Posted on 05/16/2015 5:46:41 PM PDT by SeekAndFind
What happens if you don’t and “it” comes?
L
3.08% on a 30 year bond is “skyrocketing”?
This article sounds like a lot of fear mongering to me. If ETF managers are lining up lines of credit ahead of possible withdrawals then they are insuring themselves which Lehman failed to do. And I certainly don’t see anything resembling the housing bubble that led to Lehman’s collapse.
“And without a doubt, we are in the midst of a massive stock market bubble as well.”
What are you basing the “massive bubble” idea on? The Dow is 20% higher than it was in 1999 in the middle of the dot-com frenzy. What sort of investment frenzy is there now?
The banks have so much cash parked in the stock market that when QE ends, so will they! The bubble is from banks artificially manipulating the markets to gain some advantage, while borrowing massive "margin" money!
I didn't even visit a Holiday Inn...
banks have been denied the opportunity to trade like they used to. Volker rule. Sitting on a trillion in reserves and growing. Thats been accumulated in just a few short years. THey can loosen those reigns in any sort of meltdown.
Absolutely. ETF's are just buckets of shares.
Leveraged ETF's, reverse ETF's (shorts) and the like are another matter. They are built on bank commitments and things like credit default swaps, etc and all manner of weird derivatives.
Sheer nonsense.
The world economy is just sputtering along. There is no apparent bubble.
Two of the world most populous countries, India and China, are just now beginning to move their people out of poverty and into a semi-developed state...and that will actually have an even more stabilizing effect on the world economy.
re: banks have been denied the opportunity to trade like they used to. Volker rule. Sitting on a trillion in reserves and growing.
I think that’s the reason why all these talk about inflation growing because of Fed quantitative easing ( i.e. printing money ) did not pan out.
Money is not really circulating in the economy. Most of it is just sitting there doing nothing.
QE ended last October.
I didn't even visit a Holiday Inn...
Or read a newspaper.
Spot On. At some point these guys are going to be right, but I have been amazed at how the governments have been able to kick the can down the road for all these years.
These guys are flat out wrong trying to predict a specific crash. However one has to be prepared for a crash at any moment. Does that mean putting it all in cash or gold? Hopefully not but it depends on when you need the money. You should not invest any money you need to spend within 5 years. But if you are young and won’t retire for 30 years or so you should invest heavily in stocks and ride out crashes because no one - repeat - no one can predict the crashes.
Bump!
Quite!
Re: “We have been on this stairway to hell ever since Roosevelt stole our gold and Nixon took us off the gold standard.”
Good post. Lyndon Baines Johnson takes the booby prize, too. In May 1933, Americans could at least exchange their gold coins (excepting numismatic pieces) for 90% silver coins if they desired. After JFK was popped, LBJ debased the currency with 1965 Coin Act. This replaced silver in coins with base metals. Then in 1968, LBJ strongarmed Congress to remove 25% gold backing on domestic dollars. It passed by one vote. Ike said this was a grave mistake.
From then on, politicians could print money without any real restraint.
Indeed!
And they continue to debase our “coinage”. Not only are coins made of base metals but their minting quality is greatly reduced.
Take any new quarter dollar coin and compare it to those of 25 years ago. It is readily apparent that details on the modern coins are not as fine and the images are in lower relief than those of the older coins.
Of course, the new quarters are sporting “State” designs on their obverse. This is not to instill public interest but rather to distract the public from its coinage not being struck as many times during minting. Thus it is cheaper to produce.
Our elected representatives have sold We The People into slavery. And it was all for their handful of silver.
“The banks have so much cash parked in the stock market...”
And you are getting this information where, exactly? From Schedule 13-Gs that banks are filing with the SEC? A purchase of over 5% of any company requires a filing. Other than that I don’t know how we would know what banks are doing with their money.
“The bubble is from banks artificially manipulating the markets to gain some advantage, while borrowing massive “margin” money!”
I think you may have needed to stay at that Holiday Inn. Are you claiming that banks are buying stocks on margin? Investment banks or commercial banks? And how exactly are they manipulating the market? What is it that they are doing besides buying and selling?
“that when QE ends, so will they! “
When QE ends commercial banks just won’t have the Fed buying up so much of their debt paper. Meaning that banks will retain bonds and loans on their books instead of getting a fresh infusion of cash in exchange for them. I don’t know how ending QE will wreck a bank since it looks to me like their capital position will remain the same without it. Maybe you would care to explain the wrecking process.
“After JFK was popped, LBJ debased the currency with 1965 Coin Act.”
The debasing of American small coins was already a done deal well before John Kennedy was killed. It was the result of a problem called the Triffin Dilemma which began showing up while Eisenhower was still in office, in 1959.
This was created by a conflict between monetary policy and America’s foreign policy goals. Due to the Marshall Plan and the desire of foreign banks to hold onto dollars, the amount of dollars overseas exceeded the gold that we had to back them.
The solution to the Triffin dilemma would have required the United States to the reduce dollars in circulation by raising interest rates sufficiently to bring dollars back into the US, which would have put the country into recession. Kennedy wasn’t willing to do that, nor was Johnson. Nor Nixon for that matter.
Another solution to the Triffin Dilemma would have been to free the dollar from its role as the world’s reserve currency, a position proposed by Keynes when the Bretton Woods systems was being designed..
good point. In essence inflation is being stored at the banks.
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