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Prepare For Asset Price Declines Of 50-75%

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Posted by Steve St. Angelo - SRSrocco Report

on Wednesday, 05 July 2017 05:13

2537-Bear Market Trading IdeasWhat we have is a totally propped-up market based upon debt. Energy isn’t producing positive growth, really. So instead of having real economic growth, we have inflated economic growth and inflated asset values.

When growth starts to decline, I think we’re going to see the valuations of assets decline considerably. It’s anyone’s guess how quickly they can fall, but according to what I have been looking at, I think we are going to see a 50% decrease in real estate values right off the bat. I am not saying this will happen in a day, but the first wave will be a 30-50% decrease in real estate values when the markets really start to crack. They are already at the edge of the cliff — and I see prices falling down the cliff, struggling to recover, and then falling even further. Actually, I predict within the next 5-10 years, we can easily see a 75% or more reduction in real estate values.

This was part of my interview with Chris Martenson at Peak Prosperity.  During the interview Chris and I discussed how the disintegrating energy industry would negatively impact the value of most assets…. Stocks, Bonds and Real Estate, while the precious metals would ultimately be the higher quality safe haven and store of value.

Out of all the analysts in the alternative media, I find that Chris Martenson’s work at Peak Prosperity gets closer to the root of the problem as it pertains to the future of our financial system and economic markets.  This is due to the fact that Chris focuses on energy and the Falling EROI – Energy Returned On Investment.

Unfortunately, most precious metals and resource analysts overlook energy.  Thus, their analysis is likely flawed because they view the future as a continuation of “business as usual”, once the debts and leverage are taken out of the system.  This is an incorrect assumption, because the debt and leverage actually have allowed our financial system and markets to continue to function well beyond its expiration date.  Getting rid of the debt and leverage would cause a collapse of the system… one that we will be unable to grow back out of.

Lastly, I believe it is important to continue focusing on the information and data as it changes.  This will provide the investor-public with a guideline as to the timing of the upcoming disintegration of our highly leveraged debt based financial market.

You can also access my interview with Chris here: Steve St. Angelo: Prepare For Asset Price Declines Of 50-75%

Also, if you have not watched Chris Martenson’s CRASH COARSE, I would highly recommend it.



Asset protection

Tell as Lie Often Enough it Becomes the Truth – How Lies Now Defeat Gold & Dollar

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Posted by Martin Armstrong - Armstrong Economics

on Friday, 30 June 2017 07:44

Gold-Dollar

Martin Armstrong: A flood of comments from central banks this week has been signalling that the era of easy money is coming to an end. Of course, the nonsense spouted out by the Gold Promoters that hyperinflation was coming has left 10 years of continually wrong forecasts yet the pretend analysts have done far more damage to the marketplace that is only now revealing itself. Note carefully, that gold has declined WITH the dollar. Something else the promoters said would never happen.



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Asset protection

Public Pension Crisis Reaching a Tipping Point

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Posted by Lawrence McQuillan via Financial Sense

on Thursday, 29 June 2017 07:00

public-pension-liability

With several states and local governments across the country facing insurmountable public pension obligations, and a few cities having already declared bankruptcy to cope with the problem, it’s becoming increasingly clear that the current system is unsustainable and will have to change.

 

Lawrence McQuillan, a senior fellow at the Independent Institute and author of the book California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis, explains why this is a crisis, how we got to this point, and the reforms that are needed.

Is It Safe to Call It a Crisis?

The short answer is, yes, we’re likely at the beginning of a crisis. From a national perspective, all state and local government pension debt amount to $4.7 trillion, McQuillan stated.

“This is money that should be in the bank today, but isn’t, in order to pay for pension benefits that have already been earned,” he said.

Though contributions have increased in recent years to make up for the shortfall, public pension liabilities are still climbing at a much faster rate and are unlikely to be reversed even under the most rosiest scenarios, notes Bloomberg based on a recent study by Moody's:

....continue reading summary HERE



Asset protection

Welcome To The Third World, Part 24: Illinois About To Default?

