“A Situation That Spirals Out Of Control Quickly”

Here is my interview with Rory Hall on “The Shadow of Truth.” Enjoy!

By Shadow of Truth, The Daily Coin:

Stock bubble, credit market bubbles and housing market bubbles.  Unfettered money printing by Central Banks globally have created massive bubbles of unprecedented proportions across all asset classes.

Once Government and the Central Banks lose the power to stop markets from going down, you’ll have situation that spirals out of control quickly.  – Wolf Richter, The Shadow of Truth

Wolf sees China eventually emerging as the world’s new number one, but believes that first it must “cleanse” the massive excesses – asset bubbles fueled by a massive credit bubble – with a painful financial and economic correction.

He also thinks that there’s a strong possibility that the 30% stock market correction in China is a preview of what is coming to the United States:

I am convinced that it’s very difficult to impossible to make a significant amount of money in U.S. stocks going forward. I think they’re all pretty much overpriced – way overpriced.– Wolf Richter

The biggest problem Wolf sees with the United States is the Federal Reserve.  The Fed’s money printing has enabled the Government to incur a massive load of a debt and enables Congress to operate free from any budgetary contstraints:

As long as the Fed can buy Government bonds, Congress does not need to address this country’s fiscal problems.

Finally, we take a look at the reinflation of the housing bubble by the Fed.  Wolf is one of the few blog writers who offers insightful analysis on the housing market. By Shadow of Truth, The Daily Coin

“The decades-long tailwind will shift to a housing headwind” – Zillow. Read…  Home-Buying Panic Sets in, Housing Bubble 2 Soars, Industry Drools, But It’s Doomed, Says Zillow

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  11 comments for ““A Situation That Spirals Out Of Control Quickly”

  1. LG says:

    I drove by Costco today. Across the street they’re building
    266 “Communal Housing” projects. (apartments) . With 76 thousand sqft of retail space.
    From my house to the south and the north by the freeway they’re building the “new America”. 90% of millenials will live in communal housing! Just like in Canada , Europe etc etc. Welcome to the USSA!

    • d says:

      Put the consumer environment, directly on top of the supplier environment.

      Then train the consumer, never to leave that environment.

      These projects are mere steps away from the Matrix.

  2. Mark says:

    Bring Manufacturing back to the West. Stop trying to elevate poorer countries with OUR JOBS ! Disband the United Nations. Get rid of Communism. Stop trying to make everyone equally poor because that is what will happen everywhere on the planet. By elevating 3rd and 2nd world countries with 1st world wealth you are bringing all of us down to the same level of poverty. It doesn’t work. Globalization doesn’t work. Communism doesn’t work. Then you wonder why social problems are on the rise.

    • d says:

      I bet you are against TPP as well.

      Not 1 hint of a positive suggestion, or even of a why, some things didnt work, as envisaged. .

      • Wolf Richter says:

        I’m not against TPP (or the other current trade pacts). How could I? I haven’t even seen it. You haven’t seen it either. It’s still secret. The only sections I have seen are those that have been leaked.

        But I’m against it being secret! I want full public disclosure of the agreement (and of all trade agreements), including what different companies were lobbying for, so that there can be public debate on it, long before Congress votes on it.

        But we’ve missed the train. Fast-track makes sure we don’t see what’s in it until it’s too late.

        • d says:

          “I haven’t even seen it. You haven’t seen it either. ”

          We ANZAC states don’t need to see it. To know a large part of what isn’t in it, and what is.

          We got assurances from our politicians that certain groups of regulations and Laws would not be changed to Accommodate it. Any politician that lied about that, would get taken out and shot. Further their party would never get elected again, and TPP would be rescinded.

          Then they were asked certain questions over access to, US, Japanese, and other Markets, same deal.

          If you ask people involved in it, and who have read it, questions the correct way, you can fill in a lot of gaps.

          Congress is why it has to be secret.

          If it is public, or publicly available, congress will cherry pick it, and pork barrel it, till it is completely unacceptable, to everybody, but them. Like they always do.

          You would have a situation where everybody concedes their maximum, and makes a deal. Then the US comes back and says, Congress passed it after they amended it to this.

          And congress would expect all those other nations to accept all of their amendments, unchallenged. As they always do.

          If it keeps going round and round the country’s, amended and amended, they will still be trying to get Congress, to make a fair public deal in 1000 years time. Simply as American politics, and Congress, is pork barrel, self interest, and special (Contributor) interest politics. The worst “Democratic” system on the planet.

          “But we’ve missed the train. Fast-track makes sure we don’t see what’s in it until it’s too late.”

          WRONG, you have more brains than that.

