Friday, July 08, 2016

Here We Go Again
"Nearly everywhere on the planet the giant financial bubbles created by the central banks during the last two decades are fracturing. The latest examples are the crashing bank stocks in Italy and elsewhere in Europe and the sudden trading suspensions by three UK commercial property funds .. IF this is beginning to sound like the financial crisis, that’s because it is. And the denials from the casino operators are coming in just as thick and fast .. The supreme irony of the present moment is that the perma-bulls insist that there is no lesson to be learned from the Great Financial Crisis. That’s because the single greatest risk asset liquidation of modern times, it turns out, was also, purportedly, a one-off event .. It can’t happen again, we are assured. After all, the major causes have been rectified and 100-year floods don’t recur, anyway .. There is a reason for such reckless obduracy, however, that goes well beyond the propensity of Wall Street punters and robo-traders to stay at the tables until they see blood on the floor. Namely, their failure to understand that
the current central banking regime of Bubble Finance inherently & inexorably generates financial boom & bust cycles that must, & always do, end in spectacular crashes."
- David Stockman*
link here to the essay
[While most people think of the stock market when spectacular crashes are mentioned, Cliff Küle has tried to warn that the coming crash is almost certain (it is mathematical) to be in bonds, particularly government bonds. Government Bonds are supposed to be the safe & secure foundation on which our financial system has been built. This is not solid ground; it is paper promises from mostly morally & financially insolvent governments. The government bonds which are being issued these days are mostly bought with money created by the banking authorities from thin air! It is incredible that this situation has not created panic (yet). A currency catastrophe unlike anything we have seen in our lifetimes is heading our way. Use your money to buy THINGS of permanent & lasting value (including certain stocks) because the currency being issued & controlled by bankers & politicians is turning into that which it has been for most of our lifetimes .. a lot of hot air.] 

1 comment:

Anonymous said...

In the 1960's there was a stop go cycle related to inflation. It was implicitly understood by the financial planners of the day that ithere had to be recessions to clear out mal-investment every now and again ... well at least in the UK and the USA.

Now we have the silly Germans and Chinese with all sorts of economic power but without much economic sense calling the shots. The Chinese in particular think it can all be planned in the good old commie way. There is no need for slow downs. The Germans have their awful European responsibility now. It is not easy running the Forth Reich. Their typical arrogance helps as well. No need for slow downs or to plan and engineer recessions.