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Why Blackrock (And Every Other Bondholder) Is Freaking Out (In 1 Simple Chart)
Just last week, we explained why Blackrock - the largest asset manager in the world - is gravely concerned about the 'broken' corporate bond market. Simply put, thanks to The Fed's continued presence in the Treasury market has left the corporate bond market a liquidity-starved ticking time-bomb if faith in the stability of defaults ever falters (with firm balance sheets at record high leverage) and "selling" begins. As the following chart from Deutsche Bank highlights, the current level of liquid assets as a proportion of total HY assets is about as low as it has been tracking data back around 25 years.
In other words, the massive (and likely levered) positions The Fed has forced the world to take on by its repression face a dramatic liquidity risk cost if they are ever to 'realize' any gains from the Fed's handouts (by actually selling).
That's what every bond manager 'knows'...
* * *
To BlackRock, the dangers of price gaps and scant liquidity have been masked in a benign, low interest-rate environment, and need to be addressed before market stress returns.
...
The risk posed by investors trying to dump bonds after the Federal Reserve raises interest rates is “percolating right under” the noses of regulators, he said.
* * *
And so here we are...
1. Corporate Bond Managers "KNOW" they can't sell as much as they want/need to (due to the illiquidty), so..
2. They Hedge.. first through CDS (HY CDX small sample and does not cover risk of the lowest crappiest names that many firms have bid up as the search for yield accelerated),
2a. or HYG/JNK (but that includes rate risk so the hedge is liquid but less accurate), so...
3. They Hedge... through stocks (beta-adjusted hedges - akin to capital structure arbitrage - can help more idiosyncratic risk control in the HY portfolio), and
4. They Hedge... through volatility (credit spreads and equity volatility are explicitly linked via the firm's asset - or business - uncertainty).
That's why small caps have suffered more as credit fell (as more directly linked to the weaker balance sheets).
How this ends... the hedges start to fail (i.e. MTM differences between portfolio delta and hedge delta grow large), someone else decides to "sell" and throw in the towel and prices gap down in HY... and the avalanche begins...
That's what Blackrock fears.
* * *
Bonus Chart 1: Forget "best balance sheets ever", Leverage has never been higher...
Bonus Chart 2: The Fed is leaving the building and it's time to realize this 'spread'...
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Further proof rates must not be allowed to rise.
This may be true but inflation will turn the bond paper into ass wipe paper. Two ply please.
when the asset bubbles burst (and it will)
DEFLATION
Leveraged assets will deflate; commodities and consumers staples at the retail level will go up at an even faster clip than they have. Depreciating fiat will chase after short-term needs, and away from assets.
It's not an either/or - it's both.
not a chance
soaring $US = importing deflation
NO inflation till it shows up in wages ... and it won't
You must not buy anything.
setting aside latest CPI being negative
QE/ZIRP disinflationary (see japan)
will prove deflationary when asset bubbles burst
Blackrock is not freaking out. And they will never will.
Why, just last week I said their complaining was an a priori excuse for not being able to sell all sorts-a garbage into a down market.
Alcoholic thinking. (While I really caused my own problem) I'm a victim and everybody else is responsible for the malady.
If those people didn't put in redemptions I wouldn't be faced with giving them back their own cash.
Let's put some gates on withdrawals
There.
That'll show 'em.
As a fellow AA'r (by the grace of God), your analogy is brilliant.
As a fellow AA'r, I'm now only interested in Opiates, thanks to my Higher Power. heh-heh.
What’s the big deal?
Liquidity is only a keyboard stroke away.
Because if it keeps on raining the levees gonna break.
http://www.youtube.com/watch?v=NRUTJAO7uLE
The boys at Blackrock cornholed my mother. I'll never forgive them.
Beautiful....
I'm seeing increasing margin calls for them ;)
Bullshit. Name one society/currency that collapsed/died because their purchasing power was too strong. The entire planet cannot be japan...
totally fucking stupid.
where did i say any of that?
next cycle is deflationary ... doesn't mean it is bad (well, maybe for wall street) ... or that it will last
Agreed.
First devastating deflation, then moar printing.
The double whammy of Wall Street.
People must beg for their destroyer.
Just another black swan amongst the growing flock...and they are staying around for the winter.
