Chris Martenson's Blog

James Dines has been in the business of making bold calls for over 50 years. In this deep-diving interview, he minces no words about the dire risks the US economy - and the world at large - faces at this juncture.

Simply put, he sees the excessive credit in the financial system as having placed the global economy on a collision-course with hyperinflation.

Unlike past periods of turmoil, there are no truly 'safe' places for investment capital to hide. Geographic markets and almost all asset classes are positively correlated these days. They share many of the same risks and if a systemic crash occurs, they will crash together.  read more »

Growth. It's what every economist and politician wants. If we get 'back to growth,' servicing debts both private and sovereign becomes much easier. And life will return to normal (for a few more years).

There is growing evidence that a major US policy shift is underway to boost growth. Growth that will create millions of new jobs and raise real GDP.

While that's welcome news to just about everyone, the story is much less appealing when one understands the cost that come with such growth. Are we better off if a near-term recovery comes at the expense of our future security? The prudent among us would disagree.

Resurrecting American Export Strength

It’s easy to be skeptical that America could once again be a titan of global exports.

For a very long time, that role has mostly been relegated to countries in the developing world. America as an export economy? Somewhere along the 50-year transition from industrial manufacturer to voracious consumer, Americans have lost touch with such a remote possibility. Indeed, this phase of America's economic history is now quite settled.  read more »

Back in the 1930's, Irving Fisher introduced a concept called the 'debt supercycle.' Simply put, it posits that when there is a buildup of too much debt within an economy, there reaches a point where there simply is no other available solution but to let it rewind.

We are at that point in our economy, as are most other major economies around the world, claims John Maudlin, author of the popular Thoughts from the Frontline newsletter and the recent bestselling book Endgame: The End of the Debt Supercycle and How It Changes Everything.

For the past several decades, excessive and increasing amounts of credit in the system have allowed us to live above our means as both individuals and nations. We've been able to have our cake and eat it, too. Now that the supercycle has ended and the inevitable de-leveraging cycle is staring us in the face, we will be forced to set priorities in a way that has been foreign to our society for over a generation.  read more »

Many of you have been asking when Chris and Becca plan to host this year's weekend seminar. Good news: we now have dates -- for not just one, but two workshops.

The first weekend workshop will take place, per tradition, at the Rowe Conference Center on March 23-25. The second is being held at the Kripalu Center for Yoga & Health on June 29-July 1. 

Both locations are in western Massachusetts and set in peacefully secluded regions rich in natural beauty.

For those not familiar with these workshops, you're likely asking: What are the benefits? Simply put, these weekends are designed to advance participants' ability to make constructive progress around the material and ideas we address on this site. If you've watched theCrash Course, Chris describes this weekend as all about "what comes next."

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A substantial percentage of many households' net worth is comprised of the equity in their home. With the beating home prices have taken since 2007, existing and soon-to-be homeowners are keen to know: Are prices stabilizing? Will they begin to recover from here? Or is the "knife" still falling?

To understand where housing prices are headed, we need to understand what drives them in the first place: policy, perception, and price discovery.

In my December 2011 look at housing, I examined systemic factors such as employment and demographics that represent ongoing structural impediments to the much-awaited recovery in housing valuations and sales. This time around, we're going to consider policy factors that influence the housing market.

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 photo: BP Oil Leak photo series via Boston Globe, Mark Ralston - AFP/Getty Images

Eventually the point is reached when all the energy and resources available to a society are required just to maintain its existing level of complexity. 

- Joseph Tainter

The modern world depends on economic growth to function properly. And throughout the living memory of every human on earth today, technology has continually developed to extract more and more raw material from the environment to power that growth.

This has produced a faithful belief among the public that has helped to blur the lines between human innovation and limited natural resources. Technology does not create resources, though it does embody our ability to access resources. When the two are operating smoothly in tandem, society mistakes one for the other. This has created a new and very modern problem -- a misplaced trust in technology to consistently fulfill our economic needs.

What happens once key resources become so dilute that technology, by itself, can no longer meet our growth needs?   read more »

In each of the years 2008, 2009, and 2010, significant worries emerged that Western nations might attack Iran. Here again in 2012, similar concerns are once again at the surface.

Why revisit this topic again? Simply because if actions against Iran trigger a shutdown of the Strait of Hormuz, through which 40% of the world's daily sea-borne oil passes, oil prices will spike, the world's teetering economy will slump, and the arrival of the next financial emergency will be hastened. Even if the strait remains open but Iran is blocked from being an oil exporter for a period of time, it bears mentioning that Iran is the third largest exporter of oil in the world after Saudi Arabia and Russia.  read more »

Perfect Storms

2011 was an abysmal year for the global insurance industry, which had to cover yet another enormous increase in damages from natural disasters. Unknown to most casual observers is the fact that during the past few decades the frequency of weather-related disasters (floods, fires, storms) has been growing at a much faster pace than geological disasters (such as earthquakes). This spread between the two types of insurable losses has moved so strongly that it prompted Munich Re to note in a late 2010 letter that weather-related disasters due to wind have doubled and flooding events have tripled in frequency since 1980. The world now has to contend with a much higher degree of risk from weather and climate volatility, and this has broad-reaching implications.

And critically, it has a particular impact on food.

Many factors seen over the past decade have produced higher food prices: population growth, urbanization, the decline of arable land per person, and the upgrading of diets for example. But more damaging than food inflation has been the pushing of global food prices out of their long, quiet envelope of stability. From the recently released UN Report on the World Food Situation:  read more »

[Every year, friend-of-the-site David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. Moreover, he has graciously selected CM.com as the site where it will be published in full. It's quite longer than our usual posts, but by any measure, 2011 offered an over-abundance of 'business as unusual' developments to summarize. We hope you enjoy David's colorful observations and insights, which are very much his own. -- cheers, Adam]

Background 

Governments gambled on a return to growth solving all the problems. That bet has failed.

—Satyajit Das—

Every December, I write a Year in Review. Last year's was posted at several sites including Chris Martenson’s [1]. What started as summaries posted for a couple dozen people accrued over 13,000 clicks in total last year. It elicited discussions with some interesting people and several podcasts, including a particularly enjoyable one with Chris [2]. Each begins with a highly personalized survey of my efforts to get through another year of investing. This is followed by a brief update of what is now a 32-year quest for a soft landing in retirement. These details may be instructive for some casual observers. I have been a devout follower of Austrian business cycle theory since the late 1990s and have ignored the siren call for diversification. I vigilantly monitor my progress relative to standard benchmarks. The bulk of the blog describes thoughts and ideas that are on my radar. The commentary is largely stream-of-consciousness with a few selected links that might be worth a peek. Some are flagged as “must see”. Everything else can be found here [3].

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The past several years have seen a growing backlash against "paper" investments as more and more investors consider hard assets to be a safe haven against the implications of central bank money printing. But as the global economy visibly slows, this question arises in many minds: Are commodities, which have been on a tear since the March 2009 bottom, finally topping out?

The question requires both a fundamental economic response as well as a technical chart analysis.

We can start by observing the common-sense connection between demand for commodities such as copper, cement, steel,etc. and economic expansion. When demand rises faster than supply, prices rise. Since supplies of commodities face all sorts of restraints in terms of extraction rates, energy costs, and declining reserves, increased demand quickly pushes prices higher.

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