Worldwide Chaos Continues As China Meltdown Resumes

kingworldnews.com

Worldwide chaos in global markets continues as China’s stock market meltdown resumes and the PPT intervenes, and this came on the heels of some truly historic trading action in the Dow, so today a 50-year market veteran spoke with King World News about the global chaos, the Plunge Protection Team intervention, plus one of the greatest opportunities in history.

Dangerous And Unprecedented Times

August 25 (King World News) – John Embry:  “Any number of the individuals who have been contributing to KWN have been warning about the coming chaos, and it is clear that is now playing out in global markets.  What investors have to realize is that the economic and financial system has never been this exposed to this kind of hyper-leverage at any time in history….

“So it is extremely difficult to make any prognostication other than the obvious statement that there is no way that this can end well.

Plunge Protection Had To Wait To Restore Order In Markets

I was really interested in the two pieces that you ran from Jason Goepfert at SentimenTrader. In one piece he emphasized how quickly excessive optimism in the U.S. stock market has now turned into extreme pessimism. I suspect that this factor in combination with the obvious efforts of the Plunge Protection Team (PPT) could well bring the market back in the very short term.

But I also think it was instructive that the PPT didn’t enter the fray late last week, because I believe the legitimate downward pressure was too great and so they had to let it express itself to some degree before attempting to enter the market and restore order.

… But They Will Ultimately Fail

However, when one looks at reality, I have little doubt that the authorities are ultimately going to fail.

The stock markets along with the bond and real estate markets are experiencing historic bubbles resulting from all the global money creation in the wake of the 2007-2009 global financial crisis. 

Unfortunately you can’t cure an excessive debt problem in the system by creating infinitely more debt, despite the theories being propounded by mainstream mouthpieces such as Paul Krugman.

Now we are confronted with massively levered global economies that are receding. The central bank response can be to paper this over with ever-greater QE programs that will result in some form of global hyperinflation. Or they can finally acknowledge the error of their ways by accepting the inevitable debt deflation right now, which will cleanse the system. 

This cleansing process will be extremely painful for society for the foreseeable future.  However, I honestly believe that is a better outcome than a hyperinflation, which is much more corrosive for society because it just postpones the inevitable and makes the ultimate outcome even more painful.

The Brilliant Egon von Greyerz & One Of The Greatest Opportunities In History

The one thing we can’t enjoy in the next few years is normalcy, and I think Egon von Greyerz expressed that brilliantly in his KWN interviews. He just perfectly sums up where this is all headed.

Now what investors don’t want to be exposed to during the cleansing process is traditional investment assets, which have extreme counterparty risk. People must hold physical gold and silver, and right now is a wonderful opportunity to acquire them at highly discounted prices. This is because of the continuing suppressive activity of the paper markets at the LBMA and the Comex.

As an example, the recent action in silver has been preposterous. And when gold and silver prices finally reflect reality, the gold and silver shares will have represented one of the greatest buying opportunities in the history of finance.”