Sept. 15 marked the 10-year anniversary of the Lehman Brothers bankruptcy.
Many investors undoubtedly remember that day clearly. But as Jim Rickards pointed out in a recent article at the Daily Reckoning, that day was actually the culmination of a long meltdown. Investors should have seen it coming. In fact, they could have seen it coming had they been paying attention.
So, are we in the midst of a similar slow-motion meltdown today?
“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function.” – F. Scott Fitzgerald
On the one hand, things in the economy look pretty good. The mainstream pundits sure seem to think so. They fill the financial news shows with daily doses of good cheer. But is everything really sunshine and roses? Or should we be holding some opposing ideas in our minds as well?
Saturday, Sept. 15, was the 10th anniversary of the Lehman Brothers bankruptcy. Many people consider it the seminal event of the 2008 financial crisis.
In his latest podcast, Peter Schiff said as we look back at the anniversary, we should realize that the next crisis is going to be worse. In fact, the next economic hurricane is going to be a category five.
The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes.
Jerome Powell is like a kid playing with matches and he’s dangerously close to starting a fire he isn’t going to be able to control.
The Federal Reserve nudged interest rates up again last week. It was the seventh hike since the Fed launched the current tightening cycle in December 2015. The Fed Funds Rate (FFR) currently sits at around 2%. Although this remains historically low, it may already be near the cycle peak. That means we may be close to a major economic downturn, as indicated by analysis by GoldMoney’s Alasdair MacLeod recently published at the Mises Wire.
The US national debt stands at over $21 trillion and neither political party in Washington D.C. seems inclined to do anything about it. In fact, the GOP tax plan winding its way through the political process will add an estimated $1.5 trillion more to the debt over the next decade. And that doesn’t even account for the increases in spending that Congress will certainly approve over that timespan.
Of course, all of this government debt has serious ramifications. Corporations are also piling on credit. Last month, Mint Capital strategist Bill Blain predicted that “the great crash of 2018 is going to start in the deeper, darker depths of the credit market.”
Now consider this. China has an even bigger debt problem than the US, and analysts say it could threaten global financial security.
The Federal Reserve is in the midst of inflating its third big bubble. During an interview with Greg Hunter last month, Peter Schiff said the third time isn’t going to be the charm.
