90-Days to Crashpocalypse? The Calm Before…

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Everything seems to be right on schedule.  The scent of Calamity is in the wind, yet everyone  on the rock seems bound to denial.  Why, you can see it in the Dow futures this morning, up about 270 points.  Dandy!

Enjoy it while you can.

The four “horsemen” that are presently on hiatus for a few days, which is what we would expect of a major Wave II rally.  The four are Deutsche Bank, BREXIT, Trade Wars, and the Inco-Pak flashpoint.  We’ll highlight these in a moment.

First, for those unaware of how markets work, we haul out our Aggregate Index approach to project a financial view into the future.

The all-time high, is a starting point.  Seems like eons back, but in reality is was just July of this year in our (admittedly-odd) aggregated view of markets topped.  Once we come to terms with that idea, we can figure out how much the “wave III into fall” could drop” if things run a certain course and if the present run ends as a Wave II bounce:

What would this drive us to?  Well, not full-on Depression, for sure.  A total drop from July of this year of more than 17%. is survivable just maybe not comfortable.

The good news is that from where we are now (if we’re anywhere near right) in this Wave II rally we could rally another 500 points, or more, and then have a panic attack in the fall.

All of which would imply an end-of-year rally to wind up the decline and we’d be into Happy Valley in 2020.  But not so fast, old pard.

You see the way “waves work” is they “nest” – which means we could have a Wave I through Wave V down work-out through the fall of this year, then we could rally a bit into late winter/ early spring which would form  Wave II of a larger degree.  And THAT dear reader, is the possibility to lose sleep over.

Because, as we’ve explained almost endlessly, if this is a declining “nested wave” function (though it may not be) the five waves down we’re in right now could resolve into a larger Wave I, with a year-end Wave II rally and then utter panic in spring 2020.  That’s when the large Wave III would smack us.

In other words, take the possible medium target zone for Wave 5 of this move, the 20,975.48 possible this fall.  That would become the larger degree Wave 1 down move.  From there, should it roll that-a-way,  our handy Elliott projecting spreadsheet presents a view of a Grand Canyon of Financial Collapse in the 2020-2021 area:

The magnitude of the total decline doesn’t seem so bad.  Wasn’t the Great Depression worse?

Yes, the Great Depression Was Worse…BUT…

Here’s where we need to be extremely clear-headed in our thinking about inflation.  Let’s assume, momentarily, that we could be heading into something as large (impacting daily life as bad or worse) as the Great Depression.  It’s a dead-to-nuts ringer the government would paper it over if they can.  How?  Print!!!

How could things be worse when the decline is projected smaller?

This is all about inflation and how the Fed can attempt to maintain normalcy bias even in the face of historically large financial disaster.

A Thought Experiment:

Let’s say that tomorrow morning, there was suddenly twice as much money sloshing around the world.  How would that look?  Well, you’d make twice as much money.  Government would make more than twice as much revenue from income taxes – through the magic of bracketing you into a higher tax-chattel category.  And the price of gasoline would jump from $2.50 to $5-bucks.

None of which matters (unless you need gas):  Point is the stock prices would also double.  And yet, in reality, you’d actually be able to buy slightly less goods in the double-priced model because of income tax bracketing.  Government makes more, market shills scream “Double your money!” and you get screwed.  Welcome to Rinancial Reality.  The game where we’re all ‘bottoms.’

OK, let’s say the Fed is making up money HUGELY faster than the actual growth in the economy.  FACT: The most recent 90-day annualized print rate for M1 in Table 2 of the H.6 Money Stocks Report is up 8.6% per year.

“Wait!”   Ah, seeing it, are you?  GDP is growing at less than half that which means what?  We could be in the opening round of (addictive) money creation to paper-over the facts of global financial ruin being at hand.

Let’s enumerate who the  “four horsemen’ are in all this:

90-days to Crisis Crescendo?

As one deep-thinker reminded me this weekend, incubation periods for calamity have been in the 90-day area since Revolutionary (and Civil War) times:

“From the time of the State of War existing until the actual battle broke out over Ft. Sumter was approximately 3 months.  (Jan 9 to April 12).

IMO a 3 month time frame is also a reasonable time frame to watch events unfold over the Kashmir issue.

Like with Ft. Sumter, even today it takes some time to get troops and supplies into place and draw up battle plans before a full scale conflict can erupt.

With Kashmir in addition to BREXIT (which will hog all the news attention so most won’t even pay attention to what is happening there) It is going to be an interesting fall … that is for sure…”

Just as I was posting that, here came another 90-day marker: Stocks Climb As Ross Confirms Another 90-Day Delay On Huawei Blacklist.  Kicking the can how far down the road?

