Here we are, facing another dose of “stimulus” with commodities and market prices at multi-year highs. So how can more “borrowing” or “printing” be justified?
The answer is that it doesn’t have to be. Central bankers will lie and tell you that it is designed to stimulate the private sector of the economy. It has not, nor will it do no such thing. It is designed for one purpose: to allow governments to continue their deficit spending in an economy that will not provide enough tax revenue. And it won’t matter who is President. It won’t change a thing.
There, I said it. The governments around the world could not fund their spending if Central Bankers didn’t create capital (no pun intended) that “gives” money to investors so that they can buy government bonds. And the extra money goes into assets so there are profits for the “Vigorish”.
And don’t even ask about people who need to live off the interest. They are forced to buy yield-oriented stocks, at any price. Or to chase “growth”.
Any student of history knows that this will obviously end it disaster. But before that there will be inflated “false” riches for those who are smart (stupid) enough to pick up nickles in front of the steam roller.
14 Responses to Keeping Governments Afloat…
Scott, what do you think the FED does/says on Friday?
More of the same jawboning or an announcement of something more concrete?
Buying stocks at 20 P/E and risking 98% of your capital to collect a 3.5% yield is a fucking brilliant strategy, Scott, quit scaring the kids.
Not all sectors are out of favor. Oil and the Financial Sector offer decent buying opportunities with safe growing yield or robust in oil’s sector.
I’m actually cool with low interest rates because they’ll bankrupt those jackass baby boomers first.
What is the ‘tell’ for when the steam roller is getting too close?
It is always close. You will just have to hope to not get flattened.
Gee thanks! I have enough trouble with car bumpers!
and yet you’re bullish???????
What commodities other than grains are at multi-year highs?
Equities and treasuries at multi-year highs and grains seem to have a pretty good fundamental reason for being pricey. Every other market doesn’t seem too confident in any QE action.
Or maybe every other market realizes that if you take a bank’s treasury holdings and swap them with cash, unless they lend it, you don’t actually print money.
Who is lining up to swap their cash for treasuries?
Primary dealers are mandated to line up.
May as well borrow all we can to live well. Banko is banko, so make it a big one.
you mean to say that the fed is doling out coin so the simple bills can be paid. the government will always be spending loads of money. why do you think every pension is insolvent on the state levels.insolvent state pensions are shifting to property tax payers on the local level.it’s being toyed with now,coming to a town near you,soon.
some people know how to party. http://youtu.be/EnLh1S_cW7M