Some very disturbing news is coming from financial industry insiders with the Daiwa Institute of Research, a think tank owned by Daiwa Securities Group, the second largest brokerage in Japan after Nomura, breaking ranks with other global financial institutes and describing what they believe is the "most likely" scenario which they assert will send the "world economy into a tailspin" with the global impact being "the worst the world has ever seen."
The entire technical explanation is detailed at ZeroHedge, but the bottom line is Daiwa has calculated what will happen on a global scale when China's economic bubble bursts and have conlcuded the following:
"Of all the possible risk scenarios the meltdown scenario is, realistically speaking, the most likely to occur. It is actually a more realistic outcome than the capital stock adjustment scenario. The point at which the capital stock adjustment is expected to hit bottom is at a much lower point than in the previously discussed capital stock adjustment scenario (see Chart 8). As shown in the bottom right portion of this chart, the actual economic growth rate will continue to register considerably negative performance. If China’s economy, the second largest in the world, twice the size of Japan’s, were to lapse into a meltdown situation such as this one, the effect would more than likely send the world economy into a tailspin. Its impact could be the worst the world has ever seen."
The majority of people who are not industry insiders, who aren't interested in the stock market, aren't traders or involved with the industry, just want to know how they will be affected when the next major crisis occurs and that is where the dire warning coming from Phoenix Capital Research comes in as they show clear signs that the "elite" know the next crisis is on the door-step and explain how said political/financial elite are preparing for it over the course of the last three years.
Large clearing houses (ICE, CEM and LCH which oversee the trading of the $700+ trillion derivatives market) ALL began accepting Gold as collateral back in 2012 [....] China's Shanghai Gold Exchange said it will allow physical gold to be used as collateral on futures contracts from Sept. 29, according to a statement posted on its website on Thursday.
Phoenix Capital Research states "These are clear signals that the large financial firms are aware that most derivtiuves (futures, options etc) will be worthless during the next Crisis."
How will this affect the average American citizen?
Another sign that the Powers That Be know something nasty is approaching comes from recent legislation being implemented to make it much harder to move money into physical cash.
If you find difficulty in taking my word for this, consider the recent regulations implemented by SEC to stop withdrawals from happening should another crisis occur.
The regulation is called Rules Provide Structural and Operational Reform to Address Run Risks in Money Market Funds. It sounds relatively innocuous until you get to the below quote:
Redemption Gates – Under the rules, if a money market fund’s level of weekly liquid assets falls below 30 percent, a money market fund’s board could in its discretion temporarily suspend redemptions (gate). To impose a gate, the board of directors would find that imposing a gate is in the money market fund’s best interests. A money market fund that imposes a gate would be required to lift that gate within 10 business days, although the board of directors could determine to lift the gate earlier. Money market funds would not be able to impose a gate for more than 10 business days in any 90-day period…
Government Money Market Funds – Government money market funds would not be subject to the new fees and gates provisions. However, under the proposed rules, these funds could voluntarily opt into them, if previously disclosed to investors.
In simple terms, if the system is ever under duress again, Money market funds can lock in capital (meaning you can’t get your money out) for up to 10 days. If the financial system was healthy and stable, there is no reason the regulators would be implementing this kind of reform.
The question now becomes how close are we to seeing what Daiwa considers the "most likely" scenario? According to reports published this morning by ABC Net and BBC, among others, "China's economy shows more signs of weakening," and there are "New signs of economic slowdown," in China.
When China falls and the global "tailspin" occurs and the ripples start being felt across the globe, central banks have the legal mechanism in place to simply prevent depositors from accessing their money for up to 10 days, so as we have encouraged in the past, have cash on hand because when it comes crashing down.....it will be too late.