After the stunning vote by the British people to leave the European Union, Financial chaos erupted on markets worldwide. But some "Doom-and-Gloom" prognosticators say the worst is yet to come, with next week being "catastrophic doom."
The worlds's stock and bond markets, as well as many real estate markets are tottering, over-bloated and over-bought, and have long awaited a spark to trigger the great crash.
That spark came on 23rd June 2016.
As markets collapse, liquidity will dry up, and countries like the USA will look like Venezuela. As civil disorder spreads, so will an attempt to impose martial law in countries like the USA"
So, what is the spark on 23rd June 2016? According to various "Chicken Littles" the sky is falling . . . Here's one published "wild-eyed-doom" prediction:
23rd June 2016 – UK vote for Brexit.
24th June 2016 – Euromarkets plummet. Not just because of Brexit, but if the UK is leaving, the pressure will become insurmountable for other nations to do so.
25th June 2016 – Panic in the Eurozone over the weekend will trigger a flight next week, from the Euro and from Eurodollar assets like Eurobonds.
27th June 2016 – US markets will plummet into a tailspin.
With rock bottom interest rates and the Fed stretched to breaking point, it will be impossible to halt the US run.
28th June 2016 – Capital flight will set in motion bank runs in Europe, spreading to the US.
29th June 2016 – Banks across Europe and the US are closed.
30th June 2016 – Riots break out when people cannot use their credit or debit cars, cannot access banks and ATM's are offline.
1st July 2016 – With the conventions ahead, candidates will slam and blame Obama.
4th July 2016 – Martial Law declared in the USA "to defend the nation and the Constitution."
Party conventions are cancelled to prevent further violence.
17th July 2016 – NO Republican National Convention.
That's the Rumor; What do the FACTS show?
That a whale of a doom prediction, but is it based in any kind of fact? We took a look, point-by-point:
1) CLAIM: Markets are over-valued, ready for a major fall in value.
Financial powerhouse BARON'S seems to agree. In their April 18, 2016 article "Are U.S. Stock Sharply Overvalued Again?" they bluntly point out: Yes.
CNBC agreed. In their article about the issue, CNBC stated boldly "By this measure, the S&P 500 is overvalued by 72%"
MarketWatch was shouting this from the rooftops all the way back in December 2015. In their article "Stocks are more overvalued now than in 2000 and 2007 peaks" they make very clear the stock market prices did not reflect actual stock values based upon earnings.
Any objective reader would have to agree, the doom-and-gloom claim at the top of this article, that stocks are grossly over-valued, is backed-up by the facts.
2) CLAIM: EuroMarkets will plummet
This is already proving true. On Friday, June 24, the day after the BREXIT vote, European, Asian and US Markets plunged.
In London, England, the Financial Times Stock Exchange (FTSE) opened at around 6100 and instantly plunged to 5800. It struggled the rest of the day to recover a little, to 6138. down 3.15% for the day as shown in the chart below:
In Frankfurt, Germany, the DAX opened at 10,257 and plunged immediately to 9,226, then struggled all day to close at 9,557, down 699 or 6.82% as shown in the chart below:
In Tokyo, Japan, The Nikkei opened at 16,238 and plunged dramatically while the Brexit vote was being counted, dropping to 14,864, then stuggling to rise a meager few points to close at 14,952, down 1,286 or 7.92%.
In Hong Kong, China, the Hang Seng Index also plunged while the Brexit vote was being counted. It opened at 20,868 and plunged to 19,662, finally closing at 20,259, down 609 points or -2.92% as seen below:
In the USA, the Dow opened at 18,011 and plunged to 17,356, before clawing its way back to close at 17,400, a drop of 610 points or -3.4%
The S&P 500 also got clobbered, opening at 2113, plunging to 2032, then clawing its way back to 2037, a drop of 75 points or -3.6% as shown below:
In the UK alone, the drop in stock values wiped out 164 Billion pounds in value, in TEN MINUTES.
Any rational reader would agree, the markets got clobbered after the Brexit vote, and did, in fact, "plummet." Thus, the second claim in the doomsday scenario at the top of this story turned out to be true.
3) CLAIM: Panic in the Eurozone over this weekend will trigger flight from the Euro and Eurobonds
In fact, the "panic" began to strike on Wednesday, PRIOR to the Brexit vote!! Lines formed outside Foreign Currency Exchange offices in Britain, filled with folks seeking to dump their currency in exchange for foreign money! Lines were literally out the doors at some locations as seen below:
Then, on Friday after the Brexit vote, Foreign Exchange services at banks worldwide were HALTED! For instance, Australians worldwide were left stranded without cash when Australia's Commonwealth Bank halted all foreign currency exchanges!
@Mitchy_Minx Due to recent results from the British exit referendum we are temporarily suspending all retail customer foreign exchange (1/2)
— CommBank (@CommBank) June 24, 2016
@Mitchy_Minx transactions of GBP pounds and transactions that do not include AUD until the morning of Monday, 27 June.(2/2) ^Mike
— CommBank (@CommBank) June 24, 2016
So the Third claim of the doomsday scenario above, is clearly already taking place.
Why Would Banks Close?
The prediction above claims "Banks will be closed." Why would that happen?
Well, their stock values are being pummeled. On Friday Stock values of large banks dropped in value like a rock. Wells Fargo -3.8%, Chase -5.5%, Bank of America -7% Citigroup -8.3%, Deutsch Bank -16% and Lloyd's of London -21%. That took place in ONE day.
If Monday and Tuesday show similar drops, the banks will be out of business because their stock values will not support the loans they have outstanding. The banks will be "insolvent." Once the general public hears that banks have begin to fail, they will drop whatever they are doing and head to their nearest bank branch to pull money out. It cannot be avoided. It's human nature. That's why wise folks took their cash out a long time ago. If you have any common sense left AT ALL, you would be wise to get an amount of cash out of the bank that will tie you over for a month or so.
We DO NOT MEAN money to pay your bills, we mean MONEY TO BUY FOOD and FUEL to LIVE. If this situation goes the way the prediction above says, the focus for most will be SURVIVAL, not paying the bills.
That leaves this coming Monday to see if the claim that US Markets will "drop in a tailspin" comes to fruition. If it does, that makes about 50% of the doomsday claims, TRUE.
Whether or not the rest actually play out is anyone's guess. Most folks do not believe any such chain of events could possibly take place. Then again, they are the very same people who refused to believe that a "Brexit" would take place. ALL of them were wrong about the Brexit. Will they also be wrong about the chain of events outlined above?
Perhaps, in the interest of being prepared for the unexpected, it may be a good idea to get yourself some extra food supplies, get yourself some CASH, fuel-up your vehicle(s) and talk with your family about the wild rumors (like the one above) which are circulating widely, so no one is caught off-guard if things suddenly turn bad.
We have the rest of this weekend to get some food, get some cash, fuel-up our vehicles and mentally prepare. It can't hurt to make a few little preparations, can it?
The clock is ticking. Will you be prepared or will you be one of the people without any cash, without any food, left wondering what happened, and hoping someone feeds you?
Source : www.superstation95.com