Results 1 to 8 of 8

Thread: The ‘Everything Bubble’

  1. #1
    Administrator Ross's Avatar
    Join Date
    Sep 2012
    Posts
    1,159
    Thanks
    1,024
    Thanked 1,292 Times in 777 Posts

    The ‘Everything Bubble’

    The ‘everything bubble’ is real and IMO it's going to pop...sooner than later...it has to, because in a general sense it's designed to do so.

    Article out of Australia highlighting the precarious position the financial word is in and there's many reasons to blame. The fix for the last GFC is one of these reasons.

    By design is the more accurate account after the last GFC raped assets and cash into the pockets of the designers and minions. The then implemented QE (quantitative easing) rawt is touched on below and accurate.





    HOUSE prices and stocks are soaring. If the “everything bubble” pops, it may turn out that the cure for the GFC was what caused our next crisis.

    THEY'RE calling it the “everything bubble”. Once you notice it, you can’t help but worry what will happen if it pops.
    All around the world assets have been rising with a beautiful synchronicity. Anyone listening to Donald Trump knows the US stock markets are booming. A portfolio made of Facebook, Amazon, Google and Netflix would have risen over 50 per cent in the last year alone.

    Meanwhile, Australia has seen east coast house prices go crazy. We are not alone. A simple home can cost well over a million dollars now in cities across New Zealand, Canada, Sweden and San Francisco.

    The everything bubble goes beyond share markets and homes. The global bond market is worth around $80 trillion, 10 times more than all the land and buildings in Australia put together. It has soared to record highs over the past two decades before showing curious signs of weakness in the last year or so, that have been intensifying over the last week.

    The Australian stock market may look like it’s not part of the everything bubble — after all, it is still below its 2007 peak. But when you delve into technology stocks you can find valuations that seem blown out of all proportion. For example Getswift, a company with revenue in the last 12 months of $600,000 — comparable to your local pizza shop — but valued at $585 million. (Getswift claims it has a deal with Amazon.)

    This everything bubble is so strong it even conjured into existence a whole new class of assets and made them worth billions — cryptocurrencies. Bitcoin is up 226 per cent per cent in the past two months alone. That looks puny compared to ethereum, which is up 397 per cent.

    THE TREND BEHIND THE TREND

    When just one asset is going up, you explain it by the characteristics of that asset. But if you have an everything bubble, you need to look at the trend behind the trend.

    Cast your mind back a few years and you may recall the expression “quantitative easing”. This is where central banks pumped money into the economy to try to help us recover from the global financial crisis. It happened in the US, Japan and Europe.

    It worked, more or less. But the effect was similar to what you see in a game of Monopoly. The amount of money in circulation kept going up, but the number of assets to buy remained stubbornly still. As anyone who has forked out $600 in Monopoly money for Old Kent Road knows, asset prices go up as the ratio of money to assets goes up.

    Quantitative easing is really just an extreme version of cutting interest rates. In both cases, the idea is to make people borrow more and spend more. So even though Australia didn’t have quantitative easing, low interest rates and the record amounts of household debt Aussies are shouldering represent our part of the everything bubble.

    The problem with loose monetary policy is that while it is supposed to make people do productive things like start a new company, it has a side effect of making them buy assets at crazy prices. If the everything bubble pops, it may turn out that the cure for the global financial crisis is what caused the next crisis.

    You can see the scale of quantitative easing in the next graph. It shows the assets the US central bank swapped for all the cash it pumped into the system. In return for handing out $4 trillion in cash, it took $4 trillion in assets.

    Name:  f69ac8c57807401a24037620ac439309.png
Views: 35
Size:  29.7 KB

    Donald Trump just appointed a new head for the US central bank, dumping Janet Yellen and putting in a man named Jerome Powell. Get used to his name because you’re going to see it a lot this year. (Insert by Ross: Powell graduated from Georgetown Preparatory School, a Jesuit university-preparatory school. Powell's net worth is estimated to be as much as $112 million. He's the richest member of the Federal Reserve Board of Governors.) The person most likely to pop the everything bubble is Jerome Powell

    Selling those $4 trillion in assets is likely to start in 2018. At the same time, the US central bank is likely to keep lifting interest rates. After all, the US economy now has very low unemployment and quite high growth. It no longer needs stimulatory interest rates to boost it — they can go back to normal.

