Global Crash Still On Course

From Brandon Smith at Bob Livingston's  Personal Liberty Alerts

The crazy events of the past month and what they mean for 2020

In a world without constant manipulation and disinformation most economic and geopolitical events would happen spontaneously and randomly. Things would be more unexpected, but at least they would make life fascinating and interesting. Unfortunately, this is not the world we live in. Our world is highly micro-managed by global elites with a rather broad if not clichéd agenda. This makes most events highly predictable, as each event services a singular end game.

The only aspect of our system that is not predictable is timing. In the liberty movement we can predict with relative certainty future trends and where they are headed, but one thing we have to consider is that the more effective we are at exposing the plans of the globalists the more they will attempt to either stall or expedite the timing of their agenda in the hopes of encouraging doubt and uncertainty.

Pyschopathic people are obsessed with the concept of surprise. They love to ambush. They hate when their carefully crafted schemes are made obvious by intelligent observation, because they operate on the assumption that they are always the smartest people in the room. In military lingo, this is called being inside someone's OODA Loop; which means always being a step ahead of the planning and foresight of those you want to conquer. Psychopaths are always desperately angling to achieve this constant state of superiority.

(Yes, Brandon - they always want to attack first, to keep their intended victims off-balance and on the defensive 'back foot' forever)!

;-)

Of course, the problem for these personality types is that they have very little imagination or ingenuity and are often robotic in their responses and strategies. Understand one psychopath and you essentially understand them all. Once again, as long as you know what they want, they become predictable. The only way for them to surprise us is by changing what they want, and they aren't going to do that. All they will do is delay or distract.


2019 might have seemed like a roller coaster year to many, but most of it was a simply a succession of engineered distractions and slight changes in timing to throw analysts off the scent of the globalist agenda. Finally, in the past month we have seen certain plans culminate into events some of us always expected. Let's examine some of these events and what they mean for 2020...

The big fat trade deal farce

Since the trade war between the U.S. and China began I have been warning that all is not what it seems, and that the trade war is not meant to be won, only perpetuated for as long as possible. The endless cycle of "deal" announcements followed by deal fallout followed by renewed deal optimism has conditioned the public to assume that all market movements and the economy at large is tied to the success or failure of Trump's trade war. This is exactly what the establishment wants.

If the masses are focused on the trade war, they might completely forget about the enormous financial bubble that central banks like the Federal Reserve created through nearly 10 years of stimulus. They might also completely forget that the Fed deliberately popped that bubble in 2018 using fiscal tightening policies and removing liquidity from the system. Now, the avalanche has started, and it appears that the Fed has no intention of stopping it (but we will get to that in a moment).

So, as long as the Everything Bubble is imploding, the elites need a distraction of some kind as well as a scapegoat.

The latest "Phase 1" trade deal announcement this month was an epic disappointment to almost everyone who thought that maybe Donald Trump was fighting the good fight or working toward a legitimate diplomatic compromise with China. Finally, people are beginning to understand that the trade war is Kabuki theater, and nothing more.

As it stands, the Phase 1 agreement is not an agreement at all. Last time I checked, in diplomacy, business and sales, the goal is always to get agreements in writing as quickly as possible along with some assurances that the deal will be honored. Verbal agreements and half measures are a recipe for disaster. Phase 1 is designed to fail.

Phase 1 will not be put in writing and signed, at least, not by Trump or Xi. The details are still murky, tariffs are not being rolled back in any meaningful way, and China's promise to quadruple their agricultural purchases from the U.S. in 2020 is unlikely to be fulfilled. China has already diversified their food purchases to Russia, South America, etc. To quadruple their purchases from the U.S. would mean abandoning all the work they put in to build new supply lines outside the U.S. market. This is not going to happen.

Will Chinese farm purchases increase? Yes, but only for a short period of time and not to the level of the agreement. This means that the Phase 1 deal has a built-in mechanism for collapse, as it relies heavily on China following through with a requirement they can't or won't honor. I give it a month or two before hostilities between the U.S. and China surface once again.

North Korea nuke talks collapse

In in my article 'Syria And Iran Prove There's No Chance For North Korean Peace', published in May 2018 after the initial nuke deal hype, I argued that:

"North Korea will of course refuse disarmament. The establishment will push harder, causing North Korea to pull back from the talks, to reschedule talks multiple times or to abandon talks altogether. Then, the establishment will say North Korea is not serious about peace, therefore, the force of action may be justified. They will say they gave North Korea a chance to do things the easy way, but now the hard way is necessary... North Korean missile tests will continue, and new nuke facilities will open. Trump will call for the kinetic termination of such sites."

In December the denuclearization talks with North Korea have collapsed. North Korea has indicated they have no intention of continuing, and the initial deal itself is being exposed as the fraudulent nothing-burger it always was. Like the China trade deal, the North Korean talks are designed to fail. China will not quadruple its agricultural purchases from the U.S. for any meaningful length of time, and North Korea will never voluntarily denuke.