While there are lots of idiot-polarizing stories to glamorize this site with, none really competes from a personal strategic planning perspective with simply looking at these “flash points” to see where we’re heading this fall.

Deutsche Bank: Today the bank is bouncing as “Deutsche Bank leads European shares higher.”

BREXIT:  The Labour Party will be trying to force a general election in the UK in order to avoid leaving the EU before a “deal” to hold regional trade ties and such together.  Still, Halloween  will have special meaning in the UK this year.

Trade Wars:  Another sign of Wave (ii) of the smaller degree is scene in headlines like “Stocks are soaring on fresh hopes of a ‘tidal wave’ of government stimulus and an end to the US-China trade war.”

Why, it’s as my friend  and Elliott Wave expert Robin Landry once told me:  People tend to be as optimistic at Wave 2’s as they were at the top.  Sure looking like that, isn’t it?

Indo-Pak War – Pending?  “Restrictions on phones, movement return in Kashmir after clashes ” says The Hindu, while in the meantime, the UN is looking more and more like the Western Globalist front organization we always took it for as “Kashmir, Imran Khan ‘Warns’ World of India’s Nuclear Arsenal.”

The Pakistani’s will look at Indian restridtions as anti-Muslim and akin to martial law.  Which is is…

An important historical perspective:  Long before the current outbreak of “fidget toys”  over a half-century back there was a novelty item called the “Handy-Dandy-Bullshit Grinder” – lots of pictures of it via Google here.

Today, we can summarize our “take on pertinent news” by labeling each of the four-sides of said device with one each of our problem children, the four horsemen of Crashpocalypese.

It’s a useful mental model, too.  For really expert machinists, a six-sided version the device might be constructed to accomodate a longer-leadtime.  The additional sides would be labeled Iran-Israel showdown which hits 72-years in 2020, and So Long Taiwan, China’s coming for you.  But those will be for next year.  We need to live in the present.

With that, we now return you to what “passes as news” for the frighteningly-stupid masses that we thinking people suffer-through on a daily basis.  Ready?

Average American Headlines

“Buckingham Palace responds after video shows Prince Andrew in Epstein mansion”  Just count the bodies…

Pregnant Ashley Graham lauded for sharing nude snap showing stretch marks.  Monetizing stretch-marks to come?

Think  that’s thrilling?  Try The Winklevoss twins may work with Facebook again.

And new meaning to the street slang  “meat check as a “Florida man arrested after allegedly shoving steaks worth more than $50 down his pants.”

That’s the news and most of it fits into that “Handy-Dandy Grinder” category.  So go Mondays..

Other than J. Powell of the Fed speaking Friday, we can’t think of much reason to turn a computer on this week…

Write when you get rich (or this week, bored for that matter)…

george@ure.net

37 thoughts on “90-Days to Crashpocalypse? The Calm Before…”

  1. Strong futures this morning. All indicators are still negative. Hold. This isn’t what I would have predicted, but I am never right, so follow the charts.

    A 46-year age difference hasn’t stopped rampant speculation that Caitlyn Jenner is in a relationship with Sophia Hutchins, a transgender woman. Did both become woman so they could be lesbians? A Howard Stern interview should be planned. No wonder Washington is in turmoil. The government used to be seen as a parental organization, now it is a free for all.

    • @ ECS

      Not FREE for thee and me….scumbag thieves rule the DC roost’…..and are continuing to ‘spend us…a into the death of this nation…And no ‘queer folk’ will save it

      • Everyone today is about “ME, ME, ME, Look at me, I am so Pretty”. From a Steinfeld episode when Jerry had the mink coat & European Leather Carryall (purse).

    • You might look at historical options date to end of month charts. Usually a good pullback in there somewhere (said the fellow who eyed 4-figures worth of a 3 x short etf just before the close…

  2. This skilled machinist has better things to spend his time on, you know like make money or things to protect your ass when the s**t does hit the fan! I will send you a pic in a few days.

  3. haven’t read you for ages George .. your probably the only bloke out of all the experts that is still sane . pleasure to browse .. will be back

  4. George, I too am concerned about an EMP attack.
    I was wondering how you are protecting you solar panels and control system. I know that you can spend a lot of money, but if anybody could do in an inexpensive way it would be you. I think for the readers that have solar systems it would be great if you would publish a column describing how to protect with parts and schematics , Thanks in advance,

    • mouser.com – bi-directional TVS (transient voltage suppression) diodes. I use several per array and on DC mains at the power center.
      Cost varies by type and rating, order 10% over voltage for your application. e./g. on 12 V system, consider an 18 V TVS

      • George in the past you mentioned protecting vehicles with suppression diodes. I bought ten 5KP17CA diodes from mouser. I ran a wire from the positive terminal of the battery, soldered the diode in line, and ran the end to ground.

