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The Central Banks Are Losing Control Of The Financial Markets

Tyler Durden's picture




 

Submitted by Michael Snyder of The Economic Collapse blog

Every great con game eventually comes to an end. 

For years, global central banks have been manipulating the financial marketplace with their monetary voodoo.  Somehow, they have convinced investors around the world to invest tens of trillions of dollars into bonds that provide a return that is way under the real rate of inflation.  For quite a long time I have been insisting that this is highly irrational.  Why would any rational investor want to put money into investments that will make them poorer on a purchasing power basis in the long run?  And when any central bank initiates a policy of “quantitative easing”, any rational investor should immediately start demanding a higher rate of return on the bonds of that nation.  Creating money out of thin air and pumping into the financial system devalues all existing money and creates inflation.  Therefore, rational investors should respond by driving interest rates up.  Instead, central banks told everyone that interest rates would be forced down, and that is precisely what happened.  But now things have shifted.  Investors are starting to behave more rationally and the central banks are starting to lose control of the financial markets, and that is a very bad sign for the rest of 2015.

And of course it isn’t just bond yields that are out of control.  No matter how hard they try, financial authorities in Europe can’t seem to fix the problems in Greece, and the problems in Italy, Spain, Portugal and France just continue to escalate as well.  This week, Greece became the very first nation to miss a payment to the IMF since the 1980s.  We’ll discuss that some more in a moment.

Over in Asia, stocks are fluctuating very wildly.  The Shanghai Composite Index plunged by 5.4 percent on Thursday before regaining all of those losses and actually closing with a gain of 0.8 percent.  When we see this kind of extreme volatility, it is a very bad sign.  It is during times of extreme volatility that markets crash.

Remember, stocks generally tend to go up during calm markets, and they generally tend to go down during choppy markets.  So most investors do not want to see lots of volatility.  Unfortunately, that is precisely what we are witnessing all over the world right now.  The following comes from the Wall Street Journal

Volatility over the last days has been breathtaking, especially in bond markets,” said Wouter Sturkenboom, senior investment strategist at Russell Investments. He said that it rippled through equity and currency markets, which overreacted.

 

The yield on the benchmark German 10-year bond touched 0.99%, its highest level since September, before erasing the day’s rise and falling back to 0.84%. The 10-year U.S. Treasury yield, which hit a fresh 2015 high of 2.42% earlier Thursday, recently fell back to 2.33%. Yields rise as prices fall.

Sometimes when bond yields go up, it is because investors are taking money out of bonds and putting it into stocks because they are feeling really good about where the stock market is heading.  This is not one of those times.  As Peter Tchir has noted, the huge moves in the bond market that we are now seeing are the result of “sheer panic in the market”

In a morning note before the open, Brean Capital’s Peter Tchir wrote: “It is time to reduce US equity holdings for the near term and look for a 3% to 5% move lower. The Treasury weakness is NOT a ‘risk on’ trade it is a ‘risk off’ trade, where low yields are viewed as a risk asset and not a safe haven.” And Tom di Galoma, head of fixed-income rates and credit at ED&F Man Capital Markets, told Bloomberg, “This is sheer panic in the market from the standpoint of what’s been happening in Europe … Most of Wall Street is guarded here as far as taking on new positions.”

But this wasn’t supposed to happen.

After watching the Federal Reserve be able to successfully use quantitative easing to drive down interest rates, the European Central Bank decided to try the same thing.  Unfortunately for them, investors are starting to behave more rationally.  The central banks are starting to lose control of the financial markets, and bond yields are soaring.  I think that Peter Boockvar summarized where we are currently at very well when he stated the following…

I’ve said this before but I’m sorry, I need to say it again. What we are witnessing in global markets is the inherent contradiction writ large that is modern day monetary policy where dangerously ZIRP, NIRP and QE are considered conventional policies. The contradiction is simply this: the desire for higher inflation if fulfilled will result in higher interest rates that central banks are trying so hard and desperately to suppress.

 

Outside of the short end of the curve, markets will always win for better or worse and that is clearly evident now. The ECB is getting their first taste of the market talking back and in quite the violent way. In the US, the bond market is watching the Fed drag its feet (its never-ending) with wanting to raise interest rates and finally said enough is enough. The US Treasury market is tightening for them. Since mid April, the 5 yr note yield is higher by 40 bps, the 10 yr is up by 55 bps and the 30 yr yield is up by 65 bps.

