If You Read Between The Lines, Global Economic Leaders Are Telling Us
Sometimes, a strongly-worded denial is the most damning evidence of all that something is seriously wrong. And when things start to really get crazy, “the spin” is often the exact opposite of the truth. In recent days we have seen a lot of troubling headlines and a lot of chaos in the global financial marketplace, but authorities continue to assure us that everything is going to be just fine. Of course we witnessed precisely the same thing just prior to the great financial crisis of 2008. Federal Reserve Chair Ben Bernanke insisted that a recession was not coming, and we proceeded to plunge into the worst economic downturn since the Great Depression. Is our society experiencing a similar state of denial about what is ahead of us here in 2018?
Let me give you a few examples of some recent things that global economic leaders have said, and what they really meant…
–Tesla Motors CEO Elon Musk: “We are definitely not going bankrupt.”
Translation: “We are definitely going bankrupt.”
Tesla is a company that is supposedly worth 51 billion dollars, but the reality is that they are going to zero. They have been bleeding massive amounts of cash for years, and now a day of reckoning has finally arrived. A severe liquidity crunch has forced the company to delay payments or to ask for enormous discounts from suppliers, and many of those suppliers are now concerned that Tesla is on the verge of collapse…
–Shark Tank billionaire Mark Cuban: “I’ve got a whole lot of cash on the sidelines.”
Translation: “I believe that the stock market is about to crash.”
Mark Cuban is not stupid. Like Warren Buffett, he is sitting on giant piles of cash as he waits for stock valuations to return to their long-term averages. And when “something happens”, Cuban insists that he is “ready, willing and able” to make some bold moves…
–Deutsche Bank: We need our employees to “take every opportunity to restrict non-essential travel” in order to cut costs.
Translation: We are on the verge of collapse, and we have got to save every single penny that we can right now.
If you follow my work on a regular basis, you already know that I have been extremely hard on Deutsche Bank. The biggest bank in Europe is teetering on the brink, and this latest move is more evidence that their days are numbered…
–Italian Cabinet Undersecretary Giancarlo Giorgetti: “I hope that the quantitative easing program will go forward.”
Translation: If the ECB does not buy our bonds, the Italian financial system is toast.
Italy will almost certainly be the fulcrum of the next European financial crisis, and the truth is that the EU will not have enough money to bail Italy out once it collapses.
So the Italians desperately need the ECB to continue buying their bonds, and the new Italian government seems to understand this very well…
Signs of trouble continue to erupt in the United States as well. The trade war is taking a huge toll on businesses of all sizes, and sometimes it is rural America that is being hurt the most.
For instance, the looming closure of the Element Electronics factory in Winnsboro, South Carolina would be absolutely crippling for that community…
In this day and age, we are trained to be optimistic, and that can be a good thing.
But there comes a point when blind optimism causes us to lose touch with reality, and many believe that we have already crossed that threshold.
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