I have been reading about this topic for over 20 years now. The various predictions of collapse back in 2000 and 2008 and 2020 did not materialize. So the question now is..... will the new predictions of impending collapse finally materialize? History would suggest not...... at least not yet.
Having said that I believe, or perhaps better to say, I have the opinion that there will be another last cobbled together attempt top kick the can one more time. Now we all know the adage that opinions are like assholes.... every has one. However the really question is what can you actually do about it? I think there are some things you can do to hedge your bets and I suspect most readers of this sub stack already know where you can diversify your bets ( I mention some in a reply to a comment below). However, ultimately it's all going to be a bit of a crap shoot.
The best we can hope for is that the can can be kicked down the road one more time, however few can deny the road is running out fast.....
Controlled collapse. As seen by the hollowing out of the cities, uncontrolled immigration (invasion), deliberate genocide (Covid 19 & Transgenderism), and the undermining of the economy. Not to mention a few harmless wars and the weaponizing of politics.
Well that is probably true but what are we going to do about it? If they just want to kill us all it is for their amusement because they cannot conceive of any other purpose in life. Whatever the problems in the world are, it is always someone else's fault. It cannot be them. They are the great powerful ones, right? They are too stupid, so stupid. They are going to kill everybody
One line in this article has triggered me to sign in and comment on a substack for the first time ever, despite reading 10 a day for last 2 years,
Inflation is not a monetary phenomenon? Did not expect that….are you using inflation to mean rising prices of certain goods, eg the price of salmon. The correct definition is a general reduction in the purchasing power of money. I believe this to be entirely monetary, in that you van not have generally rising prices without first increasing the money supply. This is such a simple concept that 95% of people don’t seem to understand.
Imagine an island (earth) with a fixed amount of money, say 1m USD. There are only a few essential goods and services and savings accounts (but no interest is charged on loans). Then let’s say the banana crop fails and supply drops massively, driving up the price, increasing total money spent on bananas by 100k. This extra 100k either wipes out peoples savings accounts or reduces the amount spent on another commodity, say soya beans. Neither the rise in banana prices, nor the fall in soya represent inflation / deflation. There can not be any inflation on this island without a general rise in the money supply. A certain price going up is a specific supply demand imbalance, not inflation.
"Consequently, the asset side of banks' balance sheets shrinks" Why? This is the stuff I never do get. If interest rates are higher, why cannot the banks just loan it out and get a better return? Because they already DID that? And the rates do not change, so they are stuck with the old rates they offered to people several years ago. Well, okay. So didn't the Fed know that when they raised the rates? There just seems to be no point to this stuff. And of course, they never admit to not knowing what they are doing. Pretense of sagacity always has to come first. OMG
It doesn't necessarily follow that when the central bank raises interest rates that the large banks' holdings of low coupon government bonds cause significant losses as it depends on the extent to which they have hedged their long term interest rate exposure. I suppose it is the case that the hedges in either exchange traded or over-the-counter (OTC) derivatives exposes the banks to some increased credit risk to the exchanges and OTC counterparties until margin and collateral flows reduce this. However, exacerbating the whole systemic OTC derivative risk is, I believe, the accounting framework supporting the financial industry. US GAAP overseen by FASB and IFRS by IASB build in a guaranteed financial black hole by requiring the mid-market valuation in trading book accounts of often arcane, long dated and, in a period of market volatility, definitely illiquid instruments. Shareholder dividends and bankers' bonuses will have been paid out based on these values in the good times but when the excrement hits the cooling device and positions need closing out those mid-market values are nowhere to be seen. Hello tax-payer bailout. Yet just like the rating agencies escaped lightly for their over optimistic ratings of sub-prime mortgage based CDO's contributing to/causing the crash in the naughties so I'm not aware of any real scrutiny of the accounting/auditing profession for their part in the ongoing crisis. Is this idiocy or planned? Whichever, the result is we all suffer yet more assault by acronym.
got it. I suppose ~ Well let me add this. I don't suppose it was planned, but rather the intellectual challenges are too much for them. If we cannot think something through we just give up trying to think. Then we settle for whatever we think should replace actual thinking or truth. Then "reality" is whatever occurs to you. So now look over at the academic discipline. This is called Economics. There are many things those persons have never really dug into. It just never gets investigated. When you don't have the answers, you just settle. For nonsense. Anything. As long as it looks good. It is just so you look like you know what your are doing. Because --- one has to keep up appearances, you know. They will resist any admission that they don't know something. They are the expert after all. They need to look like they what they are doing and they will ultimately resort to suppression of any dissenter like me.
Sure the large firms managed to pick better than the monkey, but they also can manipulate the market, so that’s not a very good comparison. When compared to small cap, small cap value, large cap value, and 60% stock / 40% bonds, the monkey won. He was beaten by large cap and mid cap.