And if global investors continue to move in a rational direction, this is just the beginning.  Bond yields all over the planet should be much, much higher than they are right now.  What that means is that bond prices potentially have a tremendous amount of room to go down.

One thing that could accelerate the global bond crash is the crisis in Greece. Negotiations between the Greeks and their creditors have been dragging on for four months, and no agreement has been reached.  Now, Greece has missed the loan payment that was due to the IMF on June 5th, and it is asking the IMF to bundle all of the payments that are due this month into one giant payment at the end of June

Greece has asked to bundle its four debt payments to the International Monetary Fund that fall due in June so that it can pay them in one batch at the end of the month, Greek newspaper Kathimerini reported on Thursday.

 

The request is expected to be approved by the IMF, the newspaper said. That would mean Greece does not have to pay the first tranche of 300 million euros that falls due on Friday.

 

Greece faces a total bill of 1.5 billion euros owed to the IMF over four installments this month.

Of course that payment will not be made either if a deal does not happen by then.  And with each passing day, a deal seems less and less likely.  At this point, the package of “economic reforms” that the creditors are demanding from Greece is completely unacceptable to Syriza.  The following comes from an article in the Guardian

Fresh from talks in Brussels, Tsipras faced outrage on Thursday from highly skeptical members of his own Syriza party. A five-page ultimatum from creditors, presented by the European commission president, Jean-Claude Juncker, was variously described as shocking, provocative, disgraceful and dishonourable.

 

It will never pass,” said Greece’s deputy social security minister, Dimitris Stratoulis. “If they don’t back down, the country won’t be lost … there are alternatives that would cost less than our signing a disgraceful and dishonourable agreement.”

Ultimately, I don’t believe that we are going to see an agreement.

Why?

Well, I tend to agree with this bit of analysis from Andrew Lilico

The Eurozone does not want to make any compromise with the current Greek government because (a) they don’t believe they need to because Greek threats to leave the euro are empty both because internal polling suggests Greeks don’t want to leave and because if they did leave that doesn’t really constitute any threat to the euro; (b) because they (particularly perhaps Angela Merkel) believe that under enough pressure the Greek government might collapse and be replaced by a more cooperative government, as has happened repeatedly before in the Eurozone crisis including in Italy and Greece itself; and (c) because any deal with Greece that is seen to involve or be presentable as any victory for the Greek government would threaten the political positions of governments in several Eurozone states including Spain, Portugal, Italy, Finland and perhaps even the Netherlands and Germany.

 

Furthermore, it’s not clear to me that the Eurozone creditors at this stage would have much interest in any deal based upon promises, regardless of how much the Greek had verbally surrendered.  Things have gone too far now for mere words to work.  They would need to see the Greeks deliver actions — tangible economic reforms and tangible, credible primary surplus targets and a sustainable change in the long-term political mood within Greece that meant other Eurozone states might eventually get their money back.  That is almost certainly not doable at all with the current Greek government.  The only deal possible would be with some replacement Greek government that had come in precisely on the basis that it did want to do a deal and did want to pay the creditors back.

 

On the Syriza side, I see no more appetite for a deal.  They believe that austerity has been ruinous for the lives of Greeks and that decades more austerity would mean decades more Greek economic misery.  From their point of view, default or even exit from the euro, even if economically painful in the short term, would be better than continuing with austerity now.

You can read the rest of his excellent article right here.

Without a deal, the value of the euro is going to absolutely plummet and bond yields over in Europe will go through the roof.  I am fully convinced that this is the beginning of the end for the eurozone as it is currently constituted, and that we stand on the verge of a great European financial crisis.

And of course the financial crisis that is coming won’t just be in Europe.  The global financial system is more interconnected than ever, and there are tens of trillions of dollars in derivatives that are tied to foreign exchange rates and 505 trillion dollars in derivatives that are tied to interest rates.  When this giant house of cards collapses, the central banks won’t be able to stop it.

In the end, could we eventually see the entire central banking system itself totally collapse?

