Many of us who follow the alternative media religiously have been waiting for the expected Market crash to arrive soon. It's kind of a pessimistic outlook, when you are waiting for disaster to strike; knowing clearly that we ourselves may take the brunt force of this economic disaster. But then the realization that everything around us are bubbles, takes us to a different mental state. "Better late" thinking won't work in a bubble economy as by the time the disaster arrives, they may have blown the bubble ten-fold. That means the aftereffect of it's blowing increases at least ten times; but in reality it may follow an exponential scale.
Trump is a nationalist. He wins, markets rally. Macron is a globalist. He wins, markets rally. The name for this logic is "bubble." pic.twitter.com/xX6eAou4Li
— Jim Rickards (@JamesGRickards) 24 April 2017
Is the Economy in a Bubble?
The biggest fight between Main stream media and the alternative media is based on this one issue - Are we in a Bubble Economy? The main stream media paints a picture of all rosy everywhere, we may have a small slowdown but everything is gonna fly from now on. They ridicule anyone who says the word bubble. For me, the best explanation for whether we are in bubble territory of economy is given by a sarcastic but still realistic tweet by Jim Rickards above.
There is no question whether the we are in a Bubble economy. I think the correct phrase to use would be that the"Economy is full of Bubbles". Whether it's Real Estate or Car Loan or Credit Card Loan or Student Loan or Personal Loan all are in deep bubble territory. But the biggest of them are the Stock Market and the Bond Market, whose size is multi-fold compared to the former. The Stock Market has been in ecstasy run for sometime; and that's not only in US everywhere in the World.
This week most of the Stock Market are at all-time high. May be these realistic rally? May be the reason why stocks are on all time high could be because the economy is actually at all time high. May be the stock market is reflecting the actual economy! Nope, way off the mark. You want proof, the very fact that Donald Trump is the President of United States of America and Macron is about to become President of France (even after claiming that there is noting called French Culture) is a testimony of the fact that the main stream economy is spiraling down. Each vote for these two guys have been a vote against the current economic station.
It's not only in US or France , all across the West people are turning against the current political and economic system and against the control of Global Elites. Even though the election of Trump and would be election of Macron is in essential a new way of controlling the world by Global Elites. But that's a totally different discussion and will take it up in some other upcoming posts.
Many of us have argued that the entire system will collapse last year, but that didn't happen. Many of us underestimated the strength of the System to continue the illusion and scam. But the pressure have been building up tremendously after Q1 of this year. The recent news coming out of Atlanta FED is that the GDP of Q1 will be around 0.2% and JPM agrees to it with their own number of 0.3%.
The stock market in particular is worrying many, even though the main stream media is going all out for a 30,000 DOW. Recent comments from FED indicates that even they are worried about the enormous bubble they helped to inflate in Global stock markets. When even FED is getting worried, better everyone get worried. The bond market has been wobbling for sometime and some of experienced bond gurus are already predicting that we may have entered a secular bear market in bonds.
The problems bond market is facing usually never attracts public interest. The main reason is that since public cannot trade in them, they feel totally disconnected. Prior to 2008, they may have a good case for that kind of argument. But the Troubled Asset Relief Program (TARP), which was done to save the banks in the Great Crisis of 2008 exposes every one of us to the bond market crisis. Using TARP, all the toxic assets of all the major banks have been acquired by Central Banks, that means the Governments. So Governments own all the toxic assets now and Bond Market is essentially where the confidence on Government, Currency and Central Bank comes from.
Any trouble in the Bond market will see Governments running for cover which will result in each one of our lives becoming extremely miserable. The 0.1% whose interests have been taken care by successive Governments will remain unhurt!
It's not yet clear what could ignite the economic collapse, but it's becoming clear that it will happen in 2017. When? May be tomorrow! Many people are unaware that the US Government will go into shutdown tomorrow as I see no realistic chance of a budget passing today. Early this week the mainstream media have painted a picture of compromise being reached across the table to avoid a shutdown. But yesterday complete different picture have emerged.
The Democrats are sticking to their demand of funding for Obamacare and Planned parenthood. Trump and the leading Republicans are in a mood to compromise to avoid shutdown. Trump has renege on his total nonsensical promise of the Mexican Wall (his comments that Mexico will pay is coming to haunt him now!) and more seriously he have started going back on Free Trade agreement commitments. But he will soon realize that he is 'caught in between devil and the deep blue sea'. If he thinks that he will be able to strike a deal with Democrats , wait till the Freedom Caucus Republicans shred it to parts. An extended shutdown will start the downward spiral and the scary part is that it all could happen within weeks.
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