Wednesday, March 3, 2010


Great article on the current state of affairs....and how no answer is going to be a good answer...

The ability to wage war on credit gave the West an insurmountable advantage over the East. The West’s credit, however, has now turned to debt and the West has lost its advantage. But the return to parity will not be easy.

The three hundred year economic expansion fueled by debt-based capital markets is coming to an end and with it, the hegemony of the West over the East. During that period, debt-based paper money propelled first England then the US to world dominion because of the ability to wage war on credit and to print money ad infinitum.

That era is now ending because the critical balance between credit-driven expansion and debt-driven contraction has now shifted significantly in favor of the latter; and in 2010, both East and West now find themselves on the edge of a growing deflationary sinkhole created by the sequential collapse of two large US bubbles, the and US real estate bubbles.

The US caused the 1930s deflationary depression and is again cause of the current contraction; and although similarities exist between the two, the differences between them insure a far more consequential outcome today than in the 1930s.

Global demand is again falling as credit contracts, a sign that debt-driven deflation is back but, today, there is an additional danger as well. Since 1971, because of the US default on its gold obligations, money no longer possesses intrinsic value and the consequences will soon become apparent. Deflationary depressions and a collapse in the value of fiat money have happened before but never simultaneously. Soon, they will.

We are in what Stephen Roach, Chairman of Morgan Stanley Asia, calls the end-game, the resolution of past monetary excesses and imbalances, excesses and imbalances that reached never-before-seen heights in the last decade. The long awaited day of reckoning has arrived.

Nice link from comments...cannot disagree


  1. See the attached link on predictions for 2010-2012:


  2. Guys...I was a paid subscriber for the last 3 years of Martin Weiss...please be advised...he has been wrong about a lot..I did not renew the service last month(I was in 3 of them)(Weiss's safe money picks...lost me a lot of money!) he does have a guy I still subscribe to...Larry expert(miners)...he is pretty right on "most" of the time(I kept his service)...TexasBlondie

  3. I agree with TB, Larry has made some good calls for the past 2 years that I have followed him. I am not a subscriber to the paid service only the freebies.

    Sean Brodderick is also pretty good but Martin seems to miss more than he hits.

  4. Weiss loves hysteronics...
    “You tricked me once — into buying tech stocks with no earnings; those stocks crashed and cost me a bundle. You tricked me twice — into buying real estate and that cost me even more.

    “Now, I’m madder than hell and I will never trust Washington or Wall Street ever again!" Guess again. They are in the process of tricking you a third time into buying... yep, you guessed it!