Monday, January 16, 2012
Today James Turk informed King World News that we are now headed into a vortex, and the Lehman event was a warm-up to a much deeper, widespread crisis and collapse which lies ahead. Here is how Turk described the warning signs and what to expect: “There are all of these warning signs out there and few people are paying attention. For example, hardly anyone cares that the US has lost its AAA rating and most dismiss it as a non-event. But even a cursory look at the US government’s financial position should raise investors concerns that it will not be able to meet all of its obligations.”
James Turk continues:
“Here in Europe there have been a slew of downgrades of sovereign debt, with France losing its AAA standing. Yet few question the solvency of the ECB, which has purchased over 200 billion euros worth of paper from governments whose credit ratings are seeing a steady series of downgrades.
Another example is MF Global. Can people really believe the regulators and MF Global management don’t really know what happened to the missing $1.2 billion? I see all of these things as serious warnings, Eric, confirming two things. First is the obvious one, that the financial system is in disarray and things are not functioning as they normally should be. The second point relates to the psychology of the market. When there is a bubble in the markets, people are either not paying attention or accept as conventional wisdom premises that do not stand up to logic or any kind of rationale analysis.
We’re seeing this mentality today and it confirms my longstanding belief that we are still in this national currency bubble. People still believe currencies backed by nothing except government promises are in fact money. This belief is widespread, throughout the globe, even though countless national currencies have been destroyed over the past 100 years by government and central bank mismanagement.
Taking all of this together, and looking a year or two ahead, it seem to me that we are heading into the vortex....
Continue reading the James Turk interview