What Changed On September 8, 2017?

What Changed On September 8, 2017?

Written by Craig Hemke, Sprott Money News

 

Over the past five months, we've frequently asked the same question:

What changed on September 8??

You may recall that September 8 was the day the bond market abruptly turned, taking with it the USDJPY and DXY. In the wee hours of September 8, the Dollar Index hit 91.01, the USDJPY hit 107.32 and, most importantly, the yield on the 10-year note hit 2.02%.

In the five months since, the dollar has rallied and then fallen to new lows. The USDJPY has rallied and fallen back, but the yield on the 10-year has risen to 2.88% with no end in sight!

And so: what happened on September 8?

We've asked this question repeatedly, and now we know we've had the answer all along. Our first inclination was that the Oval Office meeting between Trump, Pelosi and Schumer had changed the prevailing dynamic. As it turns out, we were right. Here's a list of links if you need a refresher:

It was this September 7 meeting that changed everything, and the action in the US bond market since then confirms it. There will be no more charade of "fiscal discipline": the US will cut taxes and raise spending, the future be damned.

We see confirmation in a collection of this week's headlines. The imaginary debt ceiling is being done away with. Trump has already signed a massive tax cut and is about to unveil $1.7T in new infrastructure spending.

In short, the US debt and deficit is about to balloon, likely exceeding $1T in this fiscal year and soaring past $1T in 2019 ... and these levels will only be this "small" IF the US avoids falling into recession. See these charts from ZeroHedge:

We have warned since 2010 that higher US long rates (what some call "normalization") can not be tolerated. Why? Because the line item of "interest on the national debt" will explode, and it will only accelerate the exponential debt/deficit explosion.

Well, it looks like we are about to see this happen. Please check the link below as it neatly summarizes the situation. I strongly urge you to read it and print it off for posterity.

And ALL OF THIS augurs for much, much higher gold and silver prices in the months ahead. Why? In short, the dollar will fall as debt explodes in a pseudo-hyperinflationary spiral of out-of-control fiscal madness. And this base reality doesn't even factor in all of the other political, geo-political and de-dollarization risks that are swirling out there! See this: https://www.sprottmoney.com/Blog/the-three-major-t...

In short, we now find ourselves back in 2010, and—not coincidentally—gold and silver prices are back to 2010 levels. The prevailing sentiment then was that spiraling deficits and massive QE would lead to rampant inflation, higher interest rates and higher gold prices. Direct Central Bank intervention managed to forestall this fate for over five years. However, the time to pay the piper has come.

For nearly eight years, we've warned that "The End of The Great Keynesian Experiment" is upon us. And now it most certainly is. Prepare accordingly.

 

What Changed On September 8, 2017?​​​​​​​

Written by Craig Hemke, Sprott Money News

 

Check out these other articles by our contributors:

Getting Around Blockchain Geo-Blocking with VPNs - Chris San Filippo (13/02/2018)

Take It To The Bank: Interest Rates Won't Rise - Keith Weiner (12/02/2018)

The Importance Of Gold In 2018 And Beyond - Sprott Money (12/02/2018)

The State of the Union – Markets - Gary Christenson (09/02/2018)

“The natural instinct should be to buy gold in this kind of environment.” - Eric Sprott on tumultuous markets (Weekly Wrap-up, February 9, 2018)

 

Comments

InnVestuhrr Wed, 02/14/2018 - 08:15 Permalink

The spending on endless useless quasi-wars sucks

BUT

the entitlement spending is MORE THAN 70% of gummint spending. So if you want to go on a crusade to "cut the wasteful spending to save America", then start with the BIGGEST SPENDING WASTE, ie entitlements.

ZH has changed dramatically since it started - it used to be a site for investors, it has become a site primarily for unemployed/unemployable no-savings-to-invest entitlement parasites, who reject any complaints about the wasteful spending on entitlements because they live off other people's earnings, ie parasites.

If I have to choose between spending on military, however misguided the regime's military policies are, and spending on entitlement parasites, so that imported biomass Pedro and Mohammed can breed more of their kind with their breeding sows, then I will vote for the military spending.

LawsofPhysics InnVestuhrr Wed, 02/14/2018 - 08:46 Permalink

Please define "entitlement".  My employees and I have been paying into social security for 40+ years motherfucker, that is NOT an "entitlement".