        I suppose this is the same principle one would use on their solar arrays. My two arrays have 5 strings of three panels going to the MNPV combiner box. I have a Midnight Solar Surge Protector MNSPD115 device wired into the box. The clamp voltage is 295 V and response is < 1 micro sec. I think the SPD will activate during an EMP and short the pulse to ground at the array. So I think my DC side to the charge controllers is covered.

        To protect me from the AC side I have an AC surge protector in the MDP to short pulses coming in from the grid. I also went to the AC output from the invertor and installed a surge protector in that distribution panel. This should protect me from any EMP picked up on any of the 20 amp copper circuits in the house.

        Do you think my system is protected from an EMP?

        • Relatively speaking, I think it’s very good. The ONE way to get it better would be to disconnect both the mains power and the telephone lines onto your property.
          the pulse from an EMP is on the order (depending on location) up to, oh, let’s toss out a made-up[ number like 25 volts/meter.

          Now on a 6 foot ac cord plugged into NOTHING that would be a pulse of lets call it 50-60V depending on orientation of the wire.
          On the other hand, if you had – let’s say in some far-out place in E NM, something like 1/4 miles from a transformer, then the pulse might be 402 meters times 25 volts to there might be an orientation where 10 kilovolts could be induced. Likely much less, but even 1.5-3 KV will pop anything plugged in.

          I have been thinking about stocking up on some small adjustable voltage walwarts that comne with different connectors as a strange kind of insurance, lol

    • George, it might be of benefit to do a redux of that column you ran some years back, showing folks where and how to install the diodes, and explaining why they go where they go…

      • I will try to find it. Looked at the PN site a while back and concluded that with almost 20-years of back issues, at an average of around 80 per year, the amount of text to search became frightening:
        20 X 80 X 4,000 – 6.4 million words worth (not counting my books!) Some where in there…..

      • That might get ugly. Hope you are upwind and the car starts. Remember if or when an EMP comes and you live near any plant that could spew a poisonous fume or radionuclides that the quickest way to safety is MOVE PERPENDICULAR TO PREVAILING WINDS. EG, if the plume is from the north to the south, the shortest route to the plume edge will be east or west.
        I don’t care if you’re in Baytown or whatever (Houston’s chemical alley on the east side of town)…keep “Running room” perpendicular to the plume and bookmark for instant access:
        https://www.aviationweather.gov/windtemp

        There is a slider on the right. The top is 530 to which you add two zeros (00) so the top of the wind map is 53,000 feet. The slider will drop to 30 (adding two zeroes makes it 3,000 feet).

        Remember with plumes that the rate of rise will be relative to plume heat and surrounding temps.

        So in the event of an explosion, your immediate plume would be the 3,000 plume to avoid rising to as much as 30,000 feet following a mushroom, but this might take several hours to evolve (depending on weapon size and elevation or ground burst.

        You remember, we’ve been over all this, however, right?

      • Robert……

        That could be a blessing in disguise..

        A blast at ground zero..you wouldn’t even have time to realize what was happening..
        By the time you could say OH NO its over.

        • There is actually a widely dispersed theological thread around the ‘net and it centers on the possibility of a mass death (nuke) where people are crisped so fast they don’t go through the recognition of “death and dying” process. So fast, they zip past the usual DMT (induced?) life review and such. Different than death in one’s sleep? No telling, but an int. line of inq.

          It’s an ugly yet profound question…

  5. Some quick thoughts on EMP – whether Carrington or NORK.

    1) EMP comes in degrees of strength. It’s not all-or-nothing. Some devices will be zapped, some not, and how far you are from the event is a big determinant.
    Corollary: When you feel an earthquake, you are most likely NOT at the center. You could be lucky.

    2) The number and size of “antennas” on any device, or the degree to which it maybe shielded, also affect that item’s vulnerability. This is why many ham radio people disconnect antennas when not actually in use.

    3) The “Zappage” from an EMP arrives via almost ANY connection to the outside world. Phone, power, antenna, speaker, and any other external tie-ins, can all act as antennas, and pipe the pulse into your device.

    4) Your device, if DIS-connected from external conductors may very well not be susceptible to the incoming Zappage. It’s an unpredictable.

