Yes, traumatic market events (falling rocks) occur, even though
markets are “managed,” statistics are manipulated, and politicians
pretend to care about something besides their next election.
From John P. Hussman, Ph.D. Fair Value and Bubbles: 2017 Edition
“Unfortunately, investors
seem to have concluded that central bank easing is omnipotent, despite
the fact that the Fed eased persistently and aggressively, to no effect,
through the entire course of 2000-2002 and 2007-2009 market collapses.”
From Bill Gross: Bill Gross Says Market Risk is Highest Since Pre-2008 Crisis
“Central bank policies for
low-and-negative-interest rates are artificially driving up asset prices
while creating little growth in the real economy and punishing
individual savers, banks, and insurance companies, according to Gross.”
From Billionaire Paul Singer:
“I’m very concerned about where we
are in terms of the financial system, the economy, the American economy,
the Global economy… After nine years of this artificial levitation on
the part of financial assets – high-end real estate, art, the things
that rich people buy – I think what we have today is a global financial
system that’s just about as leveraged, and in many case more leveraged
than before 2008.”
“Madoff Whistleblower Harry Markopolos Has Uncovered a New Fraud”
“Markopolos called what is left of
the MBTA’s pension (Boston Transit Authority) a ‘Tender Vittles
retirement plan’ meaning (sarcastically) that its participants would be
eating cat food.”
Is this different, except in degree, from Illinois, Chicago, New Jersey, CalPers (California) and many other pension plans?
“No good outcomes result when you mix politics and money,” Markopolos said.
From Karl Denninger: Illinois is Collapsing: It’s Coming Everywhere
“It was obvious that Illinois was going to fail as a state before I left in 2000.”
Denninger, in my opinion, sees the past, present, and future more
clearly than most people, including self-motivated politicians and Wall
Street Bankers. He is worried about ever-increasing U.S. government
expenditures, long term commitments, and national debt. He also warns
about public and private pension plans, medical/sick care costs and
more.
Speaking of bubbles and near-bubbles, consider the “Everything
Bubble,” and the exceptional rallies in the NASDAQ 100 and Amazon stock.
The current rallies are not as steep as during the 1999-2000 NASDAQ but
the NASDAQ 100 and the “FAANG” (Facebook, Apple, Amazon, Netflix,
Google) stocks have risen far too high.
What created the bubbles and near-bubbles? Central banks created $15
trillion from “thin air” and much of that “funny money” boosted stock
prices. Japanese, Swiss and other central banks intentionally created
currency and bought U.S. stocks, such as Amazon and Apple, which also
promoted the NASDAQ levitation.
An excellent 20 minute video explains how central banks “create” currencies and expand the total digital debt and credit.
Crash – Correction?
The U.S. stock markets could have crashed in 2015, but did not. They
could have crashed several times in 2016, but did not. They could have
crashed in 2017, but are hitting all-time highs instead. The sizable
rallies have been enabled by central bank purchases of stocks.
What happens if central banks cease purchases, or “heaven
forbid,” those central banks sell aggressively? Could such sales create a
“market event” to crush an economy or a sitting President or be used to
enrich Wall Street?
The 1987, 2000, and 2008 market crashes hurt most people.
Preparation, in case central banks don’t print enough currency to keep
bubble-like markets inflated, is appropriate. Brilliant and wealthy
people are concerned about the global financial system and the potential
disasters created by excessive debt, central banks and politicians.
Hindenburg Omen: We Got an Official Confirmed Hindenburg Omen Stock Market Crash Warning Signal
Robert McHugh, Ph.D. says his revised
Hindenburg Omen seldom occurs but when it does, pay attention. It is not
a guarantee of a crash, but it is noteworthy!
Europe: Banco Popular failed in Spain. Italian banks are shaky. Are Deutsche Bank and Chinese wealth management Ponzi debts next?
Repeat:
“No good outcomes result when you mix politics and money,” Markopolos said.
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GE Christenson is the owner and writer for the popular and contrarian investment site Deviant Investor and the author of the book, “Gold Value and Gold Prices 1971 - 2021.” He is a retired accountant and business manager with 30 years of experience studying markets, investing, and trading. He writes about investing, gold, silver, the economy, and central banking. His articles are published on Deviant Investor as well as other popular sites.
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The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
