Financial System Collapsing Before Our Very Eyes

By Bill Holter

The most common question I hear is “when”. When does the system collapse? When will we experience a re-set?I think this is a very odd question because if you stand back far enough you should be able to see [that] you are, [in actuality,] watching it! We are all so close and watching day by day movements, we are missing the big picture…The collapse is happening right before your eyes. “When” is a process and you are watching history!

The real global economy is in serious decline.You need no more evidence than declining trade and oil prices…What is and has already happened is unprecedented. Again, why ask “when” if you can already see it happening?

A Financial Collapse Is Happening Right Before Our Eyes

From a financial standpoint, we are also watching the collapse unfold.

Earnings are collapsing across many diverse industries.Just as we saw leading up to the 1987 crash, 2000 and again in 2008, we witness the “slaughter of the day” after the release of poor earnings or future guidance.

Credit default swaps are blowing out across many industries, the most obvious and probably most important is in the energy and banking sectors.

The global credit markets are seeing various corporate bonds collapse 5 and 10%on a regular basis – and not industry specific!

Here again, you are watching the collapse unfold right before your eyes but question is still “when?”

Quantitative Easing

We, of course, arrived at this financial/economic point in history with the central banks driving the bus so to speak. Looking back to 1987, 2000 and 2008 we can see each time the reaction was “easing”. Each episode was more serious than the last and took more and more liquidity to keep the system together. The last episode in 2008 took well more than $20 trillion to keep the system from seizing up. Since then, central banks across the world and sovereign treasuries have overextended themselves to the point of insolvency yet many expect them to save the day again.