You’d Think We’d Be A Little More Worried . . .

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You’d Think We’d Be A Little More Worried . . .

Posted with permission and written by John Rubino CLICK HERE FOR ORIGINAL)

 

 

 

By now everyone with an Internet connection is aware of the “ransomware” attack that shut down hundreds of thousands of computers over the weekend.

 

The fact that the onslaught is just beginning — as the military-grade hacking tools developed by the NSA and recently leaked are weaponized by hackers and released into the wild — should, you’d think, be worrisome.

 

Most people are probably also aware that North Korea, which claims to have nuclear weapons, just tested a missile capable of carrying a payload to the capital cities of its neighbors. See Putin says world shouldn’t threaten North Korea, after latest missile landed near Russia.


And yet here we are with global stock markets hitting new highs, as if the world is a stable, well-managed, nearly risk-free place. It’s easy to understand cybersecurity and defense stocks doing well today. But banks and home builders? Seems like their world is anything but benign.

 

So what’s happening? The same thing that’s been happening for many years. The world’s governments are reacting to uncertainty with massive infusions of newly-created currency. Below, for instance, is the European Central Bank’s balance sheet – a proxy for how many new euros it has created and dumped into the economy. Note that the line went parabolic in 2014 and shows no sign of flattening. Fully one trillion new euros hit the market in 2016 and have to go somewhere. For the 1%, it’s apparently easy to relax and buy Apple and Google when that much cash keeps flowing in.

 

 

And Europe is frugal compared to China, where total credit growth (public and private combined) is on track to approach $3.5 trillion this year. That would be a record year for even the US. For a developing country like China it’s ridiculous.

 

Speaking of the US, here’s Credit Bubble Bulletin’s Doug Noland on what we’re up to:

 

I expect U.S. system Credit growth to surpass $2.2 TN this year, roughly broken down by the government sector ($850bn), Business ($750bn), Household Mortgage ($350bn) and Consumer Credit ($250bn). Another big federal deficit is expected, with the perception of a blank checkbook ensuring that deficits inflate until the markets decide otherwise. Rising home prices coupled with low mortgage rates ensure a 2017 expansion of mortgage borrowings. Loose financial conditions and record debt issuance would seem to ensure another big year of Business debt growth. And while there appears to be some tightening in subprime auto and Credit cards, I would be surprised to see Consumer Credit expand by much less than 2016. As such, the relatively stable outlook for U.S. Credit growth certainly supports the global liquidity and market backdrop.

 

None of this is surprising. The tens of trillions of dollars borrowed in the recent past were largely misspent, so to prevent a crisis of epic proportions, ever-greater amounts of credit have to be created and disseminated. Inflate or die, as the saying goes.

 

To call this a classic Ponzi scheme is by now too obvious to be worth explaining. No society has ever created this much debt, and seen so much of it become non-performing. Which is the same thing as saying no society has ever set itself up for such a sudden, dramatic change in sentiment when something big finally goes wrong.

 

 

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You’d Think We’d Be A Little More Worried . . .

Posted with permission and written by John Rubino CLICK HERE FOR ORIGINAL)

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GOLDMAN SACKS FED's picture

A word from our systemic risk partners DEUTCHE BANK...

and i quote ''German      bail-in law      provides greater protection for various creditors,

such as depositors,

 

                                                      derivative counterparties,

 

beneficiaries of guarantees and letters of credit (LoC’s), holders of structured notes and money market instruments by subordinating plain vanilla senior unsecured debt — As a result, senior unsecured ratings and CDS prices are no longer a good reflection of the credit worthiness of a bank'' END QUOTE

NOTHING TO WORRIE ABOUT, EVERYTHING IS FINE, THE CONSUMERS ARE IN NO DANGER OF HOLDING ON TO ANY WEALTH ANYMORE IT'S ALL SAFE...IN THE HANDS OF THE BANKS

 

https://www.db.com/ir/en/download/Credit_Overview.pdf

 

Miggy's picture

If you are managing someone else's money where else are you going to go other than the stock market? It's where the action is and besides not your money.