There have been too many “perfect” mistakes to be considered “chance” during the Biden regime. The Afghanistan exit is first in my mind. How could anyone NOT know that leaving your only defensible position -- before a military withdraw is a bad idea? The truth is, they do know it’s a bad idea, but they have some arrangement which allows them to benefit from the outcome.
The economy is a self correcting. Therefore it can only fail with direct and deliberate intervention. That is what we are seeing now.
So when you hear that something in the economy is “transitory” run for the hills, because what that really means that we’re only seeing the tip of the iceberg.
What amazes me is the people that know Biden is a puppet, and they're just OK with it.
It's not like they really know what to expect from the people running the show. There are NO good outcomes for anybody outside of government. And even some of those people will be screwed over from the looks of it.
(Not A Trained Economist Disclaimer), but, the December 2022 Quarterly Report featured interesting numbers on page 71. The BIS concerns itself with currency exchange "settlement risk". "....estimated off-balance sheet dollar obligations of USD39 Trillion at end-June 2022..."
Meanwhile Fed Chair under Biden has been shovelling USD800 Million a day from Treasury to pay reverse-repo interest charges on loans from private sector. The world's top money printing outfit is borrowing cash it issued to banks during the scamdemic to reduce liquidity (anti-inflationary tactic he says). Biden bribes? Miniscule. At the Fed we see the real looting of America. Godfather III.
No there are other options....... have a good portion of your savings in gold and silver allocated non bank bullion (25% of my wealth) and a small amount of Bitcoin / Etherium (they could well have one more boost but no more than you can afford to lose without it impacting your future). Also many natural resource stocks for stuff that is mined or grown may see an initial collapse, but we cant do without there outputs. These are just some options of course. If you believe the system will collapse entirely then only two metals will be important, Brass and Lead. Even then, without food and shelter away from cities will be paramount. Thats brings me back to the Brass and Lead......
I have been reading about this topic for over 20 years now. The various predictions of collapse back in 2000 and 2008 and 2020 did not materialize. So the question now is..... will the new predictions of impending collapse finally materialize? History would suggest not...... at least not yet.
Having said that I believe, or perhaps better to say, I have the opinion that there will be another last cobbled together attempt top kick the can one more time. Now we all know the adage that opinions are like assholes.... every has one. However the really question is what can you actually do about it? I think there are some things you can do to hedge your bets and I suspect most readers of this sub stack already know where you can diversify your bets ( I mention some in a reply to a comment below). However, ultimately it's all going to be a bit of a crap shoot.
The best we can hope for is that the can can be kicked down the road one more time, however few can deny the road is running out fast.....
Controlled collapse. As seen by the hollowing out of the cities, uncontrolled immigration (invasion), deliberate genocide (Covid 19 & Transgenderism), and the undermining of the economy. Not to mention a few harmless wars and the weaponizing of politics.
Well that is probably true but what are we going to do about it? If they just want to kill us all it is for their amusement because they cannot conceive of any other purpose in life. Whatever the problems in the world are, it is always someone else's fault. It cannot be them. They are the great powerful ones, right? They are too stupid, so stupid. They are going to kill everybody
One line in this article has triggered me to sign in and comment on a substack for the first time ever, despite reading 10 a day for last 2 years,
Inflation is not a monetary phenomenon? Did not expect that….are you using inflation to mean rising prices of certain goods, eg the price of salmon. The correct definition is a general reduction in the purchasing power of money. I believe this to be entirely monetary, in that you van not have generally rising prices without first increasing the money supply. This is such a simple concept that 95% of people don’t seem to understand.
Imagine an island (earth) with a fixed amount of money, say 1m USD. There are only a few essential goods and services and savings accounts (but no interest is charged on loans). Then let’s say the banana crop fails and supply drops massively, driving up the price, increasing total money spent on bananas by 100k. This extra 100k either wipes out peoples savings accounts or reduces the amount spent on another commodity, say soya beans. Neither the rise in banana prices, nor the fall in soya represent inflation / deflation. There can not be any inflation on this island without a general rise in the money supply. A certain price going up is a specific supply demand imbalance, not inflation.
How is this wrong?
She ain't the smartest.
"Consequently, the asset side of banks' balance sheets shrinks" Why? This is the stuff I never do get. If interest rates are higher, why cannot the banks just loan it out and get a better return? Because they already DID that? And the rates do not change, so they are stuck with the old rates they offered to people several years ago. Well, okay. So didn't the Fed know that when they raised the rates? There just seems to be no point to this stuff. And of course, they never admit to not knowing what they are doing. Pretense of sagacity always has to come first. OMG
we're going down but all I know is she is getting more reads than I am. Please. Somebody go to my substack. I use grammar --- the whole bit.
