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Thread: The Fed lost control

  1. #21

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    Quote Originally Posted by oak333 View Post
    Central bankers are not sure what to believe anymore.
    -------------------------------------------------------------

    Central bankers and economic policy makers convened in Washington
    for the annual meeting of IMF, IIF, and World Bank.

    Three main themes:
    1) what are the long term implications of negative interest rates
    2) how disruptive is the new technology (crypto currencies, mobile payments..)
    3) what does actually greening of the financial system mean in practice ?
    It it about the effects of the climate change on the financial system.....and it
    was the biggest subject

    https://www.zerohedge.com/economics/...elieve-anymore
    1) end of what is left of the free market economy

    2) potentially very disruptive to those wanting monopolistic fiat power.

    3) diminishing of the US petro dollar and potentially the end of US $ as reserve currency

  2. #22

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    1. Bonds that still beat inflation, stock prices go insane, only way left to beat inflation?, tangibles/RE go up in price.
    2. Peer to Peer money transfer?, government confused, but omg the whole world is in on it.
    3. Solar, wind, hydro, carbon cleaners, EV's, etc.

  3. #23
    Join Date
    Jan 2017
    Posts
    4,129

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    Monetarist era is over.
    ------------------------

    Central banks were the first to recognize it and asked the governments
    to manage business cycles by fiscal policy (tax + spending)

    https://www.project-syndicate.org/co...letsky-2019-10

  4. #24
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    4,129

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    Interest rates are a combination of two factors: 1) inflation 2) risk

    While inflation looks under control for now, risk is high in financial markets.
    Higher risk asks for higher interest rates. So the markets are pushing for
    higher interest rates. The yield of 10 year treasury bond is around 1.4 %.
    Go to a bank and ask for a 10 year loan at 1.4 %....you will be laughed at.

    But the FED, ECB, and other central banks are downright scared to increase
    the interest rates. Why ? Stock markets will crash. The amount of money to
    service the debt will increase hugely. The world debt is , by some estimates,
    around 255 trillion $. Just perform a simple calculation how much more money
    is necessary to service the debt if interest rates go up by 1 %.
    Simply 255 trillion X 1 % = 2.55 trillion . That is per year ! Add 2.55 $ trillion to
    the debt service already being paid. Per year.

    These are ideas taken from:
    Martin Armstrong
    Manipulating the World Economy

  5. #25

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    Quote Originally Posted by oak333 View Post
    Interest rates are a combination of two factors: 1) inflation 2) risk

    While inflation looks under control for now, risk is high in financial markets.
    Higher risk asks for higher interest rates. So the markets are pushing for
    higher interest rates. The yield of 10 year treasury bond is around 1.4 %.
    Go to a bank and ask for a 10 year loan at 1.4 %....you will be laughed at.

    But the FED, ECB, and other central banks are downright scared to increase
    the interest rates. Why ? Stock markets will crash. The amount of money to
    service the debt will increase hugely. The world debt is , by some estimates,
    around 255 trillion $. Just perform a simple calculation how much more money
    is necessary to service the debt if interest rates go up by 1 %.
    Simply 255 trillion X 1 % = 2.55 trillion . That is per year ! Add 2.55 $ trillion to
    the debt service already being paid. Per year.

    These are ideas taken from:
    Martin Armstrong
    Manipulating the World Economy
    Right.
    But, other than that..
    We here in the u.s.A are Ejoying
    the Best Economy in the History of the World... so..
    And I can still go shop Walmart and the DollarTree!
    x3

  6. #26

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    Is there any actionable information here? Or are we just having a fun glum and doom moment, running around like chickens with our heads cut off?

  7. #27

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    Doom and gloom

    1) No one knows.. Asset inflation, rich get richer, poor get poorer, until there are riots in the streets OR sudden inflation creates a crash.
    2) No one cares, for now.
    3) It means you pay to fly green. Just like people payed to avoid going to hell back in the days. Someone is getting rich, and it's not you.

  8. #28
    Join Date
    Jan 2017
    Posts
    4,129

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    The Fed bails out the repo market second time in one week.

    https://www.zerohedge.com/markets/ny...cond-time-week

  9. #29

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    Quote Originally Posted by DBCooper View Post
    Is there any actionable information here? Or are we just having a fun glum and doom moment, running around like chickens with our heads cut off?
    Sorry but it's Just TOO Good to pass up...
    x3

  10. #30
    Join Date
    Jan 2017
    Posts
    4,129

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    This is an interesting interview with Frank Giustra:

    https://www.zerohedge.com/geopolitic...ould-mean-gold

    A few points:
    ----Fed is out of ammo but that would not stop them. They will call it
    helicopter money or MMT (Modern Monetary Theory). It was QE
    (Quantitative Easing) because it was sounding more elegant than
    printing money

    ----It all started with Alan Greenspan. He ushered in the era of
    pleasing the markets with easy money. He was the first to bail out
    the markets at every crisis. Ben Bernanke set the stage for what
    we are in now. All what they did was to encourage debt and speculation.

    Central Banks have been buying gold for quite a while, fearing weaponization
    of the US $. Wall Street ignores gold....but look at what they do, not at
    what they say.

    This phase of gold bull market (started 2019) is the THIRD AND FINAL WAVE
    of the gold bull market which started in 2001. This phase is going to be a TSUNAMI.

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