We Should Know Better!

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by Gary Christenson, Miles Franklin:

Most sane individuals believe these basic truths.

We cannot borrow our way out of debt.
We cannot spend our way into prosperity.
We cannot tax ourselves into wealth.
We trust sane individuals also understand the following.

We can’t fix an excessive debt problem with more debt. (Central bankers disagree…)
We can’t support a more expensive military and federal government with a decreasing work force, massive debt and weak economy. (Governments disagree…)
Unbacked paper money always returns to its intrinsic value – zero. (Most of the world lives in denial.)

Ayn Rand said two generations ago,

“We can ignore reality but we can’t ignore the consequences of ignoring reality.”

Violating the above basic truths ignores reality and the consequences of ignoring reality. Read Bill Holter.

The chart of the S&P shows a levitated market—thanks to multi-decade low interest rates (10 Year Rates bottomed in mid-2016), a massive creation of new debt, stock buybacks, and outright “printing” of unprecedented quantities of dollars, yen, and euros. The S&P rally is nine years old and looks tired.

The bond bull market is probably dead. Interest rates are rising! See below.

Examine the monthly S&P 500 Index since 1992. Note the near vertical moves and danger zones. Risk of a major correction is high. Markets fall after big moves up…

The chart of the S&P shows a levitated market—thanks to multi-decade low interest rates (10 Year Rates bottomed in mid-2016), a massive creation of new debt, stock buybacks, and outright “printing” of unprecedented quantities of dollars, yen, and euros. The S&P rally is nine years old and looks tired.

The bond bull market is probably dead. Interest rates are rising! See below.

Silver has bottomed, charted a reverse “head and shoulders” and is moving toward much higher prices as debt expands out-of-control. Investors will seek the safety of hard assets to avoid the counter-party risk of paper assets.

Read More @ MilesFranklin.com