That is what Phoenix Capital Research believes is about to happen…

Last year (2014) will likely go down in history as the “beginning of the end” for the current global Central Banking system.

 

What will follow will be a gradual unfolding of the next crisis and very likely the collapse of the Central Banking system as we know it.

 

However, this process will not be fast by any means.

 

Central Banks and the political elite will fight tooth and nail to maintain the status quo, even if this means breaking the law (freezing bank accounts or funds to stop withdrawals) or closing down the markets (the Dow was closed for four and a half months during World War 1).

 

There will be Crashes and sharp drops in asset prices (20%-30%) here and there. However, history has shown us that when a financial system goes down, the overall process takes take several years, if not longer.

We stand at the precipice of the greatest economic transition that any of us have ever seen.

Even though things may seem very “normal” to most people right now, the truth is that the global financial system is fundamentally flawed, and cracks in the system are starting to appear all over the place.

When this system does collapse, it will take most people entirely by surprise.

But it shouldn’t.

All con games eventually fall apart in the end, and we are about to learn that lesson the hard way.

 

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Sun, 06/07/2015 - 16:05 | 6172278 order66
order66's picture

"Laser jet." Drink.

Sun, 06/07/2015 - 18:11 | 6172538 ZH Snob
ZH Snob's picture

the great flush.  BRING IT ON ALREADY

the room is stinking to high heaven.

Sun, 06/07/2015 - 16:06 | 6172279 Bill of Rights
Bill of Rights's picture

Good then get rid of them.

Sun, 06/07/2015 - 16:06 | 6172281 kaiserhoff
kaiserhoff's picture

Nice to see someone else noticed.  The Fed is well behind the power curve, as usual.

Fasten your seat belts.  It's gonna be a bumpy ride.

Mon, 06/08/2015 - 06:37 | 6173528 MonetaryApostate
MonetaryApostate's picture

Yes indeed...

https://youtu.be/aRcY5do4MRw

 

Sun, 06/07/2015 - 16:10 | 6172287 Groundhog Day
Groundhog Day's picture

phoenix capital?  really

Sun, 06/07/2015 - 16:28 | 6172320 Soul Glow
Soul Glow's picture

This is the difference between a stacker and a doom trader - a stacker knows it's going to crash but doesn't pretend when, the trader says it'll happen tomorrow.

Stack silver

:)

Sun, 06/07/2015 - 18:26 | 6172583 Tall Tom
Tall Tom's picture

Stack food, water, ammo, pharmaceuticals, and tolietries...first. Some Currency may be helpful in the first few weeks following a Meltdown.

 

Find a source for FUEL as that will be essential

 

Then stack Silver, for day to day transactions, and Gold to maintain value through the turmoil to the reset.

 

Good luck. You will need it.

Sun, 06/07/2015 - 19:27 | 6172719 bunnyswanson
bunnyswanson's picture

Also, get any dental work done now.  New glasses, spare pair or two.  Middle class is fighting for our life.

Sun, 06/07/2015 - 20:46 | 6172873 WhackoWarner
WhackoWarner's picture

yes fuel is iimportant.  Get containers of fuel stored. In a bind have enough to fill your gas tank 2X.

Sun, 06/07/2015 - 16:38 | 6172336 Skateboarder
Skateboarder's picture

Proposition 1) ZH is an aggregator of 'contributor' articles (spare some Tylerian pieces here and there).
Proposition 2) Snyder is an aggregator of ZH articles.
Proposition 3) Snyder articles are featured on ZH.

Conclusion) We are living in infinite recursion.

Sun, 06/07/2015 - 16:40 | 6172342 TungstenBars
TungstenBars's picture

Reminds me of the NATO circle jerk we see so much.

Sun, 06/07/2015 - 17:34 | 6172458 r00t61
r00t61's picture

If we perform the recursion enough, can we travel through time?

Mon, 06/08/2015 - 01:54 | 6173381 Ying-Yang
Ying-Yang's picture

Well said skater!

I was getting dizzy... but I am self medicating.

