NOTE FROM THE EDITOR
Dear readers:
This is one of the most informative analysis that I have ran through during this coronavirus crisis. If you don’t know about economics history and panic related to our time, then this one reading you can really learn from. It is written by James Corbett, one of my favorite investigative journalists of our time. He goes an extra mile to learn about important current issues – and shoots right to the heart. – Marvin Ramírez.
by James Corbett
corbettreport.com
March 07, 2020
Last week in this column, as you might recall, I noted that the coronavirus panic had already produced “the worst week in the markets since the financial crisis, including the worst two-day point drop in Dow Jones history.” And I also warned that “the economic effects of this event are going to be very real and very profound.”
Well, here we are all of one week later. And what a week it has been. Let’s review the week in market headlines, shall we?
March 2 – Dow surge is the biggest-ever point gain
March 3 – Dow drops nearly 800 points after the Fed’s surprising news about the economy
March 4 – The Biden Bounce: Dow Futures Up 666 As Traders Forget About Panicking Fed
March 5 – Global Markets Follow U.S. Stocks Higher
Uh oh! I’ve got egg on my face, haven’t I? Here I was thinking a massive disruption of the global just-in-time supply chain was going to expose the Everything Is Awesome! phony baloney fiat economy for the Ponzi scheme that it so obviously is. But, as MarketWatch tells us, “[a]fter the worst week since 2008, the Dow is now on pace for its best week since 2011.” I guess Trump was right after all: Everything is under control and this is a great buying opportunity!
So, are you feeling optimistic about the global economy now? Yeah, neither am I. Here’s why: Record-breaking point drops followed by record-breaking point gains followed by yet more dramatic downswings are not the sign of a healthy and happy market. This is not conjecture; this is age-old accepted market wisdom.
Market volatility is of such interest to market watchers that it has its own index, the CBOE Volatility Index (better known as the VIX). In fact, market volatility is such a key early warning sign of market panic that the VIX has a nickname: the fear index. As any trader worth his salt will tell you, big up and down swings in stocks are a clear sign that the market is about to take a major turn. Now, true, that “major turn” could be a turn to the upside or a major turn to the downside, but I think we can all agree that if stocks are going any direction as a result of this massive global economic disruption, it will be to the downside.
So take a look at the VIX right now. If you extend the chart to its “MAX” setting, you’ll note that in the past week the VIX has reached levels (54.18, to be precise) that have only been seen once before in the entire 30-year history of the index. Want to guess when that was? That’s right, in October of 2008, when the VIX topped out at 59.89.
Translation: The fear index has never been more certain that we’re about to have a major market disruption since the Lehman collapse threatened to wipe out the global economy.
But the VIX index only goes back thirty years. How about this fact: In the last 120 years, the Dow Jones Industrial Average has only experienced back-to-back-to-back gains and losses in excess of three standard deviations over the average daily return six times in the last 120 years. Three of those instances took place at the start of the stock market crash of 1929 and one of them took place this week.
So, keeping all of this worrying volatility in mind, what do you make of the fact that our good friends at the IMF are now calling for an “all-out offensive” to combat the economic effects of the coronavirus hype? Or the fact that JPMorgan Chase, Morgan Stanley, Goldman Sachs and Citigroup have all begun to ready their emergency disaster plans? Or the OECD’s pronouncement that an escalation of the coronavirus fear pandemic could cut global economic growth in half?
Your first instinct might be to pooh pooh these stories as bankster propaganda. That’s a good instinct. After all, as we should all know by now, the banksters are perfectly happy to lie through their teeth as long as it ensures that they can gain a bigger slice of the economic pie.
But this time around the shell game is taking place at a deeper level. The gambit here is not to lie about the state of the economy. It’s to highlight the real state of the economy. Yes, there will be dramatic, painful economic effects from this viral panic. They’re not lying about that. If anything, they’re feeding into it by slashing forecasts, announcing their emergency plans and generally prepping the public for the coming market armaggeddon.
And why? Because, as I’ve long pointed out, ordo ab chao requires a bit of chao. After all you can’t make a global governmental omelette without breaking a few eggs. And by “eggs” I mean “the international monetary order as we’ve known it.” Is this the trigger event for the complete collapse of the current system? It’s far too early to tell at this point, but consider what is already taking place as a result of the hype we’ve seen so far:
- The WHO has already used the crisis to promote the cashless society;
- The failure of this week’s emergency Fed rate cut to buoy the market virtually guarantees negative interest rates are coming to the US in the near future;
- The “temporary” measures to have more and more workers work from home in order to prevent the spread of the virus may in fact become a permanent fixture of the economy.
I know I said this last week, but it bears repeating: An event like what we are witnessing has the potential to justify an utter transformation of the economy as we’ve known it. And, in case the point hasn’t hit home yet, “the economy” isn’t just some vague term here; it refers to the very essence of how we live our lives.
But if the banksters are licking their lips looking at the menu of agenda items that this panic is presenting to them, then perhaps we need to remember that all of this is enabled by one thing: fear. Just as the VIX “fear index” informs us that the markets are panicking over the coronavirus hype, so, too, does it remind us that all of the extraordinary measures that we are already seeing (and many more yet to come) are based on our fear and panic. The more we panic, the easier it becomes for the bankster class to claim that their emergency “solutions” are the only way to stabilize the world in this time of crisis.
And we are only fearful if we are vulnerable. There are many things that are out of control. But there are things that are within our control. If you have been listening to what I’ve been saying for years and are a part of community organizations and freedom cells, do guerrilla gardening and support farmer’s markets and community exchanges, use alternative and complementary and decentralized currencies and have part of your savings in long term stores of value, if you are stocked up on supplies and taking steps to boost your immune system in natural ways, if you have taken steps to ensure the defense of yourself and your family, you will be significantly less vulnerable and less prone to panicking.
And for those who are fearful, I can only ask: What else has to happen before you convert that fear into energy and take the steps that are necessary to move toward self-sufficiency?
So yes, we are on a rollercoaster ride right now. That ride is most obviously visible in the markets but it is about to impact every facet of our lives. And this wild ride that is about to get even wilder.
But let’s maintain our perspective about what this ride is and what it’s about. In the words of that renowned economist, Bill Hicks
“The world is like a ride in an amusement park. And when you choose to go on it you think it’s real because that’s how powerful our minds are. And the ride goes up and down and round and round. It has thrills and chills and it’s very brightly colored and it’s very loud and it’s fun, for a while. Some people have been on the ride for a long time and they begin to question: ‘Is this real, or is this just a ride?’ And other people have remembered, and they come back to us, they say: ‘Hey, don’t worry, don’t be afraid, ever, because this is just a ride.’ … and we kill those people.”
