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Bonds & Interest Rates

Debt is Financial Life – Nonsense!

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Posted by Gary Christenson - The Deviant Investor

on Thursday, 04 May 2017 07:46

Examine the picture below. The global economy thrives on debt and credit. We purchase essential products using debt/credit. The U.S. dollar bill is a debt of the Federal Reserve. All debt based assets have counter-party risk.

The St. Louis Federal Reserve publishes data on “Total Debt Securities” in $ millions. Note the rapid rise since 1971 after President Nixon encouraged rapid devaluation of the dollar.

word-image

Yes, the total U.S. increases debt rapidly – about 9% per year on average since 1971. A graph of U.S. national debt looks similar and shows about the same rate of increase.

Gold bullion and coins are NOT debt and have no counter-party risk, in contrast to debt based assets. But who cares about gold?

 

  • Central banks profess little interest in gold, although they own a substantial quantity.
  • Wall Street makes little profit from gold – no interest there.
  • The middle class struggles to pay debts and shows little awareness of gold. (A change in attitude is coming!)

 

How does increasing debt affect us?



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Bonds & Interest Rates

Panic Bank Run Leaves Canada's Largest Alternative Mortgage Lender On Edge Of Collapse

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Posted by Zerohedge

on Monday, 01 May 2017 07:59

After two years of recurring warnings (both on this website and elsewhere) that Canada's largest alternative (i.e., non-bank) mortgage lender is fundamentally insolvent, kept alive only courtesy of the Canadian housing bubble which until last week had managed to lift all boats, Home Capital Group suffered a spectacular spectacular implosion last week when its stock price crashed by the most on record after HCG revealed that it had taken out an emergency $2 billion line of credit from an unnamed counterparty with an effective rate as high as 22.5%, indicative of a business model on the verge of collapse .

Or, as we put it, Canada just experienced its very own "New Century" moment.

HCG teaser 0

...read more HERE



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Bonds & Interest Rates

This Is What Behavioral Finance Is All About

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Posted by Jared Dillian - Mauldin Economics

on Thursday, 27 April 2017 08:10

I live for this.

Check out this poll I ran on Twitter:

twit

Le Pen is about a 10-to-1 dog. But that doesn’t necessarily mean that thinking she is going to win is contrarian.

Chaser:

So the markets are pricing in a 10% (or less) chance of a Le Pen win, and yet everyone thinks she is going to win.

How the hell do you explain that?

Recency Bias



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Bonds & Interest Rates

The End of Quantitative Easing – Perhaps Now It Will Be Inflationary?

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Posted by Martin Armstrong - Armstrong Economics

on Friday, 21 April 2017 06:38

yellen-draghiOne of the greatest monetary experiments in financial history has been the global central bank buying of government debt. This has been touted as a form of “money printing” that was supposed to produce hyperinflation, which never materialized as predicted by the perpetual pessimists. Nevertheless, the total amount of Quantitative Easing (QE) adding up the balance sheets of the Federal Reserve (Fed), the European Central Bank (ECB) and Bank of Japan (BOJ) is now around $13.5 trillion dollars, which by itself is a sum greater than that of China’s economy or the entire Eurozone for that matter.

"So hold on – this is going to be the craziest ride in monetary history of humankind" - Martin Armstrong

...read much more HERE

 

...also from Martin:

French Elections on Sunday



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Bonds & Interest Rates

Central Banking Warfare Model Readies The Next Step

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Posted by Rory Hall - The Daily Coin

on Thursday, 20 April 2017 06:23

public-domain-nwo-spirit-evil-720x340The global capacity for debt has reached it’s zenith. So-called developed markets and emerging markets have all reached maximum debt load. Of the all the major countries that impact the global GDP name one that’s not fully levered with debt. I’ll wait here while you look for that needle in a haystack.

We came into the bail outs. The G7 had levered up. Then we had the emerging markets lever up and they’re finished levering up and now everybody’s levered up. 

There is no place to go. We can go to an equity model and we can optimize bottom-up but that requires a legitimate pricing function. And when you’re trying to run the whole thing with fake intel, fake science, fake news…The harvesting machine needs a new way to dig and digital currency and digital cash is that way. But you need all those countries in the tent and you need the ability to force everybody into a digital system. Source

The world (tent) must get inline with the idea of global governance and global currency, otherwise, it will not work.

Cryptocurrencies and all the people who believe this digital illusion is going to somehow save us from the evil banksters are overlooking what I have been saying since bitcoin first came onto the scene – it plays into the hands of the banksters and their desire to move us all to a digital currency. If someone believes for a second that Amazon or any other large multinational corporation that conducts retail business is going to accept bitcoin when they have been instructed not to, they are simply living in a fantasy.

That’s why the guys from bitcoin drive me nuts. Because they think “Oh this is how we’re going to be free“. No, you’re prototyping Mr. Globals digital currency.Source

If a person thinks the central banks and their digital currency will COMPETE with bitcoin you are not seeing the entire picture. That is not going to happen – EVER. The reason gold was outlawed in the U.S. in the 1930’s was to keep gold from competing with the Federal Reserve Note. Why would anyone believe the Federal Reserve is going to allow a digital form of currency to compete with their wealth transferring mechanism on a large scale?



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