    The effect of all this will be like taking cash out of that game of Monopoly. You could even ask if the recent slowdown in Australian house prices is in part an anticipation of the end of the era of easy money.

    WHAT HAPPENS IF AN EVERYTHING BUBBLE POPS

    The exciting thing about this question is we don’t know. Immediate panic is not necessary — it is unlikely each asset class will fall together like synchronised divers. More likely, a decline in one will overlap with a decline in another, creating a long period of uncertainty.

    Adding to the drama is the role of China in the everything bubble. Many believe 2018 could be the year that country finally does something about its own huge debt problems. If Jerome Powell doesn’t make things go pop this year, then China is the next big threat.

    ARTICLE
    Last edited by Ross; 01-13-2018 at 11:08 AM.
    Ross
    ***Fred Coleman, Founding Partner, Beloved Friend***
    who passed away 11/10/2016
    Rest in Peace
    ***

  2. #2
    Administrator Ross's Avatar
    Join Date
    Sep 2012
    Posts
    1,159
    Thanks
    1,024
    Thanked 1,292 Times in 777 Posts

    Re: The ‘Everything Bubble’

    Yesterday we saw freefall in the stock market across the globe...while played down somewhat and around 4% drop in value across the board, it's worth keeping an eye on it.

    US SHARE markets continued a two-day rout on Monday, with the Dow Jones suffering its worst daily percentage fall since 2011 and single biggest point drop in its 132-year history.
    Is it the correction forecast due to overvalued stocks? or something else.

    As written in the OP, bonds are at the heart of it.

    US stocks went up. The average house in the western world went up and so did cryptocurrencies.

    The market for bonds is the biggest in the world — more even than all the share markets put together. We don’t pay much attention to it because it is not really for everyday investors. Bonds tend to be bought and sold by massive investors like superannuation funds.

    What that means is that when the market for bonds started turning south about four months ago, it didn’t make big news. If you didn’t notice the biggest investment market in the world falling, then the falls in prices of Aussie houses and stocks (and Bitcoin) seem more isolated.

    But once you pay attention to the falling price of bonds, you see a pattern. An “everything bubble” that grew large is potentially coming apart.


    Just to give you an idea, and remember that the folks below, their wealth is massive, and can easily ride out a significant % wipeout.

    The Dow plunged 1,175.21 points, or 4.6 per cent, as stocks took their worst loss in six and a half years.
    Three of the top five richest people in the world - Warren Buffett, Mark Zuckerberg and Jeff Bezos - lost a combined US$12.1 billion ($16.6b) in a single day, according to Forbes.

    Berkshire Hathaway chairman and CEO Warren Buffett was hit the hardest. The drop shaved US$5.3b, or nearly 6 per cent, off his net worth.
    Last edited by Ross; 02-06-2018 at 11:37 AM.
    Ross
    ***Fred Coleman, Founding Partner, Beloved Friend***
    who passed away 11/10/2016
    Rest in Peace
    ***

  3. The Following User Says Thank You to Ross For This Useful Post:

    Zook_e_Pi (02-07-2018)

  4. #3
    Senior Member Zook_e_Pi's Avatar
    Join Date
    Apr 2012
    Location
    On the way to Tiperary (via shortcut through the Tum Tum trees)
    Posts
    1,158
    Thanks
    1,373
    Thanked 1,302 Times in 713 Posts

    Re: The ‘Everything Bubble’

    Yup.

    Again, this is their economy against ours. They play with casino cards. We play with ration cards.

    They accumulate Brobindnagian assets without contributing much sweat and then distribute in scale (according to a tribal agenda). We accumulate Lilliputian assets by contributing much sweat but lack any distribution capacity of scale.

    The problem with stock markets is that such schemes largely serve their economy, and minimally serve ours.

    Again, the solution is obvious: reduction of scale. But those in charge of the organized theft of human and natural resources don't want solutions. Solutions are a death warrant for their hegemony. The reduction of scale would be anathema to their existence, because when the scale is just right (like the temperature of Goldilock's porridge) ... hegemony is kept in check and balance.

    Individuals cannot then aspire to anything greater than THEIR RIGHTFUL SHARE.

    Justified proportion is the pink elephant in any room housing any multiple of Zionists.



    Buffet, Bezos, Zuckerberg ... all three are hardcore Zionists.



