Written by Jeff Nielson (CLICK FOR ORIGINAL)
http://www.zerohedge.com/news/2016-02-24/tale-two-crashes-part-1
By
now, regular readers are familiar with the eight-year, bubble-and-crash
cycles in our markets and economies which are manufactured by the crime
syndicate known as “the One Bank.” The
reason the cycles are roughly eight years long has also been explained:
to coincide with the U.S. political cycle, and the rotation of its two puppet parties.
With the last crash being the almost-terminal Crash of ’08, readers have been warned on many occasions that the Next Crash is
scheduled for this year. With that manufactured collapse now being only
a few months (weeks? days?) away, it is instructive to compare these
two cycles of financial crime.
The
analysis of patterns can yield insights in two opposing manners. Value
can be gleaned in looking at how these repeating cycles are the same,
but perhaps more revealing is how and why they differ. In this
particular piece, the focus will be on (hard) commodity prices in each
of these cycles, and how and why the bubble-and-crash pattern have been
significantly different in this respect.
Most
readers will recall the spiral in prices which occurred in nearly all
commodity markets – hard and soft – right up to the eve of the Crash of
’08, as seen in the table above. This analysis will examine strictly
hard commodity prices, since soft commodity markets (and their prices)
are affected by several other variables totally outside the economic
cycle.
There
were two reasons for the spiral in commodity prices which occurred
leading into the Crash of ’08, but only one of those reasons is ever
discussed by corporate media. The known reason is a massive spike in
global demand, the catalyst for which being the rapid industrialization
of “BRICS” nations, as well as a number of other, so-called “Emerging
Market” economies.
The rapid dilution/debasement of
the world’s paper currencies, especially in the West, has been hidden
from us. These corrupt regimes have had the audacity to refer to this
destruction of our currencies as“competitive devaluation” – a race to see which central bank can destroy its own currency first.
The
concept of “dilution” is well understood in the corporate world, when
it comes to the paper instrument known as “stock.” When a corporation
prints more stock, (all other things being equal) it thus dilutes its
share structure, and all shares lose value.
Incredibly, the concept of dilution is virtually entirely unknown with
respect to the paper instrument known as “currency,” despite the fact
that the principal of dilution applies in an identical manner. When a
government (via its central bank) creates more currency, all existing
currency loses value. This is the true meaning, and correct definition
of the term “inflation.”
Western governments, in particular, were already accelerating the pace of their currency-creation (andcurrency dilution )
in the years immediately prior to the Crash of ’08. Therefore, the
great spike in commodity markets which occurred immediately prior to the
crash was not a simple function of demand. Rather it was the more
complex product of demand and (central bank) inflation.
It
is important that readers are fully clear on the fact that these
commodity prices are supposed to be strongly influenced by the extremely excessive money-printing
of our central banks. This explains how and why it was necessary (for
the One Bank) to modify the 2009–2016 bubble-and-crash cycle.
The
importance of this point becomes even more apparent when we view a
chart of the hyperinflationary explosion of U.S. money-printing. This is
the infamous “helicopter drop” which
B.S. Bernanke warned and promised the world, back when he was first
appointed as a Federal Reserve Governor. Below is the last, legitimate
representation of the U.S. monetary base, before the chart and data were
falsified beyond recognition, in order to hide the unequivocal picture
below.
As has already been explained on numerous occasions, this is a chart of a currency which has already been hyper-inflated ( past tense ).
In any legitimate monetary system, the supply of money is a virtually
flat, horizontal line – as we saw with the U.S. money supply, until
approximately 20 years ago. The extreme, parabolic curve leading into a
near-vertical line is the mathematical and economic representation of
hyperinflation. The U.S. dollar is already fundamentally worthless,
beyond any possible argument .
Federal
Reserve-generated inflation was already a serious factor for the U.S.
(and global economy) in the years leading up to ’08. Yet, as the chart
above indicates, U.S. dollar-based inflation should have been a much
more significant factor in the current 2009—2016 cycle. Why has this not
been the case?
