And so castles made of sand fall in the sea, eventually.
– Jimi Hendrix
There’s a widespread belief out there that the U.S. and the global economy in general is on much sounder footing ever since the financial crisis of a decade ago. Unfortunately, this false assumption has resulted in widespread complacency and elevated levels of systemic risk as we enter the early part of the 2020s.
All it takes is a cursory amount of research to discover nothing was “reset” or fixed by the government and central bank response to that crisis. Rather, the entire response was just a gigantic coverup of the crimes and irresponsible behavior that occurred, coupled with a bailout designed to enrich and empower those who needed and deserved it least.
Everything was papered over in order to resuscitate a failed paradigm without reforming anything. Since it was all about pretending nothing was structurally wrong with the system, the response was to build more castles of sand on top of old ones that had unceremoniously crumbled. The whole event was a huge warning sign and opportunity to change course, but it was completely ignored. Enter novel coronavirus.
I’ve been concerned about the coronavirus outbreak from the start, and have been tweeting about it consistently for well over a month.
We have no idea what's actually happening with this thing, yet planes are landing from China all over the world. We may very well avoid a global disaster here, but if we do it'll be because of luck.
— Michael Krieger (@LibertyBlitz) January 27, 2020
This observation proved prescient within just a few weeks, as the U.S. Centers for Disease Control (CDC) screwed up its early response to the pandemic in the most sloppy and unimaginable way possible. For whatever reason, the CDC instituted ridiculously stringent guidelines for testing potential infections by limiting testing to only those who recently traveled from China or had contact with someone known to be infected. The CDC continued to stick to these insane guidelines as the disease began to spread rapidly all over the world, particularly in South Korea and Italy.
The event that finally prompted the CDC to change its guidelines was the emergence of the first confirmed incidence of community spread coronavirus in the U.S., which occurred in northern California. The health professionals caring for that patient had requested testing days earlier, but the CDC rejected the initial request, putting medical staff and others at risk for no good reason. On top of all that, the limited testing kits the CDC had sent out didn’t work properly. The level of incompetence and failure we’ve seen from the CDC is almost hard to fathom, but given how hollowed out and corrupt our society has become, shouldn’t be surprising.
At this point, nobody knows what the eventual impact of the coronavirus on the planet will be. Anyone who says they know for sure is lying, but I think we should be taking it very seriously given the potential tail risks. A global pandemic is an uncertain and dangerous thing in the most robust and healthy of systems, but the consequences within a fragile house of cards system such as ours can be devastating.
A month ago, stock market valuations were near the highest ever and interest rates were near the lowest they’ve been in recorded human history. A gigantic “everything bubble” of historic proportions had been blown and investors were flying too close to the sun. It was a balloon looking for a pin, and it found one in the coronavirus. Nobody knew what the pin would be, which is exactly why the stock market collapsed so rapidly the moment investors began to appreciate the gravity of the situation. The fragility of the financial markets should be taken as a warning sign with regard to the rest of the system.
Financial assets have been intentionally blown to nonsensical levels in order to coverup the massive rot underneath. They’ve been masking the fact that much of the underlying economy consists of little more than financial engineering scams and war-making enterprises. The imperial oligarchy we live under is an utterly rotten, corrupt, and fragile superstructure that’s been carefully hidden for ten years under a facade of euphoric markets and a mass of debt-based consumption slaves.
The coronavirus itself should be seen in this context. The global system as it exists is simply not prepared for anything like this, but the reality is things like this do occur from time to time. Maybe we’ll get lucky and avoid the worst case scenario with this virus, but that’s not the point. There will always be other pins, and when your entire superstructure is fundamentally fragile and led by mediocre, corrupt sociopaths, it doesn’t take much to bring it down faster than you can imagine.
We stand at a moment where the fragility of our Potemkin Village paradigm will increasingly confront the harsh realities of meatspace. Coronavirus is a warning. It’s exposing a lot already, and will likely expose far more as it continues to spread. It’s exposing our ridiculous financial bubbles, it’s exposing the fact the U.S. can’t even manufacture its own surgical masks or medicines, and it’s exposing the clownish ineptitude of our leaders and institutions.
It's insane that a country with the size and power of the U.S. can't manufacture its own hospital masks, equipment and medicine.
If coronavirus doesn't wake us up to the dangers of a completely hollowed out financialized economy, something else will.
