In the field of geology the study of the earth's crust is called "plate tectonics," referring to the fact that the surface of the earth is made up of a series of "plates" that are constantly moving and even bumping into each other.
The point of impact where two plates collide is called a "fault line" which is prone to earthquakes as the plates move, grind, and side underneath and on top of each other.
This process is interwoven with volcanic eruptions. Such a phenomenon can be seen in what is known as "the ring of fire"--an area that encompasses the rim of the Pacific ocean that includes not only the west coast of the U.S., Canada, and Alaska, but Japan and other areas on the other side of the Pacific.
This ring is known for the frequency and severity of earthquakes and volcanic eruptions, and the tsunamis that often occur as a result.
Many in the field of economics have noticed rumbling in the tectonic plates of the financial world of late, so much so that several high profile economists and market analysts have sounded the alarm that this will be the week of major seismic shifts in the financial world.
The question is are we on the brink of an economic earthquake or volcano?
Market analyst Karl Denninger stated Sunday that investors should immediately pull out of the futures market. He further suggested that this is the summer of 2008 all over again. In other words, all of the signs are there which were also present in the days leading up to the Lehman Brothers collapse in 2008, which in turn led to a major economic crisis.
Denninger has repeatedly warned citizens not to be fooled by the rallies in the stock market that are inevitably wiped out by dramatic free-falls, such as we witnessed last week during which all of the gains the markets have made since January were wiped out in one week.
Similar rallies occurred after the stock market crash of 1929, luring citizens into a false sense of security. But within three short years the markets plunged even further, thrusting the nation into the throws of the Great Depression of the 1930s, which only got worse after FDR took office in 1932.
And to the contrary of the common myth that FDR's New Deal made things much better in the 30s, the record shows that the nation stagnated in the grip of the Depression during the entirety of the 1930s. Only with WWII in the early 40s did the nation begin to dig out from the economic abyss.
All of this is to say we have been down this road before. The collapse of 1929 appeared for a while to abate and then stabilize, only to find that there were extreme ups and downs in the market which eventually culminated in a permanent crash that plunged the nation into an unemployment rate of over 20%.
And even after Roosevelt took office in 1932, unemployment continued to rise.
When Obama took office, he was quick to proclaim that the nation was "in recovery" by 2010. Many of us have screamed bloody murder that such a proclamation is a lie, a blatant untruth that has no basis in the real facts.
Unemployment numbers are manipulated by government in that the manner in which joblessness is calculated has changed significantly since the 1930s. People who drop out of the workforce in despair or who take part-time jobs but need full-time jobs are no longer counted in the figures as they once were.
Thus, the current figure of 8.2% unemployment is laughable. A more realistic figure is 18% current unemployment--a rate that has not been seen in America since the Great Depression.
These figures have led many honest economists and financial observers to conclude that we are not in a recovery and never have been despite the assurances of the Obama Administration and the mainstream media.
The latest economic figures look bad, very bad, according to those who are realistic and who do not engage in spin. And things are set to get much worse.
Such a dire scenario is due to two precipitating factors. First, the Administration has done absolutely nothing to address the unsustainable debt load that can only be corrected by a dramatic cut in federal spending. Second, the Eurozone is on the brink of collapse this week.
Despite what Germany says, the major banks in Spain, the UK, Italy, and others are bracing for the impact of the disintegration of the Euro, which will have the domino effect of unraveling the European Union. And with such an unraveling will come the destabilization of American banks.
An article on Sunday in one of the UK's largest newspapers stated that this is the week that Europe will be forced to face the ugly truth it has been putting off for years. It is fresh out of money, its debt prevents any more spending on social programs and bailouts, and at this point there is basically nothing that can be done to stop a complete collapse. That train has already left the station.
Investors in America would be wise to brace for impact. This means to get out of the futures markets immediately, TODAY. It means finding ways to protect your investments from devaluation. It may mean forsaking banks altogether for some.
Many are convinced that to rely on plastic is a prescription for personal financial ruin, and they encourage the use of cash in addition to purchasing gold coins that you keep in your possession.
None of these ideas are meant to be taken as financial advice. I am not an economist or a financial adviser. I am merely reporting what I hear from some within the financial community. But you must do your own research and then chart a course of action that YOU feel good about.
As I write this already the Asian markets have opened to losses. The Australian dollar is down. The futures markets are down. In fact, this is shaping up to be a stormy day for the financial markets across the board.
Could this be a bell-weather for things to come?
The scuttlebutt in Europe is that a major bank has been on the brink of a Lehman Brothers style disintegration for several weeks, and when it goes Europe will be plunged into the same state America faced in 2008. Is this the week that this bank goes under?
A lot of fear and uncertainty exist out there, and fear and uncertainty invariably lead to bad news for the markets. I don't see how things can possibly improve given that nobody anywhere thus far has been really serious about reining in runaway government spending in order to address the mountain of debt that buries the U.S. and Europe.
This can only mean one thing--we are in for a very bumpy ride this summer, and this time Barack Obama will find it difficult if not impossible to escape the blame.
After nearly four years in office, this is NOT George W. Bush's economy but Barack Obama's.