Monday, January 17, 2022

Stock Market Warning Siren is Blaring

0

by Wolf Richter, Wolf Street:

Are we blinded yet by the brilliance of corporate earnings?

“Adjusted” earnings growth is 10.2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} year-over-year in the second quarter, according to FactSet, based on the 91{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the companies in the S&P 500 that have reported results. The energy sector was a key driver, with 332{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} “adjusted” earnings growth from the oil-bust levels of a year ago.

The sectors with double-digit earnings growth: information technology (14.7{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}), utilities (10.8{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}), and financials (10.3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}). The rest were single digit. Earnings in the consumer discretionary sector declined.

Revenues grew 5.1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}, also led by the energy sector. At the beginning of Q2 last year, the WTI grade of crude oil traded at $35 a barrel. In Q2 this year, WTI ranged from $42 to $53 a barrel.

So the Wall-Street hype machine is cranking at maximum RPM to propagate the great news that earnings are soaring, and that this is the reason why stocks should also be soaring, and forget everything else. The hype machine carefully avoids showing the bigger picture which is dismal for earnings and ludicrous for stock valuations.

Aggregate earnings per share (EPS) for the S&P 500 companies on a trailing 12-months basis rose for the second quarter in a row. That’s the foundation of the Wall Street hype. But here’s the thing with these EPS: they’re now back where they had been in… May 2014.

Yep. More than three years of earnings stagnation. No growth whatsoever, even for “adjusted” earnings. In fact, on a trailing 12-month basis, aggregate EPS of the S&P 500 companies are down about 5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} from their peak in Q4 2014. And yet, over the same three-plus years of total earnings stagnation, the S&P 500 index has soared 34{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

This chart shows those “adjusted” earnings per share for the S&P 500 companies (black line) and the S&P 500 index (blue line). Chart via FactSet(click to enlarge). I marked August 2012 as the point five years ago, and May 2014:

And these are not earnings under the Generally Accepted Accounting Principles (GAAP). FactSet uses “adjusted” earnings for its analyses. These are the earnings with the bad stuff “adjusted” out of them by management to manipulate earnings into the most favorable light. Not all companies report “adjusted” earnings. Some only report GAAP earnings and live with the consequences. But others put adjusted earnings into the foreground, and that’s what Wall Street dishes up.

Since August 2012, the trailing 12-month “adjusted” earnings per share of the companies in the S&P 500 index rose just 12{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in total. About the rate of inflation – nothing more. Over the same five years, the S&P 500 Index soared 72{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

Read More @ WolfStreet.com

Chinese Bank Suffers ‘Rare’ Bank Run, Police Arrest “Rumor-Spreaders”

from ZeroHedge:

Chinese police questioned 27 people, detained 12 and “severely” reprimanded 15, over the spreading of gossip about Linshang Bank – a lender with 61 billion yuan ($9.1 billion) in deposits – which caused a rare bank run in Eastern China.

The South China Morning Post reports that a few disgruntled employees at Shandong Sanwei Oil Group, an agricultural processing company, were unhappy after they were placed on leave when production lines were closed at the firm.

The employees spread a rumour that the firm was collapsing with billions of yuan in unpaid loans and that it might also bring down Linshang Bank, the report added.

 

The rumour spread quickly among residents, triggering a run on the local branch of the bank, according to the article. At one point more than 500 depositors gathered outside the branch demanding to withdraw their money.

The bank said in a brief statement on its website that the spate of withdrawals at one of its branches in Linyi in Shandong province on Monday was caused by “a few individuals spreading rumours” that the bank was in trouble.

The lender urged the public “not to believe in or spread rumours to jointly maintain good financial order”.

“In the face of rumors, we hope the public reacts rationally, does not believe in rumors, does not rumor-monger, to avoid harming their own interests.”

An official in the bank’s general affairs office told the South China Morning Post on Thursday the situation was now back to normal. A clerk at the bank’s Bancheng branch also said normal operations had resumed.

“Our branch managers have been explaining to our clients … and most clients left the branch without withdrawing money after they knew it was just untrue gossip,” the clerk said.

As SCMP notes, regional banks in less developed areas are regarded as the weak links in China’s financial system as lenders often give large loans to local enterprises and may expose themselves to greater risks if local economic growth slows.

