The Black Swan Armada Approaches

The term “black swan” owes its popularity to Nassim Taleb. According to Wikipedia, a black swan is

a metaphor that encapsulates the concept that The event is a surprise (to the observer) and has a major impact.

Black swans are not normal and generally not found in nature.

Taleb used the term to describe events so rare that they are not captured in historical data used to fashion probability distributions or judgments. For all practical purposes, they are considered so rare as to be impossible. But few things dealing with human beings are impossible given enough time and outcomes.

Jim Willie wrote a piece suggesting our so-called “new normal” will be characterized by numerous black swan events. That is, what we thought impossible just a few years ago is beginning to look possible, if not probable, in Willie’s opinion. Below is an excerpt from his article that provides a list (a rather massive one) of potential black swans.

Technically speaking, I would not consider too many of these below true black swans only because probabilities are reasonably attachable to most. Some, for example, have already occurred. That makes the list only more frightening.

Most were considered black swans just a few years ago, another indication of a paradigm shift in the way the world was and will be viewed.

ARMADA OF BLACK SWANS
Consider the following black swan specimens, each of which is astounding, each alarming, each serving as one more added element to the ruined situation. The swan organization is admittedly rough, but the regiments are put in sensible order. Any small handful of these signals would qualify as forewarning a profound crisis. Not anymore, since crisis is the new normal. Not anymore, since black swans adorn the entire landscape. A healthy white swan gradually suffers from toxic exposure, quickly to turn black from a fast acting decay process. Apologies for overlooking at least a dozen other important other black swans, as time and space did not permit the exhaustive catalogue process. Emphasis was given to the United States ponds and its migratory bird population.

US TREASURY BOND SWANS

• USGovt debt ceiling standoff, with actual violations
• Over 75% of USTreasurys auctioned bought by the USFed in debt monetization
• Turnaround from primary bond dealers to POMO repurchase by the USFed is 3 weeks
• Foreign banks form 12 of 21 primary bond dealers
• PIMCO owns no USTreasury Bonds, even short
• Global boycott of USTBond by creditors, some net sellers
• Foreign creditors owns the majority of USGovt debt
• A fixture of $1.5 trillion annual USGovt deficits
• Greenspan and David Stockman warn of USGovt debt catastrophe
• USMint officers admit Fort Knox has been shut down for 30 years, as in zero gold

US FED SWANS

• QE permanence, otherwise called QE to Infinity, worked into standard policy
• Bank of England urges more bond buying
• Cost of money 0% for two full years, implication being destroyed capital
• Chairman regards monetary hyper-inflation as being zero cost
• Ron Paul pushes for a USFed audit, an end run to pay down USGovt debt
• USFed owns more USTBonds than any other creditor
• Competing Currency War has Euro weakness mean USDollar as all circle the toilet

US GOVT SWANS

• USGovt could shut all operations but still be have a budget deficit
• USGovt could confiscate all income but still have a budget deficit
• USGovt must cover AIG payouts on Greek Govt debt default from CDSwaps
• US Postal Service stops all payments into their pension system
• New York Fed refuses to disclose the destination of $6.6 billion missing from Iraqi Reconstruction Fund
• Federal Worker Pension Funds and G-Funds confiscated (called borrowed)
• USMint runs out of gold & silver metal to make coins

COMEX SWANS

• GATA Gold Rush 2011 in London Savoy Hotel on August 4th will feature the COMEX whisteblower Andrew Maguire
• Silver futures contracts settled almost exclusively in cash, often with 25% vig bonus
• Gold & silver futures contracts often settled with GLD & SLV shares
• Umpteen margin increases for gold & silver futures contracts, but reductions in USTBond futures contract margin requirements
• Brent versus West Texas crude oil price has a $20 spread
• Every time Bernanke assures US financial markets, gold & silver rise in price
• Elimination of Over The Counter gold & silver contracts due in mid-July

BANK SWANS

• Chronically insolvent USFed and EuroCB, balance sheets ruined
• FASB accounting rules permit banks to grade their own test exams
• Stress Test for banks had almost no stress, a sham
• Shadow housing inventory held by banks over one million homes
• Wall Street firms in court on the defensive, JPMorgan foreclosed soldiers
• Wall Street firms banned in Europe on bond securitization and issuance
• Strategic mortgage defaults by homeowners on the fast rise
• Gold holdings by tyrant Arab rulers targeted by New York & London banks
• War over Libya grabbed $90 billion in Qaddafi money by New York & London
• PIGS sovereign debt default in Europe to have impact ripples that reach US banks
• Standard & Poors reminds the players what constitutes a debt default
• No liquidation of big US or London or European banks since Lehman Brothers
• Much of dull US population believes the propaganda that Gold is a bubble

US ECONOMY SWANS

• USEconomic indexes fall off the cliff, see Philly Fed, Empire State, ISMs
• Rampant systemic insolvency in banks, homes, federal government
• US housing resumes its powerful bear market
• US land title system in the disintegration process, see MERS on mortgage titles
• Unemployment at 20% across the Western world, economic misery index hit 30%
• USGovt economic stimulus never contains stimulus
• Shrinking US trucker industry from $4 gasoline and diesel
• China begins to export price inflation to the United States
• Killing state worker union pensions as part of the state budget shortfalls
• Gulf of Mexico off limits for oil drilling
• 1 in 7 Americans is on Food Stamps, whose debit cards are good JPMorgan business

FOOD & WEATHER SWANS

• Food price inflation is staggering but denied
• Floods across Midwest & Plains states to interrupt with planting & harvest
• Australian floods have interfered with coal industry and agriculture
• Big volcanoes like in Chile and Iceland disrupt weather and air travel

EUROPEAN SWANS

• German bankers at war with Euro Central Bank
• Germans abandon the EuroCB, leaving it to Goldman Sachs, see Draghi
• Spanish banking system has yet to write down much on housing credit assets
• Portugal, Italy, and Spain sure to follow Greece into a debt default
• Belgium has had no government for a full year
• Ireland prints more money per capita than the USFed

CHINESE SWANS

• G-8 Meeting is pushed aside, as the Anglos deal with broad insolvency
• G-20 Meeting takes center stage in a power play, led by China and the BRICs
• China buys discounted PIGS sovereign debt, to redeem later in central bank gold
• Chinese FX reserves exceed $3 trillion held in sovereign wealth funds
• China owns most world major ports, as part of a strangulation process
• China conducts the great Idaho experiment, toward re-industrialization of America

HIDDEN SWANS

• Swiss faces hundreds of $million lawsuits, for refusal to deliver Allocated gold
• Saudi Arabia cuts new deal for Persian Gulf security protection, see Petro-Dollar
• Citigroup has high hidden exposure to Greek Govt debt default
• Chinese anger over reneged USGovt gold & silver lease, as part of the Most Favored Nation granted status, has motivated its extreme pursuit of precious metals
• Containers hold $300 to $500 billion in EuroNotes at Greek port warehouses
• Internet strides light years ahead of USGovt regulatory hounds at syndicate offices