End of the World – Part One


Predicting the end of the world, physical or financial, is seldom helpful. If the prediction is correct, how do you profit from the insight? If the prediction is wrong and the “end of the world” is delayed (typical), you lose credibility.

An estimate of risk versus reward based on an analysis of current information is more useful.

Assessment: The 2018-2020 risk for most asset classes, such as stocks, bonds, corporate debt, and real estate is high while the potential reward in those asset classes is low. Gold and silver are opposite. Their long-term risk is low (September 2018) and their long-term potential reward is huge.

From Goldman Sachs:


The central banks and financial world created an “everything bubble.” This includes the stock market, bond market, housing, student loans, sub-prime auto loans, emerging markets, fiat currencies, and central bank credibility.

Low interest rates enable bubbles!

Bubbles always burst or implode. People want to believe “this time is different,” but it usually isn’t. Bubbles will implode and cause huge damage, especially to the middle and lower classes in the United States. Remember the crashes of 1987, 2000 and 2008. Each one seemed more destructive and broader in its reach than the previous crash. What will the crash of 2018 – 202? create?

If it can’t continue, it will stop – someday. Total debt – national, household, corporate, sovereign and more – has increased exponentially since 1913 when the Federal Reserve… you know the drill.

Use national debt for example. Begin the calculations in 1913, 1971, 1980, 2000 or whenever. The rate of increase in the official national debt varies but on average the debt increased 8% to 9% every year and doubles every eight to nine years. Consider the implications of runaway debt, out of control spending, and no political will to manage spending, debt, or expansion of government, Medicare, military expenditures etc.

Year Official National Debt Projected

2018            $21 trillion doubling every 8.5 years

2027?         $42 trillion

2035?         $84 trillion

2044?       $168 trillion

2052?       $336 trillion

Outrageous! Of course these projections are only based on 100+ years of debt history and could change, congress might become fiscally responsible, global powers could “make nice,” greed and fear might take a vacation, the Tooth Fairy…

The banking cartel (commercial banks and central banks) will create trillions of dollars of debt in coming years and will feed it into the economy. However, debt creation cannot continue forever. Either the dollar crashes (think Venezuela, Argentina, Turkey and others) or the financial world resets.

From Jim Sinclair:

“Federal Reserve Gov. the Hon. Powell has only one of two moves he can make. Flood the world with dollars by active debt monetization (QE) internationally, or have the experience of presiding over the greatest depression in the history of man as his legacy. What would his boss have him do? The debt clock is ticking towards the reset by June of 2019.”

Predicting the “End of the World” is, financially speaking, predicting the reset. Yes, something must occur, but what, why and when?


Debt must be paid or defaulted. Much of global debt can’t be paid so it will default. That debt is someone’s liability and another person’s asset. Default reduces or destroys both the liability and the value of the asset. Imagine $100,000 of thirty-year bonds being repaid in full, except the $100,000 buys 100 gallons of gasoline in thirty years.

It can’t happen here… It can! Argentina lopped 13 zeros from their pesos since 1945. Interest rates in Argentina reached 60% in 2018. Venezuela and Zimbabwe created recent hyperinflations by central bank printing. It can happen in the U.S., in Europe, in Japan and elsewhere.

When massive defaults occur, will global central banks sit on their hands and watch the collapse, or “do something?” What will they do? It is likely they will print currencies, or as Jim Sinclair says, “flood the world with dollars by active debt monetization.”


There are many reasons. Some are:

The $20 trillion in created central bank monetization has made the financial world less stable. Which snowflake causes the avalanche (Jim Rickards) or which grain of sand initiates the collapse (John Mauldin) or which bank collapse will force the global reset? The condition of instability is more important than the apparent cause of the collapse.

The yield curve is declining. Recessions are consequences of excess credit issued by the fractional reserve banking system and central banks. A recession has not occurred for years, but the yield curve indicates a recession is close. Government revenues will collapse, marginal borrowers—corporations and individuals—will go bankrupt and the financial world could reset to a 2008 crisis during the next recession.

Stock markets have been too high for years. Apple and Amazon are trillion dollar companies. The NASDAQ 100 fell over 80% after the 2000 crash. Could it repeat? Yes, but crazy can become crazier to suck in more speculative dollars. Fundamentals are irrelevant compared to central bank liquidity pumps.

The “everything bubble” and excess debt will weaken currencies. Interest rates must remain low so debtors can afford the interest payments, which will weaken currencies. Or interest rates will reset higher and the bankruptcies will weaken currencies. Our central banks and governments have led the world into an ugly currency trap. Rig for stormy weather!