Sun, 06/07/2015 - 16:10 | 6172289 BlowsAgainstthe...
BlowsAgainsttheEmpire's picture

 

The Central Banks Are Losing Control Of The Financial Markets


The Central Banks Are Losing Control Of The Financial Markets


The Central Banks Are Losing Control Of The Financial Markets


The Central Banks Are Losing Control Of The Financial Markets


The Central Banks Are Losing Control Of The Financial Markets


The Central Banks Are Losing Control Of The Financial Markets


The Central Banks Are Losing Control Of The Financial Markets

 

LOL!  If I had a nickel for everytime I've heard that . . . .

Sun, 06/07/2015 - 16:20 | 6172303 mvsjcl
mvsjcl's picture

If the "plan" is for you to lose "control" of the "market," then have you really lost control?

Sun, 06/07/2015 - 16:50 | 6172360 ThirteenthFloor
ThirteenthFloor's picture

You might ask for a dollar, with inflation the nickels wouldnt go far.

Sun, 06/07/2015 - 18:15 | 6172546 sun tzu
sun tzu's picture

The metals in the nickel will be worth more when the shit hits the fan

Sun, 06/07/2015 - 22:27 | 6173088 Son of Loki
Son of Loki's picture

Only when the MIC loses control of the world will Central Bankers lose control of the markets.

Every CB in the world Bows to their master, The Fed.

I don't see that changing any time soon.

Sun, 06/07/2015 - 16:14 | 6172294 OneLessZombie
OneLessZombie's picture

The central banks are the bond buyers.  They can do as they please.  They are their own market.  Whatever anyone else thinks is irrelevant.

Sun, 06/07/2015 - 16:36 | 6172333 daveO
daveO's picture

US Bonds are claims on the Fedgov.'s taxing authority. By buying these bonds, the FED is managing a hostile takeover of what's left of the US economy. 

End the FED!

Sun, 06/07/2015 - 17:10 | 6172399 ThirteenthFloor
ThirteenthFloor's picture

Zombie -> Foreign trade is backed with trade reserves. As the foreign trade windows get tired of US games with UST/USD you will see swings central banks cannot control. US imports about 2000b annually, FRB at peak was buying 1000b annually, top 30 trade partners of US have a lot of impact on UST. That is why some US companies are being forced to pay in CNY not USD recently.

Mon, 06/08/2015 - 11:18 | 6174329 OneLessZombie
OneLessZombie's picture

Whatever construct is attempted "all" central banks have "unlimited" printing power, to which there can be no bounds ascribed, because it is "unlimited."

The games from there are between the various "unlimited power" controllers of the financial/resources universe, the same being in competition with each others for "ultimate control" which they respectively have in their control universes currently.

It's a "game" that none of us are privy to. 

Free markets do not exist except at the lowest echelons.  The closer to the top it is nothing more than power struggle between the various players, sometimes cooperative, sometimes disasterous as we have all experienced. 

Exactly none of these games represent monetary reality and probably never have.  Unlimited firepower is the only reality and always has been the only reality.  If any of us think the players will relinquish control we would be wrong.  They can't and they won't as to do so means they relinquish to some other players. They have, do and will each take out any competition because they can by virtue of their unlimited pre emminence over all comers.

We might all agree that no agents deserve such power seats, but that argument really doesn't matter to them anyway.  We should not presume benevolence exists therein except as concilation/concilliation satisfaction prizes to the masses for assurances of their continued controlling existence. 

And if that doesn't exist they can always buy and/or concoct other instruments of enforcments.  Political sock puppets are cheap when you have unlimited resorces to buy them with.  You CAN buy and own them ALL.  And "they" do. 

That won't change.  To relinquish "our" players means to only concede to another player.  It's a very small poker table and we aren't seated.  I respect power only because it's powerful.  When it's not, they're done and another comes to replace but there will always be more players to rule and dominate the masses. 

They could give a shit about the individuals or the masses.  And we would be wise to recognize that as an ever continuing reality.  All this bullshit about collapse is just that.  The power is always there, somewhere, with someones.  If it reverts to the masses, which it has in the past, it only serves to congeal the same games again and again.  And it will continue until all the resources are GONE and we have suceeded in fucking up the world beyond any resolutions.

I would prefer to see all (temporal) powers granted to a reasoning program and remove all seats at the poker table rather than granted to any given set of faulted players.  And we may see that at some point, out of necessity. Unlikely, but remotely possible.

