Government finances usually look their best at cyclical peaks when lots of people are working and paying taxes, relatively few are drawing unemployment benefits or welfare, and financial asset prices are way up, thus generating lots of capital gains tax revenue.
Governments over the past 30+ years should hang their heads in shame, always looking for the short term fix. People are waking up to the ponzi scheme of endless credit / debt. I used to get angry but now just meh knowing we've past the point of no return.
John, love your data driven summaries. Keep up the good work!
In 2018, I wrote in my book (Chapter 13) that the West would face a depression in the coming decade. It starts with recession but worsens as the prescribed toxic medicine acts against corrective measures, like QE. The ONLY way out, IMHO is to issue sovereign money toward a 50/50 ration to credit money:
"CASH IS ESSENTIAL TO DEMOCRACY AND FREEDOM – AUSTRIA KNOWS THIS: BOOM has written often about the importance of physical cash in an economy. Cash is the antidote to excessive credit. In many advanced economies, physical cash is now only 2 – 3% of the supply of fresh new money with bank loans originating 97 – 98% of the money supply. Credit money (originated via new bank loans) is interest bearing, dependent upon demand from borrowers and subject to interest rate influence set from central planning committees — central banks."
This isn't just going to be another 2008 interim cycle twin. Having pushed short nominal rates to zero for the better part of 10 years central banks won't be able to foment another financial mania by pushing those rates to new lows yet again, the reckless game they've played for the last 40 years or so (avoid hangovers, stay drunk). We can now anticipate a secular financial collapse, meaning a decades long cycle, during which decades of monetary and fiscal distortions will be wrung from financial markets and the economy...painfully. Central banks will resort to unprecedented and accelerating fiat debasement in a futile attempt paper over the disaster but that will only serve to ensure this secular collapse is inflationary rather than deflationary.
Over the course of this inflationary secular financial collapse, potentially lasting a decade or more, those acting in a timely fashion can find refuge in tangible assets, particularly ultra liquid tangibles (i.e. precious metals).
Can we just get there already! How long does this can go down the road, I bought gold three years ago believing it imminent listening to Mannarino at the time! Sigh. Would have made alot more money leaving it in the investment fund, sigh some more.
I'm very interested to see how the latest spending boondoggle plays out. If it passes I think it will signal that the government/politicians will never limit - let alone decrease - spending and the bond market may finally grow a pair and take over. After all, if such favorable conditions and public attention isn't enough now then it never will be. That will mean even higher interest rates, ongoing bond losses and structural price inflation, and the metals will surge despite a "strong" dollar.
It will also cast a major pawl on the Trump agenda, because it will show that the best ideas in the world don't mean squat if Congress doesn't accept them. I know it's the old Senate until Jan 20 but Democrats don't have to vote "yes" either.
A personal Christmas present would be a nixed bill and a government "shut down". Has sentiment really changed, or is the Trump honey moon over? We shall see.
Governments over the past 30+ years should hang their heads in shame, always looking for the short term fix. People are waking up to the ponzi scheme of endless credit / debt. I used to get angry but now just meh knowing we've past the point of no return.
John, love your data driven summaries. Keep up the good work!
In 2018, I wrote in my book (Chapter 13) that the West would face a depression in the coming decade. It starts with recession but worsens as the prescribed toxic medicine acts against corrective measures, like QE. The ONLY way out, IMHO is to issue sovereign money toward a 50/50 ration to credit money:
"CASH IS ESSENTIAL TO DEMOCRACY AND FREEDOM – AUSTRIA KNOWS THIS: BOOM has written often about the importance of physical cash in an economy. Cash is the antidote to excessive credit. In many advanced economies, physical cash is now only 2 – 3% of the supply of fresh new money with bank loans originating 97 – 98% of the money supply. Credit money (originated via new bank loans) is interest bearing, dependent upon demand from borrowers and subject to interest rate influence set from central planning committees — central banks."
https://austrianpeter.substack.com/p/cash-essential-for-freedom-and-democracy?utm_source=twitter&sd=pf
Nice Work John!!!
Have a terrific Holiday Break.
“The Casino of 2025 ” will be upon us before we know it.
Roll the Dice! 🙈
This isn't just going to be another 2008 interim cycle twin. Having pushed short nominal rates to zero for the better part of 10 years central banks won't be able to foment another financial mania by pushing those rates to new lows yet again, the reckless game they've played for the last 40 years or so (avoid hangovers, stay drunk). We can now anticipate a secular financial collapse, meaning a decades long cycle, during which decades of monetary and fiscal distortions will be wrung from financial markets and the economy...painfully. Central banks will resort to unprecedented and accelerating fiat debasement in a futile attempt paper over the disaster but that will only serve to ensure this secular collapse is inflationary rather than deflationary.
Over the course of this inflationary secular financial collapse, potentially lasting a decade or more, those acting in a timely fashion can find refuge in tangible assets, particularly ultra liquid tangibles (i.e. precious metals).
Can we just get there already! How long does this can go down the road, I bought gold three years ago believing it imminent listening to Mannarino at the time! Sigh. Would have made alot more money leaving it in the investment fund, sigh some more.
In a situation like this, to win is to keep losses to a minimum.
Giddyap, bond vigilantes
What staocks will resist tne decline. Currently hold low multiple huigh yeild
I'm very interested to see how the latest spending boondoggle plays out. If it passes I think it will signal that the government/politicians will never limit - let alone decrease - spending and the bond market may finally grow a pair and take over. After all, if such favorable conditions and public attention isn't enough now then it never will be. That will mean even higher interest rates, ongoing bond losses and structural price inflation, and the metals will surge despite a "strong" dollar.
It will also cast a major pawl on the Trump agenda, because it will show that the best ideas in the world don't mean squat if Congress doesn't accept them. I know it's the old Senate until Jan 20 but Democrats don't have to vote "yes" either.
A personal Christmas present would be a nixed bill and a government "shut down". Has sentiment really changed, or is the Trump honey moon over? We shall see.
America we hardly knew ye...
Thank you John. US 10 YR at 4.58 right now and DXY is hovering around 108.4. Metals are getting slammed.