    A sample of Warren Buffet's association:
    https://electronicintifada.net/blogs...aeli-apartheid

    The article speaks for itself. 2 gigabucks for Israeli apartheid?



    A sample of Jeff Bezos' association:
    https://thezog.info/who-controls-amazon/

    The management board at Amazon reads like a tribalist's who's who. 'Nuff said.



    A sample of Zuckerberg's association:
    http://www.jpost.com/Opinion/Choose-...ncement-496762

    This Zionist association is a bit more abstract. We have Zuckerberg giving a commencement address at Harvard, one of the most Zionist-dense universities on the entire planet. Yet we have the article absurdly claiming that Zuckerberg is receding from Zionism. It's how these Zionist snakes operate, good folks. They will send a Zionist archer down to shoot arrows back at their own Zionist prince, to make it look like he is sympathetic with the goyim. But scale betrayed Zuckerberg long before the Harvard commencement speech. Facebook only attained current scale because of the intercession of Zionist credit and ZOG intelligence agencies.


    Pax

    ps: There is something seriously wrong with this world. Until people start coming to terms with the problem of improper scale ... and who exactly is behind the mismanagement of scale ... expect more wealth concentration, more cycles of stock market boon and bust, and greater temperatures in the mass of goyim as they are subjected to more and more frictions.

    ps2: S.C.A.L.E.

  5. The Following User Says Thank You to Zook_e_Pi For This Useful Post:

    Ross (02-08-2018)

  6. #4
    Administrator Ross's Avatar
    Join Date
    Sep 2012
    Posts
    1,159
    Thanks
    1,024
    Thanked 1,292 Times in 777 Posts

    Re: The ‘Everything Bubble’

    Quote Originally Posted by Zook_e_Pi View Post
    Individuals cannot then aspire to anything greater than THEIR RIGHTFUL SHARE.
    That is the crux of the problem. The capitalist/pseudo-democratic system allows all and any to create wealth at their leisure. The designed system is flawed in this regard due to those old aristocratic families, the old wealth and political power genealogys that cornered the system many years ago. The old adage says, money makes money and buys morality disguised as justificational acceptable behaviour...

    And these power-brokers who generally remain hidden from the spotlight (clever ploy that only the very prudent insiders adhere to) have an army of minions doing the work. This is the elephant in the room most miss seeing...the everyday folk selling their own morality and ethics to gain wealth, notoriety, social standing, networking prowess.

    This is the genius of the system...justification modification. Where everyday folk will eagerly sell their metaphoric soul in order to gain wealth while justifying it all as legal and ethical...because of the capitalists/pseudo-democratic system in place.

    We're talking about the western system here, which dictates every other system, beit state run countries or dictatorships.

    Our leaders, economic systems and the army of eagerly 'mouth frothing' minions (general statement) lead by example within a corrupt stench filled system that allows for Individuals to aspire for more than THEIR RIGHTFUL SHARE.

    There is something seriously wrong with this world. Until people start coming to terms with the problem of improper scale
    Yes...yes and yes...

    Below article is out of Australia and is indicative of all economies in the western world.





    Ten signs we’re heading for ‘economic armageddon’


    THE $4 trillion bloodbath was the opening act of “economic armageddon” — and Australian people under the age of 44 should be worried.

    THIS week’s global share market bloodbath was “a small tremor before the big earthquake” as Australia moves “ever closer to economic armageddon”, a former government economist has warned.

    John Adams, a former Coalition policy adviser who last year identified seven signs that the global economy was heading for a crash — later warning the window for action had closed — believes the $4 trillion wipe-out was just the opening act of his apocalyptic prophecy playing out.

    “When the economic earthquake hits, don’t be surprised to see soaring interest rates, massive falls in asset prices [like] shares, real estate and bonds, higher unemployment and widespread bankruptcies,” he said.

    Adding to previously identified economic indicators such as household debt and record low interest rates, Mr Adams has expanded his list of warning signs to 10, including rising inflation — fear of which had a hand in the latest sell-off.

    “Against a whole range of economic and financial metrics, the Australian and international bubble which I warned about in 2017 has continued to grow larger over the past 12 months,” he said.

    “Australian household debt has never been higher — now at nearly 200 per cent as a proportion of disposable income — household savings have slumped, the US share market is now in a bigger bubble than 1929, risky derivatives are now being sold in significant quantities and global debt is $US80 trillion more than it was in 2008.”

