A highly respected market analyst issued today a dire warning for those citizens who are awake to the demise of America. Karl Denninger of The Market Ticker reported this morning that another economic meltdown could be imminent. The type of meltdown to which he refers is one similar to the crash of 2008.
Denninger was among the very first in 2008 to sound the warning that all of the signals were in place to send the country into its worst recession/depression since the 1930s. The overwhelming majority of economists and market analysts, both inside and outside the government, never saw it coming. Rather, they went as far as to debunk Denninger’s warning, referring to him as a fear-monger and a quack.
It turned out that Denninger was spot on and all of the rest were made to look like buffoons when they tried to explain how something so destructive could not be foreseen. Spokesmen for the Bush administration and then the Obama administration all seized on the mantra that it is impossible to predict this type of economic catastrophe. “Nobody saw it coming,” they said.
But this is not true. A few did, indeed, see it coming and proceeded to predict a major financial meltdown. Denninger was one of them. A tiny group of economists followed suit. But it was Denninger who was perhaps the first to sound the alarm.
One of the earliest signs Denninger picked up on was a precipitous drop in online ad revenue. The next clue was that none of the official reports from online ad firms reflected the downturn. This struck Denninger as highly odd. What was lurking behind the scenes out of public view that would lead these firms to fail to report this major drop in online ad revenue? Denninger reports that he saw all of it in the data he received, yet the ad firms did not report it.
And this brings us to the current dire warning Denninger issues to all who will pay attention. The very same early signal Denninger noted in 2008 is now happening again. Revenues are down, way down. But the companies involved are not reporting it. As in 2008, Denninger’s deep concern about the unreported drop in ad revenue is happening again, eliciting some alarm. What followed that year in 2008 was to become very clear to all Americans. The bottom fell out of the market, real estate took a major blow, and some of the largest corporations in America, particularly in the realms of banking and mortgages, nearly went under. Some of the largest players in finance on Wall St. did go under. The only thing that saved the rest were the taxpayer funded bailouts.
I am seeing the same pattern develop now.
How reliable is this signal in terms of future events? There’s no way to know, of course, since it has one previous test and as with last time the claimed “official” reports today are at odds with what I am seeing.
But it was a large enough, and sudden enough, move to alarm me in 2008.
I’m noting the same pattern now.
In short, Denninger’s data shows a drop but the companies involved are not reporting it. So how can we trust his figures when it comes to predicting a meltdown? We cannot know for sure. Why? The only other time the present scenario occurred culminated in the meltdown of 2008. Thus, there may not be enough data available to make a solid, reliable prediction. On the other hand, the only other time the current signals occurred resulted in an economic freefall. This could indicate that the signals Denninger picked up today are even more reliable, that an unreported drop in revenues does, indeed, predict financial trouble ahead.
If Denninger’s figures which were reported today do not result in a meltdown, then we will know that this particular indicator is not reliable in predicting a collapse. But if it turns out that Denninger is right and these figures are a reliable predictor of a meltdown, it will be too late for ordinary citizens to take steps to protect themselves.
The prudent thing to do is to prepare for the worst. Go about your financial business as if you are expecting a collapse. If no collapse occurs, you will have lost nothing. But if the nation plunges into another meltdown, you will be in a good position to weather the storm, and your losses, if any, will kept to a minimum.
You may also be interested in the following:
My personal blog, The Liberty Sphere.
My popular series titled, Musings After Midnight.
My ministry site, Martin Christian Ministries.