I know the negativity is taxing, especially for those of you who think I am dead serious. Lighten up. I am simply stirring the cauldron, while practicing black magic.
Here are some interesting debt/GDP stats.
United Steaks: 101%
Jamaica: 145%
Italy: 127%
Ireland: 117%
Belgium: 98% (almost!, getting there!)
Greece: 156%
Portugal: 124%
Japan: 212%
Lebanon: 139%
Singapore: 98% (close call!)
In addition to the growing mountains of debt, about a dozen countries have seen their currencies drop double digits versus the dollar, as well as see their sovereign yields shoot higher, appreciably. What does it all mean? ARMAGEDDON?!!
Not quite. It means that the primary goal of central banks will be to keep rates down, no matter the cost. If it means throwing the stock market into the garbage, in order to scare money into bonds, so be it. In order to sustain our lifestyle of grandiose entitlements, it’s important that we borrow money, cheaply, and spend as much as we like. Theoretically, this should be a race to the bottom, causing massive inflation, bullish for gold and bit coins–but NOT maxcoins. However, since 2011, the only asset that has been appreciating is stocks, worldwide.
Gold, silver, oil, natty, coal, wheat, cotton, sugar, corn, uranium: ALL BEARISH.
Let’s be frank with one another, shall we? Without the world central banks flooding the markets with liquidity, we’re all toast. But they are flooding the markets with liquidity and there isn’t a better place to make money, other than stocks. There are pitfalls, especially when looking at some of these earnings debacles. But, ultimately, the only game in town is stocks and the only balls on the table, strong arm, guarantee is that central banks will smash your equity holdings to pieces–in order to preserve this wonderful status quo.
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Sooooo… are you telling me value investing is not possible right now? if you want a fast buck then yes stocks are the way to go, but what do you think the insiders are buying? (gold)
Value investing is possible and always in style.
What I am saying is to watch these currency and yield scares closely because at the end of the day, central banks will kill you for lower yields.
The bailouts will continue and the markets should continue to surge, until we reach the point of no return.
We’re not there yet.
http://www.youtube.com/watch?v=7GSXbgfKFWg
This is a pretty simple explanation for where we stand.
So as I read it, bank as much coin as you can now, because all of the coin that you bank today will not buy you anywhere as much tomorrow (not because prices go up, but because the coin won’t is not worth as much)?
Mostly punk countries in comparision to U.S.(us)…
I’m trying to understand the move in PMs. Why now does it bounce? When we “taper”. Or was that all due to the emerging markets “scare”, money moving to safety? Or is it a realization that, as Fly says, central banks will kill you for lower yields?
Because eith these levels of debt, war is on the horizon.
May I be as bold as to suggest a contest to nickname our new Fed chairman? I will start the jingo with “Don’t Worry, Be Happy” Yellen (or perhaps “yelling” Don’t Worry, BE HAPPY!!!).
Classic post. Belongs in the bible.
The first rule of 100% Debt to GDP Club. NO ONE TALKS ABOUT 100% Debt to GDP Club – especially if you are a Democrat!
First rule of Reaganomics, don’t tell the populous that we’re actually moving the wealth to the upper echelon of society
Ron Paul is not amused
Marc Faber?
I still think the Govt is going to pull off some kind of mandatory Treasury purchase (via MyRA?) as a condition to maintain tax deferral status for IRA/401k accounts. It will probably start small, and will be sold to the people as a stability mechanism that protects your retirement accounts against crazy investment decisions & market catastrophes. Eat your peas…
couple of hundy rolls coming up 😉
If you buy really low a few rental apartments will also help
keep your head above water.
Israel – 79.5% …winning.
if they don’t care about the debt, why do they care about the interest expense?
i’m fully on board with what’s going to happen. I’ve accepted it. However, I stopped trading for the scenario because losing money like I did in 2010-2012 sucks. That’s the old “irrational longer than you can stay solvent” theme.
Not fair comparision, 6 trillion is money owed to SS and all paper is denominated in our own currency. Unlikely, China is going to ask for repayment in gold.
Rich people have too much. Take some and give it to the poor. yes, that means you. The people who really get hosed are the $40-60K folk who would live just about as well without working, getting the subsidized housing, the food subsidy, free healthcare, and social security disability.
Fly — what’s the source of your Debt/GDP numbers?
I’ve been hearing “our $17 Trillion debt” for 3 fuckin’ years.
With most of it financed at 0.2 to 2% for the next 5 to 10 years ($200 billion a year in total interest we pay) who gives a fuck? Our GDP grows at $500 billion per year.