A tale of two stories….

Tuesday 18th July 2017

A tale of two stories….

For 9-years the Bank of England has been hammering savers whilst at the same time rewarding market speculators….

Abnormally low ‘emergency’ interest rates have held across the entire period (well below the long-term average of 5%) and have served to discourage savers from placing money on deposit – forcing them into speculative and potentially-risky markets if they wanted a chance of earning a return on their money….

Low interest rates have also reduced the cost of carrying and servicing debt – fostering the illusion that debt is affordable and obscuring the risks associated with it….

The central bank’s massive injections of cash into the system – otherwise known as money-printing or quantitative easing – made credit plentiful and fueled an orgy of corporate stock buybacks, mergers and acquisitions, buy-outs and all the rest of it….

Asset prices have risen across the board. Nowhere is this more evident than in the stock market which has scaled heights never previously seen.

The value of FTSE 100 stocks has more than doubled since 2009. FTSE 250 stocks have more than tripled. Both indexes continue to ride high.

Take the market as your primary gauge and you might be forgiven for believing that Britain is enjoying something of a boomtime.… Click here to read more

Red flags waving….

Tuesday 11th July 2017

Red flags waving….

I make a point of keeping a close eye on the financial weather in the United States….

And there’s a good reason for that. The effects of what happens in the world’s largest economy – and its markets – are felt globally.

By keeping myself appraised of developments in the US economy and its markets, my intention is to be forewarned about – and forearmed against – what is heading our way in Britain….

  • Markets – blind or just complacent?

Stocks in the US and the UK continue to ride high – either at or within touching distance of the highest levels in market history….

Investors appear to believe that the bull market in stocks – which has already been rampaging for 100+ months – is going to keep on trucking….

But I disagree. I think investors should be preparing for a painful correction at best or a devastating crash at work.

I’ve been making my case for some time – catch up with the most recent coverage here and here and here….

With each week that passes more red flags appear. The market appears not to see. Either that or it does see but doesn’t comprehend or doesn’t care….… Click here to read more

Earthquake preparedness….

Tuesday 4th July 2017

Earthquake preparedness….

Devastating earthquakes seldom arrive unannounced….

There are signal tremors. Sophisticated geological equipment picks up the warning signs deep underground. Birds and animals behave strangely….

I believe an earthquake is headed our way. One that will reduce the global financial system to rubble.

I’ve been talking about it. Repeatedly. Because there’s no bigger story in the world of money than the crash coming our way. Catch up here and here….

I wouldn’t describe myself as the lone voice crying out in the wilderness. Others have been saying the same thing….

But there’s been a step-change of late. More voices are joining in. Bigger voices. More powerful voices. Voices that represent a real warning tremor….

  • A change of tune….

Last week, signs that big banks are changing their tune….

They’re starting to feel uncomfortable. The truth they’ve been tap-dancing around for years can no longer be avoided. The bogeyman must be faced. Bankers are now acknowledging facts they previously weren’t….

This from Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch….

‘Central banks, the reason behind high asset prices and low volatility, are now in a desperate dilemma….’

This from Marko Kolanovic, head of macro quantitative and derivatives research at JP Morgan….… Click here to read more

A deadly brew on the boil….

Tuesday 27th June 2017

A deadly brew on the boil….

Last week we looked at Italy and why what’s happening there could trigger a global crash….

This week our attention is focused on the kitchen here at home….

Like one of Grandma’s famous hotpots, the British economy is bubbling away on the stove. But I’m not sure it smells so good. And I can’t vouch for what it will taste like when the end-product is finally dished out.

If you want my honest opinion, I reckon some of the ingredients in the pot might turn out to upset the stomach….

  • Inflation is sprouting wings….

Mark Carney and his Bank of England (BoE) team crank the levers and push the buttons that keep the British economy on the straight and narrow….

That’s what most people believe at any rate.

Carney is the ship’s captain. He stands on the bridge, assesses conditions and the direction in which he wants to travel, and makes any necessary adjustments to the ship at exactly the right time. At least that’s the theory….

Everything is under control. Right up until the point that it isn’t….

We might well have reached that point with inflation last month. It rose to 2.9%.… Click here to read more

Where to look for the beginning of the end….

Tuesday 20th June 2017

Where to look for the beginning of the end….

My money would be on Italy. I think Italy makes for a fair bet….

Not to be the winners of the 2018 FIFA World Cup….

But to be the country that provides the spark that lights the fuse on the bomb that will bring the global financial system to its knees….

I’ve been thinking about what Jim Rogers said in his recent interview on Business Insider. I referenced his comments in last week’s column….

Rogers was talking about the crash he and I (and others) believe is headed our way and where it might start.

He said this: ‘These things always start where you’re not looking.’

  • Nobody was looking at Reykjavik in 2008….

You might recall that the 2008 global financial collapse started where nobody was looking – in Iceland.

Three of the country’s biggest banks, Kaupthing, Landsbanki and Glitnir – all privately owned – defaulted after experiencing difficulties refinancing short-term debt.

The crisis in the Icelandic banking system came as a complete shock. Nobody was looking at Iceland.

Nobody expected the most sparsely populated country in Europe – located in the far North where the North Atlantic and Arctic oceans meet – to be the source of a calamity that would fan-out and work its destruction across the entire global financial system.… Click here to read more

A surefire, post-crash winner….

Tuesday 13th June 2017

A surefire, post-crash winner….

Jim Rogers is 74 and he says the worst crash in his lifetime is coming. This year or next….

Rogers is the Chairman of Rogers Holdings. He’s a legend in investment circles. His opinions are sought-after and carry weight.

Late last week he was interviewed by Henry Blodget on Business Insider’s Bottom Line segment and he didn’t pull any punches….

His message was clear and unequivocal: ‘We should be very worried.’

Rogers underscored that message with this chilling prediction. ‘You’re going to see governments fail. You’re going to see countries fail this time around….’

  • Current debt dwarfs 2008 levels….

Rogers doesn’t know exactly when the crash will come. Or where it will start. ‘These things always start where you’re not looking,’ he told Blodget.

But Rogers has no doubt the crash is coming. Or that crushing levels of government debt will feature heavily in what unfolds….

‘In 2008, we had a problem because of debt. That debt was nothing compared to what’s happening now. In 2008, the Chinese had a lot of money saved for a rainy day. It started raining, they started spending the money. Now, even the Chinese have debt.Click here to read more

How will you earn a crust in 2037?

Tuesday 6th June 2017

How will you earn a crust in 2037?

Imagine looking in a mirror in 2037. What will you see? How will you have changed? How will the intervening years have treated you?

We can’t know. We can hazard a guess. We can speculate. We can look at how our parents changed in that 20-year period and make extrapolations. But we can’t know.

And if we can’t predict how our own facial features will change over the next two decades and we can only guess at where our hairlines will start and finish by that point, then how can we even begin to know how the wider world will look and feel?

The truth is we can’t know. Not for sure. And anybody who says he does know (for sure) is a fool, a liar or a miserably deluded soul in need of strong psychotropic medication….

But the future is a bit like the bright star in the night sky. We can’t get there from where we are standing right now. But we can’t quite take our eyes off it either. We can’t help but wonder what it is and what it would look like closer-up….

  • Henrik Lindberg’s idea of the future….
Click here to read more