— Michael Krieger (@LibertyBlitz) March 2, 2020
It’s important we take this warning to heart and do something useful with it. It’s crucial we understand that the current paradigm is long past its useful life and likely won’t be hanging around much longer. Don’t cry or experience nostalgia for what was, rather, get your stuff together so you can help build and usher in the new world to come.
Those too attached to the way things have been will have a particularly hard time adjusting to the turbulent times ahead, so you want to do whatever you can in order to avoid being in that group. Change doesn’t have to be bad, but resistance to change can be deadly. Don’t allow yourself to be a casualty.
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I think that governments are actually going to blame the virus for the economic collapse which was coming anyway.
Applying my test – “Would they, if they could?” – I expect your absolutely right, John. And, Michael, thanks for the clarity of your presentation : )
Nothing says manipulation like a cover story that can’t be articulated in a clear manner because the lying liars in government have muddied the waters to such an extent the truth can never be discovered…oh but the fear porn being pushed does give us a clue as to the importance of this event as a driver of agenda. Fear of the psyop problem as the desired reaction and the ready made solution as on offer through the MSM such as that the WHO needs to have more global power to dictate the world response to pandemics, whether real, fake, natural or man made. Sorry I’m not buying what their selling….this Chinese edition of SARS-MERS-West Nile-Zika-Ebola (have I missed any?) and the $-Tamiflu-$ bogus cure. The lying liars are at it again and have succeeded again it seems. 300,000 Chinese die every year from pneumonia. How hard would it be to attribute 1% of this number to some new killer disease to cover up those dying from extreme air and water pollution with the added massive rollout of over the top/$ 5G infrastructure in Wuhan that could well be the primary cause for those dying? I’m not saying this is actually true but giving an example of what the authorities in China, and elsewhere, are about.
This event ticks every box of the ‘pyramid cap’s’ wish list as they push their globalists manifest destiny. They have already built a parallel system ready to be slipped into place at a time of their choosing. The Beta testing of this system is on going if you’re paying any attention at all. And know science is further advanced than you think it is, the old tech of 5G being given to the masses is a great example. Know that what we see as the world system is a facade. Every nation state a hoax on its people. The USA not an empire but just the main enforcement tool of the ‘cap’ (should anyone get any ideas) that keeps in play the old international system of so called sovereign states when the ‘cap’ can and does control each and every one in a grand orchestration of events that drive agenda forward.If you don’t think the ‘cap’ “there” yet you’re fooling yourself.
Our only defense is to begin living moral lives and not accepting anything less from those we deal with.
https://blog.nomorefakenews.com/2020/03/02/coronavirus-the-contagion-of-propaganda/
“Sorry I’m not buying what their selling….this Chinese edition of SARS-MERS-West Nile-Zika-Ebola (have I missed any?) and the $-Tamiflu-$ bogus cure.”
Yeah, I think you missed bird flu and swine flu.
I find this frightening. The next downturn will make the Great Depression seem as a pool party in comparison to the next collapse.
Most people don’t even know that the Fed is responsible for all the wealth inequality and other assorted financial fascism. I mean FASB56? How much more financially fascist can one be??
People are NOT prepared, Michael. Most will wonder what the hell just happened. The complacency, apathy & lack of moral stability says this will be dangerous for many people. Then there are those of us who DO know how dangerously fascist this government really is, but when the “event” finally happens, are not prepared as we are too POOR to be. I think that’s what frightens me most. After a year long battle with cancer I have little to nothing left.
I’m fairly new to your blog and while I’ve been suspended off Twitter I can still lurk and see Tweets, but anyway, what is one to do if one is poor? To be honest I’m 400 miles short from Canada and boy does that look tempting about now. Lol!
Great article! Keep em coming, Michael!
First I’m terribly sorry for what you have had to go through. The disease is scary enough all on its own let alone the added financial stress. Medical expenses bankrupt an American every 30 seconds I have read. (?)
Don’t be afraid but build community. Take positive steps to become as independent of the rigged system as possible but close with those around you who will really matter in a crunch.
I’m CDN and while our health care is basically free (very small premiums) our tax rates reflect this. This was the people’s choice and after a fight with the medical profession and a corporate govt. (the fight lead by our “Greatest Canadian”) we got our universal medicare back in the mid 1960s. The corporate never sleeps and has been trying to reverse this fact since the inception of CDN medicare. .
People are never prepared but learn fast. Just talk to survivors of the Sarajevo siege to find out how survival proceeds. Cigs, coffee and booze became the currency while armed gangs (men form gangs easily) became the law and protection.