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Posted by John Rubino - DollarCollapse.com

on Thursday, 29 June 2017 06:58

train-wreck-1The train wreck that is the state of Illinois has generated a lot of questions lately, including “Will its government ever pass a budget?”, “Will it ever pay its overdue bills?”, and “Is it possible for a state to go bankrupt?”

Looks like we’re about to get some answers to these questions, along with one more: “What happens to the financial markets when people finally realize that Illinois is far from the only impending bankruptcy?”

Today’s Wall Street Journal has an anecdote-filled article illustrating what certainly looks like a case of terminal financial mismanagement (How Bad Is the Crisis in Illinois? It Has $14.6 Billion in Unpaid Bills):

Among the many, many data points:

  • The state comptroller predicts unpaid bills will soon top $16 billion. “It is almost hard to say those numbers out loud because they seem so insane, but that’s where we are right now.” 
  • Unfunded pension liabilities now total $250 billion. That’s about one-third of state GDP, and is in addition the myriad other debts taken on in recent years.
  • S&P Global Ratings has warned that it could lower the state’s rating to junk as early as this week if a budget isn’t passed.
  • Peoria-based OSF Healthcare, a network with 10 Illinois hospitals, is owed about $115 million for bills over four months old, the equivalent of 18 days of operating expenses.
  • The state owes Illinois dentists $225 million. Some dentists with lots of state workers are selling receivables to keep the lights on. Others are asking state employees to pay in cash.
  • The state owes two Springfield hospital systems more than $200 million.
  • The Coliseum building at the state fairgrounds closed indefinitely earlier this year after the state failed to fund needed repairs.
  • Eastern Illinois University has received $53 million less in state funding in the past five years than the previous five. Professors in the chemistry department haven’t been able to print in color since the department’s printer ran out of yellow ink a year ago. Enrollment has fallen from 12,000 to 7,000 in the past decade.
  • If the state doesn’t pass a budget in the current special legislative session or allocate emergency funding, about 700 road projects under way across the state—worth $2.3 billion and employing 20,000 people—will come to a stop.
  • Some social-services agencies are operating without state help while others have closed entirely, leaving some rural communities without mental-health clinics, domestic-violence shelters and drug-treatment clinics, despite a raging opioid crisis.
  • Illinois has lost more residents than any other American state for the third year in a row, with 90% of the state’s counties seeing a drop in population, shrinking the state’s tax base. In 2016, a net of 37,508 people left, according to census data, putting the population at its lowest in nearly a decade.


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Asset protection

WHEN THIS MASSIVE BUBBLE POPS… What Will Happen To The Precious Metals?

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Posted by Steve St. Angelo - SRSrocco Report

on Tuesday, 27 June 2017 06:19

As the Mainstream financial media continues to promote the biggest market bubble in history, only a small fraction of investors are prepared for the disaster when it finally POPS.  The markets are so insane today, it seems as if fundamentals don’t matter any more.  However, they actually do if we look at the numbers closely.

In order to invest in the correct assets going forward, one must choose between those with a low RISK and high REWARD versus assets with a high RISK and low REWARD.  While this may seem like common sense, I can assure you, the market makes no sense whatsoever today.  And most investors are doing quite the opposite.  Go figure.

If we look at the following charts in this article, we can clearly see which of the following assets, the DOW JONES, GOLD or SILVER, enjoy the lowest risk and highest reward.

Dow-Jones-Gold-Silver-20-YR-768x500

This chart shows the price action of the Dow Jones Index, gold and silver.  Since its low in 2009, the Dow Jones Index is up 229%, from 6,500 to 21,400 currently.  Even though the Dow Jones Index experienced a brief 17% correction in 2011, it hasn’t endured a healthy 30-50% market correction in over eight years.  It is most certainly overdue.

However, after the precious metals prices peaked in 2011 and then declined, silver is only up 22% from its low in 2015 and gold is up 20%.  Thus, the Dow Jones Index has surged higher for eight straight years, while gold and silver are still down considerably from their peak prices in 2011.

If we look at each asset class separately, we can see how over-valued the Dow Jones Index is compared to gold and silver.  The next chart shows that the gold price fell 46% from its peak in 2011 to its low in 2015.  Now, even considering the 20% current rise in the gold price from its low in 2015, it is still 35% below its 2011 peak:



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