Urgent Market Update: Currency Oblivion Coming (YT, Mike Maloney, en, 28:07)
Zusammenfassung:
Jerome Powell: No more rate cuts.
3 weeks later: Rate cuts.
Trump is demanding more rate cuts.
But the Fed is not able to control things anymore.
10-year treasury at 1.1%.
But it's sort of yesterday's news: the bond market had already anticipated this move.
0% bond yields are imaginable, but at that point, you just go to the bank and withdraw cash and hold cash.
[Europa kennt er offenbar nicht so gut ;)]
Anyway, gold is the only liquid hedge without a price cap.
[Er zeigt bei 9:00 einen logarithmischen Chart des Dow über die letzten 100 Jahre und veranschaulicht, dass das derzeitige Absinken nichts ist gegenüber der Finanzkrise 2008, welche ihrerseits nichts ist im Vergleich zum Absturz von 1929.]
It is absolutely possible, that something like that could be coming at us again:
We're not heading to a mild recession, but a full blown depression.
Advisers to the WHO say, the coronavirus might affect 2/3 of the world's population.
The WHO just revised the virus' death rate to 3.4%.
That's around 172 million people dead.
This disease will kill millions.
At the crisis in 2008, rates were at 5.25% and ended up near 0.
With the help of QE we got up to 2.4%.
We just cut this down to 1%.
The Fed is out of ammunition.
[Man kann aber auch minus, Mike ;)]
Overnight Repurchase Agreements were in average at 10 billion $.
The terrorist attacks spiked in a one day 80 billion $ ORA.
Lehmann Brothers at another 100 billion.
After that, ORA's were at 0.
Now look where we are since late 2019.
At 100 billion.
Something is as bad as the financial crisis in 2008.
Also, look at the "Securities Held Outright".
It's higher than when they stopped QE [in 2014].
They see something big coming.
Due to the coronavirus, there will be many bankrupties.
The government will have to print money for bail-outs, and bank bail-ins for that matter.
Make sure you don't have too much curreny in any one bank account.
[Er zeigt und erklärt bei 17:00 einen eindrücklichen Chart, der "Nonfinanical corporate business, debt secuties and loans, liabilities" ins Verhältnis zum GDP stellt. Der Prozentsatz war noch nie so hoch.]
They tell us, they spent 984 billion $ more than their income last year.
They tell us a lie.
"Federal dept: total public debt" (oh, that's you and I) is at 1.336 billion $, not their hocus pocus numbers.
This is what we owe more this year [2019] than last year in 2018!
The lie is huge: take whatever they say and add 30 or 50%.
Btw: there never were surpluses in the Clinton era [Grafik weist solche aus]: it was an accounting trick:
There was an 18 billion $ definit.
Debt to GDP is already up to 105%.
With this next crash, GDP is going to collapse.
Deficit spending will explode, because both monetary and fiscal policy [deren Unterschied er eingangs des Videos kurz erläutert].
Taxes will be cut, which Donald Trump already proposed today via a payroll tax cut.
Which does not affect you and me, because it's paid on behalf of the employee by the employer.
Which makes up almost 80% of the government revenues.
So they're talking about cutting a major portion of the gvmt revenue at a time when our GDP is shrinking.
[Er zeigt eine Grafik der "Federal government current tax receipts", welche wie der Aktienmarkt (Wilshire 5000 full market cap index) zu verlaufen scheint.]
In 2000-2003 (Nasdaq, tech bubble), there was a 28% fall in the value of the stock market, and it caused a 20% reduction in taxes.
Which means, deficits explode.
2008, the value of the stock markets fell by 40%, and tax revenues fell by 28%.
Tax revenues stopped growing at the end of QE.
While QE 1 and 2 went thru to the main street, QE 3 was just a gift to Wall Street [Grafik 23:00].
They will need to create an immense amount of currency.
Get ready for multi trillion-dollar deficits every year.
2... 3... 4... 5-trillion-dollar deficits: they are coming.
Last weekend I bought some silver.
Gold is best performer this century, with the exception of some crypto currencies.
But I'm more concerned with the gold-silver-ratio.
It's only been this out of whack a few times: back in the 30ies and a couple of months in1991.
Silver is tremendously undervalued compared to gold.
Gold is tremendously undervalued compared to the currency supply.
And all of the other assets are in bubbles.
That's why I bought some silver.
[Chart 24:50 zeigt Silberpreis seit 1970, 25:15 dividiert durch den "Consumer Price Index".]
I call it the "CP lie", because it vastly understates inflation.
Because every dollar they create has to go somewhere, period.
So something inflates this selective inflation:
all depends where the dollars go first and they've gone into the stock market and back into real estate and things like that.
They don't measure those things, the stock market isn't in the CPI.
If they took everything in society and put it in the CPI, what you would see is that silver's true price adjusted for inflation would be somewhere way below the 1980ies high.
Get prepared for something big there.
They're going to keep the stock markets up, in order for the government to survive.
The very survival of the government depends on the stock markets doing well.
And so, as the stock markets crash, the Fed has to support them.
Janet Yellen a couple of weeks ago said, in the next crisis the Fed may have to go into the stock markets and buy stocks directly.
That means, creating currency and buying stocks.
This will crash and it'll turn around to deflation.
Gold and silver may go down, I'm hoping they do, I'm hoping for 14$ silver or less, and I'm going keep on buying.
There will come the day when it reverses and when it does, it's going to explode to the upside so high the world has never seen.