If you can get in with some ‘good’ people you’ll survive just fine.
https://www.youtube.com/watch?v=g4_v2701GMg
how CDNs got our medicare
The virus puts the algos and Fed in a difficult position. Continue printing money and creating fake volume to prop up asset prices or dial it back to make it look like the market responds to the real world.
Looks like they opted for dialling it back for a bit and then went straight back to propping it up. If they keep that up, now until May will be a rollercoaster ride. Billions vanish, reappear, then vanish again, over and over.
I can’t wait to see the talking heads (CIA assets) lying their asses off explaining the volatility they’re creating.
Nice. I find your comments very clear in a truthful understanding of the true situation. The current system is kept propped up on life support while a completed parallel system is Beta tested for gliches prior to being substituted in whole as a total working system to replace the current model. This will be at a larger extent a swap out of systems rather than a piece meal implementation as a replacement operation I believe from viewing the testing taking place and the set up propaganda being pushed..
One of your best articles, Michael. Cuts to the crux of the matter, that in 2008 we decided to make our economy a zombie rather than allow the market to function and let banks fail. Since then, we’ve all been waiting for the other shoe to drop.
Political discourse has gotten noticeably dumber in the last decade. People were fooled by TARP, and many who really should know better now believe we can print our way to prosperity. With that matter settled, they have allowed their attention to dwell on the social and political lightning rods of the day, often with the intention of simply annoying opponents rather than making a coherent argument.
Will the coronavirus force people to start thinking again? It’s still too early to tell but I do hope last week’s 3000+ point drop opened some eyes. Turns out the “greatest economy ever” dies a whimpering and pitiful death without frequent liquidity injections.
“…with the intention of simply annoying opponents rather than making a coherent argument”
I don’t think they understand the difference.
Making people live under a propaganda regime disguised as a free press forces them to ignore their instincts on a daily basis. Which creates an environment where only people lacking these instincts can rise through the ranks.
It’s a psychological filtering device. It filters brain damaged people into positions of influence and power.
Propaganda, censorship, kangaroo courts, random shootings, money printing and endless wars are all characteristics of a ponerized society.
More info here: http://ponerology.com/
In any given year 29 million people in the US contract the flu , with a mortality rate of 2% …. 580,000 die .
This cold virus has a mortality rate of , 2% … 100 people have it in the US ! Big deal !!
Question Americans should be asking is , why are the socialist press pumping this ?????
They are directly responsible for endangering the shaky markets .
Looks like you are a Zulu indeed. Mortality rate of seasonal flu is less than 0,1%. Peanuts, you’re off just 20x. Try again.
Let’s not forget H1N1 (aka/Swine Flu). By the time the CDC and the Feds reacted to that outbreak over 80 people had already died in the US.
The vast majority of people who have contracted Corona19 recover.
Note how the MSM has purposefully avoided reporting on that reality.
Just like any flu or cold virus, the people who it has killed are primarily the elderly and the infirm, with other pre-existing conditions.
The flu killed 88,000 people in the US last year.
As to the ineptitude of the CDC. There are lots of very competent people working at the CDC. But a fish always rots from the head down.
So if nothing else, this needs to result in a change of leadership at the CDC.
This is different because it is airborne and because no one has immunity to it.
We are just getting started with this virus.
And I think the markets and the Fed know it now too.
This will be a huge wake up call for the American people.
Maybe all flu is airborne? They are still learning:
https://www.nbcnews.com/health/health-news/influenza-might-spread-air-study-finds-n839166
The stock market is already furiously climbing the wall of worry on the way to new all time highs. The stock market doesn’t care about Covid 19 and it doesn’t require people or an economy, just electricity. Systemically important institutions and individuals, like Warren Buffett, are now never allowed to sell equities, and in exchange they are always propped up and extended credit. If any of them breaks from the group and sells, they will lose this lifeline, and possibly more. Meanwhile, the machines can easily buy into any selloff and then trade the shares back higher between themselves, even to ten times the all time high in the same session. Individual investors are merely allowed to participate and tolerated, just as in other spheres of life, as long as they go along with the official narrative. So I don’t see any pension funds, hedge funds, investment brokers or daytraders doing anything other than buying the dip. I don’t know if Corona virus is real or not, but I see within the response to it the same measured Fabian tactics. Once again, authorities seem reluctant to truly unleash chaos. This is because ultimately they do not believe they will be successful in disarming the public, which is, and will continue to be, their primary goal. As they see Americans prepping harder and buying more guns and steeling themselves, watch Corona virus fade from the news and the stock market climb.
