Is this it? Is the bull market finished and the good times over? Well, they could very well be. We are looking at a world which is rotten to the core, a world which is built on debt which will never be repaid. And a debt which is artificially supporting $100s of trillions of assets and quadrillions if we include derivatives. The supposedly most powerful economy in the world (the US of course) is now so indebted that it needs to fight the whole world in all kinds of different wars for its survival, with the latest being a trade war.

US WAR DRUMS

Whenever a nation starts fighting with other countries, it is always done from a position of weakness. US debt has been running out of hand for a long time. Federal, state, corporate, personal, mortgage, auto, student etc, etc, they are all escalating exponentially. On top of that, the US budget deficit will be in the trillions for the foreseeable future and the trade deficit was $600 billion in 2017 and could soon be one more trillion dollar deficit.

Starting wars is an Indication of the final stages of a troubled empire. The wars and interference in countries like Iran, Libya, Ukraine, Syria, and Yemen are all part of that. The appointment of hardliner John Bolton as National Security Advisor as another perilous sign that the US is on the war path again.

So is policing the world’s financial system and so is protectionism and trade wars. These are all desperate measures of a country in a terminal decline. And it is certainly not a coincidence that this trade war started right before the oil trading in Yuan begun. Eventually, this will lead to the demise of the dollar and a major power shift from East to West as well as much higher gold prices.

Nor is it a surprise that Silk Road countries have been buying major amounts of gold in this century. As the graph shows, the gold holdings of Russia, Turkey, India, and China have increased 7 fold since 2004 from 5,000 tonnes to 35,600 tonnes. The question is how much is actually left in Western Central Banks of the 23,000 tonnes that they allegedly hold.

THE US BLAMES EVERYONE ELSE

The whole world is living above its means but the US is the worst culprit. So what is the US doing about it. Well, there is no question of adjusting your spending in line with your expenses. That would be much too simplistic. Instead, you blame the whole world that it is their fault and that they must be punished. And this is exactly what Trump is doing now. It is China’s and everybody else’s fault that a major part of US manufacturing has moved to low-cost countries. And it is these countries’ fault that the US is living above its means and borrowing and spending more that it earns. Therefore these nasty countries must be punished. And that is the reason the US has started a trade war. Trade wars are almost without exception a desperate measure taken by an ailing economy. A trade war, especially between the two biggest nations in the world will indisputably lead to a downturn in world trade and therefore also a major global economic downturn.