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The Super Wealthy Are Already Preparing For NIRP and Worse

March 5, 2019

The Super Wealthy Are Already Preparing For NIRP and Worse

The Global Elite are preparing for Negative Interest Rate Policy (NIRP) and Wealth Grabs.

How do I know?

They’re moving their money into physical cash.

Physical cash represents one of the rare loopholes in our current financial system. When money is in actual physical cash it can’t be charged interest by a bank engaged in NIRP. It’s also much easier to hide from the Political Class intent of imposing wealth taxes and other capital grabs.

With that in mind, consider that the number of $100 bills in circulation has DOUBLED since 2008. In fact, there are now MORE $100 bills that $1 bills in the financial system.

The number of outstanding U.S. $100 bills has doubled since the financial crisis, with more than 12 billion of them across the world, according to the latest data from the Federal Reserve. C-notes have passed $1 bills in circulation, Deutsche Bank chief international economist Torsten Slok said in a note to clients this week.

Source: CNBC

Let’s be blunt here, the folks who have a lot of money to hide are usually the ones with the best connections to the elites.

As a result, they typically know what is coming down the pike before the rest of us. Which is why it’s critical to pay attention to what these people DO rather than just say.

Consider the following:

  • The IMF has already called for a wealth tax of 10% on NET WEALTH.
  • More than one Presidential candidate for the 2020 US Presidential Race has already openly called for a wealth tax in the US.
  • Polls suggest that the majority of Americans support a wealth tax.

And if you think this will stop with the super wealthy, you’re mistaken. You could tax 100% of the wealth of the top 1% and it would finance the US deficit for less than six months.

Which means…

 …click on the above link to read the rest of the article…

For the First Time Since 2007, Central Banks Are Net DRAINING Liquidity

February 8, 2019

For the First Time Since 2007, Central Banks Are Net DRAINING Liquidity

Yesterday was a wake up call for the bulls.

Unfortunately it’s only going to get worse. The fact is that no matter what verbal interventions Central Banks or the political elite issue, liquidity is now rapidly leaving the financial system.

The Fed continues to drain $50 billion in liquidity via its QT program every month. The ECB is no longer engaged in QE, which means it too is now draining liquidity as bonds on its balance sheet come due.

This leaves the Bank of Japan, which is running out of assets to buy, resulting in it not being able to expand its QE program (the one that has been running since 2013). Finally, China is attempting to launch its own version of a QE program, though given the insane leverage in its financial system (the country is issuing $25 in new debt for every $1 in GDP growth) this will have little effect.

Bottomline: for the first time since 2007, Central Banks are NET draining liquidity rather than adding it.

No matter how you spin this, it means stocks are on borrowed time.

And the markets KNOW it.

Indeed, we’ve broken the bull market trendline from the 2009 lows. The ultimate downside for this collapse is at best 2,000, and more likely than not we’ll go to the high 1,000s (think 1,750-1,800).

A Crash is coming…

The Last Two Times This Happened, A Crisis Hit Within 6 Months

January 15, 2019

The Last Two Times This Happened, A Crisis Hit Within 6 Months

As I keep warning, the global economy is rapidly moving into a recession.

If you don’t believe me, consider that in the last two weeks, the following have been announced…

1)   South Korean exports, a critical measure for global growth, recorded a -1.2% drop year over year in December.

2)   China’s manufacturing PMI fell into outright contraction below 50. Car sales were negative for the first time in two decades. And Chinese exports fell 4.4% year over year.

3)   German Industrial Production fell 1.9% month over month and 4.6% year over year in November: the biggest drop since 2009. Real-time GDP trackers show the largest EU economy is already in a recession.

4)   US manufacturing ISM dropped sharply from 59% to 54% (not yet in contraction mode, but rapidly approaching it).

To top if off, we now have numerous companies issuing warnings: Apple, Samsung, LG, Fed Ex, Delta, Skyworks, Tailored Brand, Sherwin-Williams, Lindt, Macy’s, Kohl’s, and American Airlines have all lowered forward guidance.

So we’ve got everything from airlines to big tech to chocolate producers and paint manufacturers warning of a slowdown.

This is the slowdown that stocks began to discount in October.

Unfortunately it’s not over either. If you look at the long-term charts, it’s clear the market realizes that the credit cycle has turned and we are moving into a recession/ crisis.

The last two times this happened, a crisis hit within three to six months.

By the Time the Fed Hits Its Goals, the Markets Will Be Crashing

September 20, 2018

By the Time the Fed Hits Its Goals, the Markets Will Be Crashing

The Powell Fed has set one goal and one goal only for its policy…

Hitting the “neutral rate of interest.”

The neutral rate of interest is when the Fed has rates equal to the pace of inflation. While this is technicallywhat the Fed is SUPPOSED to be doing, NO Fed (or any other Central Bank for that matter) has done it in over 30 years: the Greenspan, Bernanke, and Yellen Feds were all notorious for running “accommodative” policy in which rates were kept well BELOW the rate of inflation.

Indeed, if you had to summate Fed policy from 1987 to 2018, the best word would be “accommodative.” It is not coincidental that this time period coincided with serial bubbles in the financial markets. This was done intentionally by Alan Greenspan, Ben Bernanke, and Janet Yellen.

Not Jerome Powell.  During his July Q&A session with Congress in July, Fed Chair Powell emphasized that the most important focus for the Fed under his leadership would be “a neutral rate of interest.”

In answering a question [concerning the yield curve flattening] from Senator Pat Toomey of Pennsylvania, Powell said that, in his view, “What really matters is what the neutral rate of interest is.” And perhaps longer-term Treasury yields send a message about that rate.

Source: Bloomberg

I initially thought this was Powell playing to Congress (for 30+ years Fed Chairs have simply told Congress what it wanted to hear during their testimony). However, since that time, the Powell Fed has made it 100% clear that it did in fact WANT neutral rates.

Last month, Dallas Fed President Robert Kaplan outlined this in no uncertain terms.

…click on the above link to read the rest of the article…

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