Are we collectively intelligent enough to "get there?"  It doesn't seem likely at this point.  We are collectively bent on destruction, which is a base line problem with the breed. 

Perhaps Mother Nature will ultimately resolve these things when she has nothing left to give her offspring?  Has she really just bred her own destruction? 

It would appear so to me.  The "red buttons" didn't just appear out of nowhere.  They were "bred" into the beasts and of course we are the beast at the top, supposedly, now anyway, perhaps terminally so.  These are questions we should all ask ourselves and PRESS for different buttons where our hands are effectively removed from the terminal red ones.

IF you had "unlimited firepower/printing power" what would YOU do?  Let's input all the data from all the players and see what the program spits out, then DO IT. 

Simple.  Any group of children could run this world far more effectively.

Sun, 06/07/2015 - 16:15 | 6172295 Atomizer
Atomizer's picture

The Cloward-Piven strategy explains how Obama benefits from immigration crisis

http://www.commdiginews.com/politics-2/the-cloward-piven-strategy-explai...

Sun, 06/07/2015 - 16:15 | 6172297 B2u
B2u's picture

Let's ask chrome dome Bernanke what he thinks....

Sun, 06/07/2015 - 16:18 | 6172300 Bighorn_100b
Bighorn_100b's picture

Well no shit. Managing my checking account is getting more difficult every month. WTF!

Sun, 06/07/2015 - 16:21 | 6172304 Magooo
Magooo's picture

Bullshit.  The central banks own the printing presses.   They can destroy anyone who attempts to behave rationally - they always have more money.

 

This will eventually bust up == but it will NOT bust because the herd moves.  The herd will be tramped by the Fed

Sun, 06/07/2015 - 18:16 | 6172559 sun tzu
sun tzu's picture

IT didn't work for Zimbabwe and it didn't work for Mexico, and it didn't work for Weimar Republic

Sun, 06/07/2015 - 18:31 | 6172591 Tall Tom
Tall Tom's picture

But...but...but...isn't it different this time?

 

Shhhhh....You don't want to pop their bubble...

 

Heh Heh, Heh.

Sun, 06/07/2015 - 22:41 | 6173112 Kprime
Kprime's picture

it IS different this time.   if the market does not do what we want it too we can drop a nuke on the market.  If a trillion trillion derivatives don't continue to float, we can just nuke em.  WE have hope and change and we can dooooo iiitt.

Sun, 06/07/2015 - 16:21 | 6172306 davidalan1
davidalan1's picture

bunch of scardy cats cant even raise rates....pussies in a corner...its like when i got  caught giving freebies on the steak and cheese as a teenager and the manager showed up one night and charged them for it...they seemed chagrined at the price. Yeah, so much for being Mr. nice guy......

 

Sun, 06/07/2015 - 16:38 | 6172339 daveO
daveO's picture

They are orchestrating the ultimate currency collapse. Chagrined? Darn straight. To be chagrined and survive to the other end of the tunnel will be a blessing.

Sun, 06/07/2015 - 16:22 | 6172307 Soul Glow
Soul Glow's picture

These are desperate acts from the worlds biggest thieves and thieves don't create they steal.  They'll hide like roaches after the economy crashes and ye who holds silver will inherit the earth.

Sun, 06/07/2015 - 16:31 | 6172324 Fun Facts
Fun Facts's picture

You will know when the central banks lose control because the purchasing power of their so called money will reach it's intrinsic value.

Until then, they have an infinite well from which to dwell, we are all schmucks for their raping, and they could care less what we think.

Sun, 06/07/2015 - 16:47 | 6172356 Chuck Knoblauch
Chuck Knoblauch's picture

Tell me something they don't already know.

All going according to plan.

Total destruction.

Sun, 06/07/2015 - 17:05 | 6172383 Farmer Joe in B...
Farmer Joe in Brooklyn's picture

No list?

Sun, 06/07/2015 - 17:20 | 6172423 windcatcher
windcatcher's picture

Adam Smith’s concept of a “Free Market” and the American Free Enterprise System of capitalism that was FREE from corporate monopoly is what built the American economy to be the richest in the world.

Our American Representative Republic democracy (government of, for and by the People) cooperated with our American Free Enterprise System of capitalism by passing laws against corporate monopoly and corruption that kills competitive capitalism.

