Tag Archives: Alasdair Macleod

SoT – Alasdair Macleod: If you’ve got gold, you’ve got money – If you haven’t got gold you’ve got a problem

Akin to ancient Rome, the United States has over-extended herself. She has created a climate that could easily be transformed into a war on a slight pretext. Wars, as it is well known are also a means a nation can extricate itself from debt and financial responsibility.  – The U.S. Endgame, Jeremiah Johnson (nom de plume, retired U.S. Special Forces, excerpt from Zerohedge

One would have to be blinded from either denial or ignorance not see the escalating political and military tension between the U.S. and Russia/China.  While the U.S. media spins the story into a tall-tale in which BRIC nation leaders are the provocateurs, the truth is that the U.S. has transformed its illegitimate “war on terror” into war on the world in a last-gasp attempt hold onto the economic and geopolitical hegemony it has enjoyed for several decades.

When you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you – you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed.  – Francisco’s “Money Speech,” from “Atlas Shrugged”

If you reread that passage, think about how it applies to the Patriot Act, Homeland Security Act, Wall Street, the Justice Department and Hillary Clinton.  It’s pretty obvious the U.S. is collapsing economically,  politically and socially.

Perhaps the one last chance at saving the United States is embracing the truth – the truth as it is and not the “truth” the U.S. Government would have you believe.  But economic and political truth is seeded in honest money – think about the Federal Reserve, the Comex and the political elitists in the context of this passage from “Atlas Shrugged:”

Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and base of a moral existence.  Destroyers seize gold and leave to its owners a counterfeit pile of paper.  – Francisco “Money Speech”

The San Francisco Fed’s “President,” John Williams was blowing his weekly smoke on Monday.  He said that higher interest rates would trigger “big movements downward” in asset valuations.  He didn’t exactly discover plutonium with that revelation.  But with his comments, Williams inadvertently admitted that the policy makers were responsible for creating what is now the biggest asset bubble in history.  This is not going to end well.

The Shadow of Truth hosted Alasdair Macleod for a discussion which ties into the ongoing financial, economic and political collapse of the United States.  Alasdair offers some original insight into the manner in which the inevitable geopolitical and financial “reset” might unfold:

Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns – or dollars. Take your choice – there is no other – and your time is running out – Francisco “Money Speech”

SoT #57 – Alasdair Macleod: Economics Of A Systemic Crash

The stock market is extremely overvalued – it could easily crash through the bottom hit after the Lehman crisis [S&P 500 closed at 676.53 on March 9, 2009] – Alasdair Macleod on Shadow of Truth

It’s getting harder for perma-bulls to make the argument that the U.S. economy is in a state of recovery.  It’s getting even harder for them to justify the current stock market valuations.  Not only are all of the reliable economic metrics pointing toward the early stages of what could be a deep economic recession, if the trailing twelve month GAAP earnings of the S&P 500 index companies were adjusted by using the GAAP accounting standards that were in place in 1980 – or even 1990 – the current stock market would be the most overvalued in history.

The U.S. stock market is behaving as if it is getting ready to drop like Niagra Falls:

When you see a genuine top, all the old hands say ‘this is absolutely crazy’ but they throw in the towel and buy at the top along with everyone else – that is a genuine bubble…But recently there’s a fairly strong body of expert opinion that is very cautious about the outlook for the market…that’s consistent with the end of the “B” leg of Elliot technical anlaysis, which proceeds a very nasty “C” leg and which could take us to the lows we saw post-Lehman and likely overshoot that low by a reasonable degree.  – Alasdair Macleod

The technical analysis cited above by Alasdair Macleod is supported and reinforced by the rapid deterioration in corporate revenues, earnings and credit quality.  The banking system in particular has releveraged itself both on and off balance sheet to a level that far exceeds the levels that blew up the financial system in 2008.

The condition of the U.S. economic and financial system is compounded by the fiscal condition of the U.S. Government, which will be forced to raise the debt ceiling limit again before the end of year. Furthermore, the U.S. political landscape can best be described as a three-ring circus – if you are an optimist – and a complete disaster if you are a realist.

All of the guys at the top level of Government/Central Bank authority do recognize they have a problem they just don’t know how to get out of it…there is not exit for this problem. – Alasdair Macleod

For now, the best solution coming from the elitists running the United States is to blame the volatility in the U.S. stock market on China.  While this notion is patently absurd, it’s permeated the propaganda being thrown at the American public by the media.

Rory and I hosted Alasdair Macleod on our Shadow of Truth show this week to discuss the primary economic signals which are warning anyone not in denial about the inevitable catastrophe headed toward the global financial and economic system:

The Economics Of A Crash – Alasdair Macleod

Bloomberg was out today heralding the “new bull market” in oil.  I herald it as Bloomberg’s new bullmarket in bullshit.  The price of oil is determined in the short run by a lot of factors besides the law of economics.  The spike up today in the price oil was most likely technically driven by hedge funds covering large short positions put on over the past couple of weeks.  The short-cover trigger was likely a big bid put into the market by the Too Big To Fail banks backed by the Fed.

Make no mistake about it, the Federal Reserve in conjunction with the big banks have “blood money” motivation to try and keep the price of oil propped up.  The big banks are exposed both on and off balance sheet to the price of oil.  Many of the big banks are heavily exposed on-balance sheet to the collapsing oil shale/fracking industry in the form of hundreds of millions of asset-based revolvers.  These are shorter term funding facilities, the size of which is determined by the value of the estimated shale reserves of the borrower. However, many of these revolvers were drawn down when the price of oil was much higher.  It is highly probable that the big banks like JP Morgan are sitting on drawn revolver facilities that are worth dimes on the dollar.

Preventing this default has become a growing problem and is the primary task facing central banks. Household, corporate, government and financial sectors are all exposed to debt default, ensuring political and business considerations will allow no alternative outcome.  – Alasdair Macleod (link below)

A former colleague of mine who trades distressed energy debt told me he thought the big banks had these debt facilities marked at par (100 cents on the dollar).  When I asked him if if any of was trading yet in the secondary market he responded:  “no, but all hell will break loose when it does.”

This debt will blow big holes in bank balance sheets.  We only can assess the on-balance-sheet damage.  There is no doubt 10x that amount of exposure in the form of OTC derivatives.  The lower the price of oil goes, the bigger will be the hole that is blown.  This is specifically why the Fed/TBTF banks are working to keep the price of oil aloft and why they are feeding pump and dump outlets like Bloomberg the information that a new bull market in oil has started.

Equity markets are telling us that the debt crisis is now upon us again. The detailed course that events will take from here cannot be predicted, but we can be certain that over the coming months governments will be ready to move heaven and earth to prevent a deepening crisis, by any means at their disposal.  – Alasdair Macleod

The start of an economic crash of unprecedented magnitude began in 2008.  The true severity of this crash was delayed by mark to market accounting, increased debt issuance and money printing.  Many trillions of it.   But ultimately history tells us that the no amount of artificial manipulation and attempted market control can evade the laws of economics. The collapsing price of oil is a rock-solid indication that economies globally, including and especially the U.S. economy, are in a state of collapse.

Alasdair Macleod has written a must-read commentary/analysis of what is now unfolding and why.  You can read his entire article here:   Economics Of A Crash

The Shadow Of Truth will be hosting Alasdair this Thursday.  We will discussing this article as well as his take on what is now unfolding in the precious metals markets and China.