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The Fascinating Psychology of Blowoff Tops
The Fascinating Psychology of Blowoff Tops Central banks have guaranteed a bubble collapse is the only possible output of the system they’ve created. The psychology of blowoff tops in asset bubbles is fascinating: let’s start with the first requirement of a move qualifying as a blowoff top, which is the vast majority of participants deny […]
Social Change Will Upend the Status Quo
Social Change Will Upend the Status Quo The nation is fragmenting because the Status Quo is failing the majority of the citizenry. The core narrative of the Status Quo is that nothing fundamental needs to be changed: all the problems can be solved with more “free money” (borrowed from the future at low rates of […]
Yes, But at What Cost?
Yes, But at What Cost? This is how our entire status quo maintains the illusion of normalcy: by avoiding a full accounting of the costs. The economy’s going great–but at what cost? “Normalcy” has been restored, but at what cost? Profits are soaring, but at what cost? Our pain is being reduced–but at what cost? […]
It’s Not About Democracy: Control Fraud Is the Core of our Political System
It’s Not About Democracy: Control Fraud Is the Core of our Political System The many are finally calling out the abusers of power because there’s no longer any need to pay the corrupting costs of centralization. If we strip away the pretense of democracy, what is the core of our political System? Answer: control fraud, […]
Why the Financial System Will Break: You Can’t “Normalize” Markets that Depend on Extreme Monetary Stimulus
Why the Financial System Will Break: You Can’t “Normalize” Markets that Depend on Extreme Monetary Stimulus Central banks are now trapped. In a nutshell, central banks are promising to “normalize” their monetary policy extremes in 2018. Nice, but there’s a problem: you can’t “normalize” markets that are now entirely dependent on extremes of monetary stimulus. […]
The Inescapable Reason Why the Financial System Will Fail
girardatlarge.com The Inescapable Reason Why the Financial System Will Fail Credit cannot expand faster than fundamentals forever Modern finance has many complex moving parts, and this complexity masks its inner simplicity. Let’s break down the core dynamics of the current financial system. The Core Dynamic of the “Recovery” and Asset Bubbles: Credit Credit is the […]
“Wealth Effect” = Widening Wealth Inequality
“Wealth Effect” = Widening Wealth Inequality Note that widening wealth and income inequality is a non-partisan trend. One of the core goals of the Federal Reserve’s monetary policies of the past 9 years is to generate the “wealth effect”: by pushing the valuations of stocks and bonds higher, American households will feel wealthier, and hence […]
Santa’s Stock Market Rally: Tears of Joy, Or Just Tears?
Santa’s Stock Market Rally: Tears of Joy, Or Just Tears? Everyone who believes risk has disappeared has fallen for the con. Judging by this year’s version of Santa Claus’s reliable year-end stock market rally, risk has vanished, not just in stocks but in bonds, junk bonds, housing, commercial real estate, collectible art–just about the entire […]
Un-Merry Christmas: The Perverse Incentives to Over-Consume and Over-Spend
Un-Merry Christmas: The Perverse Incentives to Over-Consume and Over-Spend Isn’t it obvious that if we set out to design the most perverse, toxic and doomed system possible, we’d end up with the Keynesian Cargo Cult’s insane permanent growth/Landfill Economy? Few topics are off-limits nowadays: the personal and private are now splashed everywhere for all to […]
Could Central Banks Dump Gold in Favor of Bitcoin?
Could Central Banks Dump Gold in Favor of Bitcoin? All of which brings us to the “crazy” idea of backing fiat currencies with cryptocurrencies, an idea I first floated back in 2013, long before the current crypto-craze emerged. Exhibit One: here’s your typical central bank, creating trillions of units of currency every year, backed by […]
Three Bubbles/Strikes and You’re Out
Three Bubbles/Strikes and You’re Out Those betting on a fourth bubble of even greater extremes will find their time at bat has come to an end. The conventional investment wisdom holds that central banks will never let markets decline. This is an interesting belief, given that two previous asset bubbles based on central bank “easy […]
Bitcoin vs Fiat Currency: Which Fails First?
Bitcoin vs Fiat Currency: Which Fails First? What if bitcoin is a reflection of trust in the future value of fiat currencies? I am struck by the mainstream confidence that bitcoin is a fraud/fad that will soon collapse, while central bank fiat currencies are presumed to be rock-solid and without risk. Those with supreme confidence […]
What Is Money? (Yes, We’re Talking About Bitcoin)
What Is Money? (Yes, We’re Talking About Bitcoin) Good ideas don’t require force. That describes the Internet, mobile telephony and cryptocurrencies. What is money? We all assume we know, because money is a commonplace feature of everyday life. Money is what we earn and exchange for goods and services. Everyone thinks the money they’re familiar […]
The Cost Basis of our Economy is Spiraling Out of Control
The Cost Basis of our Economy is Spiraling Out of Control What will it take to radically reduce the cost basis of our economy? If we had to choose one “big picture” reason why the vast majority of households are losing ground, it would either be the stagnation of income or the spiraling out of […]
Stock Market 2018: The Tao vs. Central Banks
Stock Market 2018: The Tao vs. Central Banks The central banks claim omnipotent financial powers, and their comeuppance is overdue. I will be the first to admit that invoking the woo-woo of the Tao as the reason to expect a reversal of the stock market in 2018 smacks of Bearish desperation. With everything coming up […]
