IT"S YOUR JOB

There is a simple, straight forward disclaimer at the conclusion of this article.

All of the numbers tell us the same thing. Big trouble is ahead. My job is to inform you of these things. What you choose to do with this information is up to you.

Nearly everyone likes good news. Hardly anyone welcomes bad. For some that's what life is about. Call it ups and downs. For others their contempt for reality goes so far that they try to legislate or edit it away. These are people who love to shoot the messenger. Yet most of us don't own the bus.We're simply driving it.

These are the same people who seek to legislate away or edit legitimate differences of opinion by calling those who express them mean spirited or hateful. But facts are stubborn things, as they say. You might not like it, but there's deep, deep trouble in commodity paradise. Those are the facts.

So why are commodity prices falling so rapidly?

Many analysts are pointing to the economic slowdown in China as the primary reason.  For years, the Chinese economy voraciously gobbled up commodities from sources all over the planet, but now things are changing.  The Chinese economy is really, really slowing down, and some recently released numbers give us some clues as to the true extent of that slowdown…

-Chinese exports fell 6.8 percent in November on a year over year basis after being down 6.9 percent on a year over year basis in October.

-Chinese imports were down 8.7 percent in November on a year over year basis.

-Chinese manufacturing activity has been contracting for nine months in a row.

-Last week, the China Containerized Freight Index plummeted to 718.58 – the lowest level ever recorded.

And of course it isn’t just China.  Goldman Sachs says that the seventh largest economy on the entire planet, Brazil, has plunged into a “depression“.  And as I pointed out the other day, of the 93 largest stock market indexes in the entire world, an astonishing 47 of them (more than half) are down at least 10 percent year to date.

Even though stocks slid in the U.S. this week, the major indexes still seem somewhat stable.  But this is a bit of an illusion.  Yes, the biggest names on Wall Street are still flying high for the moment, but shares of a multitude of smaller and mid-size firms have been plummeting.  At this point, nearly 70 percent of all U.S. stocks are already below their 200 day moving averages.  This is yet another thing that we would expect to see just before the bottom falls out for stocks.

Everything that I have been writing about this week (see here and here) is perfectly consistent with all of my warnings from earlier this year.

We are plunging into a deflationary financial crisis in textbook fashion.  And if the Federal Reserve actually does decide to go ahead with an interest rate hike next week that is just going to make things even worse.

But most people are not patient enough to watch a process play out.  Most people that write about “the coming economic collapse” hype it up like it is going to be some sort of big Hollywood blockbuster that is going to happen over a week or a month and then be over.  That is definitely not the way that I see things.

To me, “the economic collapse” is something that has been happening for decades, that is still in the process of happening right now, and that will continue to happen as we move forward into the future.  The long-term trends that are ripping our economy to shreds continue to intensify, and our leaders are not doing anything to fix our underlying fundamental problems.

As the man said: We're not here to tell you whether this is a good opportunity for more failure or one for back-up-the-money truck for outright success.That's your job.

theeconomiccollapseblog.com/archives/the-global-commodity-crash-tells-us-that-a-major-deflationary-financial-crisis-is-imminent