2005 and 2018 have similarities; Pay attention to the Fed Chiefs
Understanding the conspiracy for world government can be profitable.
Over the decades of trading and investing I have learned to stay focused on what matters in the markets. The mainstream and alt-financial business media both inundate with information overload; most of which are just red herrings. We need to face reality; there’s just too much information and half-truths out there and the daily news stories keep us dazed and confused. If we focus on the wrong items we will end up not making any money. This, of course, is done by intent. A confused investor is a broke investor. We need to see past the clutter.
One observation I made over the course of previous asset cycles; former and current US Federal Reserve Chairpersons seem to have a knack for telegraphing events and crises in advance. I have learned to pay close attention to them over just about everything else.
I recall in the Summer and Autumn of 2005; Alan Greenspan and Ben Bernanke relentlessly raised rates to deflate the housing bubble. They both openly discussed how they were going to keep raising rates until they achieved their desired objective.
He [Greenspan] and Bernanke have both said it is unrealistic to expect the Fed to identify a bubble in stock or real estate prices as it is inflating, or to be able to pop it without hurting the economy. Instead, the Fed should stand ready to mop up the economic aftermath of a bubble.
Bernanke: There’s No Housing Bubble to Go Bust – Washington Post (October 27, 2005)
Personally, I knew what the continual increase in short-term rates meant to me. In 2005, I owned six residential properties that were financed with no-doc, adjustable-rate mortgages. Based on short-term interest rate increases my mortgage rates would have reset about 400-500 bps higher than the prevailing LIBOR rate. LIBOR rose in step with the increases in the Fed funds rate. That’s right, my mortgage rates would have been at least 10% upon reset. I knew the end was near and sold all six of these properties by the end of 2005. I contemplated all those investors who financed with the same types of loans.
In 2005, I came to terms with the fact that the elites running the US Fed were working to destroy the real estate market. It pays to know about the conspiracy for world government. They told us in advance.
What about 2018? Remember Greenspan’s warnings within minutes of the FOMC meeting?
I recall the well-scripted Alan Greenspan interview on January 31, that aired moments after the January FOMC meeting concluded.
“There are two bubbles: We have a stock market bubble, and we have a bond market bubble,” Alan Greenspan, 91, said Wednesday on Bloomberg Television with Tom Keene and Scarlet Fu. Greenspan, who led the Federal Reserve from 1987 until 2006, memorably used the phrase to describe asset values during the 1990’s dot-com bubble.
Greenspan’s comments come as stock indexes remain near record highs, despite selling off in recent days, and as the yields on government notes and bonds hover not far from historic lows. Interest rates are expected to move up in coming years as the Fed continues with a campaign to gradually tighten monetary policy.
“At the end of the day, the bond market bubble will eventually be the critical issue, but for the short term it’s not too bad,” Greenspan said. “But we’re working, obviously, toward a major increase in long-term interest rates, and that has a very important impact, as you know, on the whole structure of the economy.”
Former Fed Chair Alan Greenspan Sees Bubbles in Stocks and Bonds – Bloomberg.com (January 31, 2018)
We need to be patient when we look for the results. Last decade’s warnings took over two years to manifest. We are only about a year into this unfolding fiasco.
This process takes time. While the US Treasury yields have not risen dramatically, look at all the volatility and loss of liquidity in the corporate, mortgage, and high yield (leveraged) loan markets. Look at the problems that have arisen this year in the emerging markets. The global bond markets have taken a turn for the worse since early this year.
How about Janet Yellen’s well-scripted exit interview?
As for whether Yellen’s view that the stock market (which plummeted on Friday) has been too high in recent months:
“Well, I don’t want to say too high. But I do want to say high. Price-earnings ratios are near the high end of their historical ranges. If you look at commercial real estate prices, they are quite high relative to rents. Now, is that a bubble or is too high? And there it’s very hard to tell. But it is a source of some concern that asset valuations are so high.
Janet Yellen: The exit interview (CBS News, February 4, 2018)
Keep in mind that Janet Yellen was still the head of the Fed when she gave that interview.
I tend to focus less on other monetary authorities around the world and more on the officials at the US Fed. Why did I pay particular attention to these interviews and events? Because all through the asset price boom of this decade the Fed chiefs were reluctant to say anything adverse. It all started this year and seemed peculiarly timed.
[Rita] Braver [CBS interviewer at the Federal Reserve] said, “This is arguably the most important economic conference room in the entire world.”
“I think that’s actually a fair assessment,” Yellen replied. “The policymakers and senior staff sit around this table, and we sometimes disagree, but we’re not disagreeable.”
Janet Yellen: The exit interview (CBS News, February 4, 2018)
Indeed, I agree. The elites formulate global monetary policy and use the US Fed as its primary architect and engineer.
Remember when the Dow Jones fell 666 points on February 2nd?
The Dow closed down 666 points, or 2.5%, its biggest percentage decline since the Brexit turmoil in June 2016 and steepest point decline since the 2008 financial crisis.
A strong jobs report showed wage growth is finally starting to pick up. That’s great news for workers, but it reinforced investors’ concern about inflation and the bond market.
Dow plunges 666 points (CNN Money February 2, 2018)
Numbers are very important to the elites. I look at the numerology in the markets to see the globalist calling cards. The March 2009 (3/6/2009) low in the S&P 500 was 666. February 2nd’s drop in the Dow Jones was 666. That was Yellen’s last business day on the job.
Recall on January 26th, after it was reported that Steve Mnuchin was speaking to reporters about his desire to see a weaker dollar, I told my listeners I sold all my non-real estate holdings and moved to cash.
There were just too many clues being dished out in too short a time. Look at what is happening now. Will the next couple years be tough for investors? I think it will and I remain in cash.
It pays to understand the conspiracy for world government.