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Old 10-05-2018, 02:13 PM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,382
Fighting deflation because they can't fight automation

The jobs went off to our low wage competitors. The State is trying to keep everybody employed by pumping money into the military and the blob State. The corporate tax reduction was a shot of Viagra to make it to the mid-terms, NOTHING more. As FED GOV prints to keep everybody working, it weakens the sovereign bond market.

Nomi Prins, "Now the Bank for International Settlements (BIS), or the “central bank of central banks,” is sounding a new alarm on this policy.
In its recent quarterly report, the BIS warned that low rates have catalyzed an increase in the number of “zombie” firms. The number of such firms has now risen to an all-time high."
These zombie firms provide jobs,,,, same as in China. By blocking the "crisis of automation", the State has created a crisis of Central Banks.
https://dailyreckoning.com/worlds-mo...-zombie-alert/

Here is a graph of global yield curve.
https://www.zerohedge.com/sites/defa...04_5-30-11.jpg
A blind man could interpret this. There just isn't enough capital to service the enormous credit bubble. As rates go up, there will be even less capital available.
https://www.zerohedge.com/news/2018-...-curve-inverts
All of this was preordained when the FED tried to rescue the far too numerous banks.

So, where do we fit in?
"An enormous "sword of Damocles" hangs over all markets now. A massive liquidity drain is underway as global QE reverses into QT and rates rise against the background of immense ubiquitous crippling debt burdens. What this means is that the biggest credit crunch of all time is bearing down on us, which will involve markets crashing in the absence of bids, serious dislocation of capital markets and out of control interest rates.
The liquidity that drove the massive bubbles in real estate and stock markets is being pulled. That must inevitably lead to these markets dropping, and we are already seeing the start of it with the Emerging Markets plunging and hitherto red hot real estate markets cooling.
so when the markets buckle and cave in, it won't be "something out of the blue" or an "Act of God" as the mainstream media will inevitably portray it; it is eminently predictable, and slated to happen soon.

What has happened in recent years is that central banks and governments have intervened with their liquidity injections to artificially extend the bull market—a bear market should have started several years back—it is like a guy who has just finished a marathon being pumped with drugs and told to run another 10 miles. What this means is that when the bear market eventually does hit, it arrives like a category 5 hurricane, which is actually what is called for now given the monstrous debt bubbles that have been inflated to gigantic proportions by all this relentless money pumping.

ZIRP policies of recent years have allowed for a massive transfer of wealth from the masses, the middle and lower classes, to the elites and super wealthy. The way it works is this: while the little folk continue to pay usurious interest rates to borrow money, the 1% pay almost nothing, borrow wads of cash and turn round and speculate in real estate, stock markets and other things
Now, you might say, when the Fed and other central banks realize that they have pulled the plug on the markets with their liquidity drain, won't they simply reverse course to stabilize the markets and pump them up again. Yes, of course they will, but by then it will be too late, as a self-feeding liquidation cycle will be going full bore, and any changes they make will need time to take effect. However, what will happen soon after they reverse course is that the dollar will suddenly find it has no wind in its sails,

With a monstrous liquidity crunch bearing down on us, you don't have to be a genius to work out what will happen to commodities. Look at 2008 as a dry run for what's coming. Basically anything that can be sold for cash will be, and that will include commodities. It will only be when the central banks and governments reverse course into mega QE that commodities will quickly reverse and soar, especially the precious metals.

"Basically anything that can be sold for cash will be"
First, he says that there will be no money / liquidity. Then, he says that everything will be sold.
Precious metals are NOT commodities, specifically gold.
https://www.streetwisereports.com/ar...it-crunch.html
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