Silver And Gold News

We’re in the crack-up phase. I think there are four big characteristics of this which will shape the way the economy and the marketplaces unfold even as we go forward. You’re heading to see increasing desperation and extreme central bank or investment company financial repression because they have become themselves decorated so deep into the corner that they’re lost and eager.

Almost week by week, we’ve another central bank or investment company – this week, it was Sweden – decreasing their money market rates into negative place. The Swiss Bank or investment company has already been there, the Denmark Bank or investment company is there, the ECB will there be on the deposit rate, the lender of Japan’s there. All of the central banks of the world now are desperately driving rates of interest into negative territory. I think that they’re lost; they’re in a race to the bottom whether they recognize it or not.

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The central bank or investment company of China can’t sit down still a lot longer when the reminbi has appreciated something similar to 30% against Japan yet because of the massive bubble of financial extension that’s being created there. So that’s the very first thing going on. Central banks out of control in a race to the bottom, sliding by the seat of their jeans, creating incoherent ideas as each goes really. The second thing is increasing market disorder and volatility. Within the last three months, the stock market has behaved just like a drunken sailor. But it’s really simply a bunch of robots and day investors that have traded chart factors until someone can find out what is occurring directionally in the world.

It has nothing to do with information or inbound data about real life. Today the 10-12 months German bond trading at 29 We have.5 basis points. Well, the German economy’s been fairly strong, fueling the Chinese boom. That export increase over is. The Chinese economy is faltering. Germany will have its problems.

But obviously, 29 basis points on the 10-12 months is irrational, regarding Germany even, to state nothing of the 160 on the market on the 10-calendar year for Spain and Italy. Both of those countries are in deep, deep fiscal decline. There is absolutely no obvious way for them to seek out of your debt capture that they’re in.

It’s going to worsen over time. There’s a huge risk in those bonds, especially because there’s no warranty that the European union will stay intact or the euro shall endure. We’ve something like four trillion worth of sovereign debt spread over Japanese issues, the major Europe that are trading at negative yields.

Obviously, that is one, second and irrational, completely unsustainable. Yet, it’s another feature of what I call these disorderly markets. Investment is currently arriving home to roost. It will be driving a huge deflation of commodity and commercial prices worldwide. 200. Obviously, it’s seen in the whole essential oil patch.

Look at the Baltic Dry Index. That is a measure, one, of faltering demand for shipments and, two, massive overbuilding of bulk carrier capacity as a result of this central bank driven increase that we’ve acquired within the last 10 to twenty years. So that is going to be ripping through the economic climate, the overall global economy, in ways that we’ve nothing you’ve seen prior experienced. And so, in ways that are hard to predict what all, you understand, the ramifications and cascading effects will be. And then, finally, clearly, demand has run smack against peak debt — I think that’s the right word for it.

We had a significant study come out within the last about a week from McKinsey, who do a very good job of endeavoring to compute, total, and monitor up the quantity of credit excellent, private, and public, in the world. 140 Trillion at the time of the crisis. 15-17 Trillion of new GDP for all that effort.

And I believe that is a measure of why the fundamental era is changing. That this boom has ended and the crackup is underway when you see that kind of minimal produce from the huge amount of new debts that has been produced. 200 Trillion, the figures from China are even more startling.