Does the ponzi scheme even have to end ?
As you know the mere whiff of QE will send markets advancing. What’s stopping the nonsense from stopping at all ?
If the dominant trend of the market is up, even if you have sensible morals as a trader why trade against it. My point here is the perpetrator is the one making the rules so he is unlikely to ruin his own party.
I will admit I’m not an economist but can clearly see the manipulation taking place.
The debt has been growing for over 30 years what and when can make it unsustainable. LFTYreply
Hi Theresa, thanks for your response and a good question that many ask.
The reasons why QE Infinity will run out or runway:
- Ever diminishing returns of effect
- Ever greater amounts required during a now hyperbolic debt build up
- A rapidly expanding bond bubble in volume and valueation as government debt creation, goes hockey stick
- QE delivers, No value to the real economy, just Asset price valuation inflating that later devalues during a fear period, such as a Brexit recently
- We also have expended other tools that helped, that are no longer available, such as monetary policy aka rate reductions
- Interest rate payments on Government debt are already to large a percentage of tax take.
- The effects of QE, is a flight to ‘safety’ for now in the overinflated government bonds and an ever increasing negative rate proliferation, which is squeezing banking margins and will precipitate bank collapse – I call this aspect the law of collateral effect.
- Capital hording in one sector of the market aka, Financial Engineering & speculation vs a drought of capital provision for SME’s or enterprise product & plant investment
- In short QE serves just the 1%’s as others don’t receive access to that largesse.. the 1%’ers can’t survive on huge assets values if the retail market is dying, there is a huge dichotomy and an unsustainable two speed environment, that which you feel, and the easy money for speculation & recapitalisation Bankers feel. They need a Buying Class and the government needs a middle class to tax
- Only its now an open secret, and with the foreboding of what is to come virtually no capital provision is going to entrepreneurs for start up capital and job creation.
- when the bond bubble collapses massive debt write offs will occur and pensions will be devalued and destroyed.
In short we already seeing the effects of the unsustainability in Deutsche Bank, Commerz Bank, Barclays and the Italian Banking segment. Not to mention CitiGroup, Bank of America etc..
20% of all bonds are now in negative territory and the binds are signalling classic recession, whilst the QE.. just pushes speculation assets like equity up in current valuation, that is just paper valuation and they can half in a month in a crash
The debt has grown for years but never like this in a 8 year period of zero rates, in short we have played all the cards, and debt upload can never see normal rates again due to the debt size, we have slowly at an ever increasing rate painted ourselves into a hole, for which there is no escape without a reset.
This is what we have to prepare for, and it can be unpleasant and the perpetrators may use extreme socio economic events to mask the meltdown to establish alibi. On the basis, ‘we could not have known that ‘xyz’… [place manufactured extreme event in here of your choice WWWIII, US martiaa law, on riots etc..]’ would happen?’
Already Alan Greenspan, the greatest criminal of the liquidity experiment, now that he is a number of years out the FED seat is saying it can’t go on. They are establishing there ‘I told you so’s’
The smart money billionaires are now all playing defence, in short it is a zombie economy with low long term investment as business cash cow whilst they await the hammer to fall.
Time to prep.. long list of to do’s from a fellow poster:
Below.. get empowered and do the list…