    5) Modest, simple steps will go g LONG way to reducing your vulnerability — and you can take them right now today. You need not buy or await anything. Secure your stuff simply immediately, and add comprehensive and expensive and complex measures later.

    6) Such measures also greatly reduce your vulnerability to the effects of a close lightning hit, or a random normal power surge.

    73

    • “EMP comes in degrees of strength. It’s not all-or-nothing. Some devices will be zapped, some not, and how far you are from the event is a big determinant.”

      It also comes in different wavelengths and durations. Different Faraday cage configurations are better suited to shield against these.

      Recall the movie “Enemy of the State?” Brill’s secure computer workspace in the warehouse features a farm-fence cage. “Open air” cages of 4×6 or 6×8 farm fence do, indeed, provide a shield against some wavelengths. For others, cages of 2×2, down to half-inch hardware cloth are best. For most, a solid cage (George’s proverbial garbage can) is the most-secure storage. With regards to a Carrington-level EMP, distance is negligible.

      The thing about an EMP/HEMP is no one actually KNOWS what will work — we can only surmise.

      For more information, search YouTube for “mythbusters EMP” (it may, or may not still be up.) The Mythbusters never did an EMP demonstration. The name was thus spawned because the test and its params were proposed in a “Mythbusters” thread on one of the EE messageboards I read, back about 2002 or ’03, as a “Why don’t the Mythbusters try to bust EMP…” or some such.

      BTW, an EMP field generator requires a LOT of power, and is a lot less portable than, and looks nothing like, the “shunt” in “Ocean’s 11” OR the zap gun in “Leverage…”

      • Also, the thing about the Carrington Event is: It was not an extremely powerful shock (estimated to have been from an M-2 flare.) It was an extremely long-duration shock, lasting from several seconds to possibly several minutes (normal for a solar shock is ~3 milliseconds.) Nobody knows, they just make wild-assed guesses based primarily on hearsay accounts from telegraph operators and their own experiences and backgrounds.

        I was (one of a number of people) in an online chat with Bill Forstchen, a few months after OSA was released. The one comment which stuck with me was he estimated the U.S. had about a 1:5 probability of suffering a HEMP attack, but a greater-than 100% chance of receiving another Carrington-level solar EMP, the only question being “When?”

        Along with no one knowing the scientific particulars of the Carrington Event, no one knows how frequently they occur. Before the telegraph, no one knew of the existence of EM solar emissions. They might have noticed enhanced Auroras, but wouldn’t have known the reason. There was nothing Western science knew of, either physically or archaeologically, which could react to an EMP and indicate one HAD occurred, and nothing on Earth which could be affected by said occurrence…

        Craps, anyone…?

        • Again to my point: No reason to design for a Carrington event because these cluster on the backj-side of the Solar Maxima and since we’re entering a (minima which may be protracted) this might fit the more for “solving the wrong problem” unless the design IMHO includes a 15-year planning horizon…

      • I think both Bill of the Radio Ranch and Ures truly will argue the assertion that EMP comes in a range of frequencies.

        No, that’s well described in the physics of gamma rays hitting the space/atmospheric boundary. Peaks around 10 MHz. To be sure, that can be pushed a bit, but in terms of response electrically, a passiv3e components response will be sufficiently wide in the 0-10 MHz range to have a roll-off sufficiently side (10 db points) up into the higher regions where there will be some spread effect. Design for the average peak power frequency and don’t build as high Q tuned circuit into this and you’ll be fine . (for the non-=extra class hams: Q is the quality of a tuned circuit which distills down to the concept of filter sharpness. As a filter becomes sharper (more narrow) the Q goes up. Great sometimes (and in a passband or blocking filter for SDFR radios on AM Bcst or FM Bcst bands, but this is a general case where the phenome of wide-area EMP is gamma-driven from a space-based explosion.

        The confusion may come from portable chemically pumped (explosive_) EMP generation devices, but these are tactical (in=-theater) applications and if this are being used in your area, your immediate problem will be egressing the theater and getting the hell outta Dodge.

      • Every estimate of the intensity of the Carrington Event I have run across has put it into a high x- flare category, of exceptional duration. The shock wave transited in record low time.
        E1 components of EMP weapons are formidible destroyers of electronics.