Miss Informed's picture

There will be defaults, debts will be written off, central banks will print money and indebt the public to prop up the speculators. The central banks will control an increasingly outsize portion of assets and the economy. So what's the question?

decentralisedscrutinizer's picture

 

It’s becoming obvious that our worst economic and political problems revolve around the global hegemony of corporate cartels headquartered in the US, where their military force resides. The only effective way, now, to regain our sovereignty as citizens of a constitutional republic is to severely curtail the activities of such corporations. To remain a free nation, we have to stop granting corporate charters to every con artist that comes along and start demanding a well-defined social value in return. The "Divine Right Of Kings” should not apply to fictitious entities just because they are “Too Big To Fail”. We can't take the incorporation of private transnational banks for granted anymore. The government must be held responsible to human voters, not fictitious entities.

 

 

 

An omission in the US Constitution created the swamp of corporate corruption we now see surrounding our capital. It is a swamp that can't be drained at this point because the Constitution doesn’t provide a legal drain. This 28th amendment is intended to provide that drain so Congress can legally pull its plug. As a matter of political practicality we must rely on the Article 5 Constitutional Convention for which the electorate will need prior consensus to avoid preemptive state or corporate interference. This is what it will take, in plain language, to save the world; and nobody gets hurt:

 

 

 

28th Amendment

 

Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to:

 

1, prohibitions against any corporation;

 

a, owning another corporation,

 

b, becoming economically indispensable or monopolistic, or

 

c, otherwise distorting the general economy;

 

2, prohibitions against any form of interference in the affairs of;

 

a, government,

 

b, education, or

 

c, news media, and

 

3, provisions for;

 

a, the auditing of standardized, current, and transparent account books, and

 

b, the establishment of a state and municipal-owned banking system

 

c, civil and criminal penalties to be suffered by corporate executives for violation of the terms of a corporate charter.

 

 

 

The Founders had to fight a bloody Revolutionary War to win our right to incorporate as a nation – the USA. But then, for whatever reason, our Founders granted the greediest businessmen among them unrestricted corporate charters with enough potential capital & power to compete with the individual States, smaller sovereign nations, and eventually to buy out the Federal government itself. Now that these fictitious entities own the USA and command its military infrastructure by virtue of the Federal Reserve Corporation and run it by virtue of regulatory capture, MSM propaganda, and Congressional lobbying, they’ve set their sights on the creation of an all-inclusive global financial empire. The US Constitution is the de facto “Charter” of that Empire. Only we, the people, can amend it, and in doing so, restore the Republic.

    

Paul Morphy's picture

2014 ECB balance sheet = €2.2 trillion

2015 ECB balance sheet = €2.8 trillion

2016 ECB balance sheet = €3.7 trillion.

 

Not to mention exploding imbalances throughout Target 2 ECB mechanism.

 

Doppelganger71's picture
For when they shall say, Peace and safety; then sudden destruction cometh upon them, as travail upon a woman with child; and they shall not escape.
1 Thessalonians 5:3 (KJV)
GRDguy's picture

It is well-managed; just not to the benefit of 99% of the population.

Isn't it obvious with the price of gold and silver? stocks all-time highs? 

and paper promises at astronomical levels?  

Phil Free's picture

You'd think... but .. that is perhaps the catch.  There is no "thinking" going on.

A whole lot of reacting, wishing, can-kicking, hand-waving ("wheeeeeee!!!"), and unicorn-riding, however ...

BTFD!

Clock Crasher's picture

Put a fork in her she's done.

JamesBond's picture

It a bad situation when the countries that boarder your own couldn't give a shit if yours disintegrated. Mexico and Canada would cheer the bonfire.

ipso_facto's picture

'Mexico and Canada would cheer the bonfire.' and then they'd realize their 'Sugar Daddy' was toast.

JamesBond's picture

Its why hindsight is such a bitch.