As I warned on Monday, all of the signs and conditions for the markets to begin their crash were in place. I specifically said to watch China, Greece, oil, and bonds. As of today, the markets were a disaster. Even after substantial intervention by central banks, the markets are still crashing globally. This has the potential to spiral out of control very quickly as the Chinese stock market has already lost nearly 40% of its value erasing trillions in a matter of hours. As such, it appears the central planners are losing the ability to manipulate markets higher. The market conditions now are pointing to a severe market correction and everyone should take action to protect any wealth they have managed to accumulate or risk major losses over the next 48 hours. Ominously, this crash is also being used to provoke a war with the Chinese to distract the population from the fact our leaders have criminally obliterated the US economy.
Most consequential at the moment, it appears the central planners in China have so far been unable to stabilize their markets and halt the collapse in their stock market. I noted this would be a key factor to monitor this week as an indication of whether or not the markets were going to move toward correction. Events have been developing quickly, but at this point it appears China will move into correction territory and sustain trillion dollar losses in its market. How far the losses go is not known, but I would predict that China could easily lose 60% if its market value before a bottom is found. As such, we are talking close to 10 trillion dollars in losses or more. It is impossible for China to sustain this kind of financial slaughter without major damage to the rest of the world’s markets. It is highly likely the contagion will continue to spread into US and European markets.
Oil has lost 20% of its value and as I predicted, it is about to break under the psychological $50 a barrel threshold. Under $50 a barrel, it becomes very difficult for many US and Canadian oil companies to profitably produce. With China’s economy now officially imploding, oil demand will sharply decline leading to a huge glut of oil in the market and a rapidly falling price. The low price and no hope of a near term recovery will force oil companies to shutter their businesses, lay off workers, and fail. Energy sector jobs are one of the few shining lights in an otherwise dismal US jobs picture. If the oil boom goes bust, the US will need no other input to effectively move the US back into a major recession…and that is the best case scenario right now.
China and oil coupled with Greece nearing a complete crisis the US markets today were hammered as forecasted. As the New York Stock Exchange (NYSE) began to freefall, the central planners conducted one of the most egregious acts of market manipulation to date. Specifically, the US government secretly hit the kill switch three times today in what amounted to futile attempts to intervene and stop the crash of the NYSE. Ironically, no one seemed to notice that the “broke” NYSE still continued to trade after all trades were canceled and it was closed for a computer glitch. More specifically, it only broke when the market began to crash and then after trading was “halted,” a miraculous event occurred. “Someone” with a giant checkbook began to buy stocks spiking trading volumes and moving the NYSE back up. Then, as soon as the “broke” stock exchange began trending higher the market miraculously was “fixed” and trading began anew. However, the market began a steep drop again…and guess what? The market “broke.” This “drop, break, mysterious buyer appears, trend higher, fixed” pattern repeated three times today. This was no accident and it wasn’t foreign manipulation for which China has been blamed. Let’s be clear, it is not in China’s interest to hurt the US market, which it relies. Further, if China did have nefarious plans, why would they stop the NYSE just as it started to crash? Anyone with even the most limited capacity for logic would instantly see the contradictions of common sense and that blaming China is nothing more than dangerous disinformation. Further, someone knocked the Wall Street Journal and ZeroHedge.com offline today just as they were announcing news of the global markets crashing.
What does this all mean? It is blatantly clear to any insider that the US government conducted a massive covert campaign to stifle and slow the spread of “bad economic news” so that it had time to intervene at the NYSE. The central planners considered this unprecedented move, which included domestic cyber-attacks on our own businesses to prevent trading algorithms from taking over and selling everything in what could have been the largest flash crash in US stock market history. To this extent, the “plunge protection team” was successful, but with respect to stopping the market from beginning the long fall to reality, they have likely failed. Dangerously, the US government has suggested that the crash was caused by a massive cyber-attack launched from China. As detailed above, this is complete garbage and makes zero sense, but is now already being used to justify sweeping new government cyber-security powers, more government control, and potentially a war with China. The last point is the most ominous. As I very specifically mentioned in my article Monday, the US would need a scapegoat in the event of a major economic collapse. It appears Iran and China are now the two leading contenders. As such, don’t be fooled by the war propaganda and the outright lies.
Based on the latest data, many economically savvy preppers have pulled any money they have left in stocks out of the market. They have also emptied their bank accounts and diversified their cash holdings into US Dollars, stable foreign currencies, gold, and silver. Further, workers with 401ks and similar plans that amount to nothing but state sponsored fraud and theft have taken the hit with taxes and cashed out their plans in fear of losing all of their savings. With this money, I am seeing people reinvest it in farms, equipment, and businesses both in the US and abroad. The bottom line is they moved their money out of the banks and stocks and into real assets domestically and abroad. Sovereignman.com is a great resource for those interested in how to insulate your wealth from the coming losses and seizures. Each one of you has your own specific situation to contend with, but the time has now run out. You need to take immediate action before the market completely collapses. There now is an increasing likelihood that the market could flash crash within days, weeks, or just a few months.
By Guiles Hendrik
July 8, 2015