is nothing short of a slap in the face.
Again, something will have to be done at some point, and I’m not the only one seeing it. Defense Secretary Jim Mattis (a retired United States Marine Corps general) recently declared that “Storm clouds are gathering” over the Korean Peninsula. I agree, but again… North Korea will merely be one part of that Pacific arena. This problem stretches all the way down to Australia.
Not only is Iran on the verge of war with Saudi Arabia, but they also have their noses extremely deep in Yemen… and they have been having vicious uprisings (evidently screaming about regime change). But this could potentially thrust Iran into war anyway but only because of who they blame for the uprisings; the United States.
Now, I’m not going to say it was the U.S. and claim that the uprisings are fake, but it’s not exactly out of the realm of possibility. I use a lot of caution when it comes to the political tides within Iran because of things like 1953, 1979, the 1980s, 2007, 2008, and 2011. The Iranian leadership is suspicious as well. Cleric Ahmad Khatami was quoted as saying, “those ordinary Iranians who were deceived by these American-backed rioters should be dealt with based on Islamic clemency.”
Regardless, as long as the current regime remains in power (which looks likely), they remain allied with Russia, China, Venezuela, and North Korea, which means they remain an enemy of the United States. Iran is not a huge player in my projection, but they are a player all the same, and they are a strategic partner in that – especially for Russia and China. Furthermore, they remain the largest state sponsor of terrorism, and that is always worthy of a watchful eye due to the hardships guerrilla warfare creates for the regular military. And finally, they are sitting on resources sought by the world, and the world is taking note of what is going on. In fact, French President Emmanuel Macron just accused the U.S., Israel, and Saudi Arabia of trying to instigate a war with Iran.
Venezuela is a tough one. However, I see them as a desperate nation holding a strategic advantage for their buddies and a hatred for the United States. This is why in my work, I have often referred to them as a staging point for the Russians or the Chinese; the same goes for Cuba.
Of course, Venezuela has also been preparing for war against the U.S. in a very public way. In fact, in September, Venezuela’s President Nicolas Maduro called on his nation’s military leaders to prepare for war against the United States. It’s hard to say how serious he was about that, but at this point, I’m not just brushing it under the rug. Especially considering that Trump (very publicly) suggested that he would not rule out a “military option” to quell the chaos in Venezuela back in August.
Venezuela was once the richest country in South America, but ever since their socialist experiment began to implode, they are beginning to rely on their allies which, in my opinion, makes them dangerous – being that they really are not that far away from the United States. That and because the help they are getting is coming from Russia and China. No doubt this help comes with a cost. Cuba is in a similar boat and relies on the same.
The Possibility of War
It is definitely a possibility. In fact, I think it’s probable – at some point. Too many nations appear to be talking about it and preparing for it. How soon and where it all starts remains to be seen, but I think we should be listening to the words of our generals for a glimpse into that future. Gen. Robert Neller not only warned his Marines in Norway to be prepared for a coming war, but he pointed to the near future possibility of Russia and the Pacific theater being the next major areas of conflict.
Think about that. Russia and the Pacific theater. That is exactly what I’ve been saying for many years. And that warning came a day before Mattis told his troops at Fort Bragg that “storm clouds are gathering” over the Korean Peninsula. It’s not pretty. And it’s not just American military leaders using such bold language. Chinese President Xi Jinping just told his military to be ready for war and be unafraid to die defending the country as well.
That’s not even the scary part, though. The scary part is the validation of my 2005 projection that the United States would not be up to the fight. CNBC reported in December that the United States might have a big problem on its hands.
U.S. defense modernization efforts are “failing to keep pace” when compared with its two big adversaries, and American forces are “poorly postured to meet key challenges in Europe and East Asia,” according to a starkly worded new report from think-tank Rand.
As tensions with North Korea heighten, Rand’s 190-page report, entitled “U.S. Military Capabilities and Forces for a Dangerous World,” also discussed war scenarios with NATO-Russia involving the Baltic states. It also broke down a possible U.S.-China clash over Taiwan and gaps in existing U.S. capabilities.
War with Russia in the Baltic States, US-China clash in the Pacific? Validation indeed. And I don’t really need to touch on the U.S. potential, considering the heated political divide. Take these same divided people and imagine the poor, jobless, hungry and desperate.