A rumour that a rural lender in Sheyang county in Jiangsu province had run out of money three years ago triggered a three-day run on the bank, which forced it to place stacks of cash behind teller windows to ease depositors’ panic.

While bank runs in China are unusual, the rapidity of this run (from gossip to deposit demands) makes us wonder just how fragile confidence must be among the average Jao. As a reminder, China’s central bank launched a deposit insurance system in May 2015, adopting Western-style protection for depositors. The maximum payout level is set at 500,000 yuan per depositor for each bank.

Read More @ ZeroHedge.com

It’s All Going Wrong For A Gold Cartel On The Precipice

by Andy Hoffman, Miles Franklin:

I wasn’t planning to write another article this week – as tomorrow morning (Friday), I’m taping a MUST LISTEN interview with one of the smartest investors in the Precious Metals/Cryptocurrency space; Edward Blake, the Renegade Investor.  Not to mention, it’s the middle of August, and I have yet to take a day off from publishing all year.  However, as we are living through what may well be a major inflection point in history – monetary and otherwise – I figured I’d pen a few thoughts.  What the heck?  Diana and Sylvie are visiting relatives in New York, so who’s going to stop me?

Anyhow, the trading day just concluded – with the “market” finally allowed to have a real down day.  But don’t worry, the “Dow Jones Propaganda Average” was down just 0.93{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}, whilst gold’s gains were capped by the equally time-honored “1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} rule” for the second straight day.  I mean, how could stocks possibly go down more than 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}; or gold up more than 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}; when we’re on the cusp of nuclear war – causing bond yields, oil prices, and the dollar to plunge, amidst unprecedentedly manipulated markets yielding “dotcom valuations in a Great Depression Era,” and the “lowest inflation-adjusted gold and silver prices in modern times?”

Boilerplate manipulation commentary notwithstanding, it’s not where we are now that matters, but where we are going – likely, much sooner than most can imagine.  Which is, a time when – at least, in real terms – these “roles” will be reversed, as capital floods out of historically overvalued financial assets into “scarcity assets” like Precious Metals and Bitcoin; i.e., the “twin destroyers of the fiat regime.”  As in my view, the “ultimate monetary death cross” – when the majority of the world’s population realizes crypto is destined to replace fiat currency – is coming soon.  And when it does, no adjectives have yet been created to describe the mad rush of tens of trillions of fiat toilet paper into the handful of tiny scarcity asset markets.  Even Ray Dalio says “buy gold before it’s too late” – as I assure you, someday soon, it will be.

Care of said “monetary death cross,” I have recently updated my longstanding view that the gold Cartel will be overwhelmed by physical demand when “the Big One” finally hits.  This is still a viable possibility, of course – particularly if a crisis is triggered by a shocking political, economic, or military event; such as, a U.S. invasion of North Korea, particularly if Kim Jung-Un’s “response” is what I think it will be.  That said, I now believe the more likely scenario is one where the Cartel voluntarily disbands, not that they would ever admit it.  The reason being, that when the crypto-currency revolution sweeps across the globe, “they” will realize there’s no point trying to hold PM prices down anymore – particularly because so little “manipulation ammunition” remains after two decades of relentless suppression, amidst an environment of surging global demand.  Thus, when PMs rise to five, ten, or even 20x their current levels, no one will care except the handful of investors wise enough to have bought them at today’s bargain basement prices.  And the best part is, governments will be so busy flailing at the “windmills” known as decentralized crypto-currencies, they won’t bother to vilify PM investors; let alone, enact windfall taxes or attempt to restrict your ownership.  In other words, the best-case scenario for a group of die-hard investors, who deserve good fortune more than any others.

I couldn’t have been blunter about how near I believe that time is, in taking the bold step to pen the “most Precious Metal bullish I’ve ever been” two weeks ago.  And per today’s title, it couldn’t be clearer that the winds of change are blowing our way.  Yes, the potential war with North Korea overshadows all else, but man are things going the wrong way for the Cartel, on all fronts.

