This Is a Financial Extinction Event

"The lower reaches of the financial food chain are already dying, and every entity that depended on that layer is doomed"

Though under pressure from climate change, the dinosaurs were still dominant 65 million year ago–until the meteor struck, creating a global “nuclear winter” that darkened the atmosphere for months, killing off most of the food chain that the dinosaurs depended on. (See chart below.)

The ancestors of modern birds were one of the few dinosaur species to survive the extinction event, which took months to play out.

It wasn’t the impact and shock wave that killed off dinosaurs globally–it was the “nuclear winter” that doomed them to extinction. As plants withered, the plant-eating dinosaurs expired, depriving the predator dinosaurs of their food supply.

This is a precise analogy for the global economy, which is entering a financial “nuclear winter” extinction event. As I’ve been discussing for the past few months, costs are sticky but revenues and profits are on a slippery slope.

Businesses still have all the high fixed costs of 2019 but their revenues are sliding as the “nuclear winter” weakens consumer spending, investment in new capacity, etc.

Despite all the hoopla about a potential vaccine, no vaccine can change four realities: one, consumer sentiment has shifted from confidence to caution and from spending freely to saving. This is the financial equivalent of “nuclear winter”: there is no way to return to the pre-impact environment.

Two, uncertainty cannot be dissipated, either. There are no guarantees a vaccine will be 99% effective, that it will last more than a few months, that it won’t have side-effects, etc. There are also no guarantees that consumers will resume their care-free spending ways as credit tightens, incomes decline, risks emerge and the need for savings becomes more compelling.

Three, consumer behavior and uncertainty have already changed, and so businesses that cannot survive on much lower revenues won’t last long enough to emerge from the “nuclear winter” of uncertainty and a shift in sentiment.

Four, assets based on 2019 revenues, profits and demand are now horrendously overvalued, and the repricing of all assets will bring down the predators, i.e. the banks.

As I’ve noted here before, the top 10% of households account for almost 50% of consumer spending. These households are older, and own the majority of assets –between 80% and 90% of stocks, bonds, business equity, rental real estate, etc. This is the demographic with the most to lose in returning to care-free air travel, jamming into crowded venues and cafes, etc.

This demographic has “been there, done that” and foregoing fine dining, sports events, concerts, cruises, etc. is not much a burden and may actually be a relief.

Meanwhile, the entire food chain of landlords, banks, local government, employees, etc. depends on enterprises returning to 100% of 2019 revenues. As tenants stop paying rent, landlords default on mortgages, sending banks into insolvency, leaving local government with less tax revenues and employees with fewer job prospects.

To a degree few appreciate, the “recovery” since 2009 has been dependent on over-spending, over-borrowing and over-speculating: as spending, borrowing and speculation all pull back to what would have been “normal” levels two generations ago, the economy collapses because it’s become completely dependent on over-spending, over-borrowing and over-speculating.

As consumers and businesses retrench, borrowing declines while defaults and bankruptcies eviscerate bank profits and balance sheets. As spending declines, businesses with high fixed costs and pre-pandemic business models (crowding people together in close quarters, etc.) cannot generate enough revenues to survive. As the collateral of commercial real estate and profit streams collapse, assets are repriced all down the food chain, reversing the wealth effect: as people feel poorer, they borrow and spend less, creating a feedback loop of lower valuations, lower spending, lower profits, lower borrowing all of which feed back into each other, pushing everything lower.

The lower reaches of the financial food chain are already dying, and every entity that depended on that layer is doomed: the small business die-off will bring down distributors, banks, landlords, and employment, and as the this layer collapses then the top predators will starve to death as well: Big Tech, healthcare, higher education, tourism, local tax revenues, etc.

The clouds are spreading and thickening, and the dawn sky is tinted an ominous red. This is a financial extinction event, and the Fed’s pathetic shamans can’t reverse history.

