Kevin Wadsworth: This Time, the Entire System is at Risk

Tom welcomes back the Market Weather Forecaster Kevin Wadsworth. Kevin discusses his background in assessing systemic risks. He believes there are serious risks of systemic failure, particularly in Europe. U.S. government debt is in a parabolic rise, and the math is starting to no longer add up. The cracks are forming in the foundations of the global central banking system. Kevin shows off his US 10-Year yield chart, which demonstrates a forty-year historic trend shift. The various PPI charts for Europe are quite literally off the charts. Germany, Italy, France, Eurozone, and U.K. have all had massive rises in their producer price indexes which surpass all historic levels even wartime. We are in uncharted waters. There is a delay between PPI levels and consumer prices. This doesn't feel transitory, and who knows what the consequences will be. We've also had absolute chaos in the U.K. pound versus the dollar. The evidence is now suggesting that problems will begin appearing in the United States. Whenever markets reach mainstream news headline levels, look for a coming reversal. The U.K. central bank has now restarted easing. Europe is seeing sky-high electrical prices, in part due to natural gas shortages. They are currently around seven times normal highs. The government solution is to subsidize electricity and have the populace pay the excess cost back later on. We're guaranteeing future inflation. The U.K. has extremely limited storage capacity for natural gas. People need to be prepared for long power outages this winter. We could see a series of domino like systemic failures this winter. History demonstrates that in a true large bear market, drops of 70-80% are normal. Hard assets are the place to be in this type of environment. He notes that Bitcoin has never been through a circular market downturn in equities. Should it break out above the 30-week MA and move up despite equity performance, that would be a good sign. Short-term quick jumps like we just saw in silver are unlikely to mean that much. Investors need to be cautious and wait for the preponderance of the weight of evidence. There are multiple reasons why governments and central banks alike would want CBDCs, including control and ease of taxation. Time Stamp References:0:00 - Introduction0:40 - Systemic Collapse Risk4:58 - Yen & Pound Stability7:00 - Rate Hikes & Yields13:20 - European PPI Indexes16:41 - Pound Vs. Dollar20:45 - Electric & NatGas Prices29:15 - Equity Markets32:50 - Gold Vs. Equity Ratios35:50 - Gold & Purchasing Power40:14 - Cryptocurrencies43:14 - Silver & Finding Bottoms48:45 - Assessing CBDCs & News54:50 - Wrap Up Talking Points From This Episode * The systemic risks are building in the global financial system and investors need to exercise caution.* PPI Manufacturing inflation indexes for Europe are quite literally off the charts.* His assessment of energy, equities, gold, Bitcoin and the potential for more inflation.* Be cautious and wait for the significant evidence of market direction. Guest Links:Twitter: https://twitter.com/NorthstarchartsWebsite: https://NorthStarBadCharts.comYouTube: https://youtube.com/c/NorthstarCharts Kevin Wadsworth has a background in meteorology, having spent over 25 years in military and civilian weather forecasting. Over the years, his career has involved everything from briefing pilots to producing commercial advice to utility companies and providing TV and radio broadcasts.