The nations must stay in business, so the central banks are acting fast
Though I do not know of anyone else who agrees with my research, my readers know the agenda; the central banks must all work together to continually lower interest rates over time, so that the nation-states can remain in business. Since 2008, no nation-state has been able to effectively fund its own spending activities at prevailing rates without central bank bond buying.
This list of nations includes China and Russia, because without the low rates afforded by the western central banks, Russia’s and China’s credit systems would have collapsed as well. Moreover, China’s high rate of credit and economic expansion would have been impossible if global debt yields were higher. After all, China needs to be built up as quickly as possible for the upcoming global conflict, and only low rates and cheap credit can promote this auspiciously timed expansion.
Falling yields support higher asset prices, which support lower yields
Yields need to continue dropping, so by default, asset prices will continue climbing. These higher asset prices will also support the demand for the ballooning sovereign debt pile. The whole dynamic generates a self-supporting mechanism. If asset prices fall, monetary policy will be more supportive and visa versa.
With respect to monetary policy, no nation-state can act independently anymore. Even the manufactured enemies for the upcoming global conflict are coordinating monetary policy at the highest levels. So, as this timeline reaches certain key moments, the central banks need to act decisively to ensure that all the debt is absorbed with room to spare. This will help to guide the yield curve lower as the debt burdens swell.
All this talk about impending economic and financial market calamity, or the ostensible trade friction both work to achieve the same goal – they give cover to the the U.S. Fed and other central banks to lower short term rates, expand credit, and manage longer-dated bond yields. Therefore, it makes me wonder about the true motives of politicians like President Trump or the mainstream and alt-media’s recession drum pounding.
Since 2013 when I started writing on Henry Makow’s site, my one overriding instruction to my reader has remained the same;
- Those at the top are in firm control of the monetary system. It’s their monetary system and their central banks possess plenty of fire power with unconventional tools, and can easily lower rates to below zero.
- Interest rates need to continue moving lower over time, and as rates fall and the supply of sovereign debt balloons, asset prices will rise, ceteris paribus.
- Despite this monetary expansion, inflation growth will continue to fade as the world sinks in a sea of deflationary red ink.
- It has become clear, especially in the wake of last year’s late market swoon, that TPTB intend to keep this moving forward. They seem to be achieving more of their new world order agenda by keeping the system intact.
There are always opportunities to speculate on all types of assets, including fungible ones like gold, bitcoin, and commodities. But over the long run, we will be best served by owning assets that can be priced by discounting their cash flows. Obviously, stocks, bonds, real estate, and private (but liquid) businesses come to mind.
The actions of the Fed will eventually overwhelm the trade situation, because in the long run, all that matters are bond yields. These low yields and explosive credit expansion will power the new order forward until the next phase, which can be years away.