    Mr Adams said Australian people born after 1973 — people under the age of 44 — had never experienced a major economic downturn as a working adult and hence needed to ensure they didn’t succumb to “normalcy bias”. (Australia avoided a recession in 2008 due to $40 billion in surplus allowing Govt economic stimulus packages to be employed, today however, there is no surplus and already extremely low interest rates)

    “Australians should be concerned about what lies ahead for themselves and the country as a whole,” he said, predicting a collapse likely to be more severe than the 1991 recession and which may potentially rival both the 1890 and 1929 depressions.

    Ordinary Australians can take some precautions for hard economic times, he added, by reducing their personal spending, increasing savings and having more cash on hand, paying down debt, reducing their exposure to risky or overvalued assets and managing the risk of rising prices, including interest rate payments.

    “We all must assume personal responsibility and take pre-emptive action to ensure that we are able to ride out harsher economic times that are coming to our shores.”


    JOHN ADAMS’ 2018 TEN SIGNS OF ECONOMIC ARMAGEDDON

    Name:  9034a3c7f096c7dd24494f0558c245b7.jpg
Views: 28
Size:  20.9 KB
    Australian household debt is at a record high.



    • Sign #1: Record Australian Household Debt


    “According to the Reserve Bank of Australia, Australian household debt as a proportion of disposable income continues to soar and reached an all-time high in September 2017 of 199.7 per cent as the Australian Bureau of Statistics recently included debt from self-managed superfunds into this statistic.

    “The RBA has continued to note in recent months that the growth in household debt is faster than the growth in household disposable income meaning that household debt to disposable income ratio is expected to increase in the coming months.
    “To give some perspective, American households entered the Global Financial Crisis with a household debt to disposable income ratio of approximately 130, meaning that Australians today are carrying 35 per cent more debt relative to when Americans faced the biggest financial collapse since the Great Depression.”

    • Sign #2: Falling Australian Household Savings

    “Coinciding with the rise in household debt, Australian household savings have fallen to their lowest level since the 2008 GFC.
    “According to the ABS, the Household Saving Ratio (seasonally adjusted) has fallen from a high of 10.1 per cent in the December quarter of 2008 to 3.0 per cent and 3.2 per cent in the June and September quarters of 2017 respectively.

    “Alarmingly, the Turnbull Government noted in its 2017-18 MYEFO Statement released before Christmas, that it expects household savings to fall even further into the near future.”

    • Sign #3: Continued Record Low Australian Interest Rates

    “Despite foreign central banks raising interest rates (see sign #8), the RBA has continued to keep the official cash rate at 1.5 per cent.
    “The Turnbull Government is trying to manage financial risk among Australia’s financial institutions and households through new macroprudential controls via the Australian Prudential Regulation Authority.

    “These controls are rules which place additional requirements on financial institutions to ensure that they don’t take excessive risks, for example, placing limitations on banks to offer interest-only mortgages.

    “However, in December 2012 former RBA Governor Glenn Stevens warned that interest rates kept too low for too long would prove macroprudential controls ineffective in controlling systemic financial risk as people would be driven to over borrow given the cheap rates.”

    • Sign #4: Growing Australian Housing Bubble

    “Concentration of credit in the Australian housing market continued to grow by 7.23 per cent from June 2016 to June 2017. As of June 2017, Credit to Housing as a proportion of Australian Gross Domestic Product reached a 26-year high of 95.33 per cent compared to 21.07 per cent in June 1991.

    “Over the same period, credit which has been directed at the business sector or to other personal expenses have remained relatively steady as a proportion of GDP.”

    Sign #5: Continued Increase in Global Debt

    “Global debt continues to grow, driven especially by rapid growth of debt in emerging economies.

    “According to the Institute for International Finance’s January 2018 Global Debt Monitor Report, global debt reached a record high of $US233 trillion in the third quarter of 2017 or 318 per cent of global GDP, representing growth in global debt of 8 per cent through the first three quarters of 2017.

    “Global debt is now $US80 trillion higher than the end of 2007 with current interest rates substantially lower relative to the pre-GFC period.”

