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The Six Year "Grand Delusion" is Ending
For six years, the world has operated under a complete delusion that Central Banks somehow fixed the 2008 Crisis.
All of the arguments claiming this defied common sense. A 5th grader would tell you that you cannot solve a debt problem by issuing more debt. If the below chart was a problem BEFORE 2008… there is no way that things are better now. After all, we’ve just added another $10 trillion in debt to the US system.
Similarly, anyone with a functioning brain could tell you that a bunch of academics with no real-world experience, none of whom have ever started a business or created a single job can’t “save” the economy.
However, there is an AWFUL lot of money at stake in believing these lies. So the media and the banks and the politicians were happy to promote them. Indeed, one could very easily argue that nearly all of the wealth and power held by those at the top of the economy stem from this fiction.
So it’s little surprise that no one would admit the facts: that the Fed and other Central Banks not only don’t have a clue how to fix the problem, but that they actually have almost no incentive to do so.
So here are the facts:
1) The REAL problem for the financial system is the bond bubble. In 2008 when the crisis hit it was $80 trillion. It has since grown to over $100 trillion.
2)The derivatives market that uses this bond bubble as collateral is over $555 trillion in size.
3)Many of the large multinational corporations, sovereign governments, and even municipalities have used derivatives to fake earnings and hide debt. NO ONE knows to what degree this has been the case, but given that 20% of corporate CFOs have admitted to faking earnings in the past, it’s likely a significant amount.
4) Corporations today are more leveraged than they were in 2007. As Stanley Druckenmiller noted recently, in 2007 corporate bonds were $3.5 trillion… today they are $7 trillion: an amount equal to nearly 50% of US GDP.
5) The Central Banks are now all leveraged at levels greater than or equal to where Lehman Brothers was when it imploded. The Fed is leveraged at 78 to 1. The ECB is leveraged at over 26 to 1. Lehman Brothers was leveraged at 30 to 1.
6) The Central Banks have no idea how to exit their strategies. Fed minutes released from 2009 show Janet Yellen was worried about how to exit when the Fed’s balance sheet was $1.3 trillion (back in 2009). Today it’s over $4.5 trillion.
We are heading for a crisis that will be exponentially worse than 2008. The global Central Banks have literally bet the financial system that their theories will work. They haven’t. All they’ve done is set the stage for an even worse crisis in which entire countries will go bankrupt.
The situation is clear: the 2008 Crisis was the warm up. The next Crisis will be THE REAL Crisis. The Crisis in which Central Banking itself will fail.
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Wow another Pheonix Capital article predicting the end...
With a printing press and no opposition; there is no stopping the presses. More debt will be issued by Central Banks and the FEDS will buy it back with interest and the same will expand to corporate bond issuance, if that has not already happened. Until there is a major war to stop the "thin-air" money printing, then "everything is awesome" or the beast runs out of prey.
The title reminded me I had forgotten how Dennis De Young was prescient in writing:
But don't be fooled by the radio
The TV or the magazines
They show you photographs of how your life should be
But they're just someone else's fantasy
So if you think your life is complete confusion
Because you never win the game
Just remember that it's a Grand illusion
And deep inside we're all the same.
We're all the same...
So if you think your life is complete confusion
Because your neighbors got it made
Just remember that it's a Grand illusion
And deep inside we're all the same.
We're all the same...
America spells competition
Join us in our blind ambition
Get yourself a brand new motorcar
Someday soon we'll stop to ponder
What on earth's this spell we're under
We made the grade and still we wonder
Who the hell we are
Incidentally - That was Styx' 7th album released on 7-7-77. Certainly the lucky one.
Yep were all the same; sinners in the hands of an angry God. BTW - that is a title of a sermon by the late-great preacher named Jonathan Edwards. July 8, 1741
https://www.youtube.com/watch?v=rI5qCFksA7Y
Transcript: http://www.biblebb.com/files/edwards/je-sinners.htm
No its not. Not even started yet.
Ford Falcon XB GT The V8 Interceptor, also known as a Pursuit Special, is driven by Max Rockatansky at the end of Mad Max and for the first half of Mad Max 2: The Road Warrior. It is based on a1973 Ford Falcon XB GT coupe, which was modified to become a police interceptor by the Main Force Patrol.
Hood mounted mini guns are extra.
six years?!?!
This guy is a complete asshat. There has been predator and prey for billions of years!
Billions of years, then explain the radiation afterglow, plenty of it, that should not be there. Try getting information from the One who was there. Historical "science" is not empirical science and historical science is based on interpretation of what can be seen/facts or what is known by witnesses/ believed to be accurate.
Based on billions of years, it makes logical sense that man needs to purge the herd and that some are superior in all manner of speaking and likewise many are inferior in all manner of speaking. Not in our Creators economy; all are precious in his sight, for He is the author of life, both yours and mine, but His patience reaches an end.
A persons belief on origins will determine their worldview; even if they are unaware of it.
Asshat, yes I wish ZH would can this feed.
"For six years, the world has operated under a complete delusion that Central Banks somehow fixed the 2008 Crisis."
For some, their crisis has been solved.
I believe Banksters have had their money supply fixed.
To me, that is the point. The goal was never to fix the general economy.
It was to find ways to fund the possibility/probability of future problems for the Bankster and their Banks.
"If you think your life's in complete confusion, 'cause you never win the game."
"Just remember that it's a grand delusion, and deep inside we're all the same."
Absolutely, the banks were all insolvent in '08 so the past 7 years have been about changing "bad" assets for "good."
The ultimate in Bad Bank Strategy. Move everything over to where the tax payer is bent over.
Yea man, I can tell things are going bad by the new all time highs in the Nasdaq yesterday and todays tape action of frantic buying on every downtick.
Facebook hasn't made a new new all time high in at least three minutes now. Something is wrong....
on a serious note, I stick to my call that the top is in for the COMP and this rally ending now is the last gasp we are seeing of a dying market. We may do another one to three more yoyo down then ups but I feel the next big move is when the bottom falls out and its on.
Every time I want to convince the wife to let me spend another few hundred dollars on preps, I essentially verbalize this article to her. Unfortunately, she is getting tired of hearing it and seeing something completely different on the news and her "feelin" for how the economy is.
Please, it is very important for you to be able to describe specific symptoms or milestones of impending collapse and show data, and what actions TPTB are taking to delay and obfuscate these symptoms. Greece, Sweden, Cyprus, Iceland, we need examples and how the US is or is not following these models.
<--- Shoes & purses & jeans
<--- preps
men, vote how you know/think your woman thinks
women, vote honestly
Always better to be overdressed than the other way around. Guess that applies to the zombie apocolypse too.
when the zombies come I can hide under my wife's pile of shoes in her closet - could backfire though if mostly female zombies
The Zombie apocalypse requires no preps if you go through it as a zombie...
I can just open the door to the storage room in the basement that my wife took over as her walk in closet. The avalanche of shoes and boots would make it impossible for the zombies find me.
The downside is my gun safe is in that room as well. I hope I can still find it.
Hide under the dirty dishes and laundry.
What is ending is the delusion of "the ending".