          So the deal gets made, then you all get to read it, investigate who you want, and up or down vote it.

          Unlike the ACA where you had to pass it, to get to read it.

          Every Government in TPP has the same deal, read, argue, question the People, and in or out.

          Japan has settled its big issues with the, US, Indonesia, Malaya, and Australia. Which again, tells me a lot of what is, and is not, in it.

          There is decades of work in this thing, and the big handbrake is, Congress.

          The US has to remember 1 thing.

          If it walk’s, they will be replaced with china, which will create the biggest market on the planet. Which the US will progressively get locked out of. For ever.

          Globalization was, and still is, used and abused by corporates, and certain nations.

          It was supposed to bring the bottom up. Not be abused to rise certain nations up a long way. By dragging the top down, and pushing the bottom down further.

          TPP is in many ways a counter to the abuse of Globalization. As bigger trading blocks, with common rules, financial systems, and close tax regulations, are the way forward. And possibly the only way to counter those who deliberately set out to “Game the system”.

          Everybody hits on NAFTA and holds it up, you stole all our jobs with NAFTA. TPP will be the same.

          CHINA was, and is not, a signatory to NAFTA.

          The vast majority of stolen US jobs, went to CHINA, we both know that. The US is not the only country corporates used china, and globalization, not just to Job strip, but industry strip.

          I had a lot of time, and hope for china. It has proved with its nine dash line of theft, and its military enforcement of it. It has no intention of playing by the rules, let alone dealing with its neighbors, in a fair and balanced manner.

          Bonaparte was correct, ‘Beware the Dragons Breath”.
          It would be nice if there was an edit feature. on this board

    • Sabbie says:

      We have the TPP and such because TPTB have *written off* the American middle class. Why should this group of people enjoy such a high standard of living? When it comes at the expense of both the wealthy elite and the global poor. American companies no longer need the American middle class. They will produce in China, service in India, sell globally, and pay taxes to Ireland.

      • d says:

        “American companies no longer need the American middle class. They will produce in China, service in India, sell globally, and pay taxes to Ireland.”

        For a while. TPP and its like will bring common tax structures.

        And common Penalty Tariffs, against those entity’s that claim nationality in the block. But pay no (Minimal) tax in, and manufacture, outside, the block.

        There is already talk of this in the EU. Corporates Globalized, and abuse the system, while tax systems for Corporates are still localized.

        Not for much longer.

        • Petunia says:

          You just described the demise of the country. Good luck getting innovation out of China and India, it won’t happen. Everything made in China was conceived outside of China, and everything maintained in India was also conceived outside of India.

          The American middle class will be selling itself to the highest bidders around the world. Sound familiar.

        • DLW says:


          You obviously haven’t observed our government’s compliance with other agreements such as the Constitution. This unwillingness to follow the ultimate law of the land extends into all 3 branches.

          You have much more faith in the government taking actions in our best interest than I do. I fear the accountability you say they have is at best a figment of your imagination.

          I predict that a short time down the road all of the citizens except the Globalists will read the agreement and weep for our children and grandchildren.

  3. Paulo says:

    LG….Home ownership rate is higher in Canada than the US. by about 2%

    From the Seattle Times:

    The second thing is the size of the unit. Canadian homes are smaller, perhaps because more are townhouses or condos. The average size of new homes built in 2009, was 1,428 square feet in Canada and 2,164 in the United States, according to industry sources. The same source put average floor space per person at 779 square feet in Canada and 832 square feet in the United States. Both were high compared with Europe and Asia.

    The third thing is debt. Canadians pay off their mortgages faster. That was true in the 1990s and it is true today. According to Zillow, 29% of U.S. houses are mortgage-free. Statistics Canada says 43 percent of Canada’s homeowner households are mortgage-free. (In both countries these figures are lower than they used to be.)

    Bottom line: having a tax deduction encourages Americans to buy bigger houses (and condos) and pay them off more slowly, but not to change the likelihood that they will own their housing.

    I have had a modest home on property paid off from the age of 40. This has allowed me to retire at age 57 by being able to use use mortgage money (interest obligations) for savings and other investments. My friends have done the same. My children own their own homes (single family dwellings) and will also have them paid off by age 40. Why?…because interest on mortgages is not deductible in Canada, therefore, it makes sense to pay off your home quicker. When you age and downsize in Canada, the sale of your residednce is not subject to capital gain taxes. I sold my house in town and relocated to the country just before the last housing crash. It left me with lots of money left over which I promptly used to buy more property…just in case.

    Nothing wrong with living within your means. Plus, if you are forced to live in a city why wouldn’t you live in a town house and be car free as well. It just makes sense.


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