Market Correction and Economic Upheaval
I know… you’ve heard everything is awesome right now. I don’t buy it. Try to remember that even Mr. Trump, as a presidential candidate, said that the stock market was a bubble that should make investors wary. Of course, he also predicted a massive recession in the near future. Was he right?
“I think we’re sitting on an economic bubble. A financial bubble.” – Donald Trump
“The only thing that is strong is the artificial stock market.” – Donald Trump
How soon we seem to forget. Never mind the rumors and stories of the Central Banks losing control; let’s face reality. The way I see it, we are looking at a cause-and-effect scenario. According to my projection model (as most of you already know), an economic upheaval will show its ugly little face fairly soon. So let’s look at that possibility for a moment.
Let’s start with the most obvious. As you may have seen on our social media, in various reports, or in your history books…
- The 1920s 8-year winning streak ended with The Great Depression.
- The 1980s 8-year winning streak ended with The Savings & Loan crisis.
- The 1990s 9-year winning streak ended with The Tech crash.
- The 2010s 9-year winning streak is ongoing… but guess what happens?
If you want to be real about it, not a single up has ever lasted, and a lot of really big winning streaks ended with really big losing crashes. I don’t see any reason to believe that this current boom is an exception. The only problem is trying to understand the cycles and figure out a better timeline. Clearly, hindsight will be easier to dissect than providing an exact date right now, but still.
And I know… the S&P 500 closed above 2700 for the first time, the Dow is over 25000, layoffs were evidently the lowest since 1990, and even Warren Buffett suggests that we have years of growth ahead of us. But that’s actually the problem for me. Everyone is really excited and not paying attention to the things literally right in their face. What has really changed? Not much! I think most are missing the forest for the trees… a forest that has been growing for some time. I agree that this little boom has been nice, but this is not the bright future that I have spoken of. That comes much later. You need to understand that this is exactly what scares me. This boom is a lot of things… but it’s not good news. The way I see it… we are one nudge from going off the edge.
Just for example (one of many)… think of the retail closures in 2017. Did you know that 2017 set a record for retail closures? Fox News is calling the trend a Retail Apocalypse. That’s only because many more closures are expected. In fact, USAToday is tracking it and calls it the Retail Death Watch. Macy’s just announced 5000 job cuts, and former Walmart.com CEO is predicting that Walmart will continue to close brick-and-mortar stores as well. Sure, these closures will likely mean more online sales, but do we forget the fact that brick-and-mortar stores equal jobs? Why are we not including this in all of the good news? Retail is one of the nation’s major industries, and yet few are paying attention to its rapid demise.
And let’s go ahead and address job creation in December, which showed only 148,000 jobs gained. Even during the holiday sales events… we saw a net job loss. That’s right! On the whole, retail posted a net job loss in 2017, shedding nearly 70,000 jobs over 12 months.
Retail employment edged down in 2017, losing 67,000 jobs after gaining 203,000 jobs in 2016.
So what jobs were gained? Construction was on top. Construction saw a steady gain, but I would be careful about how optimistic about getting over that. To begin with, many of those in the retail industry will not get jobs in construction once they get laid off. I’m also guessing that people losing their jobs are not buying homes. So let’s dig a little deeper.
We also need to consider what is being built. Office building rose 5.5%, and as USAToday says, “spending on transportation construction (roads/infrastructure) was up 3.7%, putting it 42.2% higher than a year ago, the largest advance by far by any sector.” There was also a 0.7% rise in state and local government construction. I suppose this is good, but I can’t help but think about the last time we saw massive infrastructure spending and why it occurred. And to be clear… I’m just saying that I would be completely shocked if this infrastructure spending was spontaneous or organic.
True, housing saw a 1% jump, but we should consider that home prices in much of the country are now higher than at the height of the housing bubble. That’s not comforting. In fact, CoreLogic estimates that nearly half of the nation’s largest 50 markets are overvalued. When I mix this news with the job loss news, I don’t see a pretty outcome. Sure, many in that industry insist that there is not a housing bubble. Of course, if they said there was, people like you would be less likely to continue to pay for something that is over-valued… so take it for what it’s worth.
