Jim had a lot to say, as he always does. But there were two ‘drop the mic’ statements that stole the show.
Both were on the subject of the next financial crisis:
‘The next financial crisis, which is coming, will be worse than 2008.’
‘In 1998 Wall Street bailed out a hedge fund. In 2008, the central bank bailed out Wall Street. Each crisis is bigger than the last. The next one will be much bigger than the 2008 crash.’
Every time we hear Jim speak, we feel the same way. We go into the meeting thinking there can’t possibly be anything new to hear, and yet, we sit there mesmerised as Jim casually steps the audience through the process of how the next collapse will play out.
There’s only one thing Jim doesn’t know — and he freely admits his ignorance. He doesn’t know the timing. He doesn’t know exactly when the crash will happen; only that it will happen.
According to Jim, it’s inevitable.
But why should Australians care about this? Isn’t this mainly a US thing, or a European Union thing, or a UK thing…? Anywhere except Australia.
Jim has a phrase for it, ‘Ice Nine’. We’ve referenced this before. The term comes from Kurt Vonnegut’s book, Cat’s Cradle.
The concept is the existence of an element named ‘Ice Nine’. According to the story, Ice Nine is a water-like element, which freezes at room temperature. So far so good. But here’s the thing, when Ice Nine comes into contact with water, the water molecules convert into Ice Nine molecules.
Those molecules then come into contact with other water molecules, which then also convert into Ice Nine molecules.
You can see what this means. One drop of Ice Nine into a stream, would quickly result in the almost instantaneous freezing of the stream, other streams, rivers, lakes, oceans…and any other body of water.
When the novel was written, it was a metaphor for the threat of nuclear annihilation in the Cold War. But Jim relates this concept to the global financial system. It’s the idea that when the next collapse happens, it will begin a complete freeze of the system. As one part of the financial system collapses, it will cause the collapse of another, and another, and so on.
It’s a fascinating analogy, and a fascinating theory on how it will all play out in the months ahead.
Even more interesting is the role that Australia has played in the Ice Nine scenario. And it’s not an inconsequential role either. Details soon.
Kris’ background includes 20 years of experience stock analysis, financial brokering, and wealth management. He has worked for Port Phillip Publishing for over ten years and currently pens Money Morning Australia and the Port Phillip Insider.
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