Certainly hope so. But it can never occur without losses from excess credit creation being realized. Not "recognized" like in a few footnotes to financial statements, REALIZED as in losses being borne and absorbed. And that, my friend, is when risk can be re-priced and there will once again be opportunity to make some serious $$$. Central banks around the globe will fight this to their last breath. And that is the problem. They are all simply buying time until (hopefully) reserves can be built to absorb the losses. I think they are running out of time.
Inflation now is due to the free money credit bubble. When that implodes, when no amount of stimulus gets the economy high anymore, the crash will cause deflation. My guess is that they will attempt to solve the problem by papering it over again. Huge helicopter drops which will hit wages directly and boom, we are Zimbabwe.
I know that if they did a helicopter drop to the populace, the first thing I'd do is try to convert it to something tangible before everybody else did. Something that I'd find useful that not everybody else would think of right away.
...so why wait for the helicopter drop to do so?
Something tangible that I would not be able to afford otherwise.
Cmon dude BBY has financing for the new 80" 4k idiot boxes. Yes we can afford it!
I give up. What is the answer? what is it you wouldn't be able to afford ?
a lot of inflation not related to monetary policy
housing? a lot of games there. Banks allowed to mark assets to models ... and keep REOs on balance sheet rather than liquidate ... and when they do sell it is via bulk to investment groups to avoid price discovery (not listed on mls)
health care? cartel. drugs $100 across the border. $10,000 in US. Much cheaper to fly to india for procedure than have done in US.
Education? Allowing kids to sign loan documents for tens of thousands of dollars. No incentive for institutions to cut costs when Uncle Sam more than willing to dole out $US.
who will be raising wages? the gov't for gov't employees? i don't see wage inflation in the corporate world happening. most corporations think they're being EXTREMELY generous when they give you a 3% salary increase...and only those who 'exceed expectations' get that.
Think massive tax refunds as if that has never happened before.
Wage inflation will not be the mechanism for inflation and, ultimately, currency collapse, aka the domestic ill effects of the reversal of longstanding global dollar hyperinflation. The government bidding in the physical plane will be the mechanism that causes the spiral in prices as Uncle will not curtail his spending in the absence of sufficient support for his debt. The process whereby debt purchases disintegrate is underway, but it has not reached the critical stage that will engender runaway prices in the physical plane.
If youi go on saying rational things like this, you're likely to upset people, you know?
Inflation can show up as a complete loss of confidence in the currency, regardless of wages.
That's the hyperinflation scenario. HI is not a monetary, it's a psychological phenomenon.
And it probably will happen, after the deflationary collapse.
You make a simple mistake, there are 2 types of inflation. You are referring to demand-pull inflation (wages), arguably the better kind of inflation. Increase in the money supply will eventually and ALWAYS cause cost-push inflation; the bad kind with no increase in wages.
The Shemitah Year has predicted *ALL* market corrections, depressions, and pullbacks with 90% accuracy.
"The greatest financial turning points, peaks, or long-term collapses of the past forty years that have taken place within the biblical Year of the Shemitah or its autumn wake is 100 percent!
• Where there has been both a financial collapse and an economic recession, the period connecting their starting points has fallen within the biblical Shemitah 100 percent of the time!
• Thus, from the forty-year period beginning in 1973, every single one of the five greatest financial and economic peaks and collapses have converged, clustered, and taken place according to the set time of the Shemitah.
Cahn, Jonathan (2014-09-02). The Mystery of the Shemitah: The 3,000-Year-Old Mystery That Holds the Secret of America's Future, the World's Future, and Your Future! (Kindle Locations 1239-1245). Charisma House. Kindle Edition.
On September 17, 2001 the stock market experienced a 684 point drop or 7.1% which occurred EXACTLY on the 29 Elul of the last day of the Shemitah Year.
Exactly to the DAY 7 Hebrew years later on September 29th, 2008 the market drops 777 points or 7 percent EXACTLY on the 29th of Elul the last day of the next Shemitah Year.
TODAY FYI is the FIRST DAY OF THE SHEMITAH YEAR. It Starts on the 25th of September 2014 and will run until 13th of September 2015. And Ironically the market started tanking perfectly in accordance with the opening day of the Shemitah. I would *RECOMMEND STRONGLY* that everyone read this book.
Don't encourage the anti-Shemites.
He's just advertising the book and posting on many different websites.