Quantitative Easing (QE) or “currency printing” or monetization is like an anti-anxiety drug or cocaine or hard liquor. Use it enough and you create addiction. Central banks created over $20 trillion in QE, enough to produce a substantial addiction. Chairman Powell of the Fed may attempt to “kick the habit” by taking baby steps to reduce the addiction. Based on 100+ years of history, the Fed will monetize more, not less, and probably soon.


Read part two in a few days!


  • A risk/reward analysis for 2018 – 202? points toward gold and silver, not stocks, bonds, corporate debt, student loans or most asset classes.
  • Debt and spending are “out of control.” Fiat currencies will devalue, particularly if they are needed to “paper over” massive defaults.

Miles Franklin will recycle dollars from over-valued stock markets into real money—gold and silver. The conversion is important because some stocks sell at all-time highs while gold and silver prices are low.

Gary Christenson


10 thoughts on “End of the World – Part One

  1. I don’t understand gold bugs right now. The price has done nothing but drop since 2008 or so. The dollar is strong right now. During the Great Depression the value of gold dropped!!! It was not a store of value. It was better to have paper dollars for the first five years. After that I would agree it was better to own precious metals. Will this time be different? Maybe, investors are smarter and the curve of getting in and out is changing based on speculation and smarter investors. My bet is silver will drop to 10 bucks before any recovery will begin to occur. It may not occur at all. Between 1970 and 2008 silver did almost nothing as was a real nothing burger. I like listening to all the pros speculating what is going to happen next. The truth is I just don’t think anyone knows because the real problem is what will the Fed do, or maybe they won’t do anything at all next time. A crash is inevitable. That I agree with. What it will look like is anyone’s guess. It just depends on government intervention. Keep your ear to the ground. Something big is probably about to happen, and I don’t believe anyone really knows how to best weather the storm. It is just educated guesses believing the past will be like the future.

  2. There is no need for a great reset. The problem is an excess of savings or a lack of demand due to wealt inequality. The wealthy save and invest while the rest borrows and spends.

    It is like a game of Monopoly in its final stages. The winners can let the game continue by lending money to the losers. But the losers can never repay. But writing off debt is painful.

    So why not allow interest rates to go negative? In this way the people with excess capital will hand it over to those who lack it.

    Perhaps its seems a crazy idea, but there is good reason to believe it isn’t.

    Why interest rates may go negative:

    How to deal with that:

    There is a solution. So, don’t panic. Just make yourself familiar with it and spread the news.

      • An important part of the idea is that once interest rates are negative, positive interest rates on new debts aren’t allowed any more.

        As interest is a reward for risk, the riskiest debts are going to be phased out. This will make the financial system more stable. For instance, there will be no more credit card debt.

        If the economy is doing well, interest rates rise less, and less credit will be available at zero interest as investors prefer equity. So a boom will not create a bubble nor will the economy overheat.

        The problem with raising interest rates during booms is that higher interest rates seem justified during the boom, but when the bust sets in, you have a debt overhang at high interest rates.

        Maximising the interest rate and curbing credit is better. The currency will become inflation free as monetary aggregates will not expand. There may even be deflation if the economy grows.

        Equity prices may rise, but as there is less debt, they are also less likely to fall. Only, when you try to familiarise yourself with the solution, you may start to apreciate it.

    • This solution could happen for a while, but if the money of the rich is lent out and bubbles get burst, then there is a high probability that there people will not have gotten their money back. The low interest rates are what create the bubbles and are what cause speculators to lose their money. This sort of thing causes more economic problems and it is due to this that people should have a store of wealth which is outside the system.

  3. Is that “Read part two ‘comma’ in a few days”? The new commodity stock market allows players to buy, or sell, a wide group of securities, through inverse bear ETFs. Once enough of the players turn to the downside it will self perpetuate the selloff. Initially this will be done to hedge but soon the hedge is forgotten, the longs are dropped and the market will value itself in true commodity fashion. There is an upside, in a traditional bear market money just disappears, in this instance it merely takes another form.

  4. The only sure thing to do at this point is to get completely out of debt…
    and if you have discretionary money left after that, convert it into
    things of intrinsic value… I for one am buying up bicycles and converting
    them into motor bikes for the coming petro spike… one could say that
    gas will remain cheap in a deflation event, but two things must be noted…
    the fuel producing infrastructure got too far in front of itself, and cant pay it’s
    bills on less than $100 per barrel oil… secondly, the stealth hyperinflation
    taking place , wont remain stealth after a stock market sell off, and bond collapse take place… all those hidden trillions are going to come into view
    at some point before 2020… there will be a fuel panic, one way or another.
    The fools (WHO ALWAYS EMERGE) to buy 12 MPG 4 X 4 gas guzzlers
    when the petro sine wave turns down,
    will be panicking to find a used 71 Pinto to get to their $15 an hour fast food
    jobs… and motor bikes will turn to gold.

Leave a Reply

