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The common consensus in the financial community today is that the Fed and
other Central Banks have somehow managed to end the business cycle. The
result of this is that we’ve entered a period of sustained growth (albeit low
growth) that will continue in perpetuity until something magical happens and
stronger growth returns.
On the surface, this argument is embarrassingly naive. And it
is astounding that grown adults actually believe it.
The Fed and other global Central Banks are largely being run by academics
with zero real world experience. For centuries leaders and their advisors
have tried to generate perpetual growth. None have succeeded. So the
idea that this current group of Central Bankers, isolated from the private
sector for their entire careers, somehow understand economics better than any
other group of humans in history is a ludicrous.
We don’t even have to look back far to see where this ends. A
mere 15 years ago, the financial world believed that Alan
Greenspan was an economic genius who had brought the world to an era of the
New Economy in which we saw non-stop productivity gains.
Today we laugh at the ignorance of this. Not content to have created the
since largest stock bubble in financial history, Greenspan doubled down on
his foolishness by creating a housing bubble that was three standard
deviations away from historic norms.
The fact that he handed off that mess to Ben Bernanke (another ivory
tower economist with zero real world experience) before it nearly took down
the entire financial system is the greatest accomplishment of his career.
And yet, today, a mere decade later, the investment community has fallen
for the same nonsense. Ben Bernanke is hailed by mainstream media outlets as The
Hero (!!!) because he, like Greenspan, has doubled down on his idiocy
and created yet another bubble… this one in an even more senior
asset class (sovereign bonds).
Bernanke, also like Greenspan, has handed this mess off to Janet Yellen,
who, like her predecessors, has zero real world experience in the private
sector. And yet, she is now sitting atop the largest asset bubble in
financial history.
Today, the bond bubble is over $60 trillion in size. This alone means it
is more than FIVE times the size of the US housing bubble. Moreover, this
bubble is global in nature, with 30% of global bond yields in
negative territory thanks to Central Bank meddling.
On top of this, because sovereign bonds are the supposed “risk free” rate
against which all other asset classes are priced… when sovereign bonds are in
a bubble, EVERYTHING is in a bubble: corporate bonds, muni bonds, etc.
All told, the bond bubble is now $199 TRILLION in size. It is over TWO
times the size of global GDP. And because the Fed never bothered to actually
crack down on the derivatives markets (the securities thank permitted the
housing bubble to become a systemic issue), there are now
$555 trillion in derivatives trading based on bond yields.
This is the greatest bubble in history… seven times global GDP
and backstopped by nothing more than monetary printing presses run by the
equivalent of an Alan Greenspan in every major economy.
We know how this ends. We’ve been through it twice in the last 16 years
alone. And the stock market is already making clear where this is eventually
headed.
On that note, we are already preparing our clients for this with a 21-page
investment report titled the Stock Market Crash Survival Guide.
In it, we outline the coming crash will unfold…which investments will
perform best… and how to take out “crash” insurance trades that will pay out
huge returns during a market collapse.
We are giving away just 1,000 copies of this report for FREE to the
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