Panic selling began before the virus hit. Leads one to believe in foreknowledge?
“Panic-like selling activity …Wall Street trading houses coming to the sobering reality that DC deregulators may be replaced with a far less accommodative administration come next year.”
https://wallstreetonparade.com/2020/02/the-fed-has-a-dangerous-repo-problem-heres-the-charts/
In the economic world, all signs are pointing toward Bernie becoming the next president. Monetary policy has petered out. No amount of Fed funneling can keep asset prices propped up forever.
Fiscal policy for public purpose is the only solution.
The Era of Monetary Dominance will give way to Fiscal Dominance
(interview begins at 20:00)
https://www.youtube.com/watch?v=d34bZoI8hrE
“Sanders is the ONLY (L or R) candidate who’s economic advisor is not part of the neoliberal camp that put us in this place to start with. We don’t need to make that same mistake again. It’s too late. We’re running out of time.”
https://www.youtube.com/watch?v=nuNN0Ft9h7E
Neoliberal economic policy has been thoroughly discredited, but many careers are on the line that’ve been rewarded with lucrative salaries for pushing this rubbish for 40 yrs.
Why the Fantasy World of Neoclassical Economics is Undermining Our Well Being
https://www.taxresearch.org.uk/Blog/2020/02/18/why-the-fantasy-world-of-neoclassical-economics-is-undermining-our-wellbeing/
Yes, the financial world is a house of cards that is increasingly fragile and vulnerable to collapse.
BTW, I like that illustration. Where is it from?
Excellent overview Michael, thank you and as you advise, we must be prepared for a new paradigm it emerge from the chaos to come, and my book describes it all and the likely outcome:
https://www.theburningplatform.com/2020/02/29/the-financial-jigsaw-issue-no-93/
Concerning the sources of this virus – there is no better explanation than here:
https://www.theburningplatform.com/2020/03/04/six-ways-why-coronavirus-fails-the-sniff-test/
“Those too attached to the way things have been will have a particularly hard time adjusting to the turbulent times ahead, so you want to do whatever you can in order to avoid being in that group. Change doesn’t have to be bad, but resistance to change can be deadly. Don’t allow yourself to be a casualty.”
So what do you suggest?
Crickets….
A few suggestions occur to me. The first is keep your immune system healthy and stop praying for a vaccine to save us all. An 85 degree white sandy beach and a few corona beers is probably better. Anybody who discounts what you eat, breathe, drink, do or think in relation to all illness needs to have their head examined. Go for a walk check out the real world around you not the one they say exists on the box in the corner of your living room. Take care of you and your family first if and when the SHTF, they will not take care of you. Stay heavy on supplies and not easily perishable food, heavy on water, heavy on cash and tradeable goods just in case.What’s the worst that might happen your water tastes like plastic in a few months and you can throw it out and laugh about it? The canned goods get donated to a food bank in June? Stay light on ego or set predetermined conclusions about how this is going to go. It’s too fluid. Could it be a psyops? Maybe but doubtful. Overblown? Possibly. Will coronavirus blow away with the warm breeze? It happened with the Spanish flu the first time. Is it an economic disaster? Probably, but hey we’ve bailed them out before does it really matter if our economy and money are completely fake, really? Is it the end of the world as we know it? Well I feel fine. Is it a zombie apocalypse? Now that’s a bit much according to the CDC. The point is look for opportunities you have (bonus: airlines are dirt dirt cheap to anywhere, and I doubt the TSA agents are as intrusive as they used to be) protect you and yours first, and hedge accordingly….
Michael,
Please could you write an article exploring the financial impact of the virus with respect to pension investment funds.
What happens if lots of old people with pensions start dying (apart from the tragic direct human impact), is there a danger of a chain reaction of disinvestment, first to pay out surviving partners, then to protect the overall viability of the fund?
If lots of old people start dying, great benefits begin to accrue:
1.) the pension liabilities plummet, even if only one partner dies since the actuarial calculation improves drastically insuring one life.
2.) most pension benefits are Single Life or Joint & Survivor. Very few have any sort of tertiary beneficiary and the ones that do are Period Certain, and this quantifiable and easy to accurately capitalize.
3.) the Medicare system gets a huge burden off its back, for all the same reasons, plus the most expensive health care consumers will be the ones that go.
4.) social security, the same
5.) LTC costs are avoided, making the generational wealth transfer vastly more efficient.