But nevertheless I find it very interesting:
www.wnd.com/2014/09/get-ready-shemitah-begins-this-week
Head of the IMF, Christine Lagarde, 2014 will be extraordinary: www.youtube.com/watch?v=QYmViPTndxw
Henry Paulson, one year advance knowledge of crash: www.youtu.be/uTj9HEt3Mc0?t=22m52s
rafzen.wordpress.com/2013/12/03/kliczko-lubawicz-kaczynski-and/
www.chabad.org/therebbe/article_cdo/aid/695370/jewish/The-President-Cons...
snippits-and-slappits.blogspot.co.at/2012/02/anatomy-of-one-world-religion.html
davidduke.com/the-white-house-honors-hateful-jewish-supremacists/
Google: lubavitch white house.
"All with 90%"
Inflation will not show up in wages. The combination of immigration (legal and illegal) and ever increasing automation will continue to depress employee wages low until the Reovolution comes.....or never. Probably never.
Margin calls Out tonight.. Who wants to be long over the WEAK-end?
If liquidity becomes scare everything is sold.
Conflagration ? yesh I think that covers it.
ITS A TRAP SIRS
And soon. Thats the reason the bankers want the SDR & SDRM, and want it now.
That does pit them against the MIC, which has nearly outlived its usefullness to them.
They've known this day was coming from day one ,so it will be interesting to see what they
have planned.
EKM does have it partly right.
Best any here can hope for is to not be trampled by the giants fighting it out.
We can always hope one of them trips over us and impales himself on a skyscraper.
Isn't the MIC owned by the banksters? Maybe not top military command but the industrial complex. I think the sociopaths will fight for top dog. It's the power and control they're addicted to, not the money. Someone asked Rockefeller, don't you have enough money, how much is enough? Just a little bit more was the answer. More than the other guys, being the pure alpha.
Hope you're all right. I'm not much of a fan of the military, the business of murder isn't cool to me. I do have more faith in a military junta than our current political establishment. At least some of the top miliitary men still believe in honor. There is nothing approaching honor in top politicians and beaurocratys, only personal ambition. I hope the military shoots all their asses.
Not gonna happen, but what if it does? Is deflation really a bad thing? Lower food prices, lower energy prices, lower health care prices. But do you really see any of these things happening?
Food prices: Given the severe drought in California (More than half the nation's fruit, nuts, and vegetables come from here. California is the nation's number one dairy state.), don't think so.
Energy prices: With the Mid East clusterfuck and the administrations bungling of our energy bounty, not likely in the long run.
Lower Health Care Costs: Don't make me laugh.
So, unless you're talking about cars, big screen TV's, computers, etc., I just don't see it. Besides, by definition you cannot have deflation when the money supply is increasing exponentially.
But what if all the money is tied up in cash?
“I hired a counterfeiter the other day. I told him, “As for your salary, how much you make is really up to you.” I love a business model where the employee pays the employer.”
Jarod Kintz
Ha. Ha. t ha t's pretty funny; "how much you make is really up to you". Ha-Ha.
Some confusion here:
but what if it does? Is deflation really a bad thing?
I don't fear deflation and I don't think anyone else here does either.
We fear the GOVERNMENTS / CENTRAL BANKS RESPONSE to the deflation
Conserve T-Bills, wipe with both sides.
Three ply. And make it soft, because I'm pretty sure that our assholes are going to be sore from the financial fucking.
Game.
Set.
And Motherfucking match, Bitchezzzzz.................
You mean that they don't want rates to rise. At this point, whether rates rise of not is now out of the Fed's control and once that becomes the consensus view, all hell will break loose. It's all about perception.
Ding ding ding ding!
Cant get over this view that the Fed is omnipotent. They are lost.
Doesn't matter Tim. They will.
The Fed will do a 2004-2007 esque rate hike. This will turn everyone who's been front running the Fed in, to front running it out. As bonds trade down , this will flood the forex markets with dollars which will cause an uptick in velocity . As velocity goes up, we will get an uptick in price inflation. Which will cause more bond outflows and more dollars on the forex market. This is where we get the 70's all over again. Then the Fed will try and raise rates to stop the outflow. This is what Bernanke said he can stop in 15 minutes. At this point, it's all over folks
I don't follow the logic of the Fed intentionally losing control of the currency markets. Unless, they intend on destorying USD confidence, but the geopolitical landscape makes this a much different time than the '70's.
We'll see, I guess.
They are the ones saying that they are going to raise rates IE, turn the front runners toward the exit
The Federal Reserve will never (yeah, i know ... never say never) get overnight rate over 1%
anyway, long end of the curve will just yawn if rates raised ... inverted yield curve will show who's the boss ... and it ain't the Fed
It's the Tacoma Narrows Bridge all over again!