From plummeting bond yields, oil prices, and the dollar (wow, has “Trump-flation” died); to rising market volatility; plunging “inflation” data – yielding an increased imminence of QE4; historically ugly demographics; the expanding “retail Apocalypse”; the upcoming “debt ceiling” bloodbath; parabolically rising debt – of all kinds; Bitcoin’s SegWit activation; escalating military tensions between China and India; and what’s this, for the first time in three years, positive gold money flow; the odds of the long-awaited “commercial signal failure” haven’t been this high since the height of the 2008 Financial Crisis.  Only this time around, “history’s most overdue crisis” will not only be far worse, but irreversible – as now that Central banks’ ammunition and credibility have been destroyed, their only remaining “tool” will be the blatant, massive hyperinflation that will buy them but a few months at most; before first, the weakest currencies collapse; and ultimately, the world’s “reserve currency” as well.

Read More @ MilesFranklin.com

Keiser Report: Geopolitics & Cryptocurrencies (E1109)

by RT:

In this episode of the Keiser Report, Max and Stacy discuss the electric car boom driving a resource boom in Australia . . . and the biggest mines are now being acquired by Chinese companies. In the second half, Max interviews Gerald Celente of TrendsResearch.com about paradigm shifts: from cryptocurrencies to electric cars. 

BREAKING: China says it will defend North Korea in event of US invasion

by Alexander Mercouris, The Duran:

Editorial in Chinese official newspaper Global Times sets out China’s red lines: China will intervene in event of US invasion of North Korea to prevent regime change there

As the war of words between the US and North Korea continues to mount, an increasingly angry and worried China has given Washington and Pyongyang a clear public hint of where its red lines are.

The hint came in an editorial in Global Times, a newspaper owned by the Chinese Communist Party’s official newspaper the People’s Daily, which is often used by the Chinese government to express opinions it holds but which it feels it might be too provocative to air officially.

Editorials in Global Times do not therefore have quite the same weight as editorials in the People’s Daily or the official Xinhua news agency or of course public statements by the Chinese government.  However they do reflect official Chinese thinking and should be read as such, especially since their wording is carefully chosen in advance.

The editorial in Global Times in which China has hinted at its red lines downplays the risk of war.   It says the angry rhetoric Washington and Pyongyang are hurling at each other is foolish grandstanding.  About that it is almost certainly.  However it also says that this grandstanding risks war because both sides risk humiliation if they back down

Many people believe the possibility of war is very low. If war really breaks out, the US can hardly reap any strategic harvest and North Korea will face unprecedented risks. North Korea aims to propel the US to negotiate with it, while the US wants to put North Korea in check. Neither can achieve its goal, so they compete to escalate tensions, but neither wants to take the initiative to launch a war.

The real danger is that such a reckless game may lead to miscalculations and a strategic “war.” That is to say, neither Washington nor Pyongyang really wants war, but a war could break out anyway as they do not have the experience of putting such an extreme game under control.

Yesterday in an article for The Duran I said that China’s patience with the US was almost exhausted and the Global Times editorial straightforwardly says this, putting the US on the same level of childishness as North Korea and saying that China has given up hope of persuading these two countries to start behaving like grown-ups.  It says that in light of this “reckless” behaviour by both sides – with the greater onus to behave responsibly being however first and foremost on the US since it is by far the stronger party – China is obliged to make clear to both sides what its red lines are

Beijing is not able to persuade Washington or Pyongyang to back down at this time. It needs to make clear its stance to all sides and make them understand that when their actions jeopardize China’s interests, China will respond with a firm hand.

(bold italics added)

Then comes the clear statement of what the red lines are, and what in the event of armed conflict China will do

China should also make clear that if North Korea launches missiles that threaten US soil first and the US retaliates, China will stay neutral. If the US and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so.

(bold italics added)

In other words if North Korea is so stupid as to launch an unprovoked attack on the US – which in this context probably covers the wild and reckless North Korean threat to launch a missile demonstration against Guam – it is on its own.  However if the US attacks North Korea – either as part of some ‘pre-emptive’ strategy or in order to achieve regime change there, China will come to North Korea’s defence.

The Global Times editorial – wisely – does not spell out what China would in that case do.  However since the discussion is one of war the necessary implication must be that in the event of a US attack on North Korea China will respond militarily.

