Saturday, April 12, 2014

The Mother Of All Financial Bubbles

Here is a must-read essay by David Stockman about the financial bubble which is about to burst:

Just recall some of the numbers. At the turn of the century, the US had about $25 trillion of credit market debt outstanding; now it is pushing $60 trillion. About 14 years ago, China had debt of $1 trillion; now its nearly $25 trillion. And similar credit explosions occurred in much of the rest of the world. It was all central bank enabled, and it caused world wide investment booms and asset inflations which defy every law of sound money and economics, and which cannot be sustained indefinitely.

The bottom line of those destructive policies is that “cap rates” are artificially low and so their reciprocal, asset values, are enormously inflated. Likewise, nearly zero money market interest rates in virtually every major economy of the world have fueled the most fantastic expansion of “carry trades” ever imagined.

I hate to say "I told you so", but our way of life is coming to an end. Stand by to be just another useless eater (or perhaps a Luddite if you can work up that much courage).

Maybe this is why the BLM chose this moment to seize those cattle in Nevada. They're practicing for what the US government has planned after the collapse.

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