FYI - the TWO key difference to the 1970's ..for those who don't want get into detail or my long posts/videos here' a short summary of my analysis/views -
1. Our economy is now a CREDIt/DEBT based one - FED have balance sheet of 10+ trillion, Government debt is historic compared to GDP runing at 120%+ (almost banana republic levels, and the GDP part is fake due to QE/Govt DEBT),
consumer/personal/cooperate debt is historic .. THIS makes our economy INTEREST RATE SENSITIVE - or 'addicted to low rates' , I mean, that is sole purpose of QE ! to use money of thin air to buy treasuries to lower rates precisely
because the FED understand that we cannot tolerate higher rates ....
2. Global US $ Hegemony - the global financial system emerged in 1980s - since then, when a financial crises/recession occurs, all the world RISK AVERSE CAPITAL FLIGHTS TO SAFETY of US$ TREASURIES ..'tis obvious and simple ..this
LOWERS our INTEREST RATES ... and let US recover and FED do things like increase money supply without causing inflation because cost of capital is low in US ...
- if ^this were to end, then FED won't be able to use its 'one trick' of 'mo credit' ...and worse, the entire existing asset bubbles could collapse as foreign risk capital recognizes this change, and flights out of US assets ! ...add to this,that
China and Russia understand this and are actively using it again us - by trying to trade commodities not in $'s ...and buy up commodities to pressure our bond market.
I don't really know how to say this politely, but, the FED's 'live for today' credit machine has unfortunately convinced most that reality doesn't exist, but alas it does, and they cannot 'fake reality' forever, their and our luck has run out, there
is no way out as I said early 2022 ...because we are 'boxed in' by Asia growth and K-spring ... and end of deflationary period which allowed FED to kick our debt crises down the road ....we are now at the end of that road plain and simple, but
most do not want to see it, which wont' change the outcome unfortunately.
Here is how I explain it to non financial people - If I go bankrupt, I can borrow from the bank and everything appears ok - this is what FED did last 25 years ..1+1=2 ....it's only a problem if my bank 'calls in that loan' - what calls in the FED's 'loan' ?- the above,
the reality of limited real world supply they cannot control, and our enemies using that against us.
The same people that don't want to recognize this simple reality, are the same one who did'n't see Enron coming or 2000 crises, or the 2007-2009 crises both of which were so obvious - this crises is orders of magnitude bigger because those
were controlled 'vicious cycles' which didn't change the system, this is a building systemic crises of fiancial system which all relies now on FED money creation machine which is getting cut off - and massive global liquidity crises ..it likely
will play out slower than previous but last much longer and go much deeper eventually .. I actually believe into 2030'ish and result in end of credit system and bring in new Digital system, infact i'm sure that is the goal.
I don't say this because i'm 'bearish', its just my view from a massive amount of study attempt to understanding the system over last 23 years.
Edited by EntropyModel, 08 March 2023 - 01:03 PM.
Question everything, especially what you believe you know. The foundation of science is questioning the data, not trusting the data.
I only trust fully falsified, non vested interest 'data', which is extremely rare in our world of paid framing narratives 'psy ops'.
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