6.) Residential real estate inventory increases dramatically as beneficiaries sell quickly to raise liquidity.
In effect, all of our problems are solved if 40% of the over-75 population dies in the next 12-24 months. We’ve kept them alive way to long already.
Man! I sound like a DICK!
Perhaps we should be looking into the FED’S loosing battle to keep the REPO markets afloat , would be a much more important discussion.
The BOJ & the ECB are hopelessly lost , in the battle , and are trapped by the repo market ! This will be the catalyst to send interest rates soaring to … 34% !!
Why would you think the Fed couldn’t ante up whatever amount of digital numbers needed to meet Repo window demand? If the Fed is handing out 100 billion they could just as easily commit 120 billion or higher. There is a reason the Fed is falling just shy in providing the numbers needed and propaganda, misinformation and obfuscation of the real reason are having there play in this. If we think the BOChina can lie why would we take the Fed, BOJ, ECB or any other of these one world bank entities at their word?
The Fed is the only entity supporting the repo markets …& it was never intended to be so .
Banks are no longer lending to banks , so the fed has stepped into the breach, and now trapped cannot exit , or ( as sure as the sun is coming up tomorrow ) interest rates will explode .
This is the end of Keynesian theory . Hold onto whatever is secure , we’re in for the ride of our lives . What’s coming down the pipe is going to make the “ Great Depression “ look like a pool party …. sorry but them are the facts .
This corona virus garbage is the excuse for when thing blow .
Coronavirus worse than a bomb on Italy, says doctor coordinating response
Maybe it’s just time for the purge! Maybe Mother Nature has just had enough of our bullshit! Maybe this is just what this place needs, thin out this fucking parasitic herd. Will anything ever change until oligarchs are dying for their greed and their families removed from any form of influence. IMO history has already shown us the path that we will repeat. Get ready to throw down, shits now hitting the fan!
My above post is certainly a bit negative and I apologize but truthfully there is a part of me that thinks this way. But I all so very much believe that we will have opportunities to reconnect with this planet and one another. I intend for us to rise above this and rebuild a better world, may we be successful.
I agree.
Let’s hope good Americans recognize it too, order some yellow vests and sharpen their pitchforks.
You can bet your last penny , that as Germany has now capitulated & agreed to throw whatever German marks it takes to restore banks solvency, we have now indeed reached the final chapter of Keynesian economics .
Turn out the lights this party is officially over . Shameful really…. I guess that’s why greed is one of the seven deadly sins .
reply to Nightnthebox. Old people do die. The population turns over approximately every eighty years or so. Whether the old fund their old age through govt. pension or by having lots of kids who see this obligation as a societal norm what we have is a system of human bondage, replaced in one instance by the state taking over what was formerly a family obligation, picture the old tv series the Waltons where three generations of Americans live together. Of course some adult children practice abusing their parents up to and including parentalcide for monetary gain. Your theorizing leads to a thought process that would resemble a society much like that portrayed in the sci-fi tale of “Logan’s Run.” All I can say is that no one who is not suffering mental or physical pain, to a point of not wishing to endure the pain anymore, wants to leave the party early and generally we acknowledge this in the humanity we share with each other. Your financial speculations are made without taking this humanity into consideration whether they hold water or not. The other side of this coin would be parents making their own children work for their keep under a strictly monetary reasoning process without any compassion….rather like the misplaced upbringing John D Rockefeller Sr. had at the hands of his father who stated he liked to try and cheat his boys as much as possible to ‘make them sharp.’ Our actions, ‘free will’, in life come from our thoughts which in turn come from our thinking processes, These processes are based on the information available that we can feed into our minds…garbage in – garbage out, Manipulations in, controlled actions out.
There will be many challenges on our downward trajectory, this is just one of them. The best path forward is to find ways to live better with less.
It pays to remember that “living standards” are determined by the amount of energy people are able to use. Our current extravagant lifestyles are made possible by the high-density energy of cheap fossil fuels.
The declining net energy of fossil fuels is the main reason that maintaining extravagant lifestyles is becoming increasingly difficult, and the transition to renewables, which are dilute (low-density) energy sources, will further hasten our return to the 19th century.
Learn to grow your own food, invest in relationships in your nearby community. Love thy neighbor.
Peace out…
“The refusal of King George to allow the colonies to operate an honest money system, which freed the ordinary man from clutches of the money manipulators was probably the prime cause of the revolution.” (Benjamin Franklin)