20190826-Money GPS-Central Banks are destroying the Financial System on purpose


Money GPS (Central Banks Are Destroying the Financial System):

-The pattern that is emerging in the monetary system is that Central Banks are moving towards negative interest rates.   They are moving to a place that they can NOT come back from.  What does this new paradigm shift mean?

-Many thinks they are doing that so the financial systems won’t collapse thereby  maintaining order.   However, for more astute observers, they know the people in control- the bankers, establish order out of chaos.   They create problem then provide solution.





-The graph is showing the amount of Euro that the European Central Banks were printing since 2015. 

-The hand-drawn graph shows the global stock markets that were on an upward trend until about Dec 2017.   When they cut down the amount of money they were printing in a big way in Jan 2018 (you see a big drop from Dec 2017 to Jan 2018 ), the stock markets took a nose dive and never since break pass the same Dec 2017 level.

-This means that the stock markets are completely enslaved by the Central Banks that would create a crisis intentionally as they have done countless times before.

-When they drive everything to the ditch, then they will have excuses to buy up all the assets for pennies and people will be begging them to do so!

A few points on what’s happening in the market:

-The inversion of the Treasury yield curve, as evidenced by the 10-year yield falling below the 3-month yield had persisted for about 2 months.  This means that the market participants are anticipating weaker economic conditions in the future and the Fed would soon need to lower the interest rate substantially in response.

-Global debt with negative rates has surged to $16.4 trillion from $12.2 trillion in mid-July and $5.7 trillion in October last year.

-Until f few months ago, negative-yield debt was an interesting idea.  In the last 3 months, it’s become a mainstay in the market place.

-The negative yield phenomenon – 87% of it in Europe and Japan combined.

-This is like a temperature gauge for the economy that says the economy is sick!

-Most of the negative-yield debt is in government bonds because they are seen as very safe.   But there are also about $60 billion US corporate bonds that re in negative territory.

-The US 10-year Treasury note is 1.57% and after minus inflation rate, it is in negative territory as well.

-So what is happening in the financial system?   There is yield curve inversion, negative interest rates, Central Banks cutting interest rates at a time when they have been cutting for 10 years.

-Some people will say what’s wrong with low interest rate?   It will let them borrow for cheaper.   However, people don’t understand in order to keep the interest rates low, the Central Bank has to engage in open market operations.  Essentially they have to print money keep the rates artificially low.

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