And on a similar note, I think it’s irresponsible of leadership to lie to or deceive the people about our economic issues. When people are told they are doing the right thing (spending on over-valued anything / using up savings/living on debt), they will continue to do it until it breaks them. Once that happens, it’s everyone’s problem.
I know that some are trying to remedy it but try to remember that the United States doesn’t really make stuff anymore, and this trend continues. Over 5 million manufacturing workers have lost their jobs since 1997. Where are they working now? I don’t buy the 4.1% jobs claim anyway, either. That number doesn’t include everyone that it should, and we all know it. Personally, I think it’s closer to 21% or 22%. Heck, the U6 unemployment rate (a government number) is just over 8%.
Even according to official data, the labor force participation rate has remained at 62.7 percent and has shown no clear trend over the past 12 months. For almost four years, the labor force participation rate has been largely flat, so, despite claims of low unemployment and supposed signs of strong economic growth, many are still not working. So you can show me a gain of 148,000 jobs, but compared to the millions who have already lost their jobs and/or given up looking for one and the thousands who have already received their layoff notices in 2018, it’s not impressive.
More hints of the tragedy are starting to go mainstream. CNBC reported that Byron Wien, vice chairman at Blackstone and a 50-year veteran of Wall Street, said in his annual list of market surprises that the S&P 500 will face a 10 percent correction. As I’ve shown you, a correction (or crash) is probable at some point. I also believe his number is understated, but it’s worth noting.
Wien isn’t the only one suggesting a big change. Former Fed insider and founder of Money Strong, LLC, Danielle DiMartino Booth, is not optimistic about a surging economy in 2018. As reported on USAWatchdog.com, Booth contends, “We have seen 24 consecutive back-to-back months when credit card spending has outpaced incomes. That tells you households are struggling to get by. This is not Eve Saint Laurent handbags and Jimmy Choo shoes. These are families who are using their credit cards to take care of the necessities, to fill up the gas tank, to buy groceries and fill up their refrigerator. . . . We have seen month after month of subprime automobile delinquencies, and we are starting to see a big tic up in FHA mortgage delinquencies as well. . . . We are at almost 10% (delinquencies) of FHA mortgage loans. Underlying this sugar high that we will see from all of these hurricanes and rebuilding efforts and wildfires, underneath that, still waters run deep and the economy is not doing well. We are a consumption driven economy that is weakening underneath. The sugar high will absolutely wear off in 2018.“
And the big man himself, Dr. Ron Paul, recently told the Washington Examiner that “The big opening for us is the fact that this system is coming apart. We’re on the verge of something like what happened in ’89 when the Soviet system just collapsed,” he said. “I’m just hoping our system comes apart as gracefully as the Soviet system.“
Friends… now is not the time to forget what has been said. Keep in mind that the stories shared with you in this article are less than two weeks old at the time of this entry. Both the economic upheaval and war seem to be right around the corner. By what little I have provided you, they BOTH seem plausible at this point, and none of it should be passed off as “conspiracy” or “exaggeration.” As you can plainly see… it’s not just me saying it anymore. Also, the model seems to think that all of the preceding is somehow connected. That’s just something to keep in mind.
Now… if you really want to see the result of this projection, just factor in the massive influx of robotics and artificial intelligence that will surely displace more workers around the globe. This is not to say that there won’t be jobs… it’s to say the landscape will surely change. Is the current economy set up to handle it? Absolutely not. All of this will change the way the world does business. Dr. Paul is absolutely correct in that the current system will have to collapse… if for nothing else than to make room for the next system. THAT… my friends… is the economic upheaval, and these changes will more than likely cause some trouble as it all gets ironed out. Remember… it’s like the railroad replacing the canals or cars replacing horses. It’s that big.
Timelines are hard to define but according to what I’m seeing… something big is about to go down in the near future (near being a relative word). Of course, we all need to understand that even if my projection is 100% accurate, it is not going to be some apocalyptic scenario. It’s just going to be rough for a while. Wars and crashes happen. And I’m not taking sides on who is right or who is wrong in all of this. It appears to be irrelevant at this point. There will be a lot of changes, and the other side will be dramatically different, but life will go on; there will be good times again. So keep your chin up… but keep preparing.