    • Sign #6: Major International Asset Bubbles Keep Growing

    “The past 12 months has seen significant growth in major asset class values (particularly shares) across the world which has been fuelled by the significant increase in global debt.

    “For example, according to the PE Shiller Index, the US share market (as measured by the price of a company’s share relative to average earnings over the past 10 years for US companies in the S&P 500) is now at its second highest valuation level in history at 32.62, with the highest being the 1999 dotcom bubble.

    “According to the PE Shiller Index, the bubble in US share market is now bigger than the peak reached in September 1929 which was 32.54.”

    • Sign #7: Increasing Inflation

    “In late 2017, inflation started to emerge in developed economies, beating the targets set by national governments and central banks. This emerging inflation was driven in part from rising global oil prices which increased by 51 per cent, along with increases in other commodities, over the past seven months.

    “In 2017, the US Producer Price Index hit an annual rate of 3.1 per cent (a six-year high) and the US Consumer Price Index grew by an annual rate of 2.1 per cent whereas in the UK, inflation reached an annual rate of 3.1 per cent. In both the US and UK cases, inflation as measured by the CPI is above the stated 2 per cent target of the US Federal Reserve and the Bank of England.

    “Other developed countries such as Canada and Japan also saw a notable pick-up in inflation during 2017. Higher rates of inflation will put pressure on the value of bonds and currencies, placing countries that do not deal with inflation through higher interest rates at a competitive disadvantage as investors make lower returns.”

    • Sign #8: Tightening Monetary Policy and Rising Global Interest Rates

    “Many foreign governments in the past year have been tightening monetary policy (either through reducing or ending quantitative easing or through ‘quantitative tightening’) as well as raising interest rates.

    “During late 2016 and all of 2017, interest rates were raised in both developed economies such as the US (four times, or 1 per cent), Canada (three times, or 0.75 per cent), or the UK (one time or 0.25 per cent) as well as smaller and emerging economies such as the Czech Republic, Mexico, Malaysia and Romania.

    “Interest rates across the world are expected to continue to rise in 2018 as global economic growth and inflation continue to rise. Higher interest rates will make the ability to service global debt increasingly more difficult.”

    • Sign #9: Inverted and Flattening Yield Curves

    “The US Government bond yield curve has continued to significantly flatten over 2017. In early 2018, the difference between the two-year and the 10-year bond yield reached approximately 0.5 per cent, which is the smallest difference since 2007.

    “The Chinese bond yield curve (i.e. the difference in interest rates between the five-year and the 10-year bond) briefly inverted twice in 2017 and is now approximately less than 0.1 per cent.

    “Inverted yield curves (i.e. where long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality) are known as a market predictor of a coming market crash or broader economic recession.”

    • Sign #10: Return of Risky Derivatives

    “According to the Bank for International Settlements, the value of the over-the-counter derivatives market (notional amounts outstanding) remained high between June 2016 and June 2017 to stand at $US542 trillion.

    “Many of these derivatives contracts (which are agreements that allow for the possibility to purchase or sell some other type of financial instrument or non-financial asset) are concentrated on the balance sheets of leading global financial and banking institutions, are bought and sold privately, involve significant complexity and carry significant counter-party risk that many institutions and government regulators struggle to understand.

    “In November 2017, a research report from Citibank reported that ‘Synthetic Collateral Debt Obligations’, which were one of the main financial instruments responsible for the 2008 GFC, were now back and are being sold to investors in significant quantities and is expected to top $US100 billion by the end of 2017, up from $US20 billion in 2015.”

    Article
    Last edited by Ross; 02-08-2018 at 11:57 AM.
    Ross
    ***Fred Coleman, Founding Partner, Beloved Friend***
    who passed away 11/10/2016
    Rest in Peace
    ***

  7. The Following User Says Thank You to Ross For This Useful Post:

    Zook_e_Pi (02-11-2018)

  8. #5
    Senior Member Zook_e_Pi's Avatar
    Join Date
    Apr 2012
    Location
    On the way to Tiperary (via shortcut through the Tum Tum trees)
    Posts
    1,158
    Thanks
    1,373
    Thanked 1,302 Times in 713 Posts

    Re: The ‘Everything Bubble’

    Just to give you an idea, and remember that the folks below, their wealth is massive, and can easily ride out a significant % wipeout.