Source: Of Two Minds

  1. cechas vodobenikov says

    amerikans are already veritable robots lacking individuality—they believe any ruling class ideology they r trained to believe—whereas the US and some of its vassal states will collapse when the US empire dies–in the next 5-7 years, most Asian nations, Russia r already decoupled; the anglo racists will lose their hold over Africa and latin America….rich amerikans will take their bank accounts in the Caymans and hide in their survivalist cave in NZ leaving to peasants to kill each other over wokeness, sawdust burgers and the right to be more LGBT than their lemming Hollywood idiot leaders—these Disney characters that reside in hyperreality will likely not notice—their government supervised fake news media will tell them that all their problems are due to Monaco hacking their brains —these automatons r alreadydy so alienated they copulate w mobile phones—fake people w fake lives

  2. XRGRSF says

    As the scene in the movie goes, “You wont enjoy this; it wont be over soon.”

  3. jm74 says

    That is one theory; here is another. Due to the dinosaurs flatulating over millions of years the methane gas build up in the atmosphere got ignited by a meteor and the catastrophic explosion caused mass extinction.

  4. restless94110 says

    As usual this guy’r writing is always screaming alarmism. Weren’t we supposed to go extinct like 10 years ago when he wrote another of the 200,000 columns he has written on the same theme? I mean hell to the yeah. I think he ought to rent an AirBnb and have pity parties there for the next 20 years, maybe longer. I’m sure there are people not even born yet who will come to one of his parties 20 years from now–when we will yet again all be extinct, some day real soon, over the rainbow.

  5. ke4ram says

    “it was the “nuclear winter” that doomed them to extinction. As plants withered, the plant-eating dinosaurs expired, depriving the predator dinosaurs of their food supply.”

    So how does one explain the frozen dinosaurs, Mammoths, etc with food in their mouths and cellular structure still intact? Climate doesn’t change that fast. What we are talking here is likely a sun nova. It’s fixing to happen again in this century.

    Then the author insinuates the Corona disease has caused the massive food chain destruction. Not once in the article has he blamed the perpetrators who are causing this extinction event,,, the politicians. They have destroyed commerce over a flu like event. They have declared emergencies and dictated people to stay home, businesses to close and many just outright stupid decrees. They are still destroying commerce albeit a bit slower with all the requirements to open.

    This over a disease that doesn’t even approach a epidemic, much less a pandemic. In the US so far the death toll is 128,000. Consider medical mistakes kill 250,000 to 450,000 per year.

    Consider ALL nations are doing exactly the same thing. Many of these nations have less than 10 deaths. Obviously this is a conspiracy of a globalist takeover.

    Today the deaths are declining so they are fear mongering the cases. The cases, the Cases, the CASES!! They’re trying to say this is evidence the disease is increasing where it really means many people have had it (whatever ‘it’ is) without any symptoms. Then they are saying the asymptomatic folks are the spreaders of the disease,,, spreading even more fear. The mask debacle is another area where they have spread fear. Many RCT studies have shown that masking does not in any way reduce the spread of an infectious viral disease. These masks do, however, harm the wearer which is their goal. Everything from staying indoors. (out of the sun) to wearing the masks have but one goal and that is to destroy ones immune system.

    Soon food shortages will come, that too will destroy immune systems and literally kill folks which is their entire reason for this exercise. Population reduction. They have already got everything set up for the new global government. They are destroying national currencies and will introduce a new digital currency.

    This is not a history of a natural extinction event,,, this is a full fledged war on the human race by psychopathic governments and oligarchs.

    The only way to prevent it is massive rebellion. Stop doing what ever they dictate. Fill their jails. Throw the masks away, gather in large groups to protest their wickedness. Recall representatives.

    Because, by the time you actually see what they’re doing it may be too late. Stop being the mark!

  6. Saint Jimmy (Russian American) says

    This is a precise analogy for the global economy, which is entering a financial “nuclear winter” extinction event.

    We can only hope so.

  7. disqus_3BrONUAJno says

    A meteor is completely incapable of causing a nuclear explosion.