The timing of this implosion in progress with North Korea is rather interesting, as it coincided almost exactly with the weak trade deal with China. If the U.S. government sticking its nose into the Hong Kong protests has the potential to derail trade talks, then the U.S. getting aggressive with North Korea would be a veritable powder keg. I see tensions with North Korea as an extension of tensions with China, as North Korea is essentially a satellite state of China. If the globalists want to accelerate the trade war in 2020, all they have to do is ratchet up the saber rattling with North Korea. I believe this was always the intent; the elites merely put the plan on pause.

Brexit now on the fast track

I have a love/hate relationship with the proceedings of the Brexit movement. I understand that the movement itself is mostly grassroots and is legitimate. I also understand that the European Union is a monstrosity that should be broken apart. Finally, I am a longtime champion of national sovereignty, and if the majority of British people want it, then they should get it.

However, the story of Brexit is not as simple as this. As with my prediction that Donald Trump would win the 2016 election, I also correctly predicted that the Brexit vote would succeed. I predicted these events based on the tides of change in public perception and the rise of conservative ideals, but also on the reality that the globalists would allow these events to occur because they ultimately benefit.

This is not to say that the globalists are omnipresent and control everything; that is not my argument. I continue to believe that the rise in conservative sentiment in the public is largely due to over a decade of effort on the part of the liberty movement spreading the word and fighting back against establishment propaganda. That said, anyone who thinks any voting system today is not completely dominated by the establishment is delusional, to say the least.

I predicted the Trump and Brexit wins based in the theory that the elites would simply step back and not interfere with the vote. That they would allow the obvious proliferation of conservativism to run its course, for a little while. Why? Because by triggering the first stages of the crash of the Everything Bubble in 2018, they will soon need someone to take the blame. Why wouldn't the globalists set up their ideological enemies as the cause of an economic crash that they created?

So far, my theory continues to prove correct. The trade war is unequivocally tied to the performance of the economy in the minds of the masses, and the mainstream media has made sure that this is the case through steady propaganda. Trump has attached the market bubble to himself by endlessly Tweeting about how he is personally responsible for the performance of markets, even though during his campaign he said that the markets were a huge bubble that he didn't want to inherit. And now, all eyes are on the Brexit as the conservatives under Boris Johnson now have a mandate to force through the Brexit while the mainstream predicts economic disaster.

At the beginning of this year I predicted that the Brexit would ultimately end with a 'No Deal' event. I continue to believe this will be the outcome, because it is the most beneficial to the globalists. With a No Deal and a abrupt break from the EU, the elites can accelerate the crash of the economic bubble in Europe and the U.K. while sticking "populist" movements with the blame and the consequences.

Now, Johnson's conservative majority assures the Brexit will be finalized, and I see no indication that the EU will agree to a diplomatic separation.

The EU will claim they can't support any deal from the U.K. because Brexit "puts the global economy at risk." Brexit will happen anyway, and then the current bubble collapse in Europe will hit main street hard.

Repo market crisis looms

The Federal Reserve's odd policy behavior over the past few years only makes sense if the central bank is trying to create financial crash conditions in a way that is subtle but powerful. The initial rate hikes and balance sheet cuts into economic weakness and stimulus addiction set the stage for the crash in fundamentals that is happening now. The only question left is, when will they allow markets to crash?

We may have some indication this December as to the pace of the crash in the Fed's overnight repo purchases and liquidity injections. As I noted in my article 'The Fed's Liquidity Injections Are Too Little Too Late — But That Was Always The Plan...', published in October:

"The Fed launched asset purchases to make it look like they care about trying to fix the problem. However, the Fed's repo stimulus and balance sheet increases are not enough to make any difference. Calling Fed repo actions "Not-QE" is a funny means of pointing out that the Fed is not being straightforward about its intentions, but when comparing current repo loans and asset purchases to an event like TARP back in 2008, which by itself injected over $16 Trillion in liquidity into the financial system (no audit of the other QE programs has yet been undertaken), the current stimulus is nothing but a drop in the ocean."

The creator of the Fed's repo loan structure, Zoltan Pozsar, said the same thing this past week. He argues that an unprecedented crisis in repo markets looms at the end of this month with loans coming due and many banks holding the wrong type of collateral to trade for more cash from the Fed. I suspect that Pozsar's prediction may be a little early and that the repo crisis will move slower than he expects, but not much slower. The former fed employee argues that the Fed must unleash TRUE QE4, with massive amounts of liquidity behind it in order to stave off the market collapse that is set to occur. I predict that the Fed will not do this, at least not at levels needed to make much of a difference.


The Everything Bubble is imploding in the background while the events listed above provide distraction. If the central banks really intend to kick the can on the crash, then they will have to inject tens of trillions of dollars into the global system in the next few months. If they do not, then we should expect crash effects to hit the wider public even harder in 2020.

To truth and knowledge,

Brandon Smith