debt

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Where There’s Smoke...

...There’s central bank manipulation
Friday, April 21, 2017, 8:26 PM

Many questions surround the elevated financial asset prices we are faced with today.

I'm talking not just about the sky-high prices of stocks and bonds, but also of the trillions of dollars’ worth of derivatives that are linked to them.  All are intricately linked together. For instance, stocks are elevated, in part, because bond yields are so low. 

These questions are important to consider because -- if central banks have been too involved and gotten themselves mixed up in trying to ‘wag the dog’ by using elevated financial asset prices as a means to drive economic expansion -- then the risk is a big implosion in financial asset prices if their efforts fail. » Read more

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Off The Cuff: The Era Of Easy Money Is Over

Debt-funded stimulus no longer yields an increase of GDP
Thursday, April 20, 2017, 8:44 PM

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • Sovereign Sabre-Rattling
    • Suddenly, the world became a lot less safe
  • Market Misdirection
    • The central planners are doing their utmost to paint a positive picture
  • The Era Of Easy Money is Over
    • Debt-funded stimulus no longer results in an increase of GDP
  • How This All Will End
    • Exploring the likely pins that will pop this "mother of all bubbles"

Chris and John look at the disconnect between world events and stock prices and urge folks not to misled: risk is high, and getting higher. There is *no* rational reason for the current price levels in financial markets -- only gobs and gobs of liquidity being force-fed into the system by the world's central banks.

But the data is increasingly showing that the era of "easy money" we've lived under since the Great Recession has reached its inevitable terminus. Shoving more debt into the system is no longer boosting GDP. We are now simply blowing bigger asset bubbles that will monumentally destructive when they burst -- as they must.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today. » Read more

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Banks Are Evil

It's time to get painfully honest about this
Friday, March 17, 2017, 8:05 PM

I don't talk to my classmates from business school anymore, many of whom went to work in the financial industry.

Why?

Because, through the lens we use here at PeakProsperity.com to look at the world, I've increasingly come to see the financial industry -- with the big banks at its core -- as the root cause of injustice in today's society. I can no longer separate any personal affections I might have for my fellow alumni from the evil that their companies perpetrate.

And I'm choosing that word deliberately: Evil. » Read more

Insider

Off The Cuff: Dying From Debt

Yet we're still trying to add more
Friday, March 3, 2017, 1:44 PM

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • The Coming Debt Explosion
    • Really? We're going to try to add more??
  • Pension Time Bomb
    • Going off sooner than most expect
  • The Evil Fed
    • It's policies are at the root of our economic predicament
  • The Revolution Is Brewing
    • Continental Europe will see the next iconoclast elected

The only thing more frightening than the massive overburden of debt weighing on today's economy is the recent trial balloon that we need to add a bunch more in order to spark economic growth. Chris and John slam this wrongheaded thinking, and direct our attention to the damage the effects of already having too much debt is wreaking on our future prospects.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today. » Read more

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The Mother Of All Financial Bubbles

Will be unimaginably destructive when it bursts
Wednesday, February 22, 2017, 11:45 PM

The main lesson from Oroville -- or Fukushima, or Katrina --  is that governments do a poor job of relating accurate information to their citizens when big threats are involved. Part of that is likely due to a desire to avoid stoking fear. Part probably due to politics and bureaucracy. And part probably due to plain old incompetence.

Regardless of the cause, it means that the public -- even the vigilant ones -- suffer information deficits when it matters most. Simply put, the authorities do not share all the facts necessary for making informed decisions.

Which brings us to one of the truly great risks we're facing today. One with much more destructive potential than a single failed dam but, like Oroville, one the authorities are desperate to keep us in the dark about. » Read more

Insider

Fixing The Future

How to take charge of your destiny
Friday, January 13, 2017, 11:50 PM

Executive Summary

  • The gigantic predicament we all face
  • What you should do, as a concerned individual
  • What WE should do, as a society
  • Contributing to the new narrative

If you have not yet read Part 1: Mad As Hell available free to all readers, please click here to read it first.

It simply has to be said; there appears to be little to no public appetite for facing reality. 

At least not without some sort of a calamity or forcing function to press the issue that will wake up enough people and call out what leadership actually exists to finally step up and begin to deliver.

The many predicaments and extreme complexity require astonishingly great leadership to address and there’s really none of that to be found anywhere at the moment.

So we must adopt a two prong approach in our lives to both deal with the coming calamities and lay the groundwork for the next stage of things.

As it stands right now, the central banks are mainly interested in propping up the asset markets which is only serving to enrich the already stupendously rich with a few minor scraps for enough upper and middle class people to keep them content to play along.  While this is being done, enormous imbalances are being created even as the underlying structural issues remain unaddressed.

Some of these are even dead simple, single factor financial issues, which should be among the easiest to detect and address yet these to remain unexamined and unaddressed.  Examples include exponentially increasing debt-per-capita in Japan (goosed by demographics) and pensions being utterly gutted by too-low interest rates.

If the simple math of these situations is still too difficult and complex to allow for any sort of proper response, we have to then conclude that the more subtle and intractable and larger issues we face are even further out of reach.

Here I am talking about needing to... » Read more

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As We Enter 2017, Keep The Big Picture In Mind

The new era of adjustment has only just begun
Saturday, December 31, 2016, 1:31 AM

As bluntly as I can say it: Anybody who found the level of disruptions on 2016 overwhelming is going to have a hard time navigating the future. The period of adjustment has only just begun. » Read more

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2016 Year In Review

A Clockwork Orange
Thursday, December 22, 2016, 9:03 PM

Every year, friend-of-the-site David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. As with past years, he has graciously selected PeakProsperity.com as the site where it will be published in full. It's quite longer than our usual posts, but worth the time to read in full. » Read more

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Get Ready... Change Is Upon Us

The 'economic peace' we've enjoyed for decades is over
Friday, November 11, 2016, 9:05 PM

At certain times, it’s really not that hard to predict "what" is going to happen next after disastrously short-sighted and self-interested policies are enacted. Predicting the "when", with precision, is much tricker. But obvious misguided economic policies are destined to have a limited period of apparent (but false) prosperity, after which they end with a nasty Bang!.

We have entered just such a time. This isn't a Trump vs Clinton thing; I'd make this claim regardless of who won this week's presidential election -- as our plight is much bigger than a single Administration. And my observation is that neither political party had much interest beyond some temporary election year lip-service to the economic plight of the middle class.

And by “middle class” I mean anybody not in the top 5% economic bracket. For those doing the math at home, that leaves the remaining 95% of us stuck in the meat grinder. » Read more

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Wolf Richter: The Economy Is Cracking Under Too Much Debt

Housing, restaurants & retail are suffering
Sunday, October 16, 2016, 1:25 PM

Wolf Richter joins the podcast this week to discuss the deterioration of the global macro situation, and how he is seeing growing signs of recession breaking out across the economy. » Read more