On Septemeber 30, at Murphy, North Carolina, I addressed the Appalachian Network PATCON, a gathering of very bright people on the cutting edge of preparation for the coming catastrophe. The topic was: “How to Survive an Economic Collapse.”
Interest rates are going up, which is generally not a good thing for heavily indebted economies. That would be most of them. From Wolf Richter at wolfstreet.com:
Ironically, after having lamented the flattening yield curve for a year, soothsayers now lament the steepening yield curve.
On Friday, capping a rough week in the US Treasury market, the 10-year yield closed at 3.23%, the highest since May 10, 2011, and stocks fell for the second day in a row. This is an unnerving experience for pampered equity investors who’ve come to take endless stock-price inflation for granted, who’d figured for years that interest rates would never rise, and as short-term interest rates began rising, figured that long-term interest rates would never rise – and now they’re rising too.
Posted in Business, Debt, Economy, Financial markets, Investing
Tagged central bank policies, interest rates, Treasury Bonds
Cheap credit keeps alive a lot of corporations who should be dead. From Charles Hugh Smith at oftwominds.com:
Posted in banking, Business, Debt, Financial markets, Government, Investing
Tagged central bank policies, interest rates, Zombie companies
Doug Casey is sure what he calls “The Greater Depression” will resume; we’re only in the eye of the hurricane. From Casey at caseyresearch.com:
Justin’s note: The U.S. economy is booming.
According to the government, U.S. GDP (gross domestic product)—a broad measure of economic growth—rose by 4.2% year-over-year. That’s the highest mark in four years. U.S. wages are growing at the fastest rate in nine years. Unemployment is at its lowest level in 18 years. And jobless claims are at a 48-year low.
This is great news for everyday Americans. That’s obvious. The question is… how much longer can the U.S. economy fire on all cylinders?
So I got Doug Casey on the phone to get his take…
Justin: Doug, what are your thoughts on the economy? Is it as strong as the government says?
Doug: Well, to start, I must admit that no one is more surprised than I am that things are holding together as well as they are.
I was convinced that zero percent interest rates and QE 1, 2, 3, and 4—the response to the meltdown that started in 2007—would bring on a disaster sooner, not later. They’ve caused people to borrow more and save less, which is a formula for poverty. But, so far, the most obvious result has mainly been booming stock, bond, and property markets. The rich have gotten a lot richer, while the middle class has slipped down only slowly.
The last ten years are a classic example of how something can take much longer to happen than you expect. But once the inevitable gets underway, it’s going to happen much more quickly than you expect. Continue reading
Posted in Business, Debt, Economics, Economy, Government, Investing, Money
Tagged central bank policies, interest rates, President Trump
The fallacy that economies can be efficiently planned and guided by bureaucrats from above just won’t let go, even after such planning and guidance have repeatedly failed. From Vitaly Katsenelson at mises.org:
The Federal Reserve’s changing of the guard — the end of Janet Yellen’s tenure and the beginning of the Jerome Powell era — has me remembering what it was like to grow up in the former Soviet Union.
Back then, our local grocery store had two types of sugar: The cheap one was priced at 96 kopecks (Russian cents) a kilo and the expensive one at 104 kopecks. I vividly remember these prices because they didn’t change for a decade. The prices were not set by sugar supply and demand but were determined by a well-meaning bureaucrat (who may even have been an economist) a thousand miles away.
If all Russian housewives (and house-husbands) had decided to go on an apple-pie diet and started baking pies for breakfast, lunch, and dinner, sugar demand would have increased but the prices still would have been 96 and 104 kopecks. As a result, we would have had a shortage of sugar — a common occurrence in the Soviet era.
Posted in banking, Debt, Economics, Economy, Financial markets, Government, History, Uncategorized
Tagged central bank policies, Economists, Prices, Soviet Union
If the global economy is so strong, why do central banks have to keep propping it up? From Charles Hugh Smith at oftwominds.com:
Posted in banking, Business, Currencies, Debt, Economics, Economy, Financial markets
Tagged central bank policies, Recovery
The too big to fails in 2008 are bigger, the debt pile is higher, and policymakers are at least as stupid, if not stupider. From Jim Quinn at theburningplatform.com:
“A variety of investors provided capital to financial companies, with which they made irresponsible loans and took excessive risks. These activities resulted in real losses, which have largely wiped out the shareholder equity of the companies. But behind that shareholder equity is bondholder money, and so much of it that neither depositors of the institution nor the public ever need to take a penny of losses. Citigroup, for example, has $2 trillion in assets, but also has $600 billion owed to its own bondholders. From an ethical perspective, the lenders who took the risk to finance the activities of these companies are the ones that should directly bear the cost of the losses.” – John Hussman – May 2009
This month marks the 10th anniversary of the Wall Street/Fed/Treasury created financial disaster of 2008/2009. What should have happened was an orderly liquidation of the criminal Wall Street banks who committed the greatest control fraud in world history and the disposition of their good assets to non-criminal banks who did not recklessly leverage their assets by 30 to 1, while fraudulently issuing worthless loans to deadbeats and criminals. But we know that did not happen.
Posted in banking, Business, Collapse, Crime, Currencies, Debt, Economics, Economy, Financial markets, Governments, History, Investing, Morality, Politics
Tagged central bank policies, Federal Reserve, President Trump, stock buybacks