Probably that response will be graduated and will depend on how severe the US attack on North Korea might be.  However since the editorial says that the survival of the North Korea is a matter of Chinese national interest, the necessary implication must be that in the event of a straightforward US-South Korean invasion of North Korea to achieve regime change there the Chinese response would be direct intervention by the Chinese armed forces to prevent that happening.

That would set the scene for the first armed clash between the US and the Chinese militaries since the end of the Korean war, and for the first all-out military superpower clash since the end of the Second World War.

I have repeatedly written in The Duran that bluffing China is a fool’s game because such a bluff in the end is always called.

Read More @ TheDuran.com

A2A with Andy Hoffman of Miles Franklin

by Turd Ferguson, TF Metals:

All of the current global and market turbulence meant that it was an excellent time to check in again with the great Andy Hoffman of Miles Franklin. And Andy doesn’t disappoint with 45 minutes of true, must listen audio.

First of all, I want to warn everyone that this is going to be one of those threads where we freely and openly discuss Bitcoin in the comments section. One of the reason I wanted to have Andy in for A2A is that he is an advocate for both BTC and gold…and he sees them as complimentary tools to end the reign of The Bankers and NOT as competition for each other.

So, in addition to a discussion of the value of cryptocurrencies in the fight against The Banks, Andy also addresses:

  • The recent PM flash crashes and how The Bankers are now brazenly rigging prices
  • How the market narrative (GAN2017) instantly changed the moment Trump was elected
  • His distrust of Trump, despite having voted for him
  • How declining silver miner production as a result of price manipulation is working against The Bankers
  • How and why the G-3 total market management system will eventually fail

Again, Andy has been a stalwart friend and ally in the fight against The Cartel for as long as I have known him. It was great to visit with him again and I’m confident you will gain a lot of perspective by listening to this podcast.

 

Click HERE to listen.

TF

Read More @ TFMetals.com

COT REPORT SHOWS BANKERS CAPITULATING IN SILVER/GOLD RISES $4.10 AND SILVER UP 4 CENTS

by Harvey Organ, Harvey Organ Blogspot:

GOLD AND SILVER WITHSTAND ANOTHER ATTACK BY BANKERS TODAY/RHETORIC INCREASES BETWEEN NORTH KOREA AND THE USA/CHINA REFUSES TO ADVANCE THE IDEA OF A REGIME CHANGE IN NORTH KOREA: NOT WHAT THE USA WANTED TO HEAR/CONSUMER PRICES AND WAGE INFLATION DISAPPOINT THE FED FOR THE 5TH CONSECUTIVE MONTH/GOLDMAN SACHS LOWERS THE CHANCES FOR ANOTHER RATE HIKE

GOLD: $1287.80  UP $4.10

Silver: $17.08  up 4 cent(s)

Closing access prices:

Gold $1289.50

silver: $17.11

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1288.86 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1284.30

PREMIUM FIRST FIX:  $4.56

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1291.86

NY GOLD PRICE AT THE EXACT SAME TIME: $1288.40

Premium of Shanghai 2nd fix/NY:$3.46

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1288.30

NY PRICING AT THE EXACT SAME TIME: $1288.40 

LONDON SECOND GOLD FIX  10 AM: $1286.10

NY PRICING AT THE EXACT SAME TIME. $1287.10 

For comex gold:

AUGUST/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 19 NOTICE(S) FOR  1900  OZ.

TOTAL NOTICES SO FAR: 4487 FOR 448700 OZ (13.956 TONNES) 

For silver:

AUGUST

 

 88 NOTICES FILED TODAY FOR

 

44,000  OZ/

Total number of notices filed so far this month: 810 for 4,050,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

end

 

Today, the bankers tried to raid both gold and silver.  They like Friday’s especially once London officially closes because they do not have to worry about physical demand for another 48 hrs starting on Monday. Once again their attack was rebuffed.  Also extremely encouraging is the COT for silver which saw bankers start to unload their massive shortfall

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest SURPRISINGLY FELL BY687 contracts from 195,132 DOWN TO 194,445 DESPITE THE HUGE RISE IN THE PRICE THAT SILVER TOOK WITH RESPECT TO YESTERDAY’S TRADING (UP 21 CENT(S). SIMPLE EXPLANATION: THE BANKERS HAVE CAPITULATED..THEY ARE TRYING TO COVER THEIR SHORTFALL AT HIGHER AND HIGHER PRICES. THE BANKERS ARE LOATHER TO SUPPLY ADDITIONAL SHORT PAPER AND LONGS ARE COMING IN LIKE GANG BUSTERS.

