Phoenix Capital Research's blog
Any entity or investor who is using aggressive leverage in US Dollars will be at risk of imploding
Central Bankers bet the financial system that their academic theories would work, despite the countless real-world examples showing that printing money does not generate growth.
Today, China remains central to the notion that the world is in recovery. It is believed to be growing at 7%: not as rapid as the 9% growth we’re used to seeing, but still dramatically higher than any of large country... Only the whole thing is bogus.
The era the phony recovery narrative has come unhinged. We have now entered a cycle of actual price discovery in which financial assets fall to more accurate values. This will eventually result in a stock market crash, very likely within the next 12 months.
In the simplest of terms, Abenomics was a form of economic warfare. It marked a transition in global Central Banking policy from an era of coordination to an era in which it is each country/ Central Bank for itself.
Nothing exposes the fallacies of the Fed’s policies like its horror at the prospect of raising rates even a little bit. Rates have been effectively zero for five years.
Europe is going to begin both capital and border controls.
What will happen to the markets when the Western welfare states finally go broke? It will make 2008 look like a picnic.
We need to consider the Cyprus “bail-in” and its implications. The reason for this is that this tiny country has provided the world with a template of what is eventually going to be a global phenomenon.
The situation in Greece boil down to the single most important issue for the finacial system, namely collateral.
True, the world faces issues today… so it’s not odd for bond yields to be lower… but are those issues on par with a disease that wiped out 25%+ of Europe’s population… or the single largest military conflict in history?
There are in fact problems that are too big for Central Banks to manage.
The US stock market is trading at 1929-bubblesque valuations, with a CAPE of 27.34 (the 1929 CAPE was only slightly higher at 30. And when that bubble burst, stocks lost over 90% of their value in the span of 24 months.
This is why Bernanke said rates won’t normalize in his lifetime: any normalization means a crisis magnitudes larger than the 2008 crash.
Historically, both times stocks registered similar readings, the markets plunged 50%-90% in the next two years.