Death Plunge Has Begun – Wall Street Underground

By Nick Guarino | May 1, 2015


You can cut the tension with a knife on the floor of the exchanges. It’s pick pocket in the commodities markets. With all of our favorite markets trading in their 6 month old ranges. Any break out the desperate manipulators try is allowed to run a little before more selling comes in.

The stock market lost all its gains for the year… in one day. It’s not a wall of worry the markets are confronting but a sheer cliff. Traders are sweeping under the covers the incredible economic crises the world faces. From the China wipe out to the breakup of the European Union. To the global shutdown as economies are sucking shut. The global depression has begun.

Desperate central banks the world over are in a race to see who can get their yield curve negative first. It’s a disaster that is unlike anything mankind has seen before.

Never have central bankers been under such enormous pressure to re-inflate their economics. Never have they failed so miserably. And never will a higher price be paid. We are flirting with destruction of the global economic order.

Sounds kind of wild? Really?? I don’t think so!! It is amazing to me how the plunge of the Euro and endless bailouts of EU members is spun as business as usual.

We have something only seen in depressions. Negative interest rates.

The Islamic crazies are making massive inroads

The Islamic uprising is sweeping the poorest countries in the world. Now approaching 250,000 killed and 10 million displaced people. It’s presented as a mere inconvenience.

The Mediterranean sea is no longer the yachting playground of the rich and famous. But the dash for survival of the desperate.

Italian ports in the south no longer see Mega-yachts docking. But instead death ships full of people who decided it’s better to drown at sea then be subjected to the Islamic crazies who are taking over Africa and the Middle East.

A very ugly divorce is coming

With every passing day the European Union moves closer to a great big crack up. Talk about a messy divorce. It’s not just Greece either. English elections are coming. It’s the height of campaign season and both candidates are talking about the aftermath of a British exit.

And if that were not enough the French and Spanish are seeing more and more of their political parties talking EU exit.

You need to understand the glue that binds southern Europe to the union was lots of donations from the EU for housing and road projects. And don’t forget the cheap easy loans.

Its a case of what have you done for me lately. No more money for the projects that formed the love connection. When you got a spend thrift gaga crazy wife that wants to live in the lap of luxury. It’s easier to leave her than support her crazy spending. And that is what the Euro members in the north are realizing.

And as far as those cheap easy loans. That party has come to an end because it’s payback time.

The hopelessly in debt southern Euro Zone members realize that it’s better to leave. AND a lot cheaper! They are not going to get any more money for massive projects like roads, high speed trains and solar farms.

It’s cheaper to leave the Euro and screw their creditors than stay in and slave for the next 50 years to pay them back. Besides people without jobs and social benefits vote out the austerity politicians pretty quickly.

A unprecedented double digit slow down in Chinese exports and it’s hardly mentioned

As reported to you in previous reports the slow down in the Chinese economy and debt accumulation is unparalleled in world history. Recent reports show there is a price to pay. China’s centrally planned economy is creating a conundrum. Bank bad loans are the most ever. And the economic slow down is unprecedented.

And the warnings keep coming:

“The credit-driven growth model is clearly falling apart. This could feed into a massive over-capacity problem, and potentially into a Japanese-style deflation,” said Charlene Chu, Fitch agency’s senior director in Beijing.

“There is no transparency in the shadow banking system, and systemic risk is rising. We have no idea who the borrowers are, who the lenders are, and what the quality of assets is, and this undermines signalling,” she told The Daily Telegraph.

Fitch warned that wealth products worth $2 trillion of lending are in reality a “hidden second balance sheet” for banks, allowing them to circumvent loan curbs and dodge efforts by regulators to halt the excesses.”

As we reported to you in previous reports credit outstanding since the Lehman bust in China has grown from 7 trillion dollars to 30 trillion. This has never happened before in human existence.

The reason this has become urgent is for several reasons. Look at the two quotes below:

Wei Yao from Societe Generale says the debt service ratio of Chinese companies has reached 30pc of GDP – the typical threshold for financial crises — and many will not be able to pay interest or repay principal. She warned that the country could be on the verge of a “Minsky Moment”, when the debt pyramid collapses under its own weight. “The debt snowball is getting bigger and bigger, without contributing to real activity.”

Mrs Chu of Fitch warned: The ratio of credit to GDP has jumped by 75 percentage points to 200pc of GDP, compared to roughly 40 points in the US over five years leading up to the sub-prime bubble, or in Japan before the Nikkei bubble burst in 1990.

“This is beyond anything we have ever seen before in a large economy. We don’t know how this will play out. The next six months will be crucial,” she said.

Heed the warnings because the only hope China has to survive was to have massive growth. And that hope has been dashed because of the building depression.

You need to understand the global stock market rally, including in China, is the height of lunacy.

Today we got the cherry on top. Proof the US economy is entering a wipe out.

US First quarter GDP was up a minuscule 0.2%…..

It’s the disaster of all disasters. The truth is they cooked the books to get the GDP to be up even this slight amount. This is the first report the coming revisions will show first quarter GDP was negative.

The other parts of the report were a even bigger disaster. For example exports were down a whopping 7.2%. But here is the biggie, the part of the report the FED watches like a hawk about to swoop down on a rabbit.

The price index for gross domestic purchase dropped 1.5%

Oh my GOD. This is the real Inflation index the FED watches like a hawk. In this case it has become a deflation gauge They are desperate to stimulate it up to a 2% INFLATION rate. Now it’s negative big time meaning it’s tracing the US DEFLATION rate. It is the disaster of all disasters. It means everything they have done to try and stimulate the US economy since the 2007 wipe-out has failed. Final proof the deflationary death spiral has now begun.

So what are world leaders doing as the global economy enters a depression? Why are they patting themselves on the back, congratulating their “booming” economies because iPhones are selling at a record pace.

It’s the height of stupidity to ignore commodities prices that have been cut in half. It’s extreme folly to see the factories of China shutting down because their global clients are seeing sales collapse.

The warning signs are everywhere. A global depression is upon us and the powers that be damn well know it. The only people they are fooling is the fools. Could you imagine the panic when the truth comes out?

It is incredible to me that people with mega bucks are paying banks and government to hold their money. AND FEW PEOPLE UNDERSTAND WHY.

Let that roll around in your brain. Why would someone with billions (if they got billions they can’t be that stupid) loan money to government AND get this, pay the government to take their money?

Well the answer to that mystery is because its the only safe place to store your wealth in a deflation.

As you are seeing over and over again its a global deflation NOT inflation. All the old rules have forever changed.

Thank You,
Nick Guarino




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