Nice .. thanks for compiling this.View attachment 154876
Here's what's up:
1) For most of history, interest rates had to be ABOVE the rate of inflation. In fact, arguably, part of the reason for the great inflation of the 1970's was that interest rates were a bit too low in the years before.
Although there was also some stuff going on with leaving the gold standard, and the oil crisis and such.
2) Back in the 1970's, the Federal Reserve had to raise the Federal Funds rate to almost 20% to tamp down inflation. A crazy move, somewhat legendary in history, by Paul Volker.
The problem is that today, the national debt is so high, that raising interest rates to even 10% would completely break the government's ability to repay debt. Back in the 1970's The Great Satan was a creditor nation, the national debt was very low. That's a big problem.
The Great Satan has gone through a series of bubbles, and collapses, over the years. In the 1990's, the stock market bubble burst, which sent the US into a recession. Most of that money was absorbed into the housing market, which became wildly inflated.
And in 2008, the bubble burst, which almost crushed most of America's big lending institutions. They got bailouts from the government, and the government took all of their debt onto their own books.
That means government bonds are the next bubble.
And that’s going to be a big, big disaster.
View attachment 154879
Because there is literally nothing else left to inflate. The bankers (and the world) are at the end of the road. All the other bubbles (stock market, housing, banks) were blown to prop up the biggest of them all, bonds.
What they have done is inflate the greatest bubble in bonds and this bubble is popping right now. The banksters are trapped and there is no way out.
They're backstopping everything, absorbing everything into themselves. That means, they are next.
I really think it could be bad. Why is anyone going to buy US debt when the promised interest rate is so much lower than the rate of inflation? Just like in 2008, I think these are junk bonds, they will collapse in value. And that will take the government down with it.
Now, some people say, "they want the inflation to be structural to inflate away the debt."
But, why would anyone buy US debt if they're planning to inflate it away? Nobody's going to do that. That mean, investment leaves the US and is poured into China.
And then you have the real big-brained Modern Monetary Theory geniuses:
"We'll just print the money with interest and pay ourselves back! Who cares, just print, use the magic money printer and print to oblivion!"
Yeah, Great idea, dumbfucks. Nobody ever tried that before.
View attachment 154882
The moment the fed tapers its purchases of junk mbs and corporate junk bonds, the US economy totally collapses. It's literally a fake economy based on effectively printing trillions for billionaires, it is a sick joke.I'm no too thrilled about US bonds crashing.. in the last few years only India and Switzerland increased their dollar holdings ..however last month RBI bought a lot of gold .. so it seems they see the danger too.
Americans are already attacking the "boogie" man foreigner invaders. It is common for tribes to hate and fear invaders even when times are good. When times are bad we get what happened in Rwanda or Germany. If there are not enough foreigners then those who used credit to take are often the targets (like in Germany, China and Russia).I currently live in the US and am feeling the pain of it. It is gonna be real bad.
Stagflation is going to set in in a lot of countries. This is just like the 1970's crisis.Stagflation prediction.
Stagflation is 'unavoidable' and investors should prepare for a 'significant growth slowdown,' Mohamed El-Erian saysThe Federal Reserve has a tough task ahead as it attempts to combat inflation while economic growth slows. “It needs a lot of luck at this point,” Mohamed El-Erian says.flip.it
If you really think about it, it's not so much necessary as much as it is pure class warfare.
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