  8. Charles Homer says

    Here is an interesting look at a government document showing us how governments have used behavioural science to manipulate us during the COVID-19 pandemic:

    We have been repeatedly told during this pandemic that “science” is driving the agenda, albeit science that changes on a daily basis with very little attention actually being paid to the scientific method by the vast majority of decision makers who are in charge of our lives….except when it comes to behavioural science which is being used to make us realize that “resistance is futile”.

    1. sabelmouse says

      all the info was always there. i think this is well imagined.

      from fb
      Jackie Vonne Guyot
      4d ·


      I will start my day by checking in with my contract tracing App to plot my daily itinerary…which I will follow to the letter under penalty of misdemeanor fine of $1000, including if the App tells me that I have to avoid one of my destinations because a “Suspected Positive” person was in the area…which could mean I will not be permitted to go anywhere on my list if the case was in a shopping mall, and that’s where my daily errands would have taken me.

      I will arrive at my first stop and prepare to enter the store by being sprayed down with sanitizer, wiping the bottom of my shoes on a sanitizing mat, putting on my government approved face mask (again, a $1000 fine for not using a government approved one) putting on my government approved face shield, having my temperature taken, my Bill Gates Covipass imbedded microchip in my hand scanned to see that it is indeed in place and whether I am allowed to make purchases or whether my UDBF (Universal Digital Bank Fund) account is currently blocked, and finally, entering the store.

      While I am shopping for my items, I will studiously remain 6 feet away from another human being, because the contract tracing App as well as my imbedded microchip will notify the bank and government and automatically fine me and anyone who allows me to remain closer than 6 feet to them for more than a few seconds. Yes, we will BOTH have funds automatically deducted from our UDBF account for social distance violations. Obviously, I will be harshly reminded by anyone I venture too close to that I am threatening their UDBF account balance, their life, and the life of their entire family if I do happen to venture 4 feet 5 inches close to them….which I am thankful for because we all need to keep in mind WHATEVER DER FUHRER…I MEAN, THE GOVERNMENT SAYS IS WHAT WE MUST DO.

      Then, after I have all the GMO, carbohydrate, chemical preservative and sugar laden the items I need in my cart, I will take my place in the line, which will occupy 36 feet of store aisle space if there are 6 people waiting. I will queue up to pay at the shielded check-out counter (there will of course be a line monitor checking appropriate social distancing) where I think I know the cashier, but I really can’t recognize who she is because she is wearing a mask, she will scan my items and ask me to wave my hand in front of the UDBFS (Universal Digital Bank Fund Scanner) to detect my Bill Gates Covipass ID Chip to deduct the amount from my available funds account.

      If my account has not been blocked because I have publicly expressed displeasure with this Nazi New Normal, I will be allowed to take my items to my car, which the government says I can drive 3 days a week from the hours of 7:00 AM to 5:30 PM., unless there is a positive spike in cases that will ‘require’ me and my entire family to remain in our home under house arrest until the government has declared the area safe.

      I will start my ride home, taking my usual route unless my phone beeps with the Contact Tracing Warning signal that was downloaded to my phone without my consent, and is mandatory to have on all your digital devices (again, under penalty of a $1000 fine and misdemeanor charge plus ‘points’ taken away from my UBFS account) if it beeps and tells me to avoid my usual route because of a “Suspected Positive” in the area, I will use the Covid Map function to be guided to the safest route home….even if it is a route that adds 4 hours to my drive home….because if I don’t, there will be a $1000 automatic deduction from my UDBF account for ignoring the contract tracing app warning, and I may also be subjected to additional house arrest or removal of family members after the Emergency Covid Response medical team has evaluated who in my home may have been exposed.

      When I get home, I will turn on the news to see where the latest Covid hotspots are and recoil in horror at the 89% current positive test rate, even though no one I or any of my friends know are sick, and only 12 people have died from Covid in the last 6 months….well….they all had stage 4 cancer, and the tests….well….were positive with about 85% of the people going home before they were even tested, but we must TRUST THE MEDIA AND THE GOVERNMENT.

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