Even hear of "too big to fail"?

LMFAO!!!

Tell me, why the fuck are any of us paying any taxes at all when the useless paper-pushers in banking and finance create "money" for themselves with no real work, no real risk, and no real collateral requirements?

Seems like you are missing the real issue here.

"Full Faith and Credit"

same as it ever was!

In reply to by InnVestuhrr

gdpetti LawsofPhysics Wed, 02/14/2018 - 09:01 Permalink

Good points... everything is an 'entitlement' program for the political puppets the oligarchs put in office in DC. They have all kinds of handlers to keep them on message from lobbyists to advisors to the MSM that repeats what intel tells them to repeat... to all those think tanks, govt scientists that all take on the mantle of supporting the cause like our infamous economists etc.

The govt doesn't need our tax revenue, that's for show.... to make it look like the govt is still 'real'... a constitutional republic, not a democracy, not that there's any real difference in any country controlled by a party of oligarchs, but that it the norm here in 'Purgatory'... Earth was Eden until the Fall....get it? a school in greater self conscious awareness... no pain, no gain... and waking up and realizing the fix we are in develops the necessary perspicacity to tell the difference between the real 'good' guys and the bad guys who like to pretend they are 'good' guys. They create our illusion, our obstacle course in consciousness... they make our suffering so much 'fun'.... from which we grow and learn... the hard way... be it the usual 'pograms' to force people to move around the world, to engineered wars that do the same... it's all fake, all engineered obstacles forcing us to see WTF is really going on and why.

Next up in imperial decline is usually another 'war to end all wars'... look for it... as the oligarchs want to setup their NWO on the ashes of this current OWO... so the 'outing' continues to expose all their machinations through these puppets that are exceptionally expendable, same as the rest of the herd being culled..... same every time... right before Mother Nature swings in to clean house.

In reply to by LawsofPhysics

InnVestuhrr LawsofPhysics Wed, 02/14/2018 - 11:18 Permalink

You find a way to get the regime lords to not confiscate my earnings and those of my employees to contribute to the social security ponzi and the medicare & medicaid coercive collectivisms, as well as the useless quasi-wars, and I will enthusiastically support the effort.

The primary reason why most working people - including my employees - struggle paycheck to paycheck - is because of HUGE amount of their earnings that are confiscated from every paycheck by federal and state government, and then the additional confiscation from local government for sales taxes, property taxes, vehicle registrations, etc.

No matter how much the financial regime lords are scumbags, THERE ARE NO CONFISCATIONS FROM MY EMPLOYEES' PAYCHECKS FOR THE FINANCIAL LORDS, AND NONE OF MY EMPLOYEES HAVE TO SURRENDER THEIR EARNINGS TO THE FINANCIAL LORDS AT THE LOCAL LEVEL CORRESPONDING TO LOCAL TAXES.

So I return your volley:
" Seems like you are missing the real issue here."

Leave everyone's earnings for them to use for their own expenses, end ALL coercive-collectivist confiscation and redistribution.

Everyone should be required to earn their own way and pay all of their own expenses. The motivated will prosper and the undeserving will perish.

 

 

In reply to by LawsofPhysics

mailll InnVestuhrr Wed, 02/14/2018 - 11:52 Permalink

If all entitlements just in the US were eliminated, we would experience the worse world wide collapse this world has ever seen. Whether the money is earned by an individual or given to the individual freely, that individual spends this money.  What I'm trying to say is this, put money in peoples hands and they will spend it.  Increased circulation of money keeps the economy moving.  Remove this money from peoples hands so they can't spend it, the economy comes to a screeching halt.  Ex. leading up to the 2008 collapse:  When everyone was given free credit, the economy boomed.  When this free credit was removed, the economy crashed.  It's all about giving people money to spend or taking it away that determines the ebb and flow of the economy.

Another example: put money into the stock market, and it grows.  Withdraw the money and it crashes.  It doesn't matter if this money comes from people who earned this money or if the money comes from the FEDS printing press.  It's the money that is the factor, nothing else. 

Bring it to an individual basis, when I have money, I spend it and other people make money.  If I have no money to spend no one makes money. 

In reply to by InnVestuhrr