Karl Denninger, the only economist I trust at the moment, is not a happy camper: Massive FX Dislocation
Karl, I hope you don't mind, but I'm cutting and pasting this here on my blog page:
RED ALERT: FX Dislocation in Process!
I do not know what is going on here, and I don't think I want to.
Someone, apparently someone in Asia, wants dollars. A LOT of dollars. There is a forced-liquidation event underway that is massive, it is against all asset classes and it is spreading.
It originated at approximately 7:15 CT this evening and originated out of Asia somewhere. All of the primary currency crosses got hit at once - Euro, Pound, Yen - all weakened dramatically against the dollar and it is still going on. The Asian stock markets got walloped at the same time in coordinated waves of forced selling.
At the same time the US futures markets got nailed as well, down some six handles on the /ES in a near-vertical drop. While this sounds "not that big" to move these markets in a coordinated fashion like this is a trillion-dollar enterprise - this is not some small company that went bankrupt, or even a large company.
There is no news coverage at the present time identifying the source of this but it is not small and contrary to some reports it is not "automatic selling"; this is forced liquidation.
Folks, if this translates into Eastern Europe where there are severe instabilities already brewing literally everything in the financial world could come apart "all at once."
The worse news is that if this happens Bernanke will have killed us (in the US) by extending those swap lines all over the planet during the last six months. These will become utterly uncollectable and they are massive, in the many hundreds of billions of dollars.
To those who are reading this, I hope if you're in the markets you are prepared for extreme levels of violence. You must expect that the authorities will try to arrest the destruction if they are able, but you must also be prepared for the possibility that we have reached a "critical mass" point beyond which "duck and cover" is the only winning strategy.
I hope I'm wrong; this is going to be a long night.
And a bit more bad news: U.S. Federal Debt Exceeds World GDP
For the first time in years, I'm going to play the prophet.
Stock markets around the world will plunge to levels not seen since before World War One. By the end of the month, all forms of paper currency will be worthless. Assuming your bank survives, anything you have on deposit will still have some value, but out in the real world the only thing any merchant anywhere will accept is metals. Getting your deposits out of your bank in a useful form will be temporarily impossible.
By year-end, a new currency will be issued, probably one with global usefulness. Anyone lucky enough to have funds on deposit with a real bank or savings and loan will have those funds converted into the new currency and finally available for withdrawal. Next year credit will return, but large upfront down payments will be required on any and all credit transactions. If instead of funds on deposit you were holding any form of debt prior to the conversion, that debt will still be on the books and payment will be demanded more strenuously than ever.
Between March and December, throughout the remainder of this year that is, social unrest will become commonplace. Violence will be the preferred method of dispute resolution, which means anyone who has stockpiled weapons and ammo will either be in a position to control their local society or will find themselves raided by government-backed military and police forces who mistakenly believe confiscation will stem the violence. It won't. With every mass confiscation violence will expand.
If you live in the countryside you will have to fortify your residence. Many people will flee to extremely remote regions, but instead of peace, they will find well-armed, highly organized bands of survivalists already in place. There are simply too many people and not enough remaining wild lands.
Sometime in the fall there will come either a single, global-scale catastrophic natural calamity or a series of local calamities that add up to a global event. Next winter billions around the world will starve.
In conjunction with the issuance of a new global currency, the role of the United Nations will be dramatically expanded, or perhaps they will simply be replaced. Either way, the world's first true global political system will be born from the chaos of the remainder of this year and the first half of next year. Throughout the second half of next year and into the winter, things will gradually begin to improve with one noteworthy exception: civil liberty. Despite high-sounding claims to moral and ethical standards, individual freedoms and liberties will be completely removed in order to "re-establish an orderly, prosperous world for everyone".
By New Year 2012, we will be living under the one-world, Satanic dictatorship described so eloquently in the Revelation of John. There will be a massive propaganda campaign to insure everyone that the New World Order is purely secular and solely interested in helping each of us individually to achieve our full potential. 2012 will be marked by a massive campaign to stifle dissent, but none of the "end of the world" scenarios that most people are expecting will come about. Except for the arrests and executions of anyone who opposes the global government, things will be relatively peaceful and fairly prosperous. Most everyone who is not actively opposed to the New World Order will enjoy a standard of living that nearly returns to the comfort and prosperity of a few years ago.
Welcome to Armageddon. Sit back and enjoy the show!
Comments written later in the day:
In the Congo, a Village Fights off a Rebel Militia
This is the fatal flaw in the idea that no one needs to own a gun. And yes, what is happening in the Congo could easily happen in your hometown. If it does, who will protect you? Prepare now. Before year-end we're going to be seeing similar stories coming out of "advanced" nations.
Founder of Islamic TV Station Beheads Wife
Remember yesterday? With all the drug culture driven violence in our country, do we really need this kind of religious violence? Islam is not what angers me. No, what angers me is hypocrisy. The purpose of his station is "countering Muslim stereotypes"!
CNN Reports Parents Still Seeking Answers
I know it's harsh, and not what they are looking for, but the real world answer is simple: an insane man shot her down in cold blood. The reason he chose to shoot her at school is simple as well. The United States Congress violated her Second Amendment rights by declaring her school a gun-free zone!
Former Head of MI5 Fears Britain Becoming a Police State
Britain banned handguns in 1997. Handgun crime doubled. So they banned toy handguns. Crime still doubled. So they armed their police for the first time in history, and now the police themselves have become targets. Step by step Britain is becoming a police state and the former head of MI5 agrees with me. So why does the Brady Campaign keep holding up Britain as a handgun free utopia? Maybe because what they really want is a police state in America, too.
I know things are happening fast. I know people feel helpless. There are powerful, influential people in high places who want you to feel helpless because the more helpless you feel the more important they feel. Write letters, real paper and ink letters, to your Congressional representatives at the State and Federal level. Attend every single City Council meeting. If you have the time, run for City Council yourself! In your letters and in City Council meetings you need to remind politicians that they are not nobles. They are elected public servants. They are your employee and you can fire them! So if they don't change the direction the nation is going, then vote them out of office!
Make your voice heard, before they silence you forever.