Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Closing Report: Gold and Silver Gain About 1%
By: Chris Mullen, Gold Seeker Report

Does The CoT Structure Prohibit A Rally?
By: Craig Hemke

Harry Dent’s Gold Prediction Invalidated
By: Przemyslaw Radomski, CFA

SELLING OUT OF PRECIOUS METALS AND BUYING BITCOIN…. Very Bad Idea
By: Steve St. Angelo

The Bitcoin Bubble Explained in 4 Charts
By: Jake Weber

VXX Sends an Awesome Message from Another Galaxy
By: Rick Ackerman

Geopolitical Risk Highest “In Four Decades” – Gold Demand in Germany and Globally to Remain Robust
By: GoldCore

Asian Metals Market Update: November-22-2017
By: Chintan Karnani, Insignia Consultants

Gold Seeker Closing Report: Gold and Silver Gain With Stocks
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 11 21 2017
By: Ira Epstein

 
Search

GoldSeek Web

 
The $100 Trillion Trigger That Terrifies Central Banks


 -- Published: Thursday, 8 January 2015 | Print  | Disqus 

By Graham Summers

 

The world is turning Japanese.

 

For over 20 years, Japan has been ground zero for the great Keynesian nightmare of Central Planning. Japan’s financial bubbles burst in 1989-1990. Since that time, Japan has seen little to no growth for thirty straight years.

 

The Bank of Japan has dealt with this by running an effective zero percent interest rate policy and implementing over NINE different QE programs amounting to an amount of money equal to over 50% of Japanese GDP.

 

Throughout this period, neither Japan’s GDP growth numbers nor its employment growth numbers have improved significantly.

 

In the simplest of renderings, Japan has proven point blank that you cannot fight an epic debt bubble by making debt cheaper. The facts are right out in the open for all to see.

 

However, this has not stopped Central Banks form around the world from implementing the exact same failed policies to fight their own bouts of deflation.

 

Globally, Central banks have cut interest rates over 500 times and printed over $11 trillion to combat the brief bout of deflation that ran from 2008-early 2009.

 

The results have mirrored those of Japan’s post 1990: anemic growth and chronically high unemployment. By all measures, the “recovery” post 2008 for much of the world has been the weakest in the post-WWII era.

 

Rather than trying something new, Governments and Central Banks have resorted to simply printing more money. And they’ve dealt with the slow growth by simply fudging their economic data to the point of it being outright laughable.

 

All of this makes no sense at all until you consider that ALL of their actions have been focused on one thing: making sure the global bond bubble DOESN’T IMPLODE.

 

When stocks crash, investors go broke.

 

When bonds CRASH, entire countries go bust.

 

This is why Central Banks have done everything they can to stop any and all defaults from occurring in the sovereign bonds space. Indeed, when you consider the bond bubble everything Central Banks have done begins to make sense.

 

1)    Central banks cut interest rates to make these gargantuan debts more serviceable.

 

2)    Central banks want/target inflation because it makes the debts more serviceable and puts off the inevitable debt restructuring.

 

3)    Central banks are terrified of debt deflation (Fed Chair Janet Yellen herself admitted that oil’s recent deflation was an economic positive) because it would burst the bond bubble and bankrupt sovereign nations.

 

This is also why globally the bond market has TRIPLED in the last 15 years: as bonds come due, bankrupt Governments have been forced to issue MORE debt to pay back bondholders.

 

This, in turn, has driven the rise in leverage in the financial system. As the risk-free rate fell, so did all other rates of return. Thus investors turned to leverage or using borrowed money to try to gain greater rates of return on their capital.

 

This bubble, literally dwarfs all other bubbles. To put this into perspective, the Credit Default Swap  (CDS) market that nearly took down the financial system in 2008 was only a tenth of this ($50-$60 trillion).

 

When this bubble bursts, 2008 will look like a picnic.

 

If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.

 

You can pick up a FREE copy at:

http://www.phoenixcapitalmarketing.com/roundtwo.html

 

Best Regards

Phoenix Capital Research

 


| Digg This Article
 -- Published: Thursday, 8 January 2015 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.