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Why Deal With Structural Issues When You Can Simply Engage in Wealth Grabs?
Why Deal With Structural Issues When You Can Simply Engage in Wealth Grabs?
They’re coming for your money.
The Everything Bubble has burst and the debt markets are in distress. We’ve already seen yields rise above their long-term downtrend, suggesting that higher debt costs are now a reality.
Because any real structural solution to this (cutting social programs/ defaulting on debts) means political suicide, the political elite are desperate for capital to continue funding the bloated government budget.
Already Oxfam is proposing a 1% tax wealth tax to solve the “crisis.”
If you think that’s bad, consider that the IMF has proposed a 10% wealth tax on total net worth.
And we are seeing Presidential hopefuls such as Elizabeth Warren calling for a 2% tax on wealth for those worth more than $50 million.
All of this is being sold as “making things fair” or “battling inequality” but the reality is that none of these organizations or people really care about that stuff. If they did care they would be proposing solutions that had a chance of possibly working (even a lifetime 100% wealth tax on anyone worth more than $1 million wouldn’t cover the US deficit for more than a year or two).
What they care about is finding money to continue funding Big Government.
If you think this will stop at those with net worth in the eight figures, you’re mistaken. Nebulous financial concepts such as “fairness” are ALWAYS moving goalposts in the hands of socialists.
Indeed, already legislation is in place to use savings deposits to prop up any systemically important financial institution during the next crisis.
I’m not talking about savings deposits over $1 million… I’m talking about savings deposits PERIOD.
The World Hits Its Credit Limit, And The Debt Market Is Starting To Realize That
The World Hits Its Credit Limit, And The Debt Market Is Starting To Realize That
One month ago, when looking at the dramatic change in the market landscape when the first cracks in the central planning facade became evident and it appeared that central banks are in the process of rapidly losing credibility, and the faith of an entire generation of traders whose only trading strategy is to “BTFD”, we presented a critical report by Citigroup’s Matt King, who asked “has the world reached its credit limit” summarized the two biggest financial issues facing the world at this stage.
The first is that even as central banks have continued pumping record amount of liquidity in the market, the market’s response has been increasingly shaky (in no small part due to the surge in the dollar and the resulting Emerging Market debt crisis), and in the case of Junk bonds, a downright disaster. As King summarized it “models linking QE to markets seem to have broken down.”
Needless to say this was bad news for everyone hoping that just a little more QE is all that is needed to return to all time S&P500 highs. And while this concern has faded somewhat in the past few weeks as the most violent short squeeze in history has lifted the market almost back to record highs even as Q3 earnings season is turning out just as bad, if not worse, as most had predicted, nothing has fundamentally changed and the fears over EM reserve drawdown will shortly re-emerge, once the punditry reads between the latest Chinese money creation and capital outflow lines.
The second, and far greater problem, facing the world is precisely what the Fed and its central bank peers have been fighting all along: too much global debt accumulating an ever faster pace, while global growth is stagnant and in fact declining.
…click on the above link to read the rest of the article…
The global financial system stands on the brink of second credit crisis
The global financial system stands on the brink of second credit crisis
The world financial system stands on the brink of a second credit crisis as interbank lending shows increasing risk
The world economy stands on the brink of a second credit crisis as the vital transmission systems for lending between banks begin to seize up and the debt markets fall over. The latest round of quantitative easing from the European Central Bank will buy some time but it looks like too little too late.
It was the collapse of US house prices back in 2007 that resulted in the seizure of the credit markets and banking crisis of 2008. And it would be easy to lay the blame for the 2008 financial crisis at the doorstep of American home owners, easy but wrong. The collapse of the US housing market was not the cause of the crisis, it was merely a symptom of the more insidious ills of cheap credit, low risk and the promise of another bailout round the corner.
The Keynesian pump priming that has taken place on a colossal scale across the world is failing. The Chinese economy was growing at 12pc in 2010, but that slowed to 7.7pc in 2013 and 7.4pc last year — its weakest in 24 years. Economists expect Chinese growth to slow to 7pc this year. It is the once booming property sector that has turned into a bust, and is now dragging down the wider economy as the bubble deflates.
…click on the above link to read the rest of the article…
