The Implosion Is Near: Signs Of The Bubble’s Last Days
by David Stockman •
The central banks of the world are massively and insouciantly pursuing financial instability. That’s the inherent result of the 68 straight months of zero money market rates that have been forced into the global financial system by the Fed and its confederates at the BOJ, ECB and BOE. ZIRP fuels endless carry trades and the harvesting of every manner of profit spread between negligible “funding” costs and positive yields and returns on a wide spectrum of risk assets.
This dynamic is evident in the chart of the S&P 500 since the March 2009 bottom. The dips have gotten shallower and shallower as ZIRP and other pro-risk central bank policies have eroded the market’s natural defenses against excessive speculation. As of mid-2014, therefore, it can be fairly said that fear and short interest have been extinguished almost entirely. The Wall Street casino has thus become a one-way market that coils dangerously upward, divorced completely from the fundamentals of earnings and cash flow and real world economic conditions and prospects.
At the end of the day, the Fed and its fellow traveling central banks have systematically dismantled the natural stability mechanisms of financial markets. Accordingly, financial markets have now become dangerous casinos in which speculative bubbles are guaranteed to build to dangerous extremes as the central bank driven financial inflation gathers force. That’s where we are now. Again.
Eight ways a new global crisis will hit us by 2015
A global economic crisis looks imminent and not enough action is being taken to avoid it. Based on statistics, the world could expect a financial crisis as soon as April 2015, ending in March 2016. The cause of the crisis will come from eight possible scenarios:
1.) Stock market bubble2.) Banking in China3.) Energy crisis4.) Another real estate bubble5.) Ratings & bankruptcy corporate crisis6.) War & conflict7.) Increasing poverty8.) Cash and hyperinflation
Don’t get too comfortable with low bond yields
Leslie Shaffer | Writer for CNBC.com
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