Monday, August 10, 2020

The Global Asset Bubble – How Bad Will It Be?

by Virginia Fidler, Gold Telegraph:

Shanghai economist Any Xie believes that the current “irrational exuberance” surrounding the global economy is the precursor to an inevitable global asset burst. The burst will happen, we just don’t know how serious it will be.

Asset values have been inflating globally for some time, mainly to the easy-credit policy of central banks since the 2008 global financial crisis. Low interest rates were instituted to stimulate growth. Instead, we have ended up with an ever-growing out-of-control global debt. Historically, asset bubbles have preceded the most serious periods of recession, such as the crash of the 1920s and the dot-com bubble during the 90s, followed by the real estate bubble of the early 21stcentury. Asset bubbles happen when prices of commodities rise rapidly without logical market trends and without an equal rising demand.

EU Parliament Study: Central Bank Digital Currencies ‘Will Reshape Competition’ in Crypto Market

by Molly Jane Zuckerman, Coin Telegraph:

A study on issues of competition in fintech, commissioned by the European Parliament Committee on Economic and Monetary Affairs (ECON), was published July 20. It found that central bank-issued digital currencies could be a “remedy” for a lack of competition policy in the crypto sector:

“The arrival of permissioned cryptocurrencies promoted by banks, even by central banks, will reshape the current competition level in the cryptocurrency market, broadening the number of competitors.”

From the rise of the Fed to Donald Trump… 100 years of Populism may find us full circle from central banks to the return of the gold standard

by Kenneth Schortgen, The Daily Economist:

President Donald Trump has not been shy about speaking out his thoughts on Fed policy, and indeed has broken a great deal of tradition by the Executive Branch in recent years not to interfere with the ‘independent’ central bank.

Presidents never, or rarely, comment on monetary policy or currency market moves for that matter (ex, the hackneyed meme “a strong dollar is the best interest of the United States.”)

Tesla BK Imminent?

by Karl Denninger, Market Ticker:

Oh oh…

The Wall Street Journal reports that Tesla is now “asking for” (read: demanding) a post-delivery rebate on some of the funds spent with suppliers — for the last two years.

In other words they agreed to buy “X” for $Y, and now, after the fact, after they were invoiced and, presumably they paid said invoice and consumed said supplier’s stuff they are demanding some of the money they paid back.

The Journal does not imply or state, incidentally, that this is due to some sort of post-delivery quality problem (for which such a “request” would be reasonable.)

The Death of the US Real Estate Dream

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by Harry Dent, Market Oracle:

In I showed how Japan’s first and more massive real estate bubble peaked in 1991. And then showed how it crashed right along our bubble model into 2013.

The difference was, it never bounced. Even when its Millennial generation came along to buy houses again.

A rise of “dyers” (sellers) were offsetting the rise of Millennial buyers.

Now let’s look at the U.S. bubble – or our double bubble.

Public Sector Pensions: The Parasite Devours Its Host

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by John Rubino, Dollar Collapse:

The Wall Street Journal recently highlighted a better method of analysing the impact of public sector pensions on state and local budgets. The results are ominous for government finances, the bond markets, and pretty much everything else:

Why Your Pension Is Doomed

A new study shows that benefits are rising faster than GDP in most states.

Russia Dumps Massive Amount of U.S. Treasury Holdings—Becomes World’s Largest Holder of Gold

by Jay Syrmopoulos, Activist Post:

Moscow, Russia – The Russian government has drastically reduced their holdings of United States Treasury bonds, with Russian ownership of U.S. bonds declining from $96.1 billion in March to $48.7 billion in April—and then further reducing their holdings to just $14.9 billion in May; an 11-year low.

TED BUTLER Interview: JP Morgan Silver Hoard 2011 – 2018

from Silver Doctors:

Ted’s latest analysis on the massive JP Morgan silver hoard has something for everyone, so come on in and give it a listen…

Most longtime silver bullion aficionados know the last decade or so of JP Morgan silver history.

Like me, most learned about it first from our beloved uncle from another mother, Ted Butler, who has been writing and commentating on the matter for decades now.

The Ball Is In The Fed’s Court: Will The Empire Strike Back?

from Silver Doctors:

SD Outlook: There’s a strong case to make that the Fed will not strike back, at least publicly, here’s why and what it means for gold & silver…

Here’s the perfect example of the difficulty in understanding President Trump when it comes to him being either pure genius or just having dumb luck.

Last week, we all know what the President said – I think I wrote up three articles on it because I felt it was that important.

For those who don’t know what he said, the President said, two days in a row, that he is not pleased with a strong dollar or the Fed raising interest rates.