While the Japanese and Swiss central banks have turned themselves into hedge funds by loading up on equities, the US Fed has stuck to supporting the stock market indirectly, by buying bonds. It’s worked, obviously, with all major US indexes at record highs. But it won’t work going forward, thanks to two gathering trends.
First, the main way bond buying supports equities is by lowering interest rates which, among other things, allows corporations to borrow cheaply and use the proceeds to buy back their own stock. Companies avoid paying dividends on the repurchased stock and the government gets capital gains tax revenue from a bull market. From a short-sighted Keynesian perspective, it’s a win-win.
Hey! Look! Here I am! Over here! I’m back! (Sound of thunderous applause). Thanks! Wonderful to be here!
I know that you, like most people, are probably scratching your head quizzically, asking yourself “Who is this doofus who calls himself Mighty Magnificent Mogambo in the next paragraph, which doesn’t even make sense?
And who cares that he is back, which is not to mention why am I reading this stupid crap in the first freaking place?”
This is why the Deep State is fracturing: its narratives no longer align with the evidence.
As this chart from Google Trends illustrates, interest in the Deep State has increased dramatically in 2017. The term/topic has clearly moved from the specialist realm to the mainstream. I’ve been writing about the Deep State, and specifically, the fractures in the Deep State, for years.
For decades, the US military and government denied that near space orbit was, or ever would be, a potential military battleground. The militarization of outerspace was expressly forbidden by international law and treaty. However, it was at this time that America was busy reverse engineering Nazi technology from captured German scientists. The advancements in technology were amazing (eg vertical liftoff craft that could seemingly defy gravity). Meanwhile, the conventional military hailed the arrival of the Harrier het and its hovering ability. NASA was a front to deceive our enemies as well as the American public.
What if you could build an inexpensive, energy efficient, self-sufficient home for as little as $30,000 and kiss monthly bills and mortgage payments goodbye? Sounds too good to be true, right? Well, one couple from Bisbee, Arizona, made this little fantasy come true. Karen and Bill, both in their fifties, started building their 600-square-foot house in 2010 and moved in 18 months later.
While Karen said that it was a lot of hard work, they enjoy their house and lifestyle every day. And who can blame them? Except for Internet service costs and property taxes, this off-the-grid couple doesn’t pay a single dollar for water, heat, trash pick-up, or electricity. Furthermore, they are debt free and are becoming gardening experts to provide for their own food needs.
Let’s be honest. The US attack on Mosul, Iraq, is not an attack on ISIS. It it a repeat of Israel’s operation Cast Lead in Gaza. The purpose is to kill as many Muslims for Israel as possible. Here is the evidence:
Hundreds of thousands of people in cities across Macedonia have rejected George Soros and the EU in the biggest display of anti-globalism ever seen.
For 26-days straight, thousands of people have taken to the streets in order to send the message to Soros and European leaders that the people of Macedonia are a sovereign nation who utterly reject the left-wing agenda to divide the nation and bring a socialist-Muslim coalition to power.
And likely will
Like an old vinyl record with a well-worn groove, the needle skipping merrily back to the same track over and over again, we repeat: Today’s markets are dangerously overpriced.
Being market fundamentalists who don’t believe it’s possible to simply print prosperity out of thin air, we’ve been deeply skeptical of the financial markets ever since the central banks began their highly interventionist policies. Since 2009, they have unleashed over $12 Trillion in new money into the world, concentrating wealth into the hands of an elite few, while blowing asset price bubbles everywhere in the process (see our recent report The Mother Of All Financial Bubbles).
Our consistent view is that price bubbles always burst. Which is why we predict the world’s financial markets will implode spectacularly from today’s heights — destroying jobs, dreams, hopes, economies and political careers alike.