First, we had Bonesman and US Treasury Secretary, Steve Mnuchin talking down the US dollar. Then we had Alan Greenspan, the former USFed Chair who deftly guided last decade’s well-scripted collapse, talking of asset bubbles. Now, we can add Janet Yellen to the lengthening list of puppets who are carrying out their scripted talking points to accelerate this growing manufactured “crisis” timeline.
According to Bloomberg;
Outgoing Federal Reserve Chair Janet Yellen said U.S. stocks and commercial real estate prices are elevated but stopped short of saying those markets are in a bubble.
Commercial real estate prices are now “quite high relative to rents,” Yellen said. “Now, is that a bubble or is it too high? And there it’s very hard to tell. But it is a source of some concern that asset valuations are so high.”
“Well, I don’t want to say too high. But I do want to say high,” Yellen said on CBS’s “Sunday Morning” in an interview recorded Friday as she prepared to leave the central bank. “Price-earnings ratios are near the high end of their historical ranges.”
Bloomberg – Yellen Says Prices `High’ for Stocks, Commercial Real Estate (02/04/2018)
Recall what I have been saying for the past several weeks; the US government and the US Fed desperately need to establish another aggressive round of quantitative easing. The US Treasury will issue more than $1 trillion in new Treasuries in 2018 and there is not enough global demand to soak up all this new issuance.
This is where the genesis of the upcoming manufactured crisis appears. As the US Fed raises rates it is damaging the dollar in the foreign exchange markets. This is driving up Treasury yields. This, in turn is beginning to severely impact ALL asset markets.
Mortgage rates in the US are now at about 4.5%. House prices cannot afford rising rates. My concern is that the private equity firms that invested in single family rentals will have to unload en masse to cough up cash for their leveraged positions. Anyone with cash and unleveraged assets will be able to come in and buy up residential properties very cheaply. The process will happen fast, but the damage will linger for years.
I have been saying for the past couple weeks that nothing will be safe in this upcoming manufactured crisis. Friday’s price and market action was a quick lesson for those looking for safe havens in this upcoming manufactured calamity. The Fed will come in as our hero, but the blood needs to flow.
Everything sold off on Friday. Gold sold off and silver got destroyed. The miners fell hard. Oil producers got laid waste. Stocks were manhandled. Bonds of all kinds were pummeled. the crypto market was destroyed. Once I saw Yellen’s interview this morning, I sold all my trading positions in my cryptocurrency portfolios.
I already warned my readers and subscribers two weeks ago to sell all stocks. I had been holding stocks on a short-term basis, but after Mr. Mnuchin talked down the dollar, I liquidated all my equities.
What makes this upcoming crisis unprecedented is that bonds will not get the usual support, unlike the previous “crises.” It will be the bond sell-off that will provide the catalyst for the Fed to appear with the solution.
Politics don’t matter here. If you are caught up supporting Trump or Hillary, I feel sorry for you. You are looking in the wrong direction. If you have been a Martin Armstrong fan, good luck to you. he has not been genuine. He is compromised and his advice has been costly.
Cash is the only asset we can count on right now. Do not speculate in currencies. There are no free markets and the whims of the central bankers can lay waste to your balance sheet. Stick to the currencies you commonly transact with.
Recall a couple weeks ago when I pointed out that Ray Dalio of Bridgewater was joking that those in cash will get burned. I told you he was completely wrong.
I have saved myself so much money and grief over the past month or two, by staying disciplined and focused. I am trying to relay to you what is soon to come. I always stated that as long as US Treasuries and the US dollar remained firm the leveraged buyout of the world we discussed would continue. Unfortunately, we are looking at the next phase of the globalist’s plan. Please understand what is coming. It transcends politics and the stuffed shirts that Naomi Prins talks about. This is about something much bigger.