It doesn't necessarily follow that when the central bank raises interest rates that the large banks' holdings of low coupon government bonds cause significant losses as it depends on the extent to which they have hedged their long term interest rate exposure. I suppose it is the case that the hedges in either exchange traded or over-the-counter (OTC) derivatives exposes the banks to some increased credit risk to the exchanges and OTC counterparties until margin and collateral flows reduce this. However, exacerbating the whole systemic OTC derivative risk is, I believe, the accounting framework supporting the financial industry. US GAAP overseen by FASB and IFRS by IASB build in a guaranteed financial black hole by requiring the mid-market valuation in trading book accounts of often arcane, long dated and, in a period of market volatility, definitely illiquid instruments. Shareholder dividends and bankers' bonuses will have been paid out based on these values in the good times but when the excrement hits the cooling device and positions need closing out those mid-market values are nowhere to be seen. Hello tax-payer bailout. Yet just like the rating agencies escaped lightly for their over optimistic ratings of sub-prime mortgage based CDO's contributing to/causing the crash in the naughties so I'm not aware of any real scrutiny of the accounting/auditing profession for their part in the ongoing crisis. Is this idiocy or planned? Whichever, the result is we all suffer yet more assault by acronym.
got it. I suppose ~ Well let me add this. I don't suppose it was planned, but rather the intellectual challenges are too much for them. If we cannot think something through we just give up trying to think. Then we settle for whatever we think should replace actual thinking or truth. Then "reality" is whatever occurs to you. So now look over at the academic discipline. This is called Economics. There are many things those persons have never really dug into. It just never gets investigated. When you don't have the answers, you just settle. For nonsense. Anything. As long as it looks good. It is just so you look like you know what your are doing. Because --- one has to keep up appearances, you know. They will resist any admission that they don't know something. They are the expert after all. They need to look like they what they are doing and they will ultimately resort to suppression of any dissenter like me.
Incompetence couldn’t have landed us where we are now -- in fact it’s strategic thinking that has resulted in the bad outcomes we’re seeing.
Even if we are to believe that Biden is in charge. Nobody can explain how fantastically unlucky he is.
Remember the monkey that was picking stocks a few years back? Well he was actually not that bad.
https://www.mindfullyinvesting.com/the-stock-picking-monkey-that-just-wont-quit/
Sure the large firms managed to pick better than the monkey, but they also can manipulate the market, so that’s not a very good comparison. When compared to small cap, small cap value, large cap value, and 60% stock / 40% bonds, the monkey won. He was beaten by large cap and mid cap.
There have been too many “perfect” mistakes to be considered “chance” during the Biden regime. The Afghanistan exit is first in my mind. How could anyone NOT know that leaving your only defensible position -- before a military withdraw is a bad idea? The truth is, they do know it’s a bad idea, but they have some arrangement which allows them to benefit from the outcome.
The economy is a self correcting. Therefore it can only fail with direct and deliberate intervention. That is what we are seeing now.
So when you hear that something in the economy is “transitory” run for the hills, because what that really means that we’re only seeing the tip of the iceberg.
Anyone today who believes Biden is in charge, needs to be committed to an institution asap.
What amazes me is the people that know Biden is a puppet, and they're just OK with it.
It's not like they really know what to expect from the people running the show. There are NO good outcomes for anybody outside of government. And even some of those people will be screwed over from the looks of it.
(Not A Trained Economist Disclaimer), but, the December 2022 Quarterly Report featured interesting numbers on page 71. The BIS concerns itself with currency exchange "settlement risk". "....estimated off-balance sheet dollar obligations of USD39 Trillion at end-June 2022..."
Meanwhile Fed Chair under Biden has been shovelling USD800 Million a day from Treasury to pay reverse-repo interest charges on loans from private sector. The world's top money printing outfit is borrowing cash it issued to banks during the scamdemic to reduce liquidity (anti-inflationary tactic he says). Biden bribes? Miniscule. At the Fed we see the real looting of America. Godfather III.
https://www.washingtontimes.com/news/2023/jun/21/federal-reserve-doles-out-corporate-welfare-your-d/
Interesting article seems like the only option is to stash cash under the mattress
No there are other options....... have a good portion of your savings in gold and silver allocated non bank bullion (25% of my wealth) and a small amount of Bitcoin / Etherium (they could well have one more boost but no more than you can afford to lose without it impacting your future). Also many natural resource stocks for stuff that is mined or grown may see an initial collapse, but we cant do without there outputs. These are just some options of course. If you believe the system will collapse entirely then only two metals will be important, Brass and Lead. Even then, without food and shelter away from cities will be paramount. Thats brings me back to the Brass and Lead......
The latter disguised as the former.
true