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.972 BILLION TO BE EXACT or 139{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 88 NOTICE(S) FOR 440,000OZ OF SILVER

In gold, the open interest ROSE by A CONSIDERABLE 11,516 WITH the RISE in price of gold ($10.70 GAIN ON YESTERDAY.)  The new OI for the gold complex rests at 475,913.  IN COMPLETE CONTRAST TO SILVER, THE BANKERS SUPPLIED THE MASSIVE AMOUNT OF PAPER SHORT GOLD WHICH WAS GOBBLED UP BY THE LONGS.  THE NEWBIE SPEC SHORTS HAVE NO DOUBT COVERED THEIR POSITION. NO WONDER A RAID WAS CALLED UPON BY THE ELITE TO ROB THE NEWBIE LONGS.

we had: 19 notice(s) filed upon for 1900 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

With respect to our two criminal funds, the GLD and the SLV:

GLD:

Today, no changes in gold inventory:

Inventory rests tonight: 786.87 tonnes

 

(from Tuesday through Thursday we lost .17 tonnes which paid for fees)

IN THE LAST 21 TRADING DAYS: GLD SHEDS 50.1 TONNES YET GOLD IS HIGHER BY $48.95 . 

SLV

Today: : WE NO CHANGES IN SILVER INVENTORY TONIGHT:

INVENTORY RESTS AT 335.825 MILLION OZ BUT WE LOST 3.781 MILLION OZ FROM TUESDAY THROUGH TO THURSDAY.

 

end

.

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver FALL BY  687 contracts from 195,132 UP TO 194,445 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787). THE FALL IN OPEN INTEREST WAS ACCOMPANIED BY A HUGE RISE IN PRICE AND FOR THE FIRST TIME WE ARE WITNESSING BANKER CAPITULATION.  BANKERS ARE LOATHE TO SUPPLY NEW SHORT PAPER AND THE LONGS CONTINUE TO ENTER THE ARENA PURCHASING WHATEVER SILVER THEY CAN. 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed DOWN 53.21 POINTS OR 1.63{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}   / /Hang Sang CLOSED DOWN 560.49 POINTS OR 2.04{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} The Nikkei closed DOWN 8.97 POINTS OR .05{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Australia’s all ordinaires CLOSED DOWN 1.15{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Chinese yuan (ONSHORE) closed UP at 6.6651/Oil DOWN to 48.36 dollars per barrel for WTI and 51.68 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED , Offshore yuan trades  6.6784 yuan to the dollar vs 6.7201 for onshore yuan. NOW THE OFFSHORE IS WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS  HAPPY TODAY

Read More @ HarveyOrganBlog.com

Doug Casey on Phyles

0

by Doug Casey, International Man:

The concept of phyles originated with the sci-fi writer Neal Stephenson, in his seminal book The Diamond Age. I’ve always been a big fan of quality science fiction. I’m not sure why it’s true, but there’s no question sci-fi has been a vastly better predictor of both social and technological trends than absolutely anything else.

The book, set mostly in China in the near-term future, posits that while states still exist, they’ve been overwhelmed in importance by the formation of phyles. Phyles are groups of people that get together with others, bound by whatever is important to them. Maybe it will be their race, religion, or culture. Maybe their occupation or hobby. Maybe their world view or what they want to accomplish in life. Maybe it’s a fairly short-term objective. There are thousands—millions—of possibilities.

The key is that a phyle might provide much more than a fraternal or beneficial organization (like Rotary or Lions) does. I take the concept quite seriously in my daily life. It’s one reason I don’t believe in organized charity. Phyles might provide insurance services very effectively, since a like-minded group—held together by peer pressure and social approbation—eliminates a lot of moral risk. It might very well offer protection services; a criminal might readily take out a citizen “protected” by a state, but they’ll think twice before attacking members of the Mafia.