    The Dow plunged 1,175.21 points, or 4.6 per cent, as stocks took their worst loss in six and a half years.
    Three of the top five richest people in the world - Warren Buffett, Mark Zuckerberg and Jeff Bezos - lost a combined US$12.1 billion ($16.6b) in a single day, according to Forbes.

    Berkshire Hathaway chairman and CEO Warren Buffett was hit the hardest. The drop shaved US$5.3b, or nearly 6 per cent, off his net worth.
    I would be remiss if I didn't make the following observation as per the article.

    All three Zionist-ladder high climbers mentioned above have net worths defined by imaginary numbers. They gain imaginary numbers using psychology and their contrived money system ... and they lose imaginary numbers. There's not enough printed money around to service the net worths of these individuals. That said, imaginary numbers have purchasing power as long as they hold legitimacy in the minds of the populi.

    If they lose this legitimacy, they lose the purchasing power. So it's never about the amount of imaginary numbers that one owns ... but the legitimacy of imaginary numbers. One imaginary number that is codified as legitimate is worth a lot more than a billion imaginary numbers that are not codified. That sorta thing. This point is subtle but important.

    Forbes only purpose is to try and establish legitimacy for the imaginary number money system.


    Pax

  9. The Following User Says Thank You to Zook_e_Pi For This Useful Post:

    Ross (02-12-2018)

  10. #6
    Administrator Ross's Avatar
    Join Date
    Sep 2012
    Posts
    1,159
    Thanks
    1,024
    Thanked 1,292 Times in 777 Posts

    Re: The ‘Everything Bubble’

    Quote Originally Posted by Zook_e_Pi View Post
    All three Zionist-ladder high climbers mentioned above have net worths defined by imaginary numbers.
    I get your point Zook but...

    They're able to purchase start-ups, existing companies, further shares in future tech, property, infrastructure such as telecoms, energy, and digital...in other words every damn things that makes profit. Imaginary numbers means nothing when you've converted those numbers into real-time values. Imaginary numbers, actual cold hard cash, or gold bullion stashes all equal the same thing at the end of the day, that being purchasing power beyond the legitimacy in the minds of the populi.

    Remove all three's imaginary numbers and they still own ridiculous levels of wealth in the form of all above examples.

    The legitimacy argument means nothing when the system allows those imaginary numbers to convert to 'real actual material commodities'.
    Ross
    ***Fred Coleman, Founding Partner, Beloved Friend***
    who passed away 11/10/2016
    Rest in Peace
    ***

  11. The Following User Says Thank You to Ross For This Useful Post:

    Zook_e_Pi (02-13-2018)

  12. #7
    Senior Member Zook_e_Pi's Avatar
    Join Date
    Apr 2012
    Location
    On the way to Tiperary (via shortcut through the Tum Tum trees)
    Posts
    1,158
    Thanks
    1,373
    Thanked 1,302 Times in 713 Posts

    Re: The ‘Everything Bubble’

    Quote Originally Posted by Ross View Post
    I get your point Zook but...
    They're able to purchase start-ups, existing companies, further shares in future tech, property, infrastructure such as telecoms, energy, and digital...in other words every damn things that makes profit. Imaginary numbers means nothing when you've converted those numbers into real-time values. Imaginary numbers, actual cold hard cash, or gold bullion stashes all equal the same thing at the end of the day, that being purchasing power beyond the legitimacy in the minds of the populi.

    Remove all three's imaginary numbers and they still own ridiculous levels of wealth in the form of all above examples.

    The legitimacy argument means nothing when the system allows those imaginary numbers to convert to 'real actual material commodities'.
    Yes, I acknowledged that with the quoted stuff below:

    That said, imaginary numbers have purchasing power as long as they hold legitimacy in the minds of the populi.
    If they lose this legitimacy, they lose the purchasing power.
    But the purchasing power only exists because we continue to trade in it, e.g. make it part of our economy. That was the point I was making. Take for instance, the derivatives market. It is all imaginary numbers. It has not been converted into real assets. Just numbers. Now, go and make a universal declaration and zero the derivatives market out. Gone. But only if you have power to declare. Right now, the only people with the power to declare are those working for the corrupted organized system. And they have a vested interest in keeping the derivatives market intact. The citizenry themselves have been co-opted and have lost their power to declare (e.g. via the ballot). They will only regain some measure of control if a critical mass of people become aware of the scale of tribal theft that has been going on for decades and centuries. That was my point.