+100. Yup. The Fed, whether it wants to or not essentially has to provide the liquidity to protect its own rate suppression initiative(s). No more whistling past the grave yard - it must serve as an intermediate provider of liquidity to allow a sort of orderly process for positions to close without rates sky rocketing.
It's ironic actually. The very market the FED sought to control (bond) in effect, now controls it.
Dontchya just love it when a plan comes together? It's almost like instead of the bond market calling out the FED, it's the stock market calling them out instead and the question becomes, in my opinion, is how much dry powder or how many tools are left in Bernankes tool belt that Yellen can actually utilize without full blown In your face currency dilution.
"The FED can change what things look like but the FED can never change what things really are." (James Grant, 2013). Nuff said.
Let's go golfing!
They are in a box (named Hobson's Choice) from which they can't escape. If The Fed becomes the marginal toxic sludge (aka bond) buyer they screw pension schemes from Portland Maine to Portland Oregon. And if they step away from that role then
rates will move higher, as they have done since it was merely hinted that QE would be wound down. But, guess what. They will be back in the QE business. They can check out (any time they like) but they can never leave because ultimately The Fed is government's bitch, and Government will seek to keep borrowing costs down until they can't. However, as soon as it becomes apparent that The Fed is well and truly in a mafia vortex, "Everytime I try to leave, they suck me back in" the whole shebang will not be long for this world.
In a stock market crash, you'll see a flight to "safety." So long as they can keep other parts of finance from coming apart at the seams, that's one method of keeping rates down, albeit a temporary way. After that, government theft of retirement accounts is another way. For the retirees' "protection," of course.
However, during those, if other shit starts to happen, they very well could be forced back into QE, and once those are done, I don't see any other options than QE.
Yes, bond yeilds come down for a spell. At this point such an eventuality, and those like it, count as happy accidents.
You guys forgot to remember the convienient "unforeseen" attack on the homeland where all the cops and DEA and US Marshalls and FBI guys are all watching porn and fail to notice the brown skinned marauders with big fat back packs of c-4 into our subways or other soft targets.
Yes, we may see a correction, but we'll also see a wonder artificial QE without any Fed intervention. Now, if Janet was smart, she'd be willing to let a few institutional holders buy some of her bonds on her balance sheet, allowing her to offload some of the sludge.... but my guess is that she'll just purchase new bonds to help the treasury out.
Mark my words, when things get close to getting out of hand, we'll see some kind of attack whether here or in a western european nation, just to keep things orderly in the credit markets.
Safe haven buying; bidding up the price of the underlying, drives down the quoted interest rates; but this is a temporary situation. and likely to reverse badly; well, somewhere between badly, and very, very, very, badly.
yes; agreed.
Agreed. You're a pretty smart penguin. sorry if you're not a penguin, it's hard to tell.
Ha, next you'll be saying I'm not a sentient, wooden robot (formerly made of metal!) -- you can kiss my splintery, wooden @ss!
NO. the government is the fed's bitch. jamie and lloyd own suckbutt's like obama and schumer. they proved once already. there MIGHT be a time when the populace wakes up, and they could correct this through voting for people that would change legistlation, but it will not happen anytime soon.
the .gov is FED's bitch. if jamie and lloyd want to cash out now on top - they will. nobody in congress has any say on when or how the fed will stop buying and start selling.
all sellers and no buyers when the mass mind rolls over; it's gonna be interesting.
What is this "default" you speak of? Shirley you jest.
AIG will save the day. Well, as soon as Greenberg's investor lawsuit is settled accordingly.
Default is not in our stars dear Brutus, but in ourselves.
Obligatory "And don't call me Shirley".
I've been Defcon 5 for years
cash and long bond Ts
don't mind being a turtle, at all
just waiting to pick through the wreckage to realign
Both cash and long bond T's will eventually be worthless.
won't matter
they'll be golden till the next downturn (put me down for sooner rather than later)
and then i'll be skedaddling out of both
You have a good point. or a well reaoned position. It 's so bloody difficult to be sure of anything. I guess I'm just predjudiced in favor of Silver.
My thesis is that the price of the Long Bond has already topped; what is your take on this ?
"eventually doesn't have any usable definition. If you want to discuss this, it will have to be in terms of "years"; or months; something that has a knowable meaning.
How did that work in the 70's ?
this ain't the 70s ... haven't you noticed ... disco still dead ...
