Double-mindedness in the business press guarantees more of the same
- As long as the central banks buy up all the debt required to keep rates moving lower, the markets and asset prices will move higher
- My personal observations; small and less knowledgeable investors are becoming increasingly comfortable with risky speculation
- Since 2008, the world’s net savings has no longer been able to fund sovereign borrowing needs without the additional “demand” from the central banks
- Despite stories to the contrary, global investors seems willing to allow the central banks to continue their sovereign debt buying campaigns
- Though most economists claim that negative yielding debt poses a systemic problem, I claim that this is actually the only viable solution given the direction the central banks chose. The amount of it will grow over time as the global economy sinks in a sea of deflationary and over-supplied red ink.
I received an email from a reader:
You’re kinda hinting at a gut feeling that a significant crash is incoming … well, that crash is well underway across the globe … so commodities will weaken.
The rich world is still hanging in there as the periphery is crushed and burnt, but probably not for much longer, 2020 will probably be a painful year.
For those without the assets, their worlds have already crashed
I understand this reader’s concern at what is transpiring, and while I do agree that a major crash is coming, I submit that the central banks have their agenda under control. With QE and falling rates, this banking cartel has placed the entire global economy on an indefinite IV-drip, and it now controls the world’s destiny. I submit that the globalists have a course of events planned in the future, when at that time, the central banks will prove powerless to overturn the laws of gravity. Of course, historically speaking, that has always been war, but for now these QE programs have proven effective.
There are many out there (former readers and subscribers) who do not agree with this assessment, but we are now entering 2020 and are still here discussing potential catastrophes. Most in the alt-financial media have stood by in disbelief all decade as the financial system levitates higher.
The mainstream press runs cover for the central banks
I get it; regardless of what Solomon wrote in Ecclesiastes, we are indeed experiencing unprecedented circumstances, but that does not mean things will cave soon, and arguing from incredulity has never proven profitable.
Okay, let’s turn back to the point of this article; consider the mainstream business press, which runs cover for the central banks. I came across a Bloomberg article published earlier today that illustrates my point about a complicit business media. After reading this article, I do not know where the author (or Bloomberg) stands on the matter of the central bank government debt-buying or the massive fiscal stimulus programs being contemplated. This tells me that more of the same is coming.
Now, as policy makers grapple with the slowest growth since that era, a suite of options on how to revive their economies share a common denominator: yet more debt. From Green New Deals to Modern Monetary Theory, proponents of deficit spending argue central banks are exhausted and that massive fiscal spending is needed to yank companies and households out of their funk.
Fiscal hawks argue such proposals will merely sow the seeds for more trouble. But the needle seems to be shifting on how much debt an economy can safely carry.
Central bankers and policy makers from European Central Bank President Christine Lagarde to the International Monetary Fund have been urging governments to do more, arguing it’s a good time to borrow for projects that will reap economic dividends.
“Previous conventional wisdom about advanced economy speed limits regarding debt to GDP ratios may be changing,” said Mark Sobel, a former U.S. Treasury and International Monetary Fund official. “Given lower interest bills and markets’ pent-up demand for safe assets, major advanced economies may well be able to sustain higher debt loads.”
The Way Out for a World Economy Hooked On Debt? Yet More Debt, Bloomberg, December 1st
All I know is that people continue to spend with reckless abandon. The streets around my community are clogged and get more crowded all the time. These sheep cannot stop pissing away their money and will spend themselves into oblivion. They are the great unwashed that keep the economy and asset markets moving higher. Thank them for their spendthrift ways and do the opposite. What is bad for us (personal spending and debt) is good for the economy. As long as we prepare for the inevitable, we will manage, regardless of society’s circumstances.
We should be less concerned about things we cannot control and more careful about our own affairs. Move forward in this reprobate world and trim our wicks. As long as the establishment outlets run cover for the status quo, we have more to come.