TINA (There is no alternative). This was the mantra for over a decade as many people were throwing caution to the wind and speculating that the “market” would continue up pretty much forever.
Recently, TINA has a new meaning. It starts in Europe where they are getting a HARD lesson that in regards to natural resources (particularly oil and gas) TINA to Russia.
While European (also American and others) leaders look to punish Russia it is actually their own citizens who are bearing the brunt of the ill-conceived sanctions. This is leading to MASSIVE inflation and is likely to lead to shortages of goods and possibly civil unrest globally.
In addition, the central banks are showing their true colors as they say one thing and do another. A great example would be the ECB where they said they were stopping QE (“print and buy”), and starting QT (selling assets). Just a few days after that announcement they had to have an “emergency” meeting to hold off fragmentation in the Euro sovereign bond “markets”.
What this says to me is that without central bank “printing and buying” the “markets” would likely collapse and it is highly likely that many were positioning for this to occur.
Fragmentation seems to be a neat way to say imploding or breaking down. This could occur because some of the more solvent countries like Germany and France (Notice I didn’t say solvent-just more solvent than countries like Italy or Spain who are on QE life support to avoid total implosion of their bond “markets”) would have rates Far lower than those countries struggling with higher debt loads.
This could lead to cascading bond prices and the higher yields could cause major economic disruptions particularly in those countries that had the weakest balance sheets.
An imploding bond market would imply a lot of sellers and few buyers leading to FAR higher yields and Far lower bond prices. In addition, it could demolish individuals, companies, cities, states and nations who are over-indebted and are counting on low to no interest rates forever. Good luck with that!
It seems to me that it is impossible to keep rates low by “printing and buying” creating possibly tens of trillions of new dollars, yen euros, etc. and still pretend to be fighting inflation. Many have said that QE doesn’t work when inflation is over 8%. Of course, that is the “official” number but inflation is more than twice that if reported the same way it was reported in the 1980s. I’ll bet it is even harder at nearly 20%!
Another glaring example would be Japan. I saw where they would have to “print” 10 TRILLION yen just in JUNE 2022 to keep their 10 year JGB rate at 0.25%. This, as the price of the Yen continues to plummet because of these actions. (Zerohedge)
To put that into perspective that would be like the Fed conjuring up $300 BILLION in a month based upon GDP differences.
Even if these actions work for a short period of time there are hedge funds now betting BIG that it won’t work for long. Blue Bay is one hedge fund that must see what I see- keep “printing” and bye bye Yen. Quit and the economy is likely toast as rates would likely rise uncontrollably and lead to many bankruptcies. They are reportedly positioned accordingly.
How long before the Fed is in the same position? Currently, we are actually in the same position just maybe not as far down that road so the situation is not quite as urgent as what we are seeing elsewhere. YET.
I think that it is pretty obvious that we are nearing a day of reckoning for the money-conjurers as their actions that seemed to benefit most people in the beginning are being exposed as the frauds that they are. Miracle money from nowhere is perceived as great as asset prices rise- particularly if inflation stays low. Too bad that the miracle money is only good to purchase things. It creates NOTHING. No value is created- only currency units that eventually lead to skyrocketing prices and impoverishes most of society while enriching a VERY select few.
In my opinion we are at a point where there will likely be a “great reset” that has been planned for years if not decades. The question to me is will it be the draconian reset that is planned by the Davos crowd where “you will own nothing and be happy” I’ll add- or else! Or will it be a different sort of reset where a majority of the world will not accept the paper (or computer blip) promises from western “leaders” but demand payment in real assets like commodities or gold or silver?
There are lot of signs that the majority of the world’s population (those getting abused by the current system for centuries) are waking up and taking matters into their own hands. This could lead to a few financial systems operating besides each other- at least for a while.
If I am right we can expect FAR higher price for everything as the US dollar goes to its intrinsic value and we are competing for goods with dollars while other countries are competing with hard assets that they had to produce or finished goods that also had to be created not out of thin air but with blood sweat and tears.
I believe that most are blissfully unaware of our tenuous situation. Many believe the financial game shows that have been misleading the public for decades that inflation would be temporary- then transitory and now oh-oh. They listen when the commentators (reading scripts) are surprised month after month when the economic numbers (even when massively massaged) come in far worse than expected.
I believe that all we are seeing is an illusion that is slowly being exposed. Many are making promises that based upon basic math cannot be kept.
WHAT IS THE VALUE of a promise that cannot (or will not) be kept?
Would you rather have ASSETS (tangible things like gold, silver, food, water, energy and commodities) or LIABILITIES (like currency, bonds or any other asset you are counting on someone paying you back with or having that asset hold value)? Most people believe that cash is an asset. Look at a dollar bill. It is not backed by anything. It is a Federal Reserve Note- created out of nothing and OWED back to the Federal Reserve. It is THEIR ASSET and OUR LIABILITY. We also get to pay interest on it back to them. What a Deal!
I’ll take the hard assets all day.
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