As if you could drive on the autobahn using your rear view mirror. LOL.
Just a shitty comment: as the defense condition number is lowered, you're put on higher alert. For instance, DEFCON 2 is more severe than DEFCON 4.
oops, my bad
make note: watch more war movies
Yeah; got me too. Don't watch movies at all, of course. I suppose it'll come in handy in cocktail party conversation though; except I don't go to cocktail parties either.
My kind of people. except I do watch the occasional movie that's been well vetted by someone I trust. There's some good stuff out there, just low probability of finding it randomly
As I recall, should it ever get to DEFCON 2, not very many lifeforms will be around to see DEFCON 1.
Strange how you signed up 5 weeks ago to inform everyone what you did 5 years ago.
Undoubtedly, a deep conspiracy. What out ! They're all out to get you !
You sure have a lot to say.
This hot chick once asked me if I like bondage. I said "fuck yeah, I work for Blackrock" then walked away.
I'm guessing this hot "chick" was named Lola.
I can't wait 'til the part when the avalanche reaches Uncle Warren's infallible bank holdings.
https://tammyheff.files.wordpress.com/2013/01/calvin-hobbes.gif
The fed still has ultimate control of the interest rates. If interest rates start to rise, the fed will open the discount window. The government can then borrow at no cost. The trick is that this needs to be kept a secret otherwise it might cause a bit of a panic, and countries will go to great lengths to avoid doing trade in dollars.
You are aware that ppl thought that in the 60's when rates were under 2% and gold was $35 eh ? And that was when the U.S. was still a creditor
LOL. And as they like to say, "and how did that work out, eh?".
Federal Reserve controls the short end (overnight)
Mr Market controls the long end
Wrong.
The fed is not actually in control of interest rates. The primary and secondary markets are. The Fed can purchase this debt. But they don't otherwise control the clearing prices for bonds.
The discount window will not save the corporate bond market. Nor can corporate and particularly junk bonds be used as collateral to access the discount window. And hedge funds or mutual funds use the discount window. The discount window is for member banks of the Fed.
Federal Reserve opened to discount window to a slew of folks during the crisis. Who can forget the "coincidence" of Warren Buffet's big investment in goldman sachs ... shortly before GS gained access to discount window.
Even harley davidson was in on it.
"But in the crisis, to support financial markets, we had to provide liquidity to nonbank financial institutions as well"
http://www.federalreserve.gov/newsevents/speech/kohn20100513a.htm
Speaking of Blackrock and their concerns about FI liquidity...
A while back I posed the question as to whether or not illiquid financial instruments could really be made liquid by the miracle of securitization.
The short answer seems to be: only if/when the securitizing entity is actively buying the illiquid financial instruments in question.
It seems that this issue is now an acceptable thing to worry about in Polite Society. Matt Levine covers it here (featuring Blackrock's concerns) following the revelation that Pimco has been in the habit of buying odd-lot bonds for cheap (due to their illiquidity) in the marketplace, then marking them to model (higher) via a third-party pricing service in their always super-liquid ETF(s).
The only way to re-liquify the system and maintain central bank solvency is for gold to go parabolic (assuming the central banks actually still have the gold). If not, when they they will all get hung in the public square because it is the ONLY semi stable path.
The only way to re-liquify the system and maintain central bank solvency is for gold to go parabolic (assuming the central banks actually still have the gold). If not, when they they will all get hung in the public square because it is the ONLY semi stable path.
The suppression of gold prices is the best indicator that Ft Knox is filled with 8,000 tonnes of Wonka bars and yellow-painted tungsten.
Bingo.
The gold was 'loaned' decades ago. When it's time to collect, we'll turn to the guy that 'owes' it to us, that guy will then turn to the next guy it got 'loaned' to until the last guy turns to see nothing there to collect.
Paper promises, paper deliveries. Once physical is demanded - the peasants will start to notice that the king is indeed naked. That's when the fun starts.
correct.... and even that is probably in disrepair, since nobody will ever be allowed in... that is, nobody that will emerge and breathe air for very long
it matters not whether the CB's "have gold". since it is non-auditable, it only matters whether anyone believes or not.
"good faith and credit". In fact, the mere fact that you bring up Gold impunes YOU as a "konspiracy Kook"!!
Articles like this are why CNN Money can EABOD.
Kudos, Tyler.
Hah! +10^6
10 and six carats ? is that a lot ?