Yesterday’s democratic “Capitalism” economy is not today’s totalitarian fascist “Corporatism” economy. Stop referring to the corporate fascist as “Crony Capitalism” and call them by their real name of “Multinational Corporate Monopoly Fascist.

The American recovery depends on your ability to recognize and know the difference between the two economic models.

Sun, 06/07/2015 - 17:30 | 6172428 Youri Carma
Youri Carma's picture

Peter Boockvar: "The contradiction is simply this: the desire for higher inflation if fulfilled will result in higher interest rates that central banks are trying so hard and desperately to suppress."

In reality there is a double contradiction since QE leads to deflation and not to inflation as a lot of 'experts' seem to think and thus the need for even longer lasting low rates. It's a self feeding/defeating deflation loop.

Looper - You should go to China https://www.youtube.com/watch?v=oGo96xzNSEs

Sun, 06/07/2015 - 17:25 | 6172435 NoWayJose
NoWayJose's picture

If you think central banks are losing control, then why is everyone trying to price in the next rate increase? As long as central banks can send free electronic money to their banker friends, and the banker friends are then free to buy or sell any (leveraged) position. That is control!

Sun, 06/07/2015 - 17:28 | 6172441 q99x2
q99x2's picture

Good now maybe somebody will arrest them for treason and cancel WWIII.

Sun, 06/07/2015 - 17:42 | 6172473 Colonel Klink
Colonel Klink's picture

Shit in one hand, hope in another...

Sun, 06/07/2015 - 20:16 | 6172813 silverer
silverer's picture

Cancel WWIII.  That's a good thing.  We're getting too close to that.

Sun, 06/07/2015 - 17:36 | 6172462 groundedkiwi
groundedkiwi's picture

golemxiv.co.uk has several articles well worth reading on this subject of central banks losing control.

Sun, 06/07/2015 - 18:06 | 6172522 SilverFish
SilverFish's picture

If I had a quarter for everytime I've heard this....

 

 

Well, lets just say I'd have a lot of fuckin' quarters.

Sun, 06/07/2015 - 18:36 | 6172606 Tall Tom
Tall Tom's picture

Well, lets just say I'd have a lot of fuckin' quarters.

 

 

Cash them in for Nickels.

 

The Face Value will not be worth much by the time this ends. The Copper Alloy, on the other hand, may...

Sun, 06/07/2015 - 18:07 | 6172526 jmeyer
jmeyer's picture

Here's a fun thought. The final Euro crisis occurs and Europe is in a real mess. The Troika seizes this opportunity to re-assemble Europe politically and with an ARMY to enforce peace. PIIGS, you will comply or die.

Sun, 06/07/2015 - 18:30 | 6172585 falak pema
falak pema's picture

The Casino is in desperation to find a return on leveraged plays fed on Zirp/Nirp/QE bonanza which are +.

The Casino artists : those Oligarchs now believe less and less that their CB minions can continue to deliver "the goods".

CBs provide the dough that the casino burns up. The real economy --which creates the wealth--is dead or near dead in first world.

In fact, whatever real growth there is is totally nullified by the wealth destruction of the casino which is not recognised as "destruction", as FIRE assets are not marked to real value but to fake value.

When all markets will be aligned by the Cbs into eating "free dough" there will be no place to go with "free money" and then the reset will occur.

And what a fall that will be my fellow earthlings...as inevitable as the south sea bubble.

 

Mon, 06/08/2015 - 02:00 | 6173384 Ying-Yang
Ying-Yang's picture

I think I just got a woody!

Brother... I believe you got it.

Cheers

Sun, 06/07/2015 - 18:58 | 6172652 VW Nerd
VW Nerd's picture

Central Banks losing control???  Hard to believe with the Japanese 10 year under 1%.  When the central banks truly lose control, I suspect it will show up in the bond market first.  The small inccrease in rates we've recently seen does not reveal anything has changed.