People are social. They’ll inevitably organize themselves into groups for all the reasons you can imagine. In the past, technology only allowed people to organize themselves by geography—they had to be in the same area. That’s been changing, especially over the last century, with the emergence of the train, the car, and especially the airplane. The same with communication. The telephone and television were huge leaps, but the Internet is the catalytic breakthrough. It’s now possible for people to reach out all over the world to find others that are their actual countrymen, not just some moron that shares a piece of government ID with them.

As things develop, people will find out—or create places—where their loyalties lie. The nation-state has mostly been an inefficient, counterproductive, and expensive nuisance; it’s rapidly becoming completely insufferable. And dangerous; the people living off the state (which is to say acting as parasites upon their “fellow citizens”) are going to resist having their rice bowls broken. Undoubtedly they’ll use the coercive powers of the state to try to maintain the status quo. The military and the police (whose loyalties are first to their coworkers, then to their employer, and only then to those whom they’re supposed to “serve and protect”) will be out in force wearing riot gear.

If the last major change in social structure was catalyzed by the printing press, it’s pretty easy to see how the Internet serves that function today. But what will facilitate it, the way gunpowder did? My bet is on some type of nanotechnology.

I’ve long been a fan of nanotech as a world changer. Technology has always been the friend of freedom and the common man. Sure, the powers of suppression usually get first access to it and always try to monopolize it and use it to keep the “masses” under control, but in the end the cat always gets out of the bag. Even though the state is using an intimidating variety of technologies to keep its subjects under control, technology is evolving much faster and spreading much more broadly, to the benefit of people in general. The end of the state will be precipitated by the Nanotech Revolution. In the years to come, nanotech will, in many ways, be an analog of gunpowder. But thousands of times more potent.

It will do a number of things to totally overturn the current world social order. It will, among many other things, show that (at a minimum) the state no longer serves a useful purpose. And will act as the means to facilitate treason… simply because it’s logical, if nothing else.

But I’m jumping just slightly ahead of the story. Nanotech is going to become the major force in the world over the next generation. But you’re not going to have to wait nearly that long for all this stuff to start happening.

Let me draw your attention to two important things that are just starting to happen, right now, that are going to lead to a New World Order. But not at all like the one envisioned by Bush and Kissinger.

Economic Collapse

I’m not going to spend a lot of time on this. If you’ve been reading our publications for any length of time and don’t think we’re in for something unprecedented, then we haven’t been nearly as clear—and alarmist—as we meant to be. Economic collapse doesn’t mean the world is going to come to an end; it just means there’s going to be a major change in who owns what and how things are produced and consumed. Our main focus is to suggest investments that should not only weather the building hurricane but allow you to profit from it.

The purpose of articles like this one is to try to put all that in context. One thing that’s going to militate towards the creation of phyles is the breakdown of the ability of governments to provide the services that people expect from them. At the same time that they’re extracting hugely more in taxes, they’ll be beset by inflation, economic depression, financial chaos, and regulatory havoc. People will increasingly realize the state isn’t a cornucopia that can solve their problems but is, in fact, actually the main cause of their problems. They’ll start withdrawing loyalty from it.

People will start organizing themselves into incipient phyles (although they probably won’t call them that), using the Internet. The governments of the world will increasingly clamp down on the Net, recognizing it for the subversive medium that it is, seeing that it’s defrocking their game.

Among other things, economic distress usually leads to military action, as governments try to find an outsider to blame for their problems. The tendency is compounded by the perversely wrong-headed notion that a war can somehow cure a depression. This time around, I expect military events will play a significant part in the sea change—just as they did during the agricultural and industrial revolutions.

Military Collapse

Like any bureaucracy, the military is completely predictable and so is again fighting the last war. Spending $400 million on a single F-22, $2 billion on a single B-2, and many billions on a single aircraft carrier is simply crazy. These technically amusing toys would have been helpful for fighting the armed forces of another nation-state—like those of the USSR, but those largely disappeared decades ago. In today’s world, with a near total shift to unconventional warfare, they’re about as valuable as cavalry.

Besides, the attack won’t come from Russia, which is on its way to demographic, economic, and political collapse anyway. Or from China. It’s clear to them they don’t need a military confrontation when it’s just a matter of time before they win through economics and demographics.

Read More @ InternationalMan.com