Thursday, May 6, 2010

Market Crash 5/6/2010

Today the intraday market crash was the largest since 1987, at the low the DOW touched 9,870 and was down 992 points or 9.1%.

This crash happened in the same manner as the crash in 1987, with a currency melting down in the background. Then it was the dollar, today it is the Euro.

Is this a one day wonder like 1987? NO! It is a continuation of the debt events that have been creating crisis after crisis since even before the year 2000 and are accelerating. Great risk remains as I’ve been warning. You are going to continue to see debt driven events circle the globe, and they are very likely going to lead to “other” events. You should be worried and you should be prepared.

Now, let’s talk about today, the drop was NOT a “fat fingered” mistake. The backdrop was set for a crash with the movement in currencies over the past several days. Today Harry Reid made a statement that he was going to support legislation to break up the big banks and that it and the audit the Fed bill would make it to a vote. KABOOM. The central banks who own all the computers and all the stock hit the sell button. The lesson? Don’t mess with the people who control the money. This is yet another historic event where the central bankers are flat out blackmailing the people in order to get their way. The message is, “keep your hands off or we crater the markets.”

This is why it is so important WHO controls the money – and make no mistake, the private central bankers make ALL the money, not the government. WHO controls it is FAR more important than WHAT backs it! The solution? Sovereign money as would be produced under the provisions of Freedom’s Vision.

That said, the debt around the world, as I’ve been saying, is completely out of control and once saturation has been reached there is a phase transition where adding more debt SUBTRACTS from economic productivity:



Note that I am not showing you a stock market chart, I am showing you a chart that is directly related to DEBT, the root cause not just a symptom.

Once saturation has been reached, it is impossible to cure a debt problem with more debt. Sure, things can move higher for awhile, but it is (and it was) FALSE. This is not over folks, it won’t truly be over until the root issues of our money system are addressed.

Today you had DEEP pocket money step into to stop the decline, it is a warning. Confidence has been eroding and that confidence may have just begun a phase transition of its own. That’s the way it goes. Now the markets are going to have to prove they are stable over the next few trading days. I’ll go over the technical picture later today or tomorrow morning.

*UPDATE: The Proctor & Gamble excuse is nothing but a rouse. Below are two charts, one showing the S&P futures (/ES), the other showing PG for each minute. It is clear that the market headed down FIRST, PG second. We are a sick and delusional society that cannot even accept what we are doing to ourselves, SICK. CNBC should be sued and they should be removed from the air.