You must be a FORTRAN programmer, so I'll translate for you: 10 R = 10.0**6.0
C Which equals 10^6 (1000000.0)
Inflation is a bitch and deflation is a cunt!
i don't mind bitches if they've got hot cunts. brings it on. i'm stacked and ready.
bitches need to get paid too, and they tend to like cash and shiny relics. somehow - not a lot of them like amex cards.
and i don't blame them (the bitches).
only greenspan takes amex, and i don't think many people really wanted to buy what he 'shoved down all of our throats' (and i was meaning to be graphic, but thanks greeniebeenie, because that's what he did).
tick... tick... tick...
Somebody needs to hedge some moar.
Long nail guns.
I jounced the limb.
Japan says we're nowhere near the precipice - not even close.
this knife edge can be walked a long, long, long ways. likely longer than any here will live
Here ya' go: the Perfect Antidote to this Poisonous ChickenLIttle article that Ty had the gall to post -
:
http://seekingalpha.com/article/2292095-need-7minus-8-percent-yields-in-...
Give each US citizen 1M backed by gold. Problem solved.
LOL.
I thought they were freaking out because they just figured out that "the truth will out"... eventually.
BRING IT ON!!!! JUMP, you f---kers...!
now, now. calm yourself. try the de-caf. it tastes okay, really.
Ha Ha Fink, you sucker, it’s payback time. Remember me, the London Whale Master? Well you now own the New York Godzilla.
Jamie D.
the house of cards............... now the wind..............
When this house goes down it will take down the house net door. The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy.
QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system. In postponing this collapse the Fed has created a whole slew of new problems. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html
i'm guessing all that hedging is free. /s
good for you jack [/gary]
tyler, this is one of the most important posts. i think a lot of weak companies, who probably should go bankrupt, have taken advantage of low-interest rates to sell corporate bonds to keep the charade going on for a while.
the real stock-picking in this current environment is to identify who these companies are, and initiate a short.
The low interest rates is a "oneoff" bonus to many companies. This one tine bonus flowed directly to their bottom-line as profits.
Can't we just add more chairs and put in a few more bullets?
Let's invite the Sabines to a new Religous festival, and tell them to bring their wives and daughters.
Tomorrow will most likely retrace most/all of today's loss.
Total mind-fuck market.
“How this ends... the hedges start to fail”
It’s all vaporware. Try to have a paid-off house. At least you can burn before the taxman seizes the place.
Hoard numbers into the thousands are going to be pissed and want to kill you for being you.
Obama already booted old-stock generals and has begun filling rank and file with illegals.
It might soon become apparent the economic efficiency of credit is beginning to collapse and the additional money poured into the system coupled with lower rates can no longer drive the economy forward. When this happens we are at the end game.
At some point the return on loaning money is simply not worth the risk! Why do you want to loan money if most likely you will never be repaid or repaid with something that is totally worthless? When this happens the only safe place to store wealth will be in "tangible assets" and the only lenders will be those who print the money that nobody wants.
The collapse of credit can pose major problems such as what we saw when many sellers were forced to demand payment up front before shipping goods in 2008. More on this subject below.
http://brucewilds.blogspot.com/2014/06/the-economic-efficiency-of-credit...
I'm starting to think Zeroshit is part of the Problem-Reaction-Solution with a whole lot of intellectual bullshit.
I'm starting to think Zeroshit is part of the Problem-Reaction-Solution with a whole lot of Intellectual bullshit.Its easy-all Lizards and there Allies need to be exterminated of the face of this planet once and for all,Or humanity will never have peace.
If the economy was healthy and balanced we would not be experiencing slow growth while massive amounts of money are being printed and poured into the system. The crux of our problem remains in the fact that both people and governments have lived beyond their means by taking on debt they cannot repay. Over the last several decades we have created entitlement societies built on the back of the industrial revolution, technological advantages, capital accumulated from the colonial era, and the domination of global finances.
Promises were made on the assumption that the advantages we enjoyed would continue in both Europe and the US. Ever greater prosperity and entitlements were to be sustained through debt financed consumption growth. In that eerie fantasy world, debt fueled consumption was to be the catalyst to bring about evermore growth. Debt does matter and the following article delves deeper into why kicking the can down the road will ultimately fail.
http://brucewilds.blogspot.com/2014/08/modern-monetary-theory-is-wrong-d...
A look at the future of the 10 Yr --
http://www.globaldeflationnews.com/10-yr-treasury-index-yieldelliott-wav...