It was 8 years ago that I wrote “once you go down this money “printing” path there is no way to stop. The most likely outcome is that the central banks will wind up owning everything- with the click of a mouse”.
Today, though it has taken far longer than I had anticipated, it is obvious that if the monetary methadone is turned off the stock, bond and real estate markets would likely collapse. It is also likely that all of the other financial games like rigging LIBOR, gold and silver prices, commodity prices, etc. would all likely come to an end also. I believe we are near a real turning point here.
Bond markets around the world are screaming that something is NOT right. Just a few weeks ago there were $7 trillion in bonds trading at negative rates. Just a few short weeks later and now there are over $15 trillion in negative yielding rates. Probably more by the time this gets out!
Today, on August 14, 2019 the 2-year and 10 year treasuries recorded the first yield-curve inversion of the 2 and 10 since 2007. The stock markets are reacting violently as I write this.
The answer? Many in our government calling for “more printing”, lower rates, and many other actions that have utterly failed in the past 10 years. With central banks virtually “all-in” the world’s economies are slowing down and the slowdown is accelerating. World trade is falling off of a cliff.
Of course, on the financial game shows “all is well- this is an opportunity to buy”- just like every other day. Hey, bad news means more “printing and buying” by central banks and stocks will rise! My take is quite different. Just look at last week’s article about how Japan’s markets have reacted (down 45% from 30 years ago!) after “printing and buying” over 574 trillion yen that is on the Bank of Japan’s balance sheet.
Just look at some headlines on Zerohedge today:
“We Are Struggling” Air Cargo Performance Slumps Across Major European Ports”
“USPS Reports First Drop In Package Volume In Nearly A Decade” (What happened a decade ago again?)
“China Factory Output Weakest In 17 Years, Everything Missed”
“Millenials Consider Living In “Glampervans Instead of Overpriced San Francisco Apartments”
“India’s Car Market Just Crashed, Had Its worst month in 18 Years” (Its been crashing for months)
“”Terrible” 52-week auction Confirms Plunge In Market Liquidity” (Liquidity is the lifeblood of the markets)
You get the point. The Baghdad Bobs of the financial game shows and those same type of characters in the government are parroting the same baloney that anyone with eyes can see is bogus. We can easily see that there IS inflation. We can easily see that there are NOT a bunch of great jobs out there just waiting for the “few” to come out and grab. We can see with homelessness and helplessness rising across the population that all is not well.
We all know many who had great jobs in the past but are unable to find a decent job now and many have been trying for years. We all know people who are deeper in debt now than they ever were before to keep up the lifestyles that they had become accustomed to.
The fact of the matter is that our “money” is an illusion. It is nothing but a unit of debt that has been created out of thin air and in amounts that, if known to the masses, would likely bring about its quick demise not only as the world’s reserve currency but could undermine its functioning as a currency altogether. How many know that $21 trillion has been discovered missing just from the Dept. of Defense and HUD from 2000-2015? How many know that even though we are disgusted that our government runs a trillion dollar deficit in 2019 the actual numbers are closer to $1.5 trillion with off-budget items and over $6 trillion using GAAP accounting? How many know that the Fed gave out over $16 trillion in 2008 to the banks and as of last year that number ballooned to over $24 trillion? Does anyone ever wonder, like I do sometimes, what is actually happening here? *
It appears to me that the central bank is destroying our currency and at the same time destroying the fabric of our society. Since many are focused on “winning” we seem to have lost our sense of community, working together and accomplishing things together. How many remember win-win scenarios? Today it seems that there needs to be a winner and a loser. How sad!
While I have been writing about these things for years- and many may have stopped paying attention- I am getting the feeling that there is a large segment of the population that is seeing through the propaganda and are realizing that all is NOT well and that there just might be that cliff I have been warning about for years out there somewhere.
This is likely why banks, central banks and hedge funds have been loading up on gold and silver. This may be why many are saying “become your own central bank” meaning have a way to maintain your independence just in case that cliff reveals itself.
Personally, while I readily admit that there is no one “answer” as to how to prepare for a post-dollar dominated world I do believe that real assets should play a part in everyone’s plans going forward. The illusion of money is being exposed more and more each day. The authorities have thrown all caution to the wind and are buying all sorts of assets with “money” conjured up from nowhere which is having little effect on the economy but is making the rich richer, the poor poorer and suffocating the real economy.
Farms are closing. Crops are failing. Stores are closing. Shipping (globally and locally) is collapsing. Real Estate is showing signs of topping and rolling over. The collapse of mortgage rates is not spurring any turnaround here. Auto sales are down and delinquent payments are at record highs. Personal debt, corporate debt, state and local debt, and national debts are at all-time historical highs.
More and more “printing” is required day after day to keep up the illusion that “all is ok”.
These facts and the fact that it appears the entire world is headed towards negative interest rates are leading to an increased demand for gold and silver in addition to that by the major players. This is the one major reason why I believe we really have seen nothing yet but gold and silver rising from the deck. I believe when Wall Street really starts to take notice is when the next big moves will be made.
I also believe it is imperative that at least some assets are held that cannot be conjured up from nowhere. This may mean owning companies that produce real stuff like food, water, energy, metals, electricity, etc. as well as physical assets.
If anyone is still under the illusion that we have “the best economy of all time” or that even “all is well” I believe you are in for a rude awakening.
By the time those in charge admit to the recession they are all anticipating it will likely be too late to do anything about it. By the way, my opinion is that this latest recession that hasn’t really ended since 2004 has entered a new stage that may be the most damaging we have seen so far. Don’t get caught for a third time in 20 years!