If you have read forward in your almanac, you will know the next two months of space weather looks like something right out of Babylonian myth. I was going to write a big long list of what a war in heaven looks like on earth, but Catherine Austin Fitts already did it. Read your almanac, then read her post.
One does not need to spend millions and millions of one’s own dollars over the span of decades developing a global model in order to predict a looming sovereign debt crisis. Between us and the office Christmas party are any number of challenges that could light that fuse. Nevertheless, Martin Armstrong did build such a model. For decades, he has been predicting a sovereign debt crisis at 2015.75, the evening of September 30/October 1st. It looks like this is no mere three point line throw. If it happens, this is nothing-but-net, dropped from the international space station. And it looks like it is going to happen. (I describe him as an ‘accidental Bruno’. At the moment, it seems to me that he has built the first quantifiable model for whatever blah blah harmonic/waveform blah blah thing that appears to be how the universe works. Consider it nouvelle astrologie.)
You may not immediately realise what a collapse in the global bond market has to do with you (if you live in Chicago or Puerto Rico you do, of course), then consider the following several charts from Charles Hugh-Smith.
Sell loads of cheap debt.
Spend that money on a bunch of stuff that does nothing. Everyone in the local council gets a payrise and the bridges still collapse. The rest goes to overpaying your private sector friends for garbage pick-up, etc.
Ramp up taxes to pay for the mal-invested money and also the interest payments on that pile of cash you borrowed to mal-invest.
Higher taxes mean even less disposable income which means even less economic activity, which means less sales and income tax… which means it becomes necessary to hike tax rates to pay for that pile of money you gave to yourself and your friends.
So, what happens when the music stops at 2015.75? Charles High-Smith:
1. The bond market may choke if state and local governments try to “borrow our way to prosperity” as they did in the 2000s.
2. If state and local taxes keep soaring while wages stagnate and household income declines, households will have less cash to spend on consumption.
3. Declining consumer spending = recession.
4. In recessions, sales and income taxes decline as households spending drops. This will crimp state and local tax revenues.
5. This sets up an unvirtuous cycle: state and local governments will have to raise taxes to maintain their trend of higher spending. Higher taxes reduce household spending, which reduces income and sales tax revenues. In response, state and local governments raise taxes again. This further suppresses disposable income and consumption. In other words, raising taxes offers diminishing returns. At some point, local government revenues will decline despite tax increases and the bond market will raise the premium on local government debt in response to the rising risks.
When borrowing become prohibitive (or impossible) and raising taxes no longer generates more revenues, state and local governments will have to cut expenditures. Given their many contractual obligations, these cuts will slice very quickly into sinews and bone.
Greece, South America, Puerto Rico, Illinois. The bond market is turning down in an era of almost zero liquidity. If you want to see what happens when buyers all become sellers at the one time, Catherine Austin Fitts recommends watching the film Margin Call. It is not simply a matter that your garbage pick-up may be suspended for a couple of weeks.
- Consider your employer or business’s exposure to government spending. What happens when that teet runs dry?
- Consider what a combination of a rise in interest rates and a dramatic hiking of property/council taxes will do to your monthly outgoings.
- Then consider what that property tax/interest rate hike will do to demand in the housing market, and thus the ‘value’ of your alleged ‘investment’.
I want you to read Marty Armstrong’s description of what happens to property -and how governments respond with precisely the wrong behaviour- when we encounter the part of the cycle we are heading into. It is not pretty. Now I want you to think who will be in the driving seat as this gets worse and worse, and what they might do about it. Jeb and Hillary have exactly the same donors.
Here’s a recent interview that is certainly worth listening to. (The answers are worth listening to. The show itself isn’t. Don’t bother subscribing.)
Historically, do you know the way you get banks/investors to buy bonds once again, after they have become odiously unfashionable?
You go to war.
Here’s the first half of Armstrong’s Cycles of War presentation last year. It is interesting to me that his war cycle upticked in December 2013/January 2014. Which is exactly when the Ukraine thing kicked off. I was there and then for that. It felt weird. (You do not even want to know where I will be for Sept 30/Oct 1. I will tell you on the date but it just… you couldn’t… I mean… I don’t even know what to do but laugh.)
There is no solve for this, and I expect many of you will return to a state of cognitive dissonance over it all. I’m going to be mentioning it less and less, as the 2015.75 turning point is -in Rune Soupese- the end of the outgoing archon, and that series is at a close.
I want to leave you with this. You can ignore everything else if you like.
IF the sovereign debt crisis begins the exact evening of September 30/morning of October 1, then the model works. If the model works then we will be at war from the end of 2016, extending to full-blown global war by 2020.
Spare me the ‘we’re already at war’ stuff, too. You know exactly what I mean: the war cycle is ‘disorderly decentralisation’: it’s secessions, civil unrest, refugee crises, and so on.