Friday, April 15, 2016

A Terrifying Nightmare Of 
Bank Bail-Ins,& Global Collapse
Maison Placements' John Ing: "The Panama Papers and tax inversion issue (or lack thereof) have become part of the White House’s Robin Hood policies of attacking big money, despite having the highest tax rate in the corporate world. The voters, street protesters in Europe and supporters of Trump/Sanders are mad as hell with the establishments’ inertia to keep their promises, which has fueled a rage transcending political boundaries. And, institutions like their central banks are also under fire because most investors have no idea what central banks are really doing with their trillion dollar experiments .. In this world of cheap credit, negative interest rates has produced a topsy-turvy world where debtors are paid to borrow and savers are again penalized. What this means is that the underlying debt burden just mounts higher with increased volatility. Worrisome is that junk debt yields are estimated at 8.5% and the debt to asset ratios are creeping up led by leveraged energy stocks, recent M&A busts and share buybacks. Debt defaults have become a reality. Eight years ago the governments bailed out Wall Street. With empty government coffers, Cyprus and now Canada, have implemented a 'bail-in' regime that leaves depositors with the bill. Not only must you pay the bank to hold your cash but it is now at risk to bailout the very same institution. That’s why gold is a good thing to own .. Gold is a beneficiary of negative interest rates and its best performance in four decades is due more to haven buying on fears of fragile global growth exacerbated by our central banks’ lame attempts to revive the global economy, saddled with too much debt. After eight years of central bank intervention using unorthodox and experimental measures, our monetary maestros have simply run out of options .. We believe their gold purchases and repatriation are part of the refashioning of the global monetary architecture, ending U.S. financial hegemony. So of course the price of gold can and will go much higher in the months as years ahead."
link here to the essay

No comments: