“We have a colossal credit bubble in the world. Can it expand? Yes, but it cannot expand forever. One day there will be a limit and one day there will be another huge crisis because the debt level today is higher than it was in 2007.”
Media
07/04/2017 - Dr. Marc Faber: There Will Be Another ‘Massive’ Financial Crisis In My Lifetime
07/03/2017 - Peter Boockvar: Trump Will Perpetuate This Bubble For Political Reasons
07/03/2017 - Martin Armstrong: The U.S. Stock Markets May Have A Correction But Are Climbing A Wall Of Worry
06/29/2017 - Dr. Lacy Hunt: The Federal Reserve Has Undermined The Economy’s Ability To Grow
“Quantitative easing has created a lot of negatives, one of the most glaring is this liquidity which has fueled record leverage of the business balance sheet .. Quantitative easing encouraged a shift from real investment to financial investment. The Fed’s backing your play, engage in financial engineering… buyback shares, raise dividends. The business managers think they can reverse [these actions] .. It’s the investment, the real investment which grows the economy. The Fed has created very significant unintended consequences, which have undermined the US [economy’s] ability to grow and lift the standard of living.”
06/26/2017 - Peter Boockvar: The Global Bond Market Is In A Massive Bubble
06/25/2017 - Former Fed Advisor Danielle DiMartino Booth On Why The Fed Is Bad For America
06/25/2017 - Dr. Marc Faber: Massive Wealth Taxation Or Asset Deflation Is Coming
06/15/2017 - James Grant On The History Of Interest Rates & The State Of Markets
James Grant reflects on the History of Interest Rates, the State of Markets, and the Future of Finance .. About the Interview: We stop to remember a time, in which the extraordinary measures and unprecedented actions of our monetary and fiscal authorities would have seemed unimaginable. We take a hard look at money. How does this shadow of wealth find its value? How is the rate of interest determined, and what is the role of financial markets in facilitating the discovery of that value? What happened, in 2008 and what are the consequences, realized and yet to be discovered, of those very extraordinary and unprecedented actions taken by governments around the world to douse the flames of deflation? What was done in order to contain the contraction and to prevent the discovery of prices? What does the future hold in 2017, what investments does one make and where might one find opportunity in these oceans of uncertainty.
06/14/2017 - McAlvany Podcast: Will The Free Market Ever Exist Again?
This week a discussion on the manipulated “free market” and if it will truly ever be free again. Central Bank “Buying” of Securities at $300 Billion Per Month!
06/09/2017 - David Rosenberg: Thoughts On The Deflationary Headwinds Facing The US Economy, Federal Reserve Policy
“The big challenge is, if this [Boomers retiring] was happening 30 years ago, you could go to the government bond market and get 4, 5, 6%. You can’t do that today.”
“[Low Treasury yields] are why I don’t think the dividend theme is overdone. The equity market has become a more reliable generator of the reoccurring cash flows that the Boomers need than the government bond market has.”
06/07/2017 - Dr. Lacy Hunt: How Federal Reserve Monetary Policy Has Destabilized The Economy
Dr. Lacy Hunt’s explains how Quantitative Easing has undermined economic growth and affected financial stability while increasing downside risk in asset markets.
06/05/2017 - Gordon T Long: Global Central Banks Won’t Ever Decrease Balance Sheets?
Jason Burack of Wall St for Main St interviews Gordon T Long .. discussion on if Janet Yellen and the Federal Reserve can continue to raise interest rates? .. Gordon says that the Fed could possibly do 2 more 25 basis point interest rate increases in the near future before something in the real economy or markets breaks, but that the Federal Reserve and other major global central banks cannot ever reduce their balance sheets without collapsing markets and the real economy .. Gordon highlights how the ECB now has a balance sheet over $4 trillion and so does Japan’s central bank, the Bank of Japan. Balance sheets for the PBOC and Bank of England are also massive .. Gordon thinks the Federal Reserve will have to start rapidly expanding its balance sheet in the near future rather than reducing their balance sheet .. Gordon also discusses shorting opportunities he is positioning his clients for.
06/01/2017 - Dr. Marc Faber: We Have A Bubble In Everything
“We have global debts as a percent of global GDP that is 30 to 40 percent higher than it was in 2007 .. All of us and I also own lots of assets, we’re going to lose 50 percent. Either the government will to take it through taxation or expropriation or there’ll be a deflation in asset prices that is surprising most people on the downside.”
05/31/2017 - McAlvany Commentary: U.S. GDP Growth Is Matching The 1930s Depression Decade
This week’s show:
-Normally Understated Gold Expert Jeff Christian Now Sees $1,900+ Gold Price
-Russian Ruse Being Played Politically In The U.S. To Distract From Real Issues
-U.S. GDP Growth 1.33% (10 Year Average) – Identical Match To The 1930s Depression Decade
05/30/2017 - Dr. Lacy Hunt: Indebtedness Cannot Be Solved By Taking On More Debt
Erik Townsend Interviews Dr. Lacy Hunt
Dr. Lacy Hunt: Dr. Hunt explains, the US debt load will continue to climb and velocity will continue to slow – unless, of couse, “we get lucky.”