    It doesn't matter if the stock market pumps up or pumps down imaginary numbers. It matters that the stock market is being controlled by the elites and their system of inside traders, currency speculators, commodity speculators, rogue regulators, etc. Unless the populi get privy to the extent of unfair market practices and centralized control, the imaginary numbers will continue to exchange for real assets.

    I'm just not waxing politics, here, Ross. Here in India, I've been seeing it play out with Modi's demonetization strategy and other monetary policies over the last year and a half. It comes as no big surprise that Modi is now buddy buddy with Netanyahu and Trump. He is the Rothschild brand's waterboy in India. The Indian bankers (a subsidiary of the tribal banksters) are systematically carrying out the agendas of the global elites. The result of this economic re-engineering of India is to bankrupt the people's economy (represented by black or anti-system money) so that the elites' economy (represented by white or system money) can once again have the masses beholding to the banking and industrial elites of India.

    But here's the thing: in an apparent paradox, black money is actually more real than white money. Black money gets things done for the vast majority of people (e.g. masses). White money gets agendas implemented and enriches the select few. Corruption is rampant in India largely due to white money mismanagement over the decades (just like in the rest of the world); which is why people in India turned to the black money economy, e.g. because they received more value from black money. Seeing the loss of their centralized control play out, the banking and industrial elites (e.g. the black knights) have decided to once again ride out on white horses to reclaim lost power. Real value exchange is anathema to these black knights.

    They don't have the population numbers to generate income on par with the masses; so they have evolved a system that creates imaginary numbers (exponentially for them; incrementally for us; in short, they have invented a system of theft by the select few against the vast many). The exponential imaginary numbers are then used to purchase humans, natural resources, and more imaginary numbers.

    And what do we have? Incremental imaginary numbers. To keep us smiling and blissfully contented in our apparent franchise in the imaginary number system, with dreams about greater effort leading to greater enfranchisement, until that day when, we, too, might become part of the privileged exponential imaginary number economy. Wet dreams, of course.

    To summarize: my point is about the legitimacy or lack thereof of the imaginary number system. It does matter that the system is being advertised as legitimate, when it is not. Theft of value is being codified by the system. So from a justice seeker's POV, we have two primary attack points. We can attack the amount of theft that is being undertaken. Or we can attack the thieves. I choose the latter attack point. The amount of theft is incidental to the process of theft.


    Pax

  13. The Following User Says Thank You to Zook_e_Pi For This Useful Post:

    Ross (02-14-2018)

  14. #8
    Administrator Ross's Avatar
    Join Date
    Sep 2012
    Posts
    1,159
    Thanks
    1,024
    Thanked 1,292 Times in 777 Posts

    Re: The ‘Everything Bubble’

    Interesting article out today...

    Article:

    Say your prayers, the US Fed financial safety net has gone

    Say your prayers. We no longer have a lender of last resort fully standing behind the global financial system. The US Federal Reserve is prohibited by law from carrying out precisely those emergency actions that halted contagion and a worldwide collapse in October 2008.

    The Dodd-Frank Act and the post-Lehman culture of righteousness on Capitol Hill have tied the hands of the Fed. In the America First mood in Trumpian Washington it is unclear whether the US will continue to uphold its responsibilities as issuer of the paramount reserve currency and how far it will go to help foreign institutions facing trouble.

    The tougher new rules will make it much harder - and slower - for the Fed to halt fire-sale liquidation in a crisis. It is true that the repression has made US banks "safer" than any time in the last 40 years: common equity capital ratios have doubled since 2008. Lenders have big enough cash reserves to withstand a 30-day liquidity seizure. But this is to celebrate a financial Maginot Line.

    The rules themselves have pushed ever larger parts of the money nexus into the shadows or into untested new instruments - "outside the perimeter" - and that is where the nitroglycerine now sits. As we have learnt over the last two weeks, acrobatics in the brave new world of exchange traded funds are a sight to behold. The structure is arguably more dangerous today than it was on the eve of the Great Recession.

    The Dodd-Frank Act, rushed through in 2010, prevents the Fed from rescuing individual companies in trouble (there must be at least five, and they must be solvent) or lending to non-banks in a panic.