      • George Lane’s presentation is pretty good on the physics side, and easy to read. Good find G_____.
        Unfortunately, the cost for surge protection devices (SPD’s) which have been tested to effectively stop an E1 pulse are $$$$$. I own SPD’s which I think will probably do the job, but none of them are certified to stop an E1 pulse, so I am just guessing. The same goes with the Mouser DIY surge protection. Laying out thousands for tested, certified components is a major investment. That is why I am getting a lot more interested in less expensive non-electric stuff. I still think keeping a portable radio or two, a couple of 12VDC operated battery chargers, and a roll up 12VDC solar charger panel in a shielded enclosure is a relatively cheap back-up insurance plan, compared to what engineered components will set you back.
        Oh, and the cell phone chargers may be more at risk than the cell phones themselves. Both the cell phones and the chargers become paperweights if the grid goes down hard. I don’t know how microwave satellite comms will fair, but I suspect that they will fail as well, due to technology dependence issues. I have an older Polyphasor on the TV antenna feedline for lightning. Here is some of the newer HEMP tested stuff, none of which is intended to protect a broadcast TV cable:

        https://www.polyphaser.com/search?Category=RF+Surge+Protectors&Rfpssp99band=HEMP+Tested&sort=y&view_type=grid

        Microwave types might get some use out of that equipment.

  7. G – the 4 “horsesmen” have some serious reinforcements this week..

    To be used in a Flanking Op on Fin Sys – HSBC..nothing to see in Hong Kong, cause it be gone.

    Experts in fighting wars the Syrians, w/Russian assist, bout to light it up in the desert way, Erdo not understanding the concept of “payback”.

    Wild Card of the Week – Oil Market – Petro Dollar destruction via Houthi fighters kickin it in bin salmins Arse – bout dam time they destroyed the largest oilfield facility in SA.

    black swans anyone?

    Cant have the Peeps waking up to ALL the Satanic Ritual Abuse of Children by “our elites”

    ..now why did SC Justice Brennan say one thing about Health Care Law, then Vote completely OPPOSITE of what he said/believed, only to disappear for several weeks right after SC Vote?

    Don’t think for one minute that our “Leaders” in BOTH parties got their positions via Human Compromise Operations/Situations..thats just utterly ridiculous – even if it does explain ALL the stupid, crazy, inane B.S. that flows out of these people..just ridiculous.

    Happy Monday

  8. “Every man a King”. While it may have been the depression era Huey L. catch-phrase, it could be the catch-phrase of every bank, broker, and politico today. The investment, personal debt and social manias of the 1920’s paved the way for the bipolar opposites of the 1930’s. All of the ingredients for an implosion are here already. The spark which will ignite the credit deflation tinderbox probably will remain hidden in the Wall Street back offices until the conflagration is out of control, just as it was in the 2008 monetary crisis.

    • Hi

      My family grocery bills have gone up from $138.00 per week in 2015 to $238.00 in July and I fully expect it to be $286.00 by January 1 2020. That is a 20% annual increase.

      When I hear on the news that “you need a microscope to find inflation” I change the station.

      Deflation is not happening in my grocery bill and I think it’s time for the TV experts to buy a new microscope.

      • Credit deflation refers to an implosion of monies involved in buying things with OPM (Other People’s Money). People living on the side of the road is a symptom of credit deflation.
        Credit deflation can cause prices of things typically bought on credit to deflate, but it can also cause hyperinflation in everyday necessities as businesses and industries evaporate due to financing defaults. Currently, American agriculture is poised to suffer a 1930’s style credit deflation episode, however, the effect you will see at the house will be skyrocketing food prices. Effects of credit deflation don’t always translate to price deflation for consumers.

      • Don’t forget to check the size of the package contents. When yer “half-gallon” becomes 53 ounces, it takes more of ’em to feed the fam…

      • depending on how many there are in the household that sounds about right for a four person household.. I budget three dollars a meal.. ( I do consider food for lunches in that.. coffee at the coffee shop a cookie or snack cake for breaks.. etc..) and a dollar a snack three snacks a day..
        kids eat half as much as adults in volume.. the cost still is the same..
        this year I will up the budget by two dollars per day per person..

        you can eat just about anything you want except prime every day…but it all averages out the same..

    • They’ve been here since ~1997. I began reading George’s site in 2001, when the Greater Depression, which I knew should’ve hit when the dot-com bubble shattered, didn’t. I wanted to know “Why?” and the self-professed nutjob writing these pages seemed to have a better grip on reality, and a better understanding of actual news, than any of the alphabet financial or news wonks. My biggest fear is the World of Finance is a pressure cooker, and because it didn’t let off steam when it should, when it does, the explosion (or implosion) will be so bad as to defy comprehension…

      • Of course, with nesting of Elliott waves, there’s no guarantee that that pressure cooker hasn’t been building up steam since the start of the industrial revolution, and is predestined to end badly at a time not really of our choosing…

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