Sun, 06/07/2015 - 19:02 | 6172656 KingdomKum
KingdomKum's picture

molon labe

Sun, 06/07/2015 - 20:50 | 6172882 The Merovingian
The Merovingian's picture

Careful what you wish for, because Snyder's opening quote should have read "Every great con game eventually comes to an end of a gun". The question is who has all the guns and ammo when the jig is up?   TPTB didn't come this far to not fully run the table on the gun issue too when the rest of the SHTF.  The kabuki will go on until they fully beat the shit out of that rat under the US's rug. The mid-West flyover states and Texas will be the last to resist, but make no mistake the FEDS are going to eventually come for our guns.  Sadly, all of mine went down in that horrific boating accident back in '08 along with all my PM's.  We barely escaped with our live's I tell ya! 

Sun, 06/07/2015 - 21:52 | 6173002 MagicMoney
MagicMoney's picture

Double post on accident.

Sun, 06/07/2015 - 21:53 | 6173003 MagicMoney
MagicMoney's picture

Bond buying program by the central bank attracts buyers despite very low, even negative yields, because they have a buyer with unlimited money and no concern for prices, or risk. The buyer is the central bank. Nobody wants to hold these negative yielding bonds to maturity. They simply flip the bond to the next guy and central bankers like Mario Draghi buy them. Of course negative yields is a money loser, that's only if you plan to hold them to maturity. Bond buying by central banks is to help fund cowboy governments who have no intention of cutting spending. If anything they want to increase spending. Central bank does not need to buy the bonds directly from government auctions, even simple secondary market purchases can have huge implications. Markets don't care about yields, because they don't plan to make money with the yields. They plan to sell before maturity is triggered.

Of course none of this fixes EU's problems or anybody's problems for that matter. Just another scheme to prolong government irresponsibility.

Sun, 06/07/2015 - 22:52 | 6173121 Niall Of The Ni...
Niall Of The Nine Hostages's picture

Greece isn't going anywhere. Greece will be Serbia for slow learners, with Athens bombed to the ground as a warning to others tempted to join the party of freedom under Putin's Russia.

The elites knew this round of the Great Game wouldn't last forever. It only had to last till everyone who mattered was cashed out and far enough away that they could amuse themselves watching Rome burn, before returning to buy the ruins for the price of a crust of bread and re-settle them with barbarians, who work for cheap and don't prattle about liberty. They'll be just fine, believe me.

It's the working class of north America and Europe who'll face complete financial ruin, an end to any chance of secure employment except as cannon fodder in wars to make the Middle East safe for the House of Saud, and every encouragement to stop reproducing and/or commit suicide for at least ten years, if not longer. A bit like the hell Russia went through in the 1990s and has only just emerged from, except that in 1991 there were plenty of places to flee to if you didn't want to wait for things to get better. The only refuge the American workingman can count on starts six feet under the ground.

Sun, 06/07/2015 - 23:01 | 6173148 holdbuysell
holdbuysell's picture

Everything lining up nicely for a September 13, 2015 finish.

Sun, 06/07/2015 - 23:32 | 6173195 adr
adr's picture

A haircut is up to $15 at Best Cuts.

A men's clipper cut that takes no skill and about five minutes is $15.

The cut used to be $9 two months ago. This kind of inflation is insane considering you really don't get any better value.

Mon, 06/08/2015 - 09:58 | 6174036 eishund
eishund's picture

A big haircut is coming our way. snip snip snip.

Sun, 06/07/2015 - 23:55 | 6173239 Slomotrainwreck
Slomotrainwreck's picture

fix the problems in Greece, and the problems in Italy, Spain, Portugal and France just continue to escalate as well.

 

Wait. what? There's no "F" in PIGGS?

Mon, 06/08/2015 - 06:23 | 6173521 Kina
Kina's picture

Whatever happens whenever it happens it is going to be a massive problem for us all, no matter gold, silver, guns or whatever.

 

Im thinking I need to restock my 3 months or so supply of rice, gas and stuff in case those goods get hard to come by for a while.

Mon, 06/08/2015 - 11:34 | 6174377 lisacolnett
lisacolnett's picture

Exercising your quadriceps is essential if you want to keep your knee sturdy and protected. Certain exercises that require leg extensions or static contraction of the quads will strengthen this muscle. Try this exercise to strengthen the quads. Sit up tall on the floor and keep both legs straight. Place a rolled up towel underneath your right thigh, close to the knee. Knee clicking exercise

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