• Jim Costa

Jim’s Daily Rant. Why Hasn’t The DOW Collapsed Yet On 9/26/2022?

That is a fair Question. But lets change it to “How come I can’t see the Collapse yet?”, because it makes it simpler to explain.

Lets start small. If one opens an old pocket watch more than likely a spring will pop out. Now realize there may be 2 or 3 springs in it as well as several gears that can go as well. The same is true of a global financial crash of the Big Banks and Central Banks. By the time we pull the back off them springs like stock market crashes, no more credit, bank failures and derivative defaults can all pop out in any order or over a stagger time, but roughly immediately (a month).

I am mostly looking at Bank collapses as in 2008 but most big Investment Banks and Central Banks. But first lets talk about today’s DOW movement first. It was always predicted that as governments become questionable, including their fiat currency, those country’s wealthy will do as they were trained to do, move into the U.S. stocks, bonds, equities and Dollar in banks. Last night the British Pound and the Euro both plummeted. Therefore we should expect the wealthy to move their wealth to the U.S. for safe haven. But recall that even though this was always expected, the U.S. Dollar will collapse within month or so after other currencies collapse. So the wealthy are just making their last climb up the Titanic for safety.

Before proceeding you must promise to watch the movie The Big Short, based on factual events leading up to the bank bail-outs in 2008. The movie does not explain that the entire global economic system collapsed that amazing weekend and has never returned but instead is now propped up by global banking fraud. Now consider that hundreds of $Billions has been thrown into that bailout that still has not been disclosed to the average person. Link [I think it is on Netflex too.]

Now lets talk insurance. Insurance companies will only allow one to insure something they own. Derivatives is a form of insurance in that it too is a bet but ownership is not required. So if I were to ask to bet that a man in a particular bar will propose marriage in front of friends and family, I might pay a hefty fee to an investment bank to take my $1Million to insure she won’t shoot at him instead and if she does they will owe me, a stranger, $20 Million. This is a derivative.

Well, now consider that two years ago $trillions in derivatives may have been issued at 1:20 returns that Western Europe won’t collapse. If collapse was defined as suppose a drop of 20% of prior years GDP then it is easy to see that the big Investments Banks are now in crisis mode. That is where we were this past weekend, in my opinion.

The jury is still out on the China coup but now lets add those bets coming due now as well. I am talking about major global corporations heading that China won’t cut off their supplies, etc.

So I will be watching the DOW, Treasury rates for many countries, their falling currencies and the rising U.S. dollar. I will also be interested in the Overnight REPO rate, the rates banks charge each other of one day loans to keep them solvent. I will also watch to see if bank credit rates rise as they cut off having to make loans as they are terrified while at the same time need the revenue.

So I am back to watching a submarine race and guessing from the water ripples what is happening that they won’t tell you.

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