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Old 09-28-2018, 03:25 AM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,382
Flight from ZIRP,,,Rotten Rupee

Great news;
9/27 Final reading on Q2 GDP confirms 4.2% gain, the fastest rise in four years – CNBC
Not so great news;
Household debt grows at fastest rate in 11 years - MarketWatch 2018
The national debt is rising much faster than the economy - Business .. 2018

“A one point rise in rates adds $200 billion every year to the debt,”
9/27 Fed hikes interest rates, signals another increase in December – MW

It is amazing that the money gurus have followed such terrible theories. It looks like they are just trying to make a profit regardless of whether or not it brings down the whole system.
The Western CBs + Japan instituted ZIRP to make State debt easier to service. This killed interest income and bond income. THAT killed pension and insurance funds. The FED had to buy all the sovereign bonds, mostly through proxies. They did currency swaps with other CBs.

The other effect of ZIRP is; Investors went to undeveloped markets in search of yield on investment money. They pretty much ignored safety and stability. When the FED started tightening, this brought instability to EMs with all their dollar-denominated loans.

"India’s financial markets are in the throes of this Emerging Market crisis. The Mumbai-based Infrastructure Leasing & Financial Services (IL&FS) is an over 30-year-old infrastructure lending giant that claims to have helped develop and finance projects worth $25 billion in Asia’s fastest-growing economy. The company recently defaulted on debt payments because it ran out of cash."
"This is illustrating what we have been warning about. As interest rates rise and the dollar, the first casualty will be the Emerging Markets (EM). Because interest rates were driven to absurdly low levels in Europe and the USA, those who need yield ran off to the EM field."
Posted Sep 27, 2018 by Martin Armstrong

Central Banks cannot manage the economies anymore. We live in a porous global economy. The Fed buying back 30-years bonds to lower real estate loan yields was absurd. The false assumption was that only American owned such debt. But the dollar is the reserve currency. That meant that more than 40% of such debt resided outside the USA. Central Banks can no longer manipulate the economy using the demand side economic models. They drove capital rushing into the EM sector desperate for yield "
"This is why we have a serious debt crisis on our hands. The greenback is STILL going to press higher against the rupee. Just look at the pattern. This is NOT an isolated high. We are looking at a significant rally still on the horizon for the dollar."
No matter how screwed you think American markets are,,,, most others are worse.

"Many discounted the proposal as being far too aggressive: after all, a direct assault on SWIFT, and Washington, would be seen by the rest of the world as clear mutiny against a US-dominated global regime, and could potentially spark a crisis of confidence in the reserve status of the dollar, resulting in unpredictable, and dire, consequences."
"Trump's latest sanctions on Iran, and as a result, late on Monday, the European Union said that it would establish a special payment channel to allow European and other companies to legally continue financial transactions with Iran while avoiding exposure to U.S. sanctions."
Just as much as the sanctions, Europe would very much like to bypass the leeches in the NYC banks that process all the dollar traffic.

"Paul Wolfowitz, a key player in America’s invasion of Iraq, had warned back in 1992 in a secret memo to Defense Secretary Dick Cheney that “our strategy must now refocus on precluding the emergence of any potential future global competitor.”
Yes, the chosenite who is controlling our destiny.
"During Obama’s administration, they were pushing aggressive policies by expanding NATO to encircle Russia and devising a strategy for the economic containment of China."
"China’s President Xi, speaking at the G20 conference two years ago, warned that “we can no longer rely on fiscal and monetary policy alone,” and called for spreading visionary and inclusive economic growth driven by innovation in science and technology"
WAIT, what if we want war?

"Forget NATO. We need a new world alliance to take on totalitarian capitalists in Russia and China.’ Heath continued: “NATO is no longer enough: it is too European, too many of its members are outright pacifists It would dramatically shift the global balance of power, and allow the liberal democracies finally to fight back. It would endow the world with the sorts of robust institutions that are required to contain Russia and China…”
robust institutions That is political speak for even more expensive weapons systems.
Trump is anti-globalism. He would like the world to stop using the dollar.
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