Not difficult to suggest that the global financial markets have gone mad. Erratic bonds – equities – pumping and dumping in oil – interest rate phobia crisis in the Middle East.
Well I did warn it was going to get weird – this is just the beginning.
The lunatics that are in charge – they are clueless. If they knew the reason as to why – how – where and what is going on it may solve their dilemma. Doubt it though – as they and their ilk was the cause several years ago.
So – we have lunatics in charge at all of the asylums – even in the wards.
Knowing this simple fact puts everything into perspective.
Fear not though – they know not what they do. All is good – well as good as bad can get for now.
What you must bear in mind is that confusion reigns – it reigns because these idiots know not what they do – everyone is scrambling for yield – everyone is scrambling for safety.
The biggest problem is that people believe these lunatics:-
If the head of the European Central Bank was to say to you – that ‘I will do whatever it takes’ to fix the situation.
What about the head of the US Federal Reserve was to say to you – I have no ammunition left in the arsenal and I will lift interest rates over two years to brIng them back to ‘normal levels’ or words to that effect.
Then the United Kingdom – in that if ‘there is no problem that a euro-zone bank might fail – thanks largely to the action of the European Central Bank’.
Okay – Japan’s Central Bank on Central Banks – that one cannot lower rates beyond the zero lower bound.
These are a few quotes – there are many more – in particular the Chinese Central Bank in that ‘they have control of the situation’ was a doozy.
These lunatics – and economists advising the lunatics – are running ‘modern’ monetary policy and they know not what they do. The world’s finances are dysfunctional and those in charge are using monetary policy that is basically flawed.
Through their actions and ineptitude the world financial system is akin to walking on marbles – vainly balancing the weight of debt – whilst the marbles are moving underfoot. One slip and chaos reins. The actions and reactions in interest rates – monetary policy and the power within – attempting to keep a ‘competitive and stable’ currency.
It is the Central Bankers which have created a catastrophe of immense proportions that a crash and burn is inevitable – in fact it is happening now and in slow motion.
Just stop and think for a minute on one simple fact – if I was to start increasing the zero bound interest rates – on a gradual basis – to bring these rates to a ‘normal level’ – would you invest in medium or long term bonds?
Would you divest of non-performing fixed assets and invest in equities awaiting the inevitable increase in rates and strengthening currency?
Well – each to their own – uncertainty comes to mind – why buy 5, 10, 20 or 30 year bonds when you can enter the short term market and wait – what have you got to lose?
This is happening – I highlighted this in April – volatility is in the Bond markets, initially in the German Bund market – this volatility is due to lack of capital – a lack of liquidity in support. Investors are nervous and this has set all the medium and long term bond markets teetering on collapse.
Both Yellen in the US – Carney in the UK – have indicated that it is their ‘intention’ to raise interest rates – but they have not followed this path.
Real thongs – yes flip floppers.
These idiots create the problems that exist – so liberal with their mouths and warning of their intentions they disrupt markets – provide uncertainty.
Top this off with nervous investors seeking yield – you create chaos.