Once
again, there are two answers to this question. Once again, we never see
the second answer from the mainstream media propaganda machine.
Part
of the answer is, again, demand. Prior to the Crash of ’08, demand for
most commodities was near or at record levels. Conversely, in the
current eight-year cycle we have seen what could be described (at best)
as anemic demand. In the fantasy-world of the mainstream media, demand
has “fallen.” In the real world, it has been deliberately destroyed.
Many
readers will be skeptical of such an assertion. How can a crime
syndicate, even one as large and malevolent as the One Bank, destroy
global demand for commodities? In conceptual terms, the answer is
actually quite simple. If one sabotages many of the world’s economies
(especially larger economies), then obviously those nations will consume
far less commodities, and aggregate demand will fall.
In
fact, readers have already seen it explained and documented how the One
Bank has engaged in extreme acts of economic terrorism against first India, then Russia, and now even China.
In each of these three campaigns of economic terrorism, sabotaging the
exchange rate of that nation’s currency has been a large or central part
of the overall terrorism.
Again,
this will come as no surprise to regular readers. The Big Banks of the
West—the principal tentacles of crime of the One Bank—were recently convicted of serially manipulating all of the world’s currencies, going back to at least 2008.
Showing
the endemic corruption of our entire system, these financial terrorists
were destroying the Russian ruble at precisely the same time they were
receiving their slap-on-the-wrist fines from our “regulators.” The One
Bank would never allow a little thing like a sham-prosecution to
interfere with “business.”
What hasn’t been reported in previous commentaries is that this rampant economic terrorism (primarilyU.S.-based)
isn’t restricted to just these three, major nations, but rather it is
global in scope. Look around the world, and see how many nations outside
of the corrupt West are currently in the midst of a “currency crisis,”
or at the least, dealing with what is called (by the media) a “weak
currency.”
One
does not have to be Sherlock Holmes in order to connect the world’s
most notorious currency-manipulators to each and every one of these
“currency crises.” Does no one think it strange that thebankrupt Western nations, with their hopelessly crippled economies, and near-zero interest rates have
(supposedly) the world’s “strongest currencies,” while the healthy and
productive nations of Asia, South America, and elsewhere all have “weak
currencies,” despite much higher interest rates? Not in the feeble world
of the mainstream media.
Not
once will you see it suggested that any of these “currency crises”
could be even slightly connected to the serial manipulation of all of
the world’s currencies, by the convicted currency-manipulators of
Western Big Banks. Why is such serial currency manipulation completely
censored by the corporate media propaganda machine?
The
answer to the previous question is, in fact, also the answer to the
following question. Why is currency manipulation such an important
element in “the tale of two crashes?” It is because if you manipulate
the exchange rate of a currency higher, the price of everything else
dominated in that currency automatically goes lower.
Each
time the One Bank pushes the exchange rate of the worthless U.S. dollar
up to an even more absurd level, the price of every other asset on the
planet valued in dollars (including all commodities) goes lower. Via the
one tool of currency manipulation, these economic terrorists can
literally destroy economies, and simultaneously move any and all prices.
Manipulate
the value of currencies higher, and “prices” fall. Manipulate the value
of currencies lower, and “prices” rise. Now take a look at an updated
table of commodity prices:
Based
upon the market principle and the economics principle and the
mathematics principle and the common sense principal of “dilution,”
commodity prices (in U.S. dollars) should have been exploding higher at a
much more rapid rate during the current bubble-and-crash cycle than
during the previous one. The exponential explosion in Federal Reserve
money-printing drowns out any and all changes in demand, by literally
orders of magnitude.
What
we see, however, is nothing more than an anemic rise in prices, which
abruptly halted in 2011, at which point all of these commodity markets
began descending lower in price. How? Why?
Part
II of this series will explain the extreme manipulation of commodity
markets/prices which has taken place since 2009, and then complete the
explanation of how and why this bubble-and-crash cycle has been
significantly different from the last.
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