Phoenix Capital Research's blog
Something MAJOR is happening in the financial system right now. You DO NOT get 20+% moves in the US Dollar during normal, healthy environments.
The US Dollar rally, combined with the ECB’s policies are at risk of blowing up a $9 trillion carry trade.
We are much closer to the end of the Central Bank-fueled $100 trillion bond bubble than ever before. This could be the beginning of the end.
The fact that Central banks are now openly cutting interest rates to NEGATIVE should tell you how far along we are in terms of funding problems (at these rates, bond holders are PAYING the Government for the right to own bonds). From a baseball analogy we’re in the late 8th, possibly early 9th inning.
At this point the current financial system was irrevocably broken. We simply had yet to feel it.
At this point, the writing is on the wall: nothing can be taken for granted. No assurances or promises or proclamations will hold.
We still have a LONG way to go to catch up with Oil, Copper, and Junk Bonds.
The Fed may raise rates a token amount this year, but the move will be largely symbolic. You can bet there will NEVER be a shock and awe interest rate raise.
Take note, Copper just broke down out of the massive wedge pattern formed after the 2008 Crash:
The Fed likes to claim that it is trying to grow the economy or boost employment, but both claims are false.
All of this makes no sense at all until you consider that ALL Central Banking actions have been focused on one thing: making sure the global bond bubble DOESN’T IMPLODE.
Globally, there are over $22 TRILLION worth of derivatives trades involving commodities. ALL of these were at risk of blowing up if the US Dollar rallied. And the Dollar is rallying HARD.
You only get these kinds of moves when the STUFF IS HITTING THE FAN. And this mess has only just begun.
To put this into perspective, the Credit Default Swap (CDS) market that nearly took down the financial system in 2008 was only a tenth of this ($50-$60 trillion).
Stripped of accounting gimmicks, earnings are overstated by 86%. This means the S&P 500 is sporting a REAL P/E of over 30. So much for the argument that stocks are cheap.