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Friday, June 8, 2012

Economic Collapse is coming - Here is what to do!

A week ago, Zero Hedge first presented the now viral presentation by Raoul Pal titled "The End Game." We dubbed the presentation scary because it was: in very frank terms it laid out the reality of the current absolutely unsustainable situation while pulling no punches. Yet some may have misread the underlying narrative: Pal did not predict armageddon. Far from it: he forecast the end of the current broken economic, monetary, and fiat system... which following its collapse will be replaced with something different, something stable. Which, incidentally, is why the presentation was called a big "reset", not the big "end." But what does that mean, and how does one protect from such an event? Luckily, we have another presentation to share with readers, this time from Eidesis Capital, given at the Grant's April 11 conference, which picks up where Pal left off. Because if the Big Resettold us what is coming, Eidesis tells us how to get from there to the other side...
First of all, what is systemic risk?
Typical Systemic Risks:
  • Wide-spread defaults, sovereign debt crises, devaluations, capital controls, bank holidays, etc.
How it usually happens:
  • No warning;
  • Emergency announcement over a weekend;
  • Drastic measures to “protect the public” against [insert suitable culprits];
  • Outcome- someone’s value gets expropriated.
Yes, it can happen here –it has in the past.
Usually, the best warning indicator of a major systemic "event" are soaring cross-asset correlations: something we are experiencing right now.

1 comment:

  1. Hello. I just read your post on Whisperer's blog. I agree with your thoughts that Vancouver house prices are in for a major "adjustment" (that is going to shock most people).

    You may be interested in the following link on the Statistics Canada web site which is a data table of Canada's total credit market debt over the last 5 years. Check out the 6th line from the bottom - Total funds raised equals total funds supplied, what this number was at the end of 2011, and its rate of increase over the last 4 years .

    Canada truly has an "empire of debt" (to borrow a phrase from Bill Bonner). Clearly this will end very badly at some point.