We believe we are in the early to middle stages of a worldwide sovereign debt bubble collapse. The “bubble” which exists today is in debt and the currencies which are backed and supported by this debt. This is a very big deal and does not happen very often. In fact, no one alive today has ever seen a sovereign debt collapse of a large country.
You need to consult the history books to find one, with the last ones occurring in the 1900’s to 1930’s. Because of this, the average investor today is not prepared for what is coming.
Historically, these crises occur when sovereign debt exceeds 100% of GDP as identified by Reinhart and Rogoff in their book This Time is Different: Eight Centuries of Financial Folly. Presently, the on balance sheet US Federal Debt ($28.1 Trillion) is 130% of GDP ($21.6T). Off balance sheet liabilities (Social Security, Medicare/Medicaid) add another $100 to $200T depending upon assumptions.
This debt level could not be serviced (much less reduced or paid off) if interest rates, which are the price of money, were set by a free market. In this respect, the monetary authorities world-wide, through price fixing of interest rates, have broken the financial markets. History proves that price fixing does not work (see USSR and grain prices). The price of money is the most important price in capitalism and messing with it distorts the price of everything. Capital is not allocated efficiently. In a free market system, interest rates balance the needs of savers and borrowers.
With over-indebtedness as a backdrop, history shows us that there are only three ways for a country to deal with a situation like this.
1. Default. Debts collapse to worthlessness as entities fail. Which leads to Deflation.
2. Restructure/Revalue against some superior form of money. Reset. (see Roosevelt 1934).
3. Inflate the currency and GDP versus the Debt. (see US Post WWII).
Option 1 is possible, and perhaps in due course, option 2 could be chosen. However, in our current political structure, we believe the most likely path the US will take is option 3 (Inflation). Therefore, we believe inflation is in our future. Not just a little bit of inflation, a lot of inflation!
When an economy becomes too debt saturated things begin to break, and the government generally intervenes to prevent the natural deflationary cleansing that would occur without intervention. The government intervened in 2008 during the GFC. In March 2020 when the economy grinded to a halt (COVID was the match, but the fire had been built), the government again stepped in (with an unprecedented order of magnitude) to prevent a severe deflation and economic collapse.
(..) As far as we can see, he only has two possible tools: (i) raising interest rates; and (ii) withdrawing monetary liquidity (i.e., reverse QE). Given the levels of national debt, both of those tools would lead to a system wide collapse, in our opinion. To be fair, maybe the Fed can jawbone or threaten these tools to calm down inflation, but they are walking a very thin line. The market has demonstrated at many instances in the past three years (e.g., Q4 2018) that it cannot handle higher interest rates or less liquidity. Some have said: “you cannot taper a Ponzi”.
In our opinion, Powell was bluffing in front of Congress. He knows inflation is coming, so he warns of it. Like Rudolf von Havenstein in 1920 Germany, he is hoping he can control inflation once unleashed.
https://drive.google.com/file/d/1qQRvmH
Varam pievērsties sarunai par īstajiem naida kurinātājiem mūsu sabiedrībā. Vairākas dienas Latvijas sabiedrības faktiskais vairākums tika dēvēti par līdzvainīgiem barbariskā noziegumā – ikviens, kas uzskata, ka ģimenes pamats ir vīrieša un sievietes savienība. Par vainīgiem tika nosaukta baznīca, konservatīvās partijas un konkrēti politiķi. Atsevišķi žurnālisti aizmirsa jebkādu “medijpratību”, jo viss taču skaidrs. Kāpēc gaidīt faktus un kaut kādu izmeklēšanu?
(..) Jau iepriekš rakstīju par dīvainībām, kas varētu būt saistītas ar LGBT lobiju. Dīvaini viltus profili, kas pauž neiecietību, pašu izlīmētas “homofobiskas” uzlīmes. Tas, ka notikumi Tukumā, bez faktu noskaidrošanas, momentā tika izmantoti viņu juridisko prasību popularizēšanai, bija tikai likumsakarīgi. Pārsteidz tikai pārgalvība un nekaunība, kurai nav robežu. Pat zemiskums, ja saprotam, ka runa ir par konkrētu cilvēcīgu traģēdiju.
Likumsakarīgi tas ir arī kreiso galvenās politiskās metodes kontekstā – viņi pilnīgi visu dara un pasniedz caur upura lomas prizmu. Tā ir ļoti iedarbīga varas tehnoloģija – tā izslēdz diskusiju, tā liek taisnoties oponentam, ka viņš nemaz nav varmāka, tā automātiski pašus ieceļ morāli augstākā pozīcijā, tā izraisa līdzjūtību publikā. Twitter kreiso pūlis šajā pozīcijā jūtas kā mājās – upura loma ir viņu mobinga, viņu agresijas pamatojums, kas pašiem nekad nešķiet kā agresija, jo viņi jau tikai aizstāvas. Pret tiem tur – apspiedējiem – “konserviem”.
(..) Drošības iestādēm ir jāturpina monitorēt komunisma un neomarksisma ideju un metožu izplatību jauniešu vidē. Tāpat būtu jāizvērtē tādu organizāciju darbība, kas uzskata provokācijas un melus par pieņemamiem līdzekļiem savu mērķu panākšanai. Un jāsper nepieciešamie soļi, lai sargātu valsti un tautu.
Veselību cietušajam, kuram papildus fiziskajām ciešanām ir nākusi klāt visa šī nevajadzīgā uzmanība un iesaistīšana politiskā akcijā.
https://www.austsaule.lv/kurs-atbil
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