Hunt points to an excellent summary was published in 2010 by McKinsey Global Institute…
“They looked at 24 advanced economies that became extremely over-indebted. The indebtedness brought on a panic year, such as 1929, 1873, 2008, and they followed the process through to completion.
It’s a very long process, and what it shows is that an indebtedness problem cannot be solved by taking on additional debt.
McKinsey says specifically that multi-year sustained rise in the savings rate, what they term austerity, is needed to solve the problem, and of course, as we all know, in modern democracies, that option doesn’t seem to exist.
So, we try to continue to use what has failed, and while we get transitory improvement in economic activity, the longer-term trend is to weaker and weaker economic performance.”
05/28/2017 - Chris Martenson: Non-U.S. Banks Are Being Paid By The U.S. Central Bank
“The Fed is now paying interest on so-called ‘excess reserves’ held at the Fed. Those ‘excess reserves’ include a huge chunk of money held there by foreign banks who are only too happy to receive 1% on their holdings from the Fed given that their own central banks are paying 0%, or even negative rates. The money that the Fed pays these foreign banks is deducted from the amount remitted to the US Treasury at the end of each fiscal year. It’s this simple: foreign banks are being paid billions .. not one single person in the US got to vote for or approve of that action. Let me repeat that: billions and billions .. are being sent to boost the profits of foreign banks. And there’s not a single thing a voting citizen can do about it .. The decision to do this has been made unilaterally by unelected people for reasons they are under no obligation to either share or even have audited by the public. I wonder if Detroit wouldn’t mind getting several billion dollars to use however it wishes, courtesy of the Federal Reserve? Or the permaculture movement? Or jobs training programs?”
05/25/2017 - David Rosenberg: The Fourth Industrial Revolution Is Having A Profound Impact On Worker Anxiety
“The yield curve is flat enough that if the Fed raises rates four more times, that’s all it takes. We probably will have a recession next year .. Politics, to me, unless it has a substantive impact on the earnings outlook or the economy, is just short-term noise .. What’s happening in terms of artificial, robotic intelligence and the shared economy… Right now, we’re going through the fourth Industrial Revolution, and it’s having a profound impact on worker anxiety .. How is it that we have 23 million Americans between 25 and 54, in their prime working age, that are out of the labor force? .. There’s some real structural things happening here that really transcend the need to cut taxes or what’s happening in terms of immigration policy.”
05/22/2017 - Russell Napier Fears The Dark Ages Of Government Allocating Resources And Capital To Run The Financial System
“The central banks try to manipulate markets to deliver growth, that’s effectively what they do by manipulating the price of money. If it doesn’t work, then what? Well, it’s pretty straightforward. Well, people the demand the politicians do something, people demand political action. But political action for those people who invest in financial markets means in some way reducing the par of financial markets, reducing the par of price. And yeah, I’ve speak to a lot of people about this. People fear inflation, they fear deflation. I fear something much bigger than that, that the political reaction to this is effectively to go through one of those periods again, what we’ll called ‘dark ages’, where we basically- the politicians can make it and then they run the financial system, or they begin to get directly involved with the allocation of resources and capital and credit and we go back into that, let’s call it the 1950s, 1960s, certainly a in a European context, that type of world is a world that the population demands because they look at central banks and say ‘well you haven’t been able to do this using so-called market forces, so let us use non-market forces.’ So, we’re really dealing with something very existential, here, that this will be a shock to the face and the ability of the market to deliver, not only in the ability of central bankers, but in the ability of the market to deliver in a decided move towards intervention in markets.”
Erik Townsend Interviews Russell Napier:
05/16/2017 - David Rosenberg: Investing Around The Latest Trump News? Don’t
05/10/2017 - Yra Harris And Rick Santelli: Lessons From Japan & Implications Of France’s Vote
“The global markets have been lulled into an eerie calm–think Minsky—as the recent Dutch and French elections have driven the anti-euro populists back underground. I caution that the economic situation still remains a very serious concern as President Draghi continues to build the ECB balance sheet in an effort to bail-out the fiscally weak states of Italy, Spain, Portugal, France and others. Italy is still a major concern as the non-performing loans plague its domestic banks. Add in that Italy has a debt-to-GDP ratio of 136% and it will take the entire EU to backstop the Italian financial system. I WARN ALL READERS THAT THE GLOBAL DEBT SITUATION IS FAR MORE PERILOUS THAN GLOBAL EQUITY MARKETS REFLECT .. The world’s central banks have been busy adding liquidity to the financial system, which provides the backdrop for a Minsky Moment for complacency in the realm of ZIRP creates instability below the surface. We do not fight markets and therefore have not been sellers of equity markets by battling the power of central bank liquidity creation. But as geopolitics calm markets will return to focus on the fragile financial situation created by mountains of debt.”
LINK HERE to Yra’s related blog post