    It can lend only to "insured depository institutions" through its discount window with the Treasury's permission.
    Fed chieftains Ben Bernanke and Don Kohn warned that these curbs were ill-advised.

    They were overruled.

    What saved capitalism in 2008 was epic action by the Fed to shore up the commercial paper and the asset-backed securities markets, and to head off an implosion of the money market industry.

    It took US$1.5 trillion ($2t) of emergency loans to stop the vicious cycle. Events moved with lightning speed, in chaos, with zero visibility.

    "The Federal Reserve lent to individual non-bank institutions whose default would have been extremely damaging for the financial system and the state of the economy," said Stanley Fischer, the Fed's former vice-president in a speech in 2016.

    "The facilities were many and varied, and developed as needed, because the US financial system is complex and, as the crisis unfolded, the nature of the next phase was largely unforeseeable. Had that flow of credit ceased, the severe recession that resulted would have been far more serious," he said.

    New York Fed chief Bill Dudley has made much the same argument, describing how the institution had to step in with "funding backstops" when panic caused counterparties to shut off credit to rock-solid companies.

    He lamented that the Fed cannot easily provide such a circuit-breaker today. It can act only in extremis, with a delay, and under severe constraints.

    Financial crises do not wait for bureaucracies to catch up. Bear Stearns informed the Fed on a Thursday that it would default that Friday. When US Treasury secretary Hank Paulson pulled the plug on Lehman Brothers, and its US$660b book of liabilities, he thought the shock could be contained. Within days the collapse had engulfed the world's biggest insurance firm AIG, and threatened to engulf all else.

    Once the bomb had exploded, it went global instantly. It was the Fed that then saved the European financial system, preventing a chain-reaction of defaults when the offshore dollar funding markets froze and it became nigh impossible to roll over three-month dollar credits. The European Central Bank and its peers could not create the dollars desperately needed to buttress Europe's interbank markets.

    The Fed responded by advancing liquidity swap lines in US dollars to central bank peers, removing all limits over the wild weekend of October 14, 2008. Total swaps surged to US$580b.

    The Fed can in principle still do this today, subject to approval by the US Treasury secretary, and therefore the Trump White House. My question is whether the Fed would hesitate - and for how long - under the implicit political constraints of Trumpian Washington.

    The situation would be comical if it were not so grave.

    It is not hard to imagine a dark scenario where Donald Trump positively relishes a bout of dollar waterboarding for Europe's pious elites. That was the attitude that prompted the (nationalist) Chicago Fed to sweep aside requests for help from the (metropolitan) New York Fed in 1930 and 1931, causing the US banking crisis to metastasise.

    It was the bloody-minded attitude of the Banque of France in the early Thirties when it refused to reflate under the etiquette of the inter-War Gold Standard.

    I have long argued that the Achilles' heel of the international system is the edifice of offshore dollar debt outside US jurisdiction. This has mushroomed from US$2t to US$11t (BIS data) over the last 15 years, driven by global leakage from zero interest rates and quantitative easing. The world has a "short position" on the US dollar that it cannot cover in a liquidity crisis.

    We are probably not at the end of this cycle.

    Goldman's Lloyd Blankfein is right that Trump is throwing "lighter fuel on the fire" with his late-cycle stimulus and the biggest fiscal deficit in US history, outside war and recession. The policy is unconscionable and will backfire once the Fed hits the brakes. But for now it is elixir for asset markets. I will start to worry only if - and when - the dollar starts grinding higher and threatens to trigger the proverbial "short squeeze" on dollar credit.

    The situation would be comical if it were not so grave. The Fed and fellow central banks have stimulated a titanic expansion of debt over the last quarter century: an asymmetric policy of letting booms run their course while always intervening to prevent busts, culminating in the final throw of QE.

    This has driven down the natural Wicksellian rate of interest and led to grievous intertemporal distortions. It has lifted the world debt ratio by 51 per cent of GDP to 327 per cent since the pre-Lehman peak, and led to a synchronised "everything bubble", from bonds, equities, property, to art and Bitcoin.

    While one branch of western governments has created this leviathan of leverage and interlinked global asset speculation, another branch has called into question whether there will be a lender-of-last resort when the moment of reckoning finally comes. Just brilliant.

    Article
    Ross
    ***Fred Coleman, Founding Partner, Beloved Friend***
    who passed